2003/04 provisional grant settlement

Report: 4
Date: 10 December 2002
By: Treasurer

Summary

The report summarises the contents of the 2003/04 provisional local government finance settlement as they impact on the MPA.

A. Recommendation

1. Members are recommended to consider the initial conclusions of the impact of the provisional grant settlement in the context of the original report circulated for this meeting and the draft budget submission.

B. Supporting information

Settlement announcement

1. The provisional local government finance settlement for 2003/04 was announced on 5 December 2002. Information relevant to the Metropolitan Police Authority has been provided by both the Office of the Deputy Prime Minister (ODPM) and the Home Office. There remain a number of unresolved issues particularly in relation to some specific grants to be allocated by the Home Office. However there is sufficient information to allow broad conclusions as to the Authority’s grant funding for next year.

2. Attached to this report are copies of a letter from the Home Office setting out specific information for the Metropolitan Police Authority (Annex 1) and the ministerial statement on the police funding announcement (Annex 2).

National position

3. The ministerial statement shows, at Table 1, the national provision for police underpinning the settlement. The total provision is £9,243 million which is an increase of 6.2% over 2002/03. However, within this overall increase, central spending on police has increased by 15.7%, capital provision by 6.8%, and earmarked funding for police authorities by 36%, so that the residual total available for distribution generally to police authorities has only increased by 3.7%.

4. Changes in year-on-year grant entitlement are being damped by a system of floors and ceilings. For police authorities the floor, or minimum increase, is 3% and there is a ceiling on grant increases of 4.9%. In our case these provisions are applied to the GLA as a whole.

5. The review of the police distribution formula has resulted in two changes being agreed, the incorporation of the updated activity analysis and the final elimination of the establishment factor. These changes were broadly expected and were already reflected in our draft budget by an assumed £20 million distribution gain.

6. Outside the police formula there are two changes which impact on police authorities. Although the basic principles of the area cost adjustment have not changed, its coverage has been extended and its application within London varied. The system has also been re-based to reflect a more realistic assumption about average council tax. This latter adjustment is referred to under the heading of ‘resource equalisation’.

7. Grant distribution has also been affected by data changes, principally the incorporation of 2001 Census population figures.

8. The total of specific grants for police authorities has increased by 36% and accounts for 7.7% of total standard spending. The ministerial statement at Annex 2 sets out details of the main specific grants. A complete listing, taken from the Deputy Prime Minister’s consultation document, is reproduced at Appendix A to this report. The main new specific grants relate to the police reform pay package, basic command units and community support officers. The crime fighting fund (CFF) is being extended to fund further increases in police officers and grants agreed during this year in respect of counter-terrorism and street crime are being sustained in 2003/04.

Impact on MPA

9. The analysis which we have been able to conduct so far of the impact of the settlement on the Metropolitan Police, and in particular on the funding assumptions underlying the draft budget, is reflected in Appendix B. The following paragraphs provide further commentary on the components of the total grant funding as they affect the MPA.

Formula distribution

10. Some 90% of the MPA’s grant funding comes via the general distribution arrangements relying primarily on the police allocation formula. The provisional settlement total of the principal police grant (including the special payment), revenue support grant (RSG), and non domestic rates (NDR) is £1,763.561 million, an increase of 5.2% over the equivalent figure for 2002/03.

11. The figures quoted in the official statements and consultation documents relate to the ‘GLA – all functions’ and it has been necessary to disaggregate the figures between MPA and LFEPA, the only two functional bodies to receive grant in this form. This disaggregation has been carried out by ODPM.

12. Total GLA grant has been restricted by the application of the grant ceiling of 4.9%. This has reduced the total grant entitlement by £13.6 million. Since LFEPA would actually be losing grant in the absence of the floors and ceilings this clearly represents a reduction in MPA grant of £13.6 million. This means that the MPA is contributing that amount of its true gain under the settlement towards funding the 3% floor applying to other police authorities. 19 police authorities have their grant losses limited by the 3% floor whilst 14 authorities have gains restricted to the 4.9% ceiling.

13. In disaggregating RSG between police and fire within the GLA total, ODPM has then applied a 3% floor to LFEPA’s grant position. This has resulted in a further reduction in the MPA’s grant entitlement of £13.3 million in order to subsidise LFEPA.

14. In the absence of floors and ceilings the MPA would have been receiving non-specific grant of £1,790.443 million, ie £26.9 million more than our actual allocation. Nevertheless, at 5.2%, the MPA has a higher percentage increase than any other police authority since they have had the 4.9% ceiling applied directly to their entitlement.

