Police Funding Formula

Mike Penning Excerpts

Monday 9th November 2015 Commons Chamber

[Keith Vaz (Leicester East) (Lab)]

(Urgent Question): To ask the Secretary of State for the Home Department if she will make a statement on the police funding formula calculation errors.

[The Minister for Policing, Crime and Criminal Justice (Mike Penning)]

It is with regret that the Home Secretary cannot be with us today, as she is attending the extraordinary meeting of the Justice and Home Affairs Council in Brussels.

The Government believe that police funding must be allocated on the basis of a modern, transparent and fair funding formula that matches the funding demands faced by the police, but I think we all agree that the current arrangements are unclear, out of date and unfair. In recent years, many chief constables have called for a new formula. The National Police Chiefs Council, the Association of Police and Crime Commissioners and Her Majesty’s inspectorate of constabulary have all called for a revised model. The issues with the current formula are well known. In 2009, the former Policing Minister, the right hon. Member for Delyn (Mr Hanson), agreed to review the police funding formula—[Interruption.] Sorry, in 2009, he called for it to be reviewed, but sadly it was not. The Home Affairs Committee, the National Audit Office and the Public Accounts Committee have all argued for a new formula as well.

In the previous Parliament my predecessor announced that the Government would review the formula, and in July we went into consultation. That closed in September, having received 1,700 responses. Since then, we have been working with forces around the country on the principle of how their budgets could go forward. I am sad to say that during this process a statistical error was made in the data used. The data do not change the principles consulted on and the allocation provided to the forces was never indicative, but we recognise that this has caused great concern to police forces around the country. I and the Government regret the mistake, and I apologise to the House and to the 43 authorities I wrote to during the extended consultation period as part of the funding formula review.

For that and other reasons, the Government are minded to delay the funding formula changes for 2016-17 that we had previously intended to make, and we will seek the views of the police and crime commissioners and the National Police Chiefs Council before going any further. It is essential that we come to a funding formula that is not only fair, transparent and matched by demand, but supported by the police. I have listened throughout the consultation, and the Government will continue to do so in considering the next steps, in conjunction with police leaders. I will update the House in due course. We should all support the reform of the police funding formula. Police forces and Committees of the House have been calling for it for years. We will bring it forward, but we are delaying the process at the present time.

[Keith Vaz]

Mr Speaker, I thank you for granting the urgent question, and I thank the Minister for his answer. I commend him for being the first Policing Minister in recent years to tackle the problem of police funding, which desperately needed to be addressed.

Last week, the Home Affairs Select Committee took evidence on the funding formula. The testimony we received about the process was damning. Last Wednesday, 34 Members took part in a debate on this subject based on the old criteria, and last Friday in a letter to the Devon and Cornwall police and crime commissioner, the Home Office admitted that its proposed funding formula was based on the wrong data. According to the previous formula, two thirds of police forces would have gained from the proposals and a third would have lost funding. Now, 31 forces will lose out. For example, Northumbria in July was first a loser, then a gainer, and now it will lose out again. The Metropolitan police was expecting to lose £184 million, but it appears that it is now set to gain—or possibly lose—a different amount. Leicestershire constabulary was set to lose £700,000 before last week; it is now set to lose £2.4 million.

This entire process has been described by police and crime commissioners and others as unfair, unjust and fundamentally flawed. What started off with good intentions is rapidly descending into farce. To call it a shambles would be charitable. There is now a very real prospect of a number of forces planning to take the Government to court. Given what has happened, will the Minister agree to a number of suggestions?

I warmly thank the Minister for his apology to the House. It was the right thing to do—it is typical of him to come before the House and say that—because police forces and PCCs spend an enormous amount of time and effort on this subject. The Minister has suggested a delay, which I support, but will he go one step further and establish an independent panel of experts who understand the importance of sharing data and, more importantly, are able to count and understand mathematics, unlike some officials in the Home Office?

The Minister will agree with me that this is a defining moment for policing. Last week at the Dispatch Box he said that he was

“proud to be the Minister responsible for the best police force in the world”.—[Official Report, 4 November 2015; Vol. 601, c. 1074.]

Now is his chance to show it by engaging with the police service. This formula will last a long time. If the Penning formula is to last as long as the Barnett formula, it must be seen to be fair, just and workable.

[Mike Penning]

The Barnett formula seems to be very popular in parts of the United Kingdom.

I wanted to ensure that the House was aware of what we are going to do. Many of the things that the right hon. Gentleman has asked for are exactly what we are going to do. The decision I have made today with the Home Secretary is partly based on some of the submissions to the Home Affairs Committee and its recommendations. I listened carefully to that evidence. Not every PCC and chief constable in the country was unhappy—I noticed that not many of them gave evidence; perhaps they are shy. We will listen carefully, get it right and make sure the mathematics are right, so that I am not in this embarrassing situation again.

