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Police Funding (Dorset)

1 pm

Mr. Robert Syms (Poole): It is a great pleasure to see you in the Chair, Mr. Conway. First, I should apologise on behalf of my hon. Friend the Member for West Dorset (Mr. Letwin), who is otherwise engaged with his duties as shadow Home Secretary, but who offers his support for this debate. I have also contacted the Minister's office about my hon. Friend the Member for Christchurch (Mr. Chope) making a brief contribution to the debate, and I am sure that the Minister is happy with that. I am also pleased that my other Dorset colleagues, the hon. Members for South Dorset (Jim Knight) and for Mid-Dorset and North Poole (Mrs. Brooke), are attending this important debate.

Dorset police are a good and efficient force, and Dorset's crime levels are low compared with the rest of the country. However, there is an on-going funding problem, which I am here to address. Neither I nor my colleagues feel that Dorset is being treated fairly. The Government's headline settlement figure for the increase in policing is 6.1 per cent., and 3.3 per cent. is maintained for central initiatives and priorities, including the crime fighting fund. The figure for centrally provided services such as the National Crime Squad, and for the general increase in respect of individual police authorities, is just 2.8 per cent. Although forces such as Dorset's receive a share of the crime fighting fund, rural moneys and Airwave funding, the settlement is not particularly good. Differences in funding resulting from the present formula cannot be explained by the different spending needs of police authorities. The matter is dealt with in part in the recent White Paper, which in general we welcome.

The level of policing in Dorset is good despite the low level of funding. The 2000-02 budget provided real opportunities to improve and increase operational effectiveness. Dorset police are grateful for Government support for its private finance initiative project, and for grant in support of party conference policing, which is particularly useful in Dorset. Continuation of the 2002-03 crime fighting fund, and of rural and Airwave grants, is also most welcome.

Our principal concern is that Dorset police receive the second lowest amount of central funding per head of population of any police authority in England. The difference between Dorset police and the rest of the service increased following the 2001-02 settlement, and matters have not been improved by the 2002-03 settlement. Dorset remains 3 per cent. below the third lowest funded authority, receiving only £85.40 per head, yet the weighted average is £110.39. If Dorset received the average, it would receive an extra £17 million in central funding.

Last year, Dorset police received the third lowest funding increase of any authority. For 2002-03, Dorset police will receive the standard spending assessment increase of 2.8 per cent., which is approximately the average. However, the settlement is not enough to cover even basic police pay increases of 3.5 per cent., and national estimate pension increases of 8 per cent. Dorset cannot continue to absorb a funding shortfall through reductions in expenditure and increases in precept beyond the level of other authorities. According to

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future funding figures in the comprehensive spending review, and to our prediction on police pensions, times will be hard for police authorities, particularly Dorset's. There is much concern that Dorset will suffer disproportionately, and that the poor overall settlement will exacerbate an already difficult funding situation.

The on-going low level of central funding has two direct results, the first of which affects resources available to fund policing in Dorset. I am pleased that the crime fighting fund has enabled an increase in officer numbers, but Dorset still has 95 more members of the public per police officer than the English average. It has a population of 511 per police officer, compared with the English average of 416.

Secondly, low central funding affects the level of council tax paid by the population of Dorset. Dorset police authority carefully balances the needs of policing with the cost to council tax payers, and expenditure per head of population that is 22 per cent. below the service average is testimony to that. Nevertheless, a low central contribution means that Dorset currently has the third highest council tax of any police authority, a situation unlikely to improve in 2002-03.

Jim Knight (South Dorset): I agree with the hon. Gentleman that, overall, Dorset does not get its fair share, but while he is on the subject of council tax, I remind him of one piece of good news that he has not so far mentioned. The Secretary of State for Transport, Local Government and the Regions announced in the local government White Paper last week the intention to remove the council tax benefit subsidy limitation. That is good news for us because it should result in a reduction in the precept.

Mr. Syms : It should do. It is good news, but we will still have a fairly high precept in Dorset.

The 2001-02 budget is £3 million below the total needed to provide the same level of service as in 1992-93. Since 1995-96, the budget has increased by 29 per cent., but central funding by only 17 per cent. Expenditure on pensions has increased by 83 per cent. in the same period. In 1995-96, Dorset police authority received 78 per cent. of its funding from the centre. By 2001-02 that had been reduced to 70 per cent. Although the budget requirement for 2002-03 has not yet been finalised, the discussions currently going on with the police authority are for a precept increase of between 10 and 14 per cent. That is likely to keep us somewhere at the top of the list of precepting authorities.

Issues of real concern to the authority include changes in grant allocation, the future of the crime fighting fund—the CFF—rural funding and the funding of pensions affecting Dorset in particular because of its low central funding. What help could be provided? It is important that floors and ceilings have been applied for 2002-03. That is welcome. It is important to continue to apply any funding changes that may arise from data or methodology changes, especially because of the proposals in the local government White Paper.

