Police Employer Pension Contributions

Rachael Maskell Excerpts

Wednesday 14th November 2018 Commons Chamber

[Mr McFadden]

The price is being paid on the streets of the west midlands, the streets of Greater Manchester, the streets of Durham, the streets of Cardiff and the streets represented by everyone who has made interventions.

[Rachael Maskell (York Central) (Lab/Co-op)]

Does my right hon. Friend recognise that, where the fire and rescue authority has amalgamated with the police, such as in North Yorkshire, the risk has been spread even further, to our fire service?

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[Mr McFadden]

My hon. Friend has graphically set out the potential impact on a smaller police force such as Gwent. For my force in the west midlands, the commissioner and chief constable estimate that the extra costs from these pension changes could be around £22 million over the next two years. If these costs came from their budgets alone, the impact would be around 450 officers lost. That would be on top of the 2,000 that we have already lost. As I said to the Minister at the beginning of the debate, expecting the public to accept reductions of this magnitude in force levels after the cuts that have taken place over the past eight years would be intolerable.

[Rachael Maskell]

Julia Mulligan, the Conservative police and crime commissioner in North Yorkshire, wrote to me yesterday to highlight how for her police force, the £1.6 million to be cut in 2019-20 and the £4 million in 2020-21, on top of the £10 million savings that also have to be made, will mean that 30 officers will be lost immediately and then another 80 the following year. How can that be sustainable?

[Mr McFadden]

It is not sustainable, which is why leading chief constables have said that forces are already stretched beyond sustainability.

I turn now to how the changes might be paid for. The Budget allocated no extra money for local policing, but it did allocate extra funds for national counter-terrorism work, which I welcome. Of course, it is an essential part of protecting the public—we are all aware of the grave terrorist threat facing the country, so we all support extra funds for this essential counter-terrorism work—but it is not a substitute for the local neighbourhood policing that all our communities need on an all-year-round basis.

In evidence to the Treasury Select Committee on Monday 5 November, shortly after the Budget, the Chancellor implied that the Treasury would meet the extra costs of the pension changes.  He said:

“In 2018 the Government decided that it was necessary to reduce the scope discount rate still further but on that decision we decided that the Treasury would absorb the additional cost. We have added a sum to the reserve and Departments will be reimbursed for the additional costs of the 2018 scope change.”

When asked if that would be for every year ongoing, the Treasury official accompanying the Chancellor at that evidence session said:

“It is actually for every year”.

On the face of it, that sounds as though the Government are ready to compensate Departments for the extra costs incurred. I hope the Minister will address this when he sums up, because if that is the case, it will be warmly welcomed by chief constables, the public and Members on both sides of the House.

The picture is not really that clear though, because in response to an urgent question on Tuesday 6 November, the Minister for Policing did not say that the money would come from the reserve and go through Departments. In response to a question from me, he said that

“it is my intention to work through the issue and come to the House in early December with a funding settlement that works.”—[Official Report, 6 November 2018; Vol. 648, c. 1387.]

He also said that the outcome of the question of where these extra costs would fall would be decided in the comprehensive spending review. These two statements appear to be in contradiction: either the Treasury will fund it, or the issue is not settled and will be settled, or not, in the CSR.

To add to the confusion, a written answer from the Chief Secretary to the Treasury on 9 November read:

“Budget 2018 confirmed additional funding for expected costs in excess of the level envisaged at Budget 2016. Government will review police spending power and further options for reform at the provisional police funding settlement in December.”

I hope the Minister can clear this up. Has the Budget set aside further funds for the police to cover these costs, so that the fears of chief constables about their impact need not come to pass, or as he has implied, is the matter undecided and to be settled in the CSR? It cannot be both: either it has been settled, or it has not. What is the correct understanding that the House should have of the financial position?

I want to deal with one more issue that often comes up in these debates: the issue of reserves. During last week’s urgent question, there were several references to these reserves, the implication being that there was a large unused pot of cash sitting there, ready-made to deal with such situations. My own force in the west midlands has publicly set out the position on reserves. It does have reserves, but they are there to deal with issues such as capital costs, the self-insurance of vehicles, protective equipment, major incidents and so on, and the West Midlands force is already committed to running down these reserves at around £20 million per year. The capital and budget reserves will be gone completely by the end of the next financial year, and on current plans, 70% of the total current reserves will be gone by 2020, so this money is already committed and not available to meet the pension costs. In a couple of years, all that will remain will be reserves for essentials such as civil unrest, terrorist attacks and the self-insurance of vehicles.