[Sir Edward Garnier (Harborough) (Con)]

The right hon. Member for Leicester East (Keith Vaz)—my parliamentary neighbour, who initiated this urgent question —my hon. Friend the Member for Bosworth (David Tredinnick) and I were very kindly met by the Minister not so very long ago, when we discussed this question. How would my right hon. Friend the Minister describe fairness and the time schedule for the new process? It is very important that police and crime commissioners—in particular, the police and crime commissioner for Leicestershire—know the context within which they will be setting their budgets in the spring.

[Mike Penning]

I thank my hon. and learned Friend for his comments. We had a good meeting and I promised to listen, and I hope that the response I am giving today shows that we have listened. The funding formula for 2016-17 will be based on the existing formula and the announcement, as normal, will be made in December, but there will be a lot of work, a lot of listening and a lot of understanding of what the demands are, within the difficult financial situation that we are in. Not everybody will think it is fair, but we will think it is fair and we will not be in the opaque position of the existing formula.

[Jack Dromey (Birmingham, Erdington) (Lab)]

The first thing the Policing Minister should do is apologise to the police service for an omnishambles process—replacing one opaque and unfair formula with another; withholding vital financial information; publishing that information only under threat of legal action; and then publishing the wrong information.

The Policing Minister was right to apologise to Parliament, but I ask him to go one step further. Last Wednesday he dismissed all concerns about his new funding formula. Forty-eight hours later, it was revealed that he had got it wrong and had published the wrong data. Funding allocations varied by up to £181 million and there were 31 losers. When did he know that? What did he know, and when did he know it?

Tony Hogg, the Conservative police and crime commissioner for Devon and Cornwall has summed it up on behalf of the police service:

“We have now lost all trust in the process.”

The Policing Minister should abandon the discredited process, as he has agreed to do; he should start afresh, as proposed by the police and crime commissioners, which I hope he has agreed to do; and acting in an open, transparent and honest way, he should publish all financial data, which should be concluded as soon as possible and be overseen by an independent third party—perhaps the National Audit Office, because there is no longer confidence in the Home Office.

The third and final apology that the Policing Minister should give is to the public. The first duty of any Government is the safety and security of their citizens. People expect their Government to act responsibly when it comes to the policing of their communities and the country. This would be laughable if it were not so serious. I say in all sincerity to the Policing Minister and to the Home Secretary: get a grip, and get it right.

[Mike Penning]

The House will be disappointed in the shadow Minister’s tone. I was informed on Friday, and this is the first opportunity I have had to inform the House about the situation—[Interruption.] I hear shouts from the Labour Benches, “You should’ve known.” At the end of the day, I was not told, and the first I knew about this was when I was in the House on Friday. We will make sure that we have a fair process in place as we go forward. That is only fair. I have apologised and I will do so again if necessary, but I am not apologising when it comes to the hon. Gentleman’s tone, because he has got it wrong as usual.

[Dr Sarah Wollaston (Totnes) (Con)]

I welcome the Minister’s apology and congratulate Tony Hogg and his team on uncovering this inadvertent error. Will the Minister confirm to my constituents and to those across Devon and Cornwall that in reviewing this situation he will take full account of the impact of rural policing and tourism on policing costs?

[Mike Penning]

I have apologised to the 43 authorities and I apologise in particular to Devon and Cornwall, which highlighted the information that was wrong in the letters I sent out to those 43 authorities. Getting the decisions right about rural and other issues within the formula was exactly what we were trying to do in the first place, as it was mostly the rural constituencies that were most upset with the existing formula, but I can assure Members that we will now get it right.

[Mr Dennis Skinner (Bolsover) (Lab)]

Late last week, the Derbyshire police commissioner and chief of police informed me that the settlement was very good. Forty-eight hours later, they were told by none other than Devon and Cornwall police—not the Minister—that the whole thing was wrong. Now Derbyshire has lost £13.1 million. Is there any occasion on which Ministers in this Tory Government would consider resigning because of an almighty mess that they have taken part in?

[Mike Penning]

I congratulate Derbyshire on reducing crime by 21% since 2010. Derbyshire has not lost anything, because the proposals were indicative and no money was allocated. As usual, the hon. Gentleman gets it wrong.

[Mr David Jones (Clwyd West) (Con)]

According to the report in The Times, North Wales police, which was due to gain some £2 million under the formula, now stands to lose some £10 million. Does the Minister agree that although the force will appreciate the frank apology that he has given, it now requires some form of reassurance that the settlement will be arrived at with sensitivity to the morale of the officers of that force?