It would be helpful if there were more stability in the CFF and rural grant, which could continue outside the standard spending assessment and affect the time for which the grants were allocated. Assurances on the medium-term future of rural and CFF funding could be

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made to assist planning and budget strategy. Pensions data should be updated, perhaps with assurances provided by external auditors. Increased predictability of general fund settlements for future years would be helpful. Spending review figures have not provided the detail that individual police authorities could use for financial planning. That must be improved.

The additional detailed settlement information that is available from the website of the Department for Transport, Local Government and the Regions for the first time this year has helped us to analyse the position, but further comparison tables would make the analysis more complete and straightforward. We are interested in seeing how the elements of the formula have changed to affect our settlement. Comparisons with other forces are helpful. The availability of capital grant information at the same level as information on revenue funding would assist us greatly.

Recent years have seen a trend in capital information being made available much later in December, or even in January. The two budgets are necessarily interlinked, and it is difficult for the authority to give firm budgetary direction when part of the settlement is not known. Dorset police support a formula-based method of fund allocation, but some issues relating to the formula must be taken into account in any future developments.

The first such issue is area cost adjustment, something that comes up again and again in the south-west. A report produced in 1996 at the Government's request acknowledged that the majority of police expenditure went on pay and pensions and that, apart from the housing allowance and London weighting, there was no variation of costs between authorities. The report recommended a recalculation of the ACA, which would have expanded recompense for higher rates and support staff costs to areas adjoining the current ACA area. That would have provided an additional £1 million funding to Dorset police. It is important for Dorset that proposed changes take that into account.

The second area of concern is SSA variations. Clearly, the White Paper on local authority finance seeks to reassure all authorities that SSA variations will be carefully managed to avoid significant changes in funding. However, to put SSA changes into context, their effect on relatively small authorities such as Dorset can be devastating. For example, if an authority received 0.99 per cent. of total police SSA rather than 1 per cent., its funding would be reduced by £1 million.

The third area of concern is the data used in the pension calculation, which were provided as long ago as 1995. It cannot be right that funding for such an important aspect of expenditure is based on potentially out-of-date information. To give an indication of the scale of the financial effect of police pensions, they accounted for 10 per cent. of overall expenditure in 1995-96. In 2001-02, they represent 15 per cent., and it is estimated that by 2005-06 they will represent 17 per cent. It is vital that authorities can be reassured that the data that is used to allocate funding is accurate, especially in the case of authorities such as Dorset that are at the bottom of the funding level.

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Mrs. Annette L. Brooke (Mid-Dorset and North Poole): Does the hon. Gentleman agree that there could be no better time to review the problems that he is describing, given the recent White Papers on police reform and local government settlement reform?

Mr. Syms : I agree with the hon. Lady, but it is always a matter of winners and losers when one is dealing with a formula. We Dorset Members are arguing the best case for our authority, which has not been treated fairly. It has struggled with settlements over a long time, including under the previous Government, and that has led to problems in terms of police funding.

Fourthly, the review of SSA methods of calculation that was announced in the White Paper should take full account of the unique funding position of police authorities. All police authorities have a lower proportion of their funding met through council tax than local councils, owing to direct police grants. That has meant that the impact on council tax payers of changes has been disproportionate when applied to police authorities.

Jim Knight : My right hon. Friend the Secretary of State for Transport, Local Government and the Regions has said that when the formula is reviewed there will be winners and losers. I am sure that the hon. Gentleman agrees that we have to keep reminding the Government that we in Dorset have been losers for too long and it is about time we were winners. When the formula is reviewed, we must ensure that we are not on the losing side again.

Mr. Syms : That is absolutely right. As local Members of Parliament, we experience pressure from our constituents for more policing, we put pressure on the chief constable and the police authority, and the police authority faces the problems of juggling the budget. Difficult issues such as pensions are starting to have a big impact on Dorset's funding.

We have mounting problems in Dorset. We are second lowest in terms of funding, we have one of the highest council tax precepts and our low budget base will inevitably cause the chief constable difficulties in undertaking policing in the county. I look forward to hearing the Minister's response after my hon. Friend the Member for Christchurch has, I hope, supported me in my arguments.

1.12 pm

Mr. Christopher Chope (Christchurch): I certainly support my hon. Friend the Member for Poole (Mr. Syms) and congratulate him on securing the debate.

This has been an issue for us in Dorset for many years. Last year, when Dorset Members took a deputation led by the chief constable to see the Minister's predecessor, he gave us to believe that we had a strong case and that the Government would respond to it. It is therefore particularly disappointing to find that this year's settlement is the same as before.

