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Mr. Paul Truswell (Pudsey): The announcement that my right hon. Friend has made about West Yorkshire will be most welcome and will go some way towards mitigating the £3.4 million that the service spent on policing the Bradford disturbances. Will he bear in mind, however, that the authority, like many others, also faces claims for riot damage? In the case of West Yorkshire, the amount is £7.5 million. Will he monitor the situation with a view to being equally generous when the final picture and its impact on the service and on police funding becomes clearer?

Mr. Denham: The amount that I announced is an improvement on the normal special grant criteria. Those criteria would have allowed for only a small payment for policing costs—only about £300,000 for West Yorkshire. I hope that the move to meet almost 64 per cent. of the extra policing costs will be seen as significant.

I can say nothing specific this afternoon about possible claims under the Riot (Damages) Act 1886. We shall have to wait and see what the position is. We are aware that the Lancashire police authority, for example, is determined to resist claims under the Act. I cannot speak for the authority, but it sees no reason why taxpayers' money should be spent on refunding insurance companies. I believe that that is some way in the distance, but I hope that the additional resources will be welcomed by the forces that receive them.

We have also considered the position of Greater Manchester police, which, as I have just announced, will receive £1.44 million to help to meet the costs of the disturbances. The Secretary of State and I have agreed that a grant of £3 million will be paid to Greater Manchester police as a contribution to the policing costs of the Commonwealth games in a few months' time. Until two or three months ago, Greater Manchester police was telling us that the costs would be £4.8 million, so £3 million is a fairly substantial amount. There was a £3 million hike in that cost, of which we were informed in November.

There cannot be a blank cheque for underwriting whatever costs Greater Manchester police says that it will incur. My officials are still in discussions with the police authority to ascertain whether further costs are justified, but comments of the sort that I heard the chairman of the police authority make today, suggesting that people would be put at risk, show a great deal less confidence in Greater Manchester police than I have.

Mr. Brady: The Minister has said that the estimate of the cost of policing has increased since the original estimate was given, but will he give an undertaking that if he is persuaded that the new estimate is accurate and

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the costs will be £7.5 million, the whole cost will be funded by the Home Office, not dumped on the council tax payers of Greater Manchester?

Mr. Denham: I have said what I have said. Until November we were told that the costs would be £4.8 million, and then someone said that they would be another £3 million. We are in discussions about the nature of those costs and we shall have to see what happens. Clearly, that would be additional substantial Government funding, in addition to the funding that has already been made available to the Commonwealth games. Of course we all want the games to be a success and a safe success, but equally there cannot be a blank cheque.

Mr. Stephen McCabe (Birmingham, Hall Green): My right hon. Friend has been generous in recognising the difficulties faced by many forces, but will he also recognise that when particular areas decide to bid for large events such as the Commonwealth games, it is done on the basis that local people, local business interests and others believe that there will be a financial gain as a result of attracting these events? Should not they also contribute something towards the policing costs?

Mr. Denham: My hon. Friend is right in the sense that we all hope that Manchester, and the north-west region, will benefit substantially from a successful Commonwealth games. I am quite prepared—I believe that this is the Government's attitude—to approach the issue in partnership, which is why there has been significant Government funding and why I was pleased to make the announcement that I made this afternoon. But I am aware of the reality that may have prompted my hon. Friend's question—that money that I find for the Commonwealth games in Manchester is money that cannot be made available to the police service in any of the areas represented by any of the other hon. Members in the Chamber. We must get the right balance between the needs that arise from specific events and the needs that exist in every area of the country, and I hope that we are doing so. That is why we do not like blank cheques, and why we consider issues very seriously and carefully, on the merits of each case.

For the coming year, we continue to set store by stability in the grant system, to help police authorities to plan ahead. As with this year, we have not proposed any changes to the method of police grant distribution for 2002-03. There will be no substantive changes to the operation of the police funding formula for next year, although of course data have been updated as usual. For 2002-03, the average increase in grant-supported expenditure for police authorities will be 2.9 per cent.

The formula has many strengths. It is generally acceptable to much of the policing community; it also has well recognised limitations. It is largely based on the way in which police forces allocated officers to services in the early 1990s, so we are working to update the formula in line with the policing needs of the next five years. We have a working group with the Association of Chief Police Officers, the Association of Police Authorities, the Department for Transport, Local Government and the Regions, the National Assembly for Wales, the Local Government Association, the Greater London Authority and the Metropolitan police. That group is considering a range of options to update the funding formula,

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particularly with regard to the police activity data that underlies it. The group is also considering how best to deal with the additional costs that may arise from policing especially sparsely or densely populated areas—an issue raised earlier in the debate.

During the consultation on the grant this year a variety of issues have been raised about the formula. Those who raise such issues always assume any change will be to their benefit, even though no change will ever produce only winners. However, my right hon. Friend and I have concluded that this is the time to undertake a serious and wide-ranging review of the formula. As part of that review, we shall want to examine all the issues raised in the consultation and seek to ensure that the grant formula properly supports the police service of England and Wales on its key role of tackling criminality, reducing crime and tackling the fear of crime.

Where possible, I should like changes to the funding formula to be introduced, after consultation, in time for the provisional police funding settlement for 2003–04, but the ability to do that will depend on making good progress in the months ahead.

Dr. Ashok Kumar (Middlesbrough, South and Cleveland, East): I have listened carefully to what my right hon. Friend has said about the annual settlement. I have a briefing from the Cleveland police authority in which I am told:

Is my right hon. Friend aware of that? The chairman of the police authority has said that the police precept will have to increase by at least 50p a week—about £26 on a band D council tax bill. That is a serious consequence of the settlement.

Mr. Denham: I shall write to my hon. Friend about the position in his authority, but I have set out pretty clearly that this is a good settlement, taking into account not just the grant settlement, but the additional funding, through the crime fighting fund, to recruit additional police officers—plus the 30 per cent. increase on average in capital funding, together with the additional resources from which many forces benefit. Of course, it is for police authorities to set their precepts, and we expect them to do so in a reasonable and prudent manner, but those who are trying to represent the settlement as a particularly poor one are really not reflecting the contribution of the different sources of funds that I have set out this afternoon.

Mr. Roger Williams (Brecon and Radnorshire): I was pleased to hear that the Minister has consulted the National Assembly for Wales on the future of the formula. The settlement has had a mixed reception in Wales, but there is a growing feeling that police functions and police funding should be devolved to the National Assembly for Wales. Has his Department had any discussions with the Secretary of State for Wales or the First Minister, with a view to making progress?

Mr. Denham: I think that I can be absolutely confident in saying that no such discussions have taken place in the six or seven months that I have been in this job, and I am not aware that any took place previously, but we enjoy

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in the devolution settlement an extremely good working relationship with National Assembly for Wales at official and political level. The Assembly shares absolutely our commitment to tackling criminality, reducing crime and tackling the fear of crime. I have made a number of visits to Wales, as I have to the regions of England. We have a good, effective working relationship, and I hope that we can build on it in the years to come. We are determined to reduce crime and to lessen the fear of crime. The investment that I have announced will help the police to play their key part in tackling crime and disorder.

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