[Mike Penning]

I am always conscious of the morale of police officers. That is why I say again from this Dispatch Box that I am proud to be the Policing Minister with the best police force in the world. I can tell my right hon. Friend that no money has gone missing from north Wales, because the proposal was indicative and no money was likely to go until a decision was made. However, the existing formula will continue for an extra year while we finish the rest of the proposals.

[Mr David Winnick (Walsall North) (Lab)]

Will the Minister bear in mind what has been said repeatedly, namely that the west midlands police force has suffered drastically as a result of the cuts that have occurred? Representations have been made and debates have been held about the position. Before the Minister tells us about the crime situation, I should say that in the past he has, I believe, accepted the unfairness of what occurred because of the previous formula. Will he bear all that in mind, and let us hope that there will be a fair settlement, at long last, for the west midlands police force?

[Mike Penning]

I usually disagree with most of what the hon. Gentleman says, but this time I do not. I think that the settlement needs to be fair to the West Midlands authority, and to the other 42 authorities, and we delayed the process so that we could get it right.

[Seema Kennedy (South Ribble) (Con)]

I thank my right hon. Friend for meeting me, and other Lancashire Members of Parliament. Will he confirm that he will continue to meet all the Lancashire MPs to establish a fair funding settlement for the Lancashire constabulary?

[Mike Penning]

I congratulate all the Lancashire Members who took the time, and were considerate enough, to meet me. Members of all parties listened to our proposals, and then presented their own ideas. That, too, helped us to make the decision to delay the process.

[Mr David Lammy (Tottenham) (Lab)]

The Metropolitan Police Commissioner will be taking £1.3 billion out of the Metropolitan Police budget. Will the Minister tell us how much the Met needs to save or keep, and what bearing that has on the announcement that he has made today, in the context of borough amalgamations here in London?

[Mike Penning]

Decisions on front-line operations are a matter for the commissioner. He is an excellent commissioner, and we await his proposals for his force. However, no decision has been made because the comprehensive spending review has not been announced. As I said a few minutes ago, the funding formula will be announced in December.

[Nick Herbert (Arundel and South Downs) (Con)]

I welcome the Minister’s statement that the process will be delayed, and I thank him and the Home Secretary for their willingness to engage colleagues on the issue. While there may indeed be problems with the existing formula, it is always going to be difficult to adjust between different forces in an environment in which forces are already having to find ways of reducing their spending, and some forces will have to face double cuts. Is that not an argument for an extended delay while the current situation continues?

[Mike Penning]

I think that, now we have made this decision, we need to sit down and talk to the police authorities, the police commissioners and the police themselves, but it was clear to the Home Secretary and me that we needed to pause so that we could get it right. Surely that is the important thing.

[Graham Jones (Hyndburn) (Lab)]

Is the Minister aware of the amount of time and effort that was wasted in Lancashire over the summer in pursuing this matter and trying to get to the bottom of the funding formula? Lancashire was due to lose £24.9 million, a huge amount, which would make it the biggest loser in percentage terms. Is not the reason for this shambles the Minister’s failure to supply the funding formula to the police and crime commissioners—so that they could dissect it and we could debate it—until only a few weeks ago?

--- Later in debate ---

[Mike Penning]

As I said a moment ago, I had what I thought was a very good meeting with Lancashire Members on both sides of the House. We listened, and we listened carefully. The reason for the problem is that data were not transferred in accordance with the new method of calculation. A statistical error was made in the Department. Ministerial responsibility dictates that I am responsible, and that is the way it should be.

[Stephen Hammond (Wimbledon) (Con)]

I commend my right hon. Friend for coming to the House and making his apology, which I think will be welcomed. When the Met police met London MPs, they complained about the opaqueness of the previous formula, and also pointed out that the London police undertook nationally significant policing tasks. Will my right hon. Friend guarantee that the new formula will be more transparent, and that the London settlement will recognise and match the demand for the policing of nationally significant events?

[Mike Penning]

London is one of the greatest capitals in the world, if not the greatest, and it has particular police issues that have to be addressed. One of the reasons we are pausing is to make absolutely sure that all the different funding streams that come into this great capital city are managed correctly, and that it has the resources it needs.

[Paula Sherriff (Dewsbury) (Lab)]

The director general of policing sent the letter outlining the error on Thursday 5 November. Is the Minister honestly telling us he was not made aware of its contents until Friday?