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[Rachael Maskell (York Central) (Lab/Co-op)]

It is a pleasure to follow the excellent speech from my hon. Friend the Member for Ilford North (Wes Streeting) about the real issue of policing here in the capital, but I want to reflect on North Yorkshire. Everybody says what a wonderful city York is, and I agree with that, but it is really challenged, too. Crime is an issue that has been brought to my attention by so many of my constituents, and we have challenges and pressures on our police service.

I want to raise a number of points associated with that. Antisocial behaviour has provided our city with a poor label at night and we do not have the policing available to bring that under control. As is the case for other hon. Members, county lines has also had a real impact on our city. Individuals are preying on the most vulnerable people in our city. I spent an evening with the police recently, and I was devastated to hear how the county lines special operations unit was being cut. These are vital prevention services being cut, and it is because the money clearly is not in the budgets to be able to provide security and safety to the most vulnerable children in our communities and the most vulnerable people in our cities.

The police also pick up capacity where other services fail. We cannot dismiss the 50% cut in local authority funding and of course the cuts to safer neighbourhoods partnerships, which are formed with the police. The police are ever more having to subsidise for those serious cuts in our communities. I must also raise the issue of the serious impact on mental health and the fact that our police officers are often at the frontline of providing mental health services to some of the most vulnerable people we know in our communities. Of course, where there are pressures on the mental health service—despite the warm words from the Prime Minister—the money is not reaching the frontline. Services are seriously at risk and stretched, and this is putting people in my constituency at risk. If the cuts we are hearing about to our police service are added to that, it will put a real pressure on those services.

Again, I want to reflect on an evening I spent with the police. I was meant to be looking at some of the work they were doing to tackle county lines, but instead I was diverted to spend five hours with a woman with dementia, whose partner had tried to take his life. Fourteen professionals were involved in that case, which diverted resources. Five police officers were involved in trying to provide safety for that individual because of the failed mental health services. The police are having to pick up the price of other services which are not able to fill those spaces, an issue I am sure the Minister will wish to respond to because it has an overall impact on the budgets available to policing. That is what we are discussing tonight: the impact that this is having on our communities, and on their security and safety. Crime in York has now become an issue that is frequently not only in the headlines of our newspapers, but on the lips of my constituents, as I speak to them day by day. They are increasingly concerned about what is happening in our community. We have many pressures in our city, but crime has shot up the agenda—

[Mr Deputy Speaker (Sir Lindsay Hoyle)]

Order. Sorry, but this debate is about contributions to pensions. We have to very careful here, because otherwise we could open up all areas. As much as I love York and know how important it is, and as much as you may be right and I understand all the aspects you have raised, I must ask you to include pension contributions as well, in order to help me.

[Rachael Maskell]

I am grateful for your guidance, Mr Deputy Speaker. I was about to turn to the pension changes. Police and crime commissioner Julia Mulligan wrote to me just yesterday about the pressures. This issue applies not only to North Yorkshire police; as the Minister will know, as of tomorrow it will affect the North Yorkshire fire and rescue service because the services are to be amalgamated. We are therefore not only putting community safety at risk but risking safety with regard to the fire service—

[Mr Deputy Speaker]

Order. Sorry, but as much as the hon. Lady wants to spread the debate, it is not a debate about the fire service and it is not about dementia. It is about police pension contributions. I am trying to be as helpful as I can be; if Members can ensure that the debate is about pension contributions, the lack of police numbers and the fact that they may have to be cut, that will help me a lot. Bringing in the fire authority does not help me in the slightest.

[Rachael Maskell]

Thank you, Mr Deputy Speaker. The motion refers to changes to police employer pension contributions. As I was just explaining to the House, in North Yorkshire, as of tomorrow, the fire and rescue authority and the police will be amalgamated, so the fire and rescue service is absolutely pertinent to the debate. I shall therefore continue as I was, Mr Deputy Speaker.