15. The special payment, which recognises the MPS’s national and capital city functions, is contained within the principal police grant allocation. The figure for 2003/04 has been increased by 2.5% to £202 million.

16. At this stage there is insufficient information to explain fully the movement in grant between 2002/03 and 2003/04. It derives from a combination of the following factors:

• the increase in the national police control total of 3.7%.
• a significant net distributional gain from the changes to the police allocation formula and also those outside the police formula particularly the resource equalisation adjustment.
• data changes such as the Census population.
• the operation of floors and ceilings explained in paragraphs 12 and 13 above.

17. Even at its reduced level the MPA’s non-specific grant entitlement is £39.792 million more than assumed in the draft 2003/04 budget submission. However it is apparent that the bulk of the cost of the police reform pay package has to be met from this general funding. The draft budget had assumed separate funding for this purpose, estimated at £30.487 million. The position on funding the pay package is considered further at paragraphs 25-26 below but this clearly represents a substantial offset to the apparent improvement in the general grant.

Specific grants

18. The various specific grants, which can only be applied to the purpose for which they are provided, are considered in the following paragraphs in the order in which they appear in Appendix B.

Crime fighting fund

19. The Authority’s allocation from the CFF is confirmed as £70.46 million for 2003/04. This £1.9 million more than assumed in the draft budget at which stage no plans had been announced for any increased funding for further police officers beyond the allocations for 2002/03. The Home Office now intends to provide CFF funding for a further 600 officers nationally in 2003/04 and more in the subsequent two years but only at a rate of 75% of the cost. Otherwise the precise rules and conditions applying to this funding have not been announced. Since the MPA’s draft budget already assumes maximum recruitment subject only to capacity constraints there can be no matching adjustment to our budgeted expenditure to offset this additional funding.

Pay lead grant

20. This grant has been payable to the MPA since 2001/02 to support the cost of the additional pay lead agreed for police officers in London in June 2000. Nominally it funds 75% but since the Home Office exclude employers national insurance contributions from the calculation it actually covers about 66% of the extra cost. It is not clear why it appears to be split over two headings in the list of specific grants at Appendix A but a Home Office press release confirms the continuation of the existing arrangements. This would confirm the figure assumed in the draft budget.

DNA expansion programme grant

21. A sum of £9 million is included in the settlement nationally for this purpose. No indication has been given of the likely allocation. Expenditure was included in the budget on the assumption that it would earn grant. If in the event the grant is less than assumed then the expenditure will have to be cut back accordingly. This line will therefore have a neutral impact on the budget whatever the final grant allocation is.

Loan charges grant

22. This grant deals with a historic anomaly relating to the MPS’s position vis-à-vis the local government capital controls system. It has been in place for over ten years and will reduce each year until it is eventually eliminated. It is not listed with other settlement grants but the Home Office have provisionally confirmed the grant at the budgeted level of £3.7 million.

Free rail travel

23. The specific provision in the settlement of £3 million covers the City of London police as well as MPS and therefore confirms the draft budget assumption of £2.5 million.

Airwave revenue grant

24. The Authority’s allocation under the settlement is £20.02 million as against the draft budget figure of £6.05 million. The difference is accounted for by one-off costs for which funding had been requested but which had not been included in the draft budget. The budgeted expenditure will be adjusted accordingly.

Police Negotiating Board

25. There are two provisions in the list of specific grants which appear to relate to the police reform pay package, described respectively as Police Negotiating Board (£36 million) and Reform Deal (£8 million). The ministerial statement (Annex 2) says that the ‘pay and conditions package agreed by PNB is fully provided for in the settlement’ but only refers to specific grant funding to ‘underpin’ the PNB proposals for special priority payments.

26. This element of the settlement remains particularly unclear. The estimated cost of special priority payments in the MPS is £7.8 million (net of employers national insurance contributions which are unlikely to be funded). It is not clear whether the payments will be fully funded by the specific grant? Is there in practice other specific support for the package not identified in the ministerial statement (which is inevitably selective)? It is becoming clear that some elements of the package such as competency related threshold payments, may be more costly in the MPS than is currently estimated in the draft budget. It will be necessary to have a full review of the expected costs together with clarification of the funding arrangements before the final impact on the overall budget can be assessed. At this stage it does appear that there could be specific funding up to £7.8 million.