[Mr Speaker]

Order. I entirely understand the rationale behind the hon. Lady’s question, but may I gently say one should not insert the word “honestly” into any question? The working assumption has to be that every Member in this House is always honest. We do not accuse Members of dishonesty or suggest as much; we debate issues. The hon. Lady is a new Member and I understand the purport of her question. I have no desire to get at any individual Member, but I think it is useful for new Members to get to grips with the new procedures—for example, recognising that debate goes through the Chair and that the word “you” is not used, and so on. I hope that is regarded as helpful.

[Mike Penning]

Thank you, Mr Speaker. Even those of us who have been here quite a long time get things wrong as well.

The first I knew of the letter was Friday.

[Richard Drax (South Dorset) (Con)]

I, too, commend my right hon. Friend for halting the process. May I also put in this plea for Dorset police, who have been at the lowest end of the funding for many years, that rurality and tourism in particular will be very much in my right hon. Friend’s mind when eventually we do get to sorting out the formula?

[Mike Penning]

One distinct advantage of being here today and making the statement is that we are starting the process again and everybody will, naturally, put the case for their own parts of the world, which my hon. Friend did really well.

[Richard Burden (Birmingham, Northfield) (Lab)]

In response to my hon. Friend the Member for Walsall North (Mr Winnick), the Minister said he hoped West Midlands would be treated fairly, but is he not aware that under the existing funding formula, which he is maintaining, West Midlands has been hit abnormally hard with cuts of over £100 million in five years? What is he going to do over the next period while he has the pause to ensure that West Midlands and other forces are not hit again in the comprehensive funding review? What is he going to say to the Chancellor to ensure police forces get treated fairly?

[Mike Penning]

We were changing the funding formula to get a fairer, less opaque system. I have been asked to pause; I have paused it. The formula is in place for another year.

[Several hon. Members rose—]

[John Glen (Salisbury) (Con)]

Thank you, Mr Speaker. I thank my right hon. Friend the Minister for his characteristic honesty and integrity in coming to the House today and responding in the way he has. When he comes to contemplate the future funding for Wiltshire, will he make sure that not only is the absolute amount of money considered carefully, but also the freedoms that exist for small rural forces to work collaboratively with larger forces nearby—for example, Avon and Somerset?

[Mike Penning]

My hon. Friend makes an important point. Alongside the funding formula review was a capability review being run by the chiefs. Some of that can be driven by the chiefs, some of it will be done by the regions and some of it through the National Crime Agency, but, as I always say at the Dispatch Box, we can often do things better if we do them together, and I think forces should listen to that.

[Jo Stevens (Cardiff Central) (Lab)]

I welcome the Minister’s apology today, but how can my constituents and my police and crime commissioner and South Wales police have any confidence that when the Home Office undertakes the formula, which the Minister has described, in 2016-17 he will get it right this time?

[Mike Penning]

One of the things we can ensure is that the calculations and modelling within the formula done by the statisticians are looked at very carefully. One thing we are looking at, which has been a recommendation from the Select Committee, is to get an independent peer review towards the end, but whatever happens this formula needs to change so it is fairer for everybody.

[Dr Andrew Murrison (South West Wiltshire) (Con)]

I congratulate my right hon. Friend the Minister on instigating the police funding formula review, which was promised by the Labour party when in office but never delivered. In pausing this process, which is an inevitability, may I urge him not to wait too long because many authorities, particularly those that deal with sparsely populated communities, feel they have been seen off in a major way for many years and would rather like to see the formula amended in a transparent and open way, and hopefully in a way that will correct the imbalance they perceive in police funding?

[Mike Penning]

One reason that the funding formula was not changed by the previous Administration or any other Administration is that it is so damned difficult. I know that that is not parliamentary language, Mr Speaker, but it is true. I have experienced this in the past couple of months. The fact that it was hard was not an excuse not to do it, however, and we do need to get it right.

[Mr Kevan Jones (North Durham) (Lab)]

I welcome the Minister’s statement today, but he must realise that the buck stops with him and not with his officials. I find it remarkable that it took 24 hours for him to find out about the problem, and that his officials did not tell him sooner. Does he not realise that the Home Office has now lost all credibility among the police and the police and crime commissioners—the police family—over this process? Is it not about time he took up the suggestion of the Chair of the Home Affairs Committee, my right hon. Friend the Member for Leicester East (Keith Vaz), and established independent oversight of the process?

[Mike Penning]

I do not accept that the whole police family has no faith in the Home Office or in me. The hon. Gentleman is absolutely right, however, to suggest that, so far as ministerial oversight is concerned, I am ultimately responsible. That is why I have not blamed an individual civil servant or any Department. At the end of the day, this is my responsibility, which is why I am standing here now.