As I have already highlighted, the cost to North Yorkshire police will be £1.6 million in 2019-20 and £4 million in 2020-21. That is on top of the £10 million that is already having to be saved. The police authority was seeking to recruit another 70 police officers but is now having to put that opportunity on hold.

[Gareth Snell (Stoke-on-Trent Central) (Lab/Co-op)]

My hon. Friend is advancing an important argument, which is that every penny that the police now have to put into increased employer contributions is one penny less that they have to spend on the mental health services and employer support that they have to provide, and on vital community services. Does she agree with my local chief constable in Staffordshire, who has said that cuts like this will not only impact on police numbers, but mean that in some parts of the county the services that he provides in addition to traditional policing will just have to stop?

[Rachael Maskell]

My hon. Friend makes a really important point. Policing is not just about the police service; it is about the wider partnerships that are formed.

Let me return to the point I was making—

[Gareth Thomas]

Will my hon. Friend give way?

[Rachael Maskell]

I will just make a little progress, then I will be happy to give way.

The problem raised by the police and crime commissioner is that there is no certainty in the future, beyond 2019-20, about the impact of the cuts to pension contributions, so it is really important that we have clarity from the Minister about the future of the police force, not only in the short term but in the long term.

[Gareth Thomas]

My hon. Friend is making a good speech about her area. Does she agree that the Minister and his Home Office colleagues will have an early opportunity to put right the debacle that has motivated my right hon. Friend the Member for Wolverhampton South East (Mr McFadden) to secure this debate? The report on the police grant has to come before the House soon; perhaps my hon. Friend might like to encourage the Minister to intervene on her, perhaps at 5 o’clock, to set out a specific guarantee that the Government are going to fill the gap identified by my right hon. Friend?

[Rachael Maskell]

My hon. Friend is absolutely right that the Minister has a real opportunity to alleviate the fears of police and crime commissioners and those with responsibility for policing up and down the country, and to address the real shortfall they are facing in their budgets. I would of course welcome any intervention from the Minister in which he did that, because there is clearly a lot of concern throughout the country, not only for our constituents’ security but for the services themselves.

[Chi Onwurah (Newcastle upon Tyne Central) (Lab)]

In the absence of an intervention from the Minister, perhaps I can echo what my hon. Friend is saying. Northumbria police and crime commissioner Vera Baird has written to me to say that the

“pension changes demanded by the government could cost Northumbria £11 million per year…equivalent to a loss of 220 Police Officers.”

That follows a cut of a third in funding since 2010, which has already led to the loss of 1,000 police officers.

[Rachael Maskell]

I thank my hon. Friend for her intervention. We all know that Vera Baird, a police and crime commissioner, commands so much respect across the whole community of police and crime commissioners. She does not mince her words in highlighting the real pressures that are now bearing down on her budgets in Northumbria. It is clear that, across the country, police and crime commissioners are being put under undue stress in trying to balance sheets that cannot be balanced.

Let me return, if I may, Mr Deputy Speaker, to the situation in North Yorkshire. I am not sure whether you heard my response to the point that you made to me about the fire and rescue service.

[Mr Deputy Speaker (Sir Lindsay Hoyle)]

Just to help: I recognise that you are bringing the subjects together. It is about trying to save money and being forced to do so, but what I want you to do is to link that up to pensions. As long as you link the subject to pensions, I am comfortable, I can assure you.

[Rachael Maskell]

I am really grateful to you, Mr Deputy Speaker, for providing that clarity. This absolutely does link into the pensions, as the police and crime commissioner has set out for me. There is a perception that there is a large financial reserve within the budgets to absorb costs such as pensions but, clearly, that is not the case, and it is certainly not the case in North Yorkshire. Home Office figures of 6 November 2018 showed that the financial reserves of the North Yorkshire fire and rescue service, as a share of core spending power, were the third lowest in the country, at just over 20%, which equates to £6.6 million. The amalgamation of the fire service and the police will, therefore, bear down on the police pension. The same is happening in the areas represented by my colleagues. In fact, it is estimated that the fire and rescue service will have to lose 37 firefighters, which is 12% of the overall total number of firefighters in my constituency. Again, that will have a real negative impact on safety. That is a direct result of the cuts that we are debating this evening.

