Police Funding Formula

Kevin Foster Excerpts

Tuesday 1st March 2016 Commons Chamber

[Keith Vaz (Leicester East) (Lab)]

I am very pleased that the House has an opportunity to focus on the important issue of the police funding formula. I will set out the background to, and the timeline of, the funding formula review before assessing where the process is now. The fundamental concern of the Home Affairs Committee is: when is the new review going to start?

I want to thank the members of the Committee, who have unanimously agreed the report—the hon. Members for Louth and Horncastle (Victoria Atkins), for Kingston and Surbiton (James Berry), for Enfield, Southgate (Mr Burrowes), for Wealden (Nusrat Ghani), for North East Hampshire (Mr Jayawardena), for East Worthing and Shoreham (Tim Loughton), and for Cumbernauld, Kilsyth and Kirkintilloch East (Stuart C. McDonald), and my hon. Friends the Members for Bradford West (Naz Shah), for Streatham (Mr Umunna) and for Walsall North (Mr Winnick).

The majority of police forces, chief constables, police and crime commissioners and Members of Parliament welcomed the launch of the police funding formula review last year. The manner in which police funding is currently distributed is outdated, inefficient and not fit for purpose. I want to commend the Minister for Policing, Crime and Criminal Justice for taking on this challenge head-on. However, his ambition, which is shared by the whole House, has not been matched by the process.

When the Home Office launched the public consultation on 21 July 2015, it allowed a period of only eight weeks. After receiving an initial 1,700 responses, it laid out its proposed refinements to the model on 28 October. The second proposal was described as “inadequate”—by, among others, Tony Hogg, the Devon and Cornwall police and crime commissioner—as it gave PCCs and chief constables just three weeks to respond.

The refined model showed that 11 forces would lose by the changes, while the remaining 32 forces would increase their share. The chief constables and PCCs were puzzled and frustrated about how the sums had been calculated. Eventually, it took Andrew White, the chief executive in the office of the Devon and Cornwall PCC, to purchase the original data, and he wrote to the Home Office on 2 November to inform the Home Office that it had used the wrong data in making its calculations. The whole police service and this House owe a debt of gratitude to Andrew White for his actions.

In a letter to me from the permanent secretary, Mark Sedwill has since stated that this error occurred because officials got confused with similar filenames and therefore used the wrong set of data. When the error was discovered, the director general of the crime and policing group at the Home Office, Mary Calam, admitted that she did not understand the significance of the response that she had signed. I am not sure whether that admission was to give us faith in the system or make us question it further. Overnight, police forces across the country had swung from being winners to losers and vice versa. Chief Constable Giles York of Sussex police said that his force went from a £10 million loss to a £2 million gain. Chief Constable Mike Creedon of Derbyshire police said that his force went from a gain of £20 million to a £7 million loss. Chief Constable Simon Cole demonstrated that Leicestershire constabulary was set to lose £700,000 under the old system, but would now lose £2.4 million.

Subsequently, Mr Speaker granted my urgent question on 19 November 2015 and the process was rightly suspended by the Policing Minister. Again, he should be commended for coming to the Dispatch Box and agreeing that the sums were wrong and that the process had to be halted. I do not want to dwell any further on the history, except to say, as it says in the report, that this was a shambolic end to a poorly managed process that significantly damaged the relationship between the Home Office and its primary stakeholders, the police.

Currently, police funding is supposedly being given on the basis of a funding formula that has not been operated for a number of years. The formula is over a decade old and is not based on the latest census data, but on the previous census. It is impossible for police forces to calculate it because many of the data are out of date and it does not take into account the modern nature of policing.

[Kevin Foster (Torbay) (Con)]

Having acted as the rapporteur for a report on the police funding formula by the Public Accounts Committee, may I ask the right hon. Gentleman whether he agrees that one issue is that the formula only really reflects the demands that crime places on the police, and not many of the other issues that they have to deal with? Does he share my disappointment that the shadow Policing Minister is not here to listen to this debate?