[Jake Berry (Rossendale and Darwen) (Con)]

I warmly welcome my right hon. Friend’s approach; his apology to the House is characteristic of the transparent way in which he has approached this entire settlement. When he brought that characteristic transparency to the cross-party meeting of Lancashire MPs, we were hoping that Lancashire would see a fairer formula. It cannot be right that some budgets are going up and some budgets are going down. Every police force should be equally miserable across the country. The formula should be fair.

[Mike Penning]

I thank my hon. Friend for his comments. That was a really good meeting, which we held in the Deputy Speaker’s office. I promised to listen and I will continue to listen. At the end of the day, though, there will be winners and losers with any change to the funding formula. That is why some of the forces that are going to do very well seemed to be quite quiet when they appeared before the Home Affairs Committee, but I understand exactly where they were coming from.

[Several hon. Members rose—]

--- Later in debate ---

[Mr David Hanson (Delyn) (Lab)]

I thank the Minister for the name check, but this is complicated. The fact is that North Wales police will still receive £10.5 million less than they expected in relation to planning assumptions. Can the Minister give them any confidence that they will be able to deal with their shortfalls?

[Mike Penning]

I have not yet announced the 2016-17 budget; I shall do so in December. As a former Home Office Minister, the right hon. Gentleman will know that he will have to wait until December for the formula decision.

[Oliver Colvile (Plymouth, Sutton and Devonport) (Con)]

I thank my right hon. Friend for his candour. May I also encourage him to work with the police and crime commissioners to ensure that efficiencies can be made to enable us to change in a different way?

[Mike Penning]

There are more efficiencies that can be done without affecting front-line policing. Actually, some of the technology that is coming through will aid front-line policing, not least the body-worn video cameras. I intend to work with all 43 police and crime commissioners and their chief constables, and with Devon and Cornwall in particular, as they have some very good statisticians.

[Jonathan Edwards (Carmarthen East and Dinefwr) (PC)]

The residents of Dyfed-Powys already contribute far more per head for their policing than those living in large urban areas in England. Will the Minister ensure that the new formula takes into consideration the extra costs of policing an area such as Dyfed-Powys, which covers two thirds of Wales, especially the extra infrastructure required to secure an effective emergency response?

[Mike Penning]

As I said earlier, one reason that people were calling for a new funding formula was the need to take into account the effects of modern policing in rural communities. That is exactly what we will do.

[Mark Menzies (Fylde) (Con)]

I was one of the Lancashire MPs who greatly appreciated the meeting with the Minister a few weeks ago. Can he assure us that, when Lancashire is being considered, we will not be losers in the process, as my hon. Friend the Member for Rossendale and Darwen (Jake Berry) suggested? Speaking as someone with direct experience of a blue-light service, may I also thank the Minister for the open and—I will use the word— honest way in which he has approached this process with us all?

[Mike Penning]

I sometimes get myself in trouble here for being too honest and too forthright, so I thank my hon. Friend very much for those comments. I cannot promise anything as we start a new process, but I will sit down with people from all the constituencies and all the forces to make sure we get the best we can with the modern formula. As I say, that will be suspended for a year.

[Helen Goodman (Bishop Auckland) (Lab)]

Durham was last month ranked the highest-performing force in the country, so it is very worrying that there might be a £10 million cut. Does the delay mean that there will cuts in the autumn statement followed by further cuts in 18 months’ time?

--- Later in debate ---

[Mike Penning]

The purpose of my standing here making a statement is to say that the possible losses that Durham would have had with the new formula will not happen because it is going to stick with the original formula. We will have to wait for the autumn statement.

[Nigel Adams (Selby and Ainsty) (Con)]

The Minister will be aware that North Yorkshire is the largest policing area in England, and the force gains approximately £8 million under the current formula because of its rurality. Will he assure me that our police and crime commissioner, who does a fantastic job, will be properly consulted and listened to during this welcome extended process?

[Mike Penning]

I pay tribute to the North Yorkshire force, and I fully understand the pressures on it as a rural force. One reason why I got into this situation was that I was working with the 43 PCCs, writing to them and telling them exactly what was going on. I will continue to do that.

[Phil Wilson (Sedgefield) (Lab)]

I am sure the Minister will join me in congratulating Durham police on being designated the most outstanding force by Her Majesty’s inspector. Does he realise, however, that his flawed formula means that it will have to face an additional £10 million in cuts? If that happens, it would mean a reduction in police numbers from 1,700 in 2010 to 850 in 2020. How does he expect Durham police to continue policing? May I respectfully say to the Minister that he should go back to the drawing board, recalibrate the formula and come back with something that makes sense to the people and the police in County Durham?

[Mike Penning]

I have tried to be very careful in not responding to people who probably were not listening to my statement. I have suspended the formula. As with the other 42 authorities, we will work with Durham on a new formula.