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In essence, the Government say that Dorset police authority needs to spend only £75.5 million a year, yet the police authority says that it needs to spend £85.5 million a year. That extra £10 million has to be funded totally by the council tax payer. As the Minister knows, a disproportionately high number of council tax payers in Dorset are in pensioner households and on fixed incomes. If they are faced with a 10 per cent. to 14 per cent. increase in their police precept this year, they will have to cut other items of household expenditure.

We in Dorset have the third highest council tax of any police authority, but because of our high property values we make the highest per capita contribution towards the police of anywhere in the country. As my hon. Friend said, the fact that our spending is so much below the national average suggests that something unfair is happening in the system. I look to the Minister to sort it out for Dorset by bringing that to an end.

1.14 pm

The Minister for Police, Courts and Drugs (Mr. John Denham) : I congratulate the hon. Member for Poole (Mr. Syms) on securing this debate on police funding in Dorset. I am pleased to see so many of his Dorset colleagues from different parties in the Chamber. This is a useful, albeit brief, opportunity to air some of the concerns and issues about crime and policing in Dorset and to discuss the resources that the Government provide to support policing in Dorset.

It is worth emphasising the point made by the hon. Member for Poole that the record on crime in Dorset—that is what people are primarily concerned about—is good relative to the remainder of the country. Crime recorded by police in Dorset fell by 3.8 per cent. during the 12 months to March 2001, which is better than the national picture—crime throughout England and Wales fell during the same period, but by 2.5 per cent. Throughout the south-west, recorded crime fell by 2.6 per cent. during the 12 months to March 2001 and since 1997 has fallen by 14.6 per cent. Those are important reductions in crime. During the past five years, recorded crime in Dorset has fallen by 22.1 per cent., compared with the national average for England and Wales of 11.75 per cent. Detection rates in Dorset are also slightly better than the national average in England and Wales. Some good results should be recorded about the level of crime in Dorset.

We are committed to raising police standards wherever necessary, and in our recent White Paper we set out more details of our proposals to set up a new standards unit. We have established in Dorset, as in other parts of the country, local crime and disorder reduction partnerships to ensure that the police can work effectively with other local agencies to tackle crime and antisocial behaviour at local level. We are backing that with the biggest ever investment in crime reduction. The crime reduction director for the south-west tells me that Dorset has received around £2.6 million from the crime reduction programme to help with crime reduction initiatives throughout the county, ranging from large-scale closed circuit television projects to burglary reduction projects in houses in multiple occupation. An additional £650,000 has been allocated from the community against drugs fund in the current financial year to tackle drug markets and reduce drug-

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related crime. We are making a significantly broader investment in fighting crime in Dorset, which will be welcomed by all hon. Members who are present this afternoon.

We have recently announced that the provisional police funding settlement for 2002-03 at national level will be just over £9 billion. That is a 6.1 per cent. increase and builds on the record 10 per cent. increase last year. The amount going directly to police authorities, including funding for specific initiatives—for example, the crime fighting fund, the rural policing fund and Airwave, all of which Dorset benefits from—will increase by 5 per cent. The settlement is just part of our commitment to crime reduction.

Through the settlement for next year, Dorset will receive an increase in total standing spending, excluding specific initiatives, of 2.9 per cent. over this year, which is higher than the average increase for forces in England and Wales. In addition, Dorset will receive £1.892 million through the crime fighting fund for the specific purpose of recruiting additional police officers to police the towns and villages of Dorset; that is over and above the amount of money that is received in the police grant.

Dorset continues to benefit from additional funding towards the cost of Airwave, which is the new radio communications system for police forces. It will receive around £200,000 towards that next year. That is a centrally provided budget, but it is for something that is an absolute operational necessity to the police service—decent communications are essential—as is the money for police officers. The fact that it does not appear in the grant should not lead us to believe that Dorset is not receiving a more substantial increase in resources, which will be of practical benefit to the police and communities.

We recognise the problems of policing rural areas, and that is why in the last spending settlement we announced that an extra £30 million will be invested for the next three years in those police authorities that contain substantial rural areas. Dorset receives £442,000 from the rural policing fund this year, and it will receive slightly more than that next year. This is additional funding for the force over and above the grant settlement that we discussed earlier. I am confident that the extra resources will help to sustain quality rural policing. It is for forces to decide how best to use the additional resources, and they must explain how that is done in their annual policing and best value performance plan.

Dorset has used the money to provide two mobile community support units with facilities to report crime and incidents online. The units regularly serve rural areas and market towns. Specially selected support personnel staff them. Visits to communities by those units are often arranged to coincide with a visit from the local community officer. Those facilities increase police presence and visibility, and will give added reassurance to those living in rural areas. I understand from the chief constable that the units have been well received and that the facilities are being used effectively. Indeed, I have an outstanding invitation from the chief constable to visit the units in Dorset, which I hope to be able to do next year. When the crime fighting fund and the rural policing fund are taken into account along with grant funding, Dorset police force will benefit from an overall increase in funding of 3.4 per cent.