[Keith Vaz]

I make no comment on the absence of the shadow Policing Minister. I am sure that he will come in very soon and make up for lost time. I will come to the hon. Gentleman’s first point in my speech. He raises an important issue on the capabilities of the police and the new demands of 21st-century policing.

Mike Creedon, the Derbyshire police chief, said to me that if the current formula was still valid,

“it would be reflecting a reality which is ten years old”.

He is clear, as are many other chief constables, that there is a consensus that we need to restart the process of moving to a fairer funding model. I think that that consensus is reflected throughout the House.

Since the publication of the police grant report in December 2015, concerns have been raised that it represents a real-term cut to grant levels of 1.4% and requires increases to the police element of the council tax precept. Police forces are being required to raise the police precept across the country, including in Cheshire, Northumbria, Humberside and Thames Valley—the area that is partly represented by the Prime Minister and the Home Secretary. Dee Collins of West Yorkshire police estimates that her force has received a 3.2% cut in real terms, even after the PCC agreed to the maximum precept increase.

The Select Committee published its report on 11 December. The Government’s response is now 19 days late. The first question for the Minister is when the response will come.

Last Tuesday, five police and crime commissioners gave evidence to the Home Affairs Committee: Ron Ball from Warwickshire, Alan Charles from Derbyshire, Sir Clive Loader from Leicestershire, Katy Bourne from Sussex and Jane Kennedy from Merseyside. It was clear from their evidence that the police and crime commissioners had not been consulted on the new review. Ian Hopkins, the chief constable of Greater Manchester, has said that he wishes to work collectively and collaboratively with the Home Office, as do many PCCs and chiefs.

It is clear from the concerns that have been raised with me by chief constables before this debate that they have not been consulted. However, in the last debate, which as you know, Madam Deputy Speaker, was only last Wednesday, the Minister alluded to the fact that he had met a number of chief constables. I am sure that he will enlighten us as to his further discussions when he responds to this debate. Chief Constable Neil Rhodes and Deputy Chief Constable Heather Roach of Lincolnshire police have informed me that they met the Policing Minister last Wednesday, 24 February, to discuss the formula. I hope that he will tell us the outcome of that meeting.

When he replies to the debate, will the Minister tell us about his engagement with police forces, and reassure them that he is taking the matter as seriously as he was when he last appeared before the House? One issue that must be clarified is the capability review undertaken by the National Police Chiefs Council under the leadership of Sara Thornton. If the Minister could advise the House about how far those deliberations have reached, that will assist us in knowing something of the timetable that he has in mind.

It is concerning that since last year’s formula changes were abandoned, there have been no further proposals to work on. The Minister wrote to me on 1 February with an update on the formula arrangements, but as I said, he has not given us a date for when that review will commence. Police forces need to know what is going to happen. Ian Drysdale, the director of business services for Kent police, said that the continuing uncertainty is unhelpful, and that a transition to a new arrangement should be made as soon as possible. Following the glaring errors last year, it is self-evident that the Home Office should redouble its efforts to create a fairer funding model, and it is clear that the funding review should be restarted as swiftly as possible.

You will be interested to know, Madam Deputy Speaker, that Stephen Kavanagh, chief constable of Essex police, has stated that any prevarication on the part of the Home Office would be hugely disappointing and regrettable. Many have argued that it would be wrong to change the formula in a period of austerity, but on the contrary, austerity could have been a starting point for an informed reassessment of the formula in order to incentivise the police for reforms and deal with other inefficiencies. The flat rate reduction for all forces continues to penalise those who have already received less. However, following the Chancellor’s announcement in the comprehensive spending review on 25 November, which the Committee welcomed, that is less of a concern. In fact, the Home Office has a renewed opportunity to review the formula.

The three key failings aside from the stand-out mistake of confusing data filenames, were essentially process failures, such as sharing exemplifications at an early stage, which meant that data errors went unnoticed until it was too late, setting out transitional arrangements at an early stage, which meant that losers were even more concerned about the potentially immediate damaging impacts on their budget, and not allowing sufficient period for consultation, particularly with PCCs and chief constables. Does the Minister accept that those serious failings should be addressed in a future review process?