[Henry Smith (Crawley) (Con)]

I congratulate my right hon. Friend on re-examining this issue. Will he commit to speaking to Katy Bourne, the excellent PCC for Sussex, where crime has reduced, when the new formula discussions take place?

[Mike Penning]

Not only will I commit to speaking to the excellent PCC in Sussex, Katy Bourne, but I left her 15 minutes ago.

[Marie Rimmer (St Helens South and Whiston) (Lab)]

Will the Minister commit to give due consideration to low council tax base rate metropolitan districts? Across-the-board cuts have a devastating impact on areas such as Merseyside and other metropolitan districts. To make up the cut that was brought forward before, we would have to have a 24.9% increase in council tax. We collect about £500,00 for 1% council tax, whereas other areas collect about £2.5 million, so there is a different impact because of lower tax base rates. Will he give due consideration to that when reconsidering the formula?

[Mike Penning]

One issue that has been raised consistently by Members from across the House is the precept issue, which I believe is what the hon. Lady is alluding to. Although that is not in my hands, it is part of what we look at when we are doing the formula and as we go forward. In some parts of the country the precept forms a substantial part of the funding, whereas in others it does not. I promise the hon. Lady that I will keep a watch on that.

[David Rutley (Macclesfield) (Con)]

I also congratulate my right hon. Friend on coming to the House today. I fully recognise his commitment to tackling crime across the country; it is absolutely clear. Will he confirm to the House that there will be a very clear communication plan that will be sent to all police forces, from Cheshire police right the way through, so that they are aware of the milestones they will be required to pass to finalise, once and for all, this funding formula in the months ahead?

[Mike Penning]

Yes, we have time now to ensure that we consult across the board and that we work closely together. In my statement, I specifically said that we need to get agreement from the chief constables and the police and crime commissioners to ensure that the formula works, and that, I think, is the way forward.

[Mr Gavin Shuker (Luton South) (Lab/Co-op)]

I congratulate the Minister on making an apology, as it underlines the importance of the matter. In Bedfordshire, we have the fourth highest level of gun crime, the fifth highest level of burglary, and the seventh highest level of knife crime. We also face a real threat from extremism. We face urban challenges, but we are funded today as a rural force. Even Her Majesty’s inspectorate of constabulary has acknowledged that historic underfunding has been a major issue for the force. Under both the new figures and the old figures, Bedfordshire makes hardly any gain. Does not common sense dictate that there was a flaw with the formula, and will it be corrected?

[Mike Penning]

I say to my parliamentary neighbour that I know his part of the world extremely well. Even though Bedford is not my county, I am very conscious of the pressures it is under, particularly from the Luton policing angle. It is something that we will look at as we go forward.

[Mr Alan Mak (Havant) (Con)]

I congratulate my right hon. Friend on his statement, which he delivered with characteristic clarity and integrity. Does he agree that larger urban forces such as Hampshire police, which serves my Havant constituency, deserve a revised funding formula so that they can be funded on the basis of need as well?

[Mike Penning]

Although I cannot comment on exactly how Hampshire will be funded with the new formula, or what it will get in December, may I congratulate it not only on having excellent MPs who have bent my ear extensively over the past couple of weeks—MPs from across the House have done so as well—but on forward thinking and working with the other emergency services brilliantly well? That is something on which other forces from across the country could think.

[Julie Cooper (Burnley) (Lab)]

I welcome the Minister’s apology and his decision to suspend the formula while the correct figures are being calculated. Given the scale of the error—last week Lancashire was due to lose £25 million and today it is due to gain £16 million—does he now acknowledge that Lancashire constabulary was right to maintain reserves to plan prudently for the future?

[Mike Penning]

I think that I agree with most of what the hon. Lady said, but it is an issue that, in the 43 authorities of England and Wales, there are reserves of £2.1 billion.

[Tom Pursglove (Corby) (Con)]

Historically, Northamptonshire has been underfunded, but despite that we have seen many innovative new policing models coming forward in the county. Despite this latest delay in the funding formula, will the Minister commit to continue to provide funding for innovative new models to come forward?

[Mike Penning]

Northamptonshire is one of the most forward thinking authorities in the country, and the work it and its PCC are doing alongside the fire service and other blue-light emergency services is really significant. The police innovation fund is exactly what my hon. Friend was alluding to and that is what the money is for.

[Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)]

I heard what the Minister said about suspension, but the fact is that, under this error, South Wales police would have had, at £15.5 million, the fourth highest loss across the UK. That comes on top of the fact that Cardiff already does not receive the same treatment for the particular challenges that it faces as a capital city as London, Belfast and Edinburgh. So when the Minister is reflecting on the funding formula and thinking on this error, will he address that concern, because Cardiff is not getting the support for its policing that other capitals across the UK are getting?