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The hon. Members for Poole and for Christchurch (Mr. Chope) reasonably raised several issues about funding. I shall refer the matters relating to information available on the DTLR website to my ministerial colleagues to see whether they want to respond.

I turn to a substantive issue. Police pensions represent an increasing burden to many police authorities. That has been reflected in the increasing size of the pensions component within the funding formula, which has risen from 13.2 per cent. in 1998-99 to 14.5 per cent. in 1999-2000. Rising costs are a matter of concern to both the police service and to Ministers, and a review of the issue by the Home Office and Treasury officials is nearing completion. The options include establishing fully funded schemes and changing the way in which expenditure on police and fire pensions is presented in the accounts. The views of police authorities and other key stakeholders have been sought.

In the recent White Paper in which we examined future arrangements for police pensions, we acknowledged the importance of having a system of benefits that is appropriate to the 21st century and that gives greater certainty to police authorities in planning their pension budgets. I hope that I shall receive a report on the alternatives in the new year. Meanwhile, we intend to update the pensions data used in the police funding formula in time for the next settlement, which addresses a specific point raised by the hon. Member for Poole.

I turn to the formula, the SSA process and the area cost adjustment. In the White Paper on local government, which was published last week, the Government outlined a number of weaknesses in formula grant distribution, but stressed that formulae can continue as the basis for distributing the great majority of general grant. However, the systems must be fairer and more intelligible, although formulae cannot take into account every local circumstance in each police authority. The White Paper emphasised the Government's commitment to introduce new grant formulae to replace SSA from 2003. That will clearly have consequences for the formula for police authorities, which we will need to address.

The area cost adjustment is designed to reflect the higher costs of providing a policing service in London and the south-east. Some forces regard the ACA as inappropriate in a service in which pay is nationally determined. It is also true that the dates used are volatile and can swing significantly from one year to the next. The methodology for determining the ACA is a matter for the DTLR. A review is under way and we are taking a close interest in that.

Jim Knight : Last week, when the Secretary of State made a statement on the local government White Paper, he repeated his assertion that the formula was unfair. Does my right hon. Friend agree that the formula is unfair, particularly in relation to the police? My constituency has one of the lowest levels of funding in the country and one of the most efficient forces, yet we are paying the highest proportion of council tax. It will

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be of some comfort to council tax payers in Dorset if the Minister agrees that that is unfair and that he hopes that we will get something better.

Mr. Denham : I am sure that it would be of enormous benefit to the taxpayers of Dorset if I were to say what my hon. Friend invites me to, but it is more prudent to say that we recognise that worries exist about the way in which the area cost adjustment is calculated and operated. It is not inherently unfair and it should be possible to produce a system that is better and more widely understood, which will also mean that it is better supported.

Police numbers are of great concern to everybody. As we announced yesterday, we have had the largest intake of recruits into the police service of England and Wales since 1979, and we are well on our way to achieving a record number by April 2003. Dorset is already in the position of having record numbers of police officers—1,360 at the end of September, which is 76 more than in March 1997. The hon. Member for Poole talked about officers per head of population. Some 18 forces, most of which are predominantly rural like Dorset, have fewer officers per head of population than Dorset. Therefore, although I cannot say that Dorset is in the strongest position, many have worse ratios.

We have record numbers in Dorset, which is good news. In addition, civilian support staff numbers have risen to 721; that is 126 more staff than in 1997. Civilian staff play a crucial role in releasing police officers from paperwork and jobs that can be done as effectively, and sometimes better, by civilians. That allows the record number of police officers to devote more time to professional policing work.

We have achieved that through the introduction of the CFF. Dorset police have been allocated 85 recruits from that fund. They were so successful in their recruitment efforts that, in 2000-01, they were able to bring forward part of this year's allocation and recruited 46 recruits through the CFF, compared with the 29 that they had been allocated. The excellent record on recruitment continues: the force expects to use all remaining allocation for CFF recruits for this year, and we are considering a request to bring forward into this year six further recruits that were scheduled and budgeted to be recruited next year.

I am pleased to say that wastage—a terrible term—which means the loss of officers to the force through resignation, retirement or movement to other jobs, has fallen in Dorset during the past year. Therefore, its record on retention and recruitment looks to be good. Both additional recruitment and the reduction in wastage have helped to achieve the record police officer numbers that Dorset enjoys today.

This has been a useful opportunity to raise a number of important issues. We are committed to providing Dorset, and indeed all police forces, with the resources that they need to continue to provide a quality service to the public. The hon. Member for Poole and his colleagues have raised legitimate issues for discussion, but I hope that I have been able to put those in context by talking about the good performance in Dorset in bringing down crime, and the excellent record in increasing the number of police officers who are there to serve the public.

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