Counter-terrorism

27. The funding allocated by the Home Office for counter-terrorism in April 2002 amounted originally to £49 million but was subsequently reduced to £46 million. This sum was allocated, in agreement with the Home Office, to an increase of 689 police officers working on counter-terrorism (£34 million), the recruitment of 500 PCSOs (£8 million) and policing of public order events during 2002/03 (£4 million).

28. With the agreement of the Chair of the MPA a bid was submitted recently to cover the full year costs of this year’s initiatives and for a further enhancement of counter-terrorism capability. The settlement includes a provision of £47 million for the MPS’s counter-terrorist activity which meets the full year costs, including support, of the 689 additional officers but does not contribute to any further enhancement. The budgeted expenditure will now be increased to reflect the full year costs and match the agreed funding.

Police community support officers (2002/03 recruitment)

29. The settlement also includes specific notification of £15 million funding to cover the full year costs of the PCSOs being recruited in the current year. This is £1.5 million short of the sum bid for but it does fully cover the pay costs and the expenditure budget should be adjusted to match the funding. The funding of further PCSO recruitment is dealt with in paragraph 32 below.

Street crime

30. It was originally expected that the additional funding for the street crime initiative in 2002/03 would be one-off and therefore no provision was made in the draft budget. In fact the 2002/03 funding has been repeated into next year with an allocation to the MPA of £8.008 million. The MPS will have to advise what expenditure over and above current budget provisions will be necessary to substantiate this funding.

Basic command units

31. A national total of £47 million will be allocated for use at command unit level to help reduce crime in high crime areas in partnership with Crime and Disorder Reduction Partnerships. No further details have been announced. It is probably appropriate to assume that this will fund additional activity and will therefore be matched by extra spending.

Community support officers

32. The specific provision to sustain this year’s recruitment of PCSOs is referred to at paragraph 29 above. Funding will be available for further CSO recruitment from next year but only at the rate of 50% of the cost. It is assumed that the settlement provision of £39 million nationally will first have to meet the full year cost of CSOs recruited in 2002/03 in other forces as well as the MPS. This will obviously limit the resources available to support new recruitment. There is no information yet as to how the new funding will be allocated. Clearly bids will have to be supported by local matching funding.

33. The draft budget submission includes an indicative figure for the full year cost of 500 PCSOs at £18 million. The actual cost in the first year would depend on the rate of recruitment but assuming even recruitment through the year would suggest a part year cost of about £10 million allowing for one-off recruitment and training costs. If the specific grant was available to support recruitment of this number of additional PCSOs the net cost to the MPA would be £5 million in the first year.

Other specific grants

34. There remain a number of relatively low value specific grants where the MPA may be able to secure an allocation. At this stage it is assumed that these would require matching expenditure and therefore need not be considered in the context of determining the MPA’s overall budget.

Conclusion

35. The figures in Appendix B show that there is sufficient confirmed improvement in the MPA’s grant entitlement following the announcement of the provisional settlement to eliminate the funding gap of £9.6 million which remained when the draft budget was submitted to the Mayor. The improvement, excluding grant relating to the police reform pay package, is £11.2 million. If special priority payments were fully funded by specific grant this would release a further £7.8 million resources which would give total additional flexibility beyond balancing the current budget proposals of £9.4 million. It is unlikely that this position will be fully clarified before the Mayor is due to go out to consultation on his budget proposals.

36. In this situation the Authority can probably only make conditional decisions. For example the Authority could determine its preferences if in the event the final clarification of the settlement confirms that there is additional flexibility. This would take place in the context of scenario B set out in paragraph 10 of the original report to this meeting. In relation to new initiatives, if members wished to pursue that option, an order of priority should be determined. This conditional information could then be reported to the Mayor in response to his letter of consultation with a request that he include it with his budget proposals for external consultation.

C. Equality and diversity implications

There are no new equality issues other than those already reflected in the draft budget submission.

D. Financial implications

As set out in the main report and in the body of this report.

E. Background papers

• 2003/04 Provisional Local Government Finance Settlement

F. Contact details

Report author: Peter Martin, MPA.

For more information contact:

MPA general: 020 7202 0202
Media enquiries: 020 7202 0217/18

Annex 1: Letter - Police funding allocations 2003/04

This annex is also available as a PDF document.