[Mike Penning]

That is part of the review. We will ensure that we look carefully at what the hon. Gentleman has said, but, at the moment, Cardiff has not lost anything because I have suspended the review and the changes.

[Nigel Mills (Amber Valley) (Con)]

I am not sure what was the worst news for Derbyshire. First, there was the news that the proposed new formula was unduly generous to Derbyshire; now there is the news that we are stuck with the outdated, unfair existing formula for at least another year. May I urge the Minister to stick to his guns and press ahead and get a new formula in place as soon as he possibly can?

[Mike Penning]

So many Committees and so many experts outside this House and inside this House—I have met lots of them in the past couple of weeks—believe that we need a new funding formula. There is cross-party agreement on that, so that is what we need to do. I did say that there would be winners and losers, and I apologise to Derbyshire for the delay.

[Tom Brake (Carshalton and Wallington) (LD)]

The police and crime commissioners and chief constables have made it clear that budget cuts delivered through any revised formula will fundamentally change policing. What is the vision and strategy of the Home Secretary and the Policing Minister for this fundamentally changed policing landscape, and how will this incorporate the possible loss of between 5,000 and 8,000 police officers in London and the possible loss of 1,000 community support officers?

[Mike Penning]

The assumption of any loss of front-line police officers—of course, that is a decision for the commissioner—was based on the original formula, not on my announcement today. Policing is changing, and so is crime. That is something we all have to understand and address. Any offence taking place against the right hon. Gentleman is likely to be while he is asleep in bed tonight, and it will be on his computer; it will not be a robbery or a burglary at his house.

[Mr Philip Hollobone (Kettering) (Con)]

I commend my right hon. Friend for responding to the urgent question with an apology. He is right, of course, to say that the buck stops with him, but I have heard from the exchanges today that the error was discovered by one of the police authorities. I am therefore concerned that the error was made by the Department in the first place, and that the Department itself did not uncover the error. This has wider implications for the protocols used by the civil service on all these funding formulae across Government. Will my right hon. Friend make sure that the lessons he is learning from this are extended to other Departments, including Education, Health and all the others with local funding formulae?

[Mike Penning]

I am deeply conscious that we must make sure that there is confidence in a Department, particularly the two Departments that I represent. I met the permanent secretary this morning, and the Home Secretary, the permanent secretary and I are meeting tomorrow.

[Fiona Mactaggart (Slough) (Lab)]

The Minister will be aware that rapid population growth creates challenges for the police. Violent crime in Slough, which I represent, has increased by 18.5% over the past year. When re-examining the formula, will he work in a transparent way, because that is critical to trust in policing by consent? Will he perhaps adopt the suggestion made by my right hon. Friend the Member for Leicester East (Keith Vaz), the Chair of the Select Committee, and take into account the challenges created in areas of high population growth?

[Mike Penning]

One of the reasons that we need a new formula is the high population growth that has taken place, particularly in Slough. That is why the formula needed to be changed, and because it was so opaque. I rest my case.

[Andrew Stephenson (Pendle) (Con)]

I join my hon. Friend the Member for South Ribble (Seema Kennedy) in thanking my right hon. Friend for meeting Lancashire MPs on a cross-party basis to discuss the issue, allowing us to scrutinise in detail the predicted changes, consequences and formula, unlike our police and crime commissioner, who confused this with much wider issues to do with police cuts. My right hon. Friend mentioned the meeting with Lancashire MPs and the ideas that we submitted. Will he confirm that those ideas can now be fully considered and incorporated, following the delay that he has announced?

--- Later in debate ---

[Mike Penning]

Fortunately, the ideas from the cross-party group of Lancashire MPs came before the end of the consultation, so they formed part of it. Along with the evidence of the Home Affairs Committee and other things that have come forward, that is part of the reason for the delay. The misuse of the data—clearly in the wrong place—is the catalyst that created the situation, but we were already listening. I think that is the best way to go forward.

[Steve McCabe (Birmingham, Selly Oak) (Lab)]

The Minister will know that as things stand, West Midlands police could lose £28 million of his indicative budget. Can he give us an assurance today that nothing on that scale will occur? Will anyone be held responsible for the blunder and the delay in informing the Minister, or are officials, like Ministers, increasingly immune from responsibility for their actions?

[Mike Penning]

I am fully responsible for my actions and I take full responsibility for what has taken place under my brief. I cannot comment on what will happen and what will be announced in December, which will be based on the existing funding formula. We will all have to wait for the autumn statement.

