More than £160 million wiped from budgets through new pension calculation  

Police leaders have issued “stark” warnings after a revaluation of the police pension is set to have a “significant impact” on the future funding for forces across the country, potentially wiping out nearly all of the latest increases gained through rises in Council Tax precepts.

Sep 27, 2018
By Tony Thompson
Chief Constable Dave Thompson

Speaking at the Excellence in Policing conference on Wednesday (September 26), Dave Thompson, chief constable of West Midlands Police and the National Police Chiefs’ Council lead for finance and resources, said the revaluation was his “biggest worry” and represented a looming challenge ahead of the next comprehensive spending review (CSR) due to take place next year.

Last December the Government gave police and crime commissioners the power to raise Council Tax contributions by up to £1 per month per household, which theoretically enables them to increase their funding by a total nationally of up to £270 million to help meet demands.

However, the cost of the pension revaluation will have to be met by the forces themselves and in that event, as much as £160 million (60 per cent of the income derived from the precept) could be wiped out.

“The impact could be really significant,” said Mr Thompson. “It’s a looming challenge that we are working through. Our general advice is to panic slowly and we are working with government on this.”

The precept was intended to enable budgets to remain at 2015 levels, but while the overall size of the grant has remained the same, increasing amounts of money have been diverted to other areas, such as funding bail changes, the Independent Office for Police Conduct and the Gangmasters and Labour Abuse Authority, meaning less money is available to forces.

Mr Thompson said that the current, “outdated” per-capita funding formula has created a huge disparity for police forces across the country. The amount of money raised through the use of the precept changes depending on the affluence of the local tax base. Forces with more deprived areas and those with younger, more diverse populations end up with less additional income. In Surrey, for example, 57 per cent of force funding comes from the precept while in Northumbria, this figure falls to just 20 per cent.

This means the areas with the largest additional income from the precept are those that have had the smallest reductions in their overall budgets, while those with highest cuts are receiving the lowest amounts of additional income from the levy.

Mr Thompson said planning beyond the current year was extremely difficult.

“We are arriving at a position where I cannot determine any logic whatsoever as to what forces get in terms of money. There are consistent inconsistencies.

“Funding has not fallen as in the first CSR, but less of the grant now goes to forces. The new CSR is likely to be the most challenging ever.”

Additional pressures from Home Office technology projects and the impact of Brexit are also contributing to concerns.

“Council tax used to be the way that forces would top up for additional investment, but it is now becoming the only way forces can bridge their funding challenges,” said Mr Thompson.

Forces are unable to run in deficit so the only way they can balance their books is by making cuts, either to their workforce or the services they offer. The situation is, according to Mr Thompson, untenable.

With GDP growth projections being lower than previously said, combined with unfunded promises for the health service, Mr Thompson said it will be a big challenge to present a strong case for more funding.

His concerns were shared by Zoe Billingham, HM Inspector of Constabulary, Fire and Rescue Services (HMICRFS). “We are at a critical point for policing,” she told EIP delegates. “The idea of taking 20 per cent out of policing in 2010 was extremely daunting – what could face policing in next spending review could be even more daunting.”

Ms Billingham warned that increased complexity, expectations and demand are stretching services to breaking point and setting off alarm bells due to the potential impact on the ability of the police to continue to be effective or keep the public safe.

“The job of HMICFRS is to warn when it has concerns and we are doing so in the starkest terms.”

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