Police Resources Unit
5th Floor Home Office,
50 Queen Anne's Gate,
London
SW1H 9AT
Switchboard 020 7273 4000
Fax 020 7273 3742
Direct Line 020 7273 4105
E-mail andrew.ford@homeoffice.gsi.gov.uk www.homeoffice.gov.uk

Date 5 December 2002

Dear Commissioner/Clerk to the Police Authority

Police funding allocations 2003/04 - Metropolitan Police Authority

The provisional revenue settlement for the police service in 2003/04 was announced today along with details of the police funding formula. The overall increase in funding for policing is 6.2%. The allocations for your authority are detailed in this letter. I am enclosing a copy of the Ministerial Statement which describes the settlement in detail, including the additional elements to be allocated to support specific initiatives. Also enclosed is a copy of the provisional Police Grant Report that sets out the basis of next year’s police grant allocations. The text of both these enclosures will be placed on the Home Office internet site http://www.homeoffice.gov.uk, and the internet site of the Office of the Deputy Prime Minister, http://www.odpm.gov.uk.

Changes have been made to the funding formula for 2003/04. These changes are detailed in the attached Ministerial Statement. Other changes have been made as part of the wider local authority settlement. Data changes have also been implemented as usual.

Spending Review 2002 has resulted in substantial increases in central government funding for the police. With these and further increases from Home Office funding spending on policing supported by central Government will rise to £9683 million in 2003/04.

Your police authority will receive funding from the general settlement and for specific initiatives. General information about the specific initiatives are given in the enclosed ministerial statement. This letter contains expected allocations from the Crime Fighting Fund, the Rural Policing Fund, and (where applicable) for Airwave and Street Crime. You will be notified separately about funding through other specific initiatives. Some of this funding will be on a matched funding basis.

As for 2002/03, for the 2003/04 settlement, “floors and ceilings” have been applied. The floor for 2003/04 provides a minimum level of increase of 3%.

Police funding

The proposed funding in 2003/04 for your police authority is set out below:

Street crime

Your allocation through the Street Crime Initiative for 2003/04 will be £8.01m.

Airwave

Capital and current grant allocations for Airwave are made to authorities in the year of service take-up. Grants are also made to enable those forces who have the Airwave service to purchase additional menu services. The cost of the core service will be met separately by the Home Office. As with this year, the payments in 2003/04 will be dependent on forces meeting their RFS (Ready for Service) date

Airwave (Capital and Revenue)

£20.02m

The settlement continues to take account of the Home Secretary’s commitment to improve efficiency and effectiveness in the police service. Future Police Grant allocations will be considered in the light of police authorities meeting the 2% efficiency improvements and the implementation of activity based costing in forces. Guidance on efficiency plans will be issued shortly.

The Home Secretary continues to expect police authorities to set budgets that are responsible, prudent and reasonable. We shall be monitoring the position very carefully. The National Assembly for Wales is responsible for exercising reserve powers in respect of council tax increases in Wales.

I will write to you shortly about capital allocations.

I will also be sending you a copy of the Government Actuary’s Department (GAD) Report explaining how authorities relative need to spend on police pensions in 2003/04 has been projected from revised data provided by authorities this year.

Any written representations on the Government’s proposals should be received by me no later than 14 January 2002. Any representations received after that date will be passed to Ministers for information but will not be considered for this settlement. Representations may be sent by post, fax or e-mail.

If you have any enquiries about this letter please contact Alister Williams on 0207 7273 3446 or Sue Lewis on 020 7273 3739.

Yours faithfully

Andrew Ford
Head of Police Resources Unit

Annex 2: Ministerial statement on provisional police funding announcement

This annex is also available as a PDF document.

Allocations of grant for police authorities in England for 2003/2004

Mr Denham

I have today placed in the Library a copy of the Home Secretary’s proposals for allocation of police grant for England in 2003/2004. The Home Secretary and I intend to implement the proposals subject to consideration of any representations we receive about them, and to the approval of the House.

Funding the police service properly is a top priority for this government. The settlement I am announcing today continues that commitment. The total provision for policing, to be supported by grant in 2003/04 is £9,243 million. This is a cash rise of £543 million or 6.2% over the provision for 2002/03. This includes principal formula police grant, direct Home Office spending, the standard spending on which revenue support grant is based.