[Richard Graham (Gloucester) (Con)]

The House needed an apology for the statistical errors by the Home Office, and we had one, without reservation, from the Minister. We should welcome that. What matters more to me is that when the results of the spending review are announced in December, forces such as the Gloucestershire constabulary will still have the resources they need to tackle serious crime such as drugs, knife use, and the very sad deaths resulting from both. Will my right hon. Friend give my constituents that reassurance?

[Mike Penning]

My hon. Friend’s constabulary has done fantastically well. It is a statistical error that has caused me to make this decision with the Home Secretary today. The reason for the change in the formula was to address the anomalies that we have heard about from Members across the House on the unfairness of the existing formula. It still needs to be changed and we need to push on with that with the chief constables and the PCCs.

[Wes Streeting (Ilford North) (Lab)]

We have heard from today’s exchanges that not only was there an error in terms of the formula and the failure of the Home Office to pick it up, but a letter was sent on Thursday that the Minister was not informed about until Friday, which I think we would all agree is unacceptable. Given the damage that this has done to the credibility of the Home Office, will he now respond directly to the suggestion by the Chairman of the Home Affairs Committee and others that some independence needs to be brought to the consultation process? May we have a clear, simple answer?

[Mike Penning]

I have already said that when we do the statistical analysis we will almost certainly be looking for some independent guidance on that. That is important. It will be as open as possible. [Interruption.] If that is not good enough, then why did the Opposition not do it when they were in power for 13 years? We are doing it. They did not.

[Mr David Burrowes (Enfield, Southgate) (Con)]

Amid a number of inconsistencies with the process, what has been consistent is that the Minister has always said that he is listening, and he has continued very much to show that at the Dispatch Box today. I welcome the decision he has made. Will he also be consistent—he has hinted at this—in the recognition that London, as the capital city, needs full access to capital city funding, reflecting the fact that it is a national hub for policing and criminality?

[Mike Penning]

As I said, this great capital that we are all in today needs to have the capital city force that it needs. The funding will reflect that and we will make sure that it continues to do so.

[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

This episode raises serious concerns regarding the efficacy of the verification and validation process, particularly in relation to the Minister not being aware of it. Further to the statements that have been made, what will he do to ensure that there is some independence, robustness and credibility in the verification and validation process?

[Mike Penning]

As I said, I met the permanent secretary this morning. We will be meeting the Home Secretary when she returns tomorrow to find out exactly what work goes on, and inquiries will continue.

[Paul Flynn (Newport West) (Lab)]

Taking £12.8 million from Gwent police would not be a cut; it would be an act of butchery that would grievously damage the fine work of the Gwent force, which has recently seen an increase in violent crime in the area. I think we all admire the breathtaking chutzpah of the Minister, who seeks to shift the blame to the previous Government and my right hon. Friend the Member for Delyn (Mr Hanson). Can the Minister give us a clear account, in language we all understand, of how this foul-up was made so that we can measure the ineptocracy that the Home Office has become?

[Mike Penning]

I would like to have thought that we would have a better question from the hon. Gentleman, but clearly not. I was not passing the blame to anybody; I was simply saying that I am being criticised for not doing something that did not happen in the 13 years of the previous Administration. Gwent has not lost anything; no force has lost anything. These are indicative figures. We need to make sure that we get the figures right as we go forward.

[Diana Johnson (Kingston upon Hull North) (Lab)]

With the background of the lowest levels of police officers since 1979 and Her Majesty’s inspectorate of constabulary describing the force’s funding as inadequate, Humberside would have been set to get an additional £5.7 million under the right data. Can the Minister assure me and my constituents that under any new formula Humberside will still get that additional sum of money?

[Mike Penning]

No, of course I cannot do that, but I do understand exactly where the hon. Lady is coming from. We are going to pause, look carefully at the funding formula, and make sure we get it right. I am sure she would agree that it has to be fair across the 43 authorities, not just fair for Humberside, although I understand that she wants to push buttons for that region.

[Andy Slaughter (Hammersmith) (Lab)]

Neither the Minister nor the Government are in control of the facts or the policing budget. Standing at the Dispatch Box, he does not seem to understand how incompetent this is. In the case of the Met, the error is of the sum of £180 million. Can we at least have a full written explanation of how this farce occurred, and can we be told the amount of money wasted by the Home Office and the 43 forces in going through the process thus far?

[Mike Penning]

I find it fascinating that, after listening to all the other questions that right hon. and hon. Members have asked, that was the best the hon. Gentleman could do. At the end of the day, when mistakes are made it is right and proper that Ministers stand at the Dispatch Box and tell the House what is going on. We will make sure that the new process is as open and honest as possible, especially for London.

[Several hon. Members rose—]