[Mr Deputy Speaker]

I must say to the hon. Lady that we are not debating cuts; we are debating the pension contributions to the police. I am trying really hard to allow you to raise cuts in other areas, but I would be much happier if you could please keep pension contributions in part of your speech.

--- Later in debate ---

[Rachael Maskell]

Let me clarify my point, Mr Deputy Speaker. Cuts are coming because, obviously, the police and crime commissioner is having to divert the budget into pensions. As a result, services are being cut. Therefore, that has a negative impact on the services that are being provided. So this is directly about cuts as a result of having to divert budgets. I hope that that clarifies that point. That is what police and crime commissioners are having to manage.

[Mike Amesbury]

Just to clarify, is the police and crime commissioner for North Yorkshire a Conservative?

[Rachael Maskell]

indicated assent.

[Mike Amesbury]

I have just received a tweet from a Tory councillor in Cheshire who claims that we are posturing in this debate. What does my hon. Friend say to that?

[Rachael Maskell]

Julia Mulligan wrote to me yesterday, before this debate, to urge me—[Interruption.] Yes, a Conservative police and crime commissioner. She wrote to me to urge me to make the case to the Minister about the impact that these pension contribution changes will have. Clearly, that has a direct effect on the services that can be run, so it is not posturing. We are deeply, deeply concerned about the safety of our communities as a result of the redirection of resources.

[Chi Onwurah]

Let me emphasise and underline my hon. Friend’s point about the connection between the changes to pension contributions and future cuts. The police and crime commissioner for Northumbria has said that, should these changes to pension contributions go ahead, she will need to make savings of £4.3 million in 2019-20 and a further £6.7 million in 2020-21.

[Rachael Maskell]

I thank my hon. Friend for providing that clarity. Yet again, we are talking about services that are having to be reduced as a result of resources being diverted into pension pots. These services have clearly not been receiving the revenue to properly substantiate their current pensions. For our police and crime commissioners, this means that £1.5 million will have to be diverted just to address the fire service alone. I have mentioned the loss of firefighters as a result, but there is also a lack of resource to deliver the replacement of five fire engines because of the budget being diverted. When it comes to crewing, over a third of the day’s shifts at fire stations are affected as the budget is diverted into the pension contributions that will have to be made. This is happening as a result of the new pressures and demands on the service. The police and crime commissioner also highlights the cost of crewing three quarters of the 24 retained fire stations.

[Mr Deputy Speaker (Sir Lindsay Hoyle)]

I really am sorry; I am trying very hard to be helpful. It is no use the hon. Lady shaking her head at me. I did not pick the title of the debate. The title is very clear: police pension contributions. As much as fire crew numbers, fire stations and fire engines are important—and I am 100% in agreement on those points—unfortunately the debate is not about the fire service.

[Rachael Maskell]

Yes, it is.

[Mr Deputy Speaker]

No, it is not. I am sorry, but the title is on the annunciator: police. It does not mention fire services. I am going to have to give a ruling, which I did not want to do. The debate is about the police, not fire services. I understand that there is a consequence, but let us stick to the effect of police pension contributions.

[Rachael Maskell]

With respect, Mr Deputy Speaker, I can see that the title on the annunciator is actually different from that on the Order Paper. I am speaking to the title on the Order Paper, which is “Changes to police employer pension contributions.” North Yorkshire police will tomorrow incorporate the North Yorkshire fire and rescue service, so these points are directly related to the title on the Order Paper, as opposed to the title on the annunciator.

[Mr Deputy Speaker]

Unfortunately, I think you have answered your own question—tomorrow, not today. Let me help the House. There are other Members who wish to speak. The 5 o’clock deadline has passed, so there is going to be no statement from the Government tonight. By all means, let us hear speeches, but if this is about keeping the House going, there is no purpose at this stage.

[Rachael Maskell]

Thank you for that clarity, Mr Deputy Speaker. As I was saying, we are talking about future contributions to the pensions scheme across the board. Therefore, whether the changes to the police are happening tomorrow or into the future beyond that, clearly there will be a devastating impact across North Yorkshire, as I have highlighted in my contribution. I will leave it there because I know that other hon. Members wish to speak.

[Mr Deputy Speaker]

What a great choice.