We launched the first National Policing Plan last month. It outlined four policing priorities: tackling anti-social behaviour and disorder; reducing volume, street, drug related and violent and gun crime; combating serious and organised crime; and, increasing the number of offences brought to justice. This settlement underpins delivery of those priorities and reinforces our commitment to police reform. There is funding to enable English forces to increase police strength and contribute towards the target of 132,500 police officers in 2004. This will be made available through continuation of the highly successful Crime Fighting Fund which we plan to fund for another three years. Better use will be made of those officers. They will benefit from a pay system that rewards the most experienced officers who can demonstrate a high level of professional competence and those in the most difficult and demanding posts. They will be supported by Community Support Officers (CSOs) and civilian custody staff and investigators, reducing bureaucracy and freeing police officers for operational duties. As part of this, resources will be available to recruit further CSOs across the next three years, allowing English forces to employ their share of the 4,000 we believe should be in place by 2005. Better use of technology will help police officers still further. We are investing in IT with further funding for authorities taking up the Airwave radio communication service and for the Metropolitan Police Authority’s’ Command Control and Communications Information (C3i) System. Funds will be available for roll-out of the custody and case preparation system which will enable data on those in custody to be collated by the police and used across the Criminal Justice System.

We are taking the opportunity to outline the wider provision for support for the police service in England. This includes police grant and revenue support grant, a range of specific grants to be paid directly to police authorities for particular initiatives, capital grants and borrowing approvals, and operational and central spending in support of policing provided directly by the Home Office.

The settlement

We propose to distribute the settlement as follows:

Table 1: Police funding settlement for 2003/04 compared to 2002/03 (figures rounded to nearest £m)

Police funding proposals within the Local Government finance system are being announced today by my Rt Hon Friend the member for Greenwich and Woolwich. These proposals together would provide Total Standard Spending (TSS) on the police in England of £7,659 million, on a like-for-like basis with 2002/03, an increase of £275 million or 3.7%.

Provisional grants (i.e. Home Office Police Grant, Revenue Support Grant and National Non Domestic Rates) for English police authorities in 2003/04 compared with 2002/03 are given in Table 2. Protection has once again been given to authorities that would otherwise have received a grant increase below inflation, by applying a ‘floor’ or minimum increase of 3%. This ‘floor’ will be accompanied by a ceiling of 4.9%. Grant increases for individual authorities vary. Differences between authorities reflect funding formula changes resulting from the recent consultation process over formula changes and year-to-year data changes.

Changes to the police funding formula

The police funding formula that distributes both Home Office Police Grant and Revenue Support Grant to police authorities has been reviewed as part of an overall review of local authority funding formulae.

We consulted on proposals for the police funding formula that would make the policing formula more responsive to current policing needs. The six options for change relating specifically to the police funding formula published in the consultation paper were to:

• update the activity analysis data on which over 70% of the formula allocation is based;
• incorporate the £30m Rural Policing Fund into the main grant formula;
• remove the remaining component that was still based on police establishments;
• increase the personal crime component by 5%;
• increase the public order component by 5%;
• introduce a deprivation component at 2%.

Consultation on the proposals was wide ranging. In the light of comments received, the Home Secretary has decided that two changes will be made to the police funding formula. These changes were widely supported by the policing community during the consultation process.

Activity analysis data has been updated to make the formula more responsive to current policing needs. Up to this year, the pattern of resources across policing functions has been calculated using data collected in 1995. It is important to bring it up to date to reflect contemporary pressures on the police service.

The Home Secretary has agreed to reduction of the ‘establishment component’ in the formula from 10% to zero. This change finally removes the old damping mechanism that cushioned police authorities from the full impact of change when the present formula was introduced in 1995. The component had been reduced from 50% to 10% before the moratorium on formula change was introduced in 1999. The change will complete the process of phasing out the damping. Other damping mechanisms, in the form of floors and ceilings on grant change, are now in place.

The Home Secretary has announced already that the Rural Policing Fund will remain unchanged as a separate £30m fund. A proportion of this will be available to police forces in Wales.

My Rt Hon Friend the member for Greenwich and Woolwich has today announced wider ranging changes to funding formulae that affect all local authorities in England, including police authorities. These will change the area cost adjustment and resource equalisation used. Both impact on the distribution of police funding.

Metropolitan Police funding

Grant for the GLA (all functions), of which the vast majority is for the MPA, will increase from £1,927 million to £2,022 million; a cash increase of 4.9%.We propose that the Metropolitan Police Authority should continue to receive additional funding in recognition of its distinct national and capital city functions. The principal police formula is not sufficiently flexible to take account of these special circumstances. As in previous years a special payment of grant will be made to the MPA above that given through the principal grant formula. The amount has been set at £202 million and is included in the total provision. This is an increase in special payment of £5 million from 2002/03. The MPA will receive £47m for counter-terrorism, continuing funding made available in this year’s budget and a further £15 million to fund CSOs recruited this year. The MPA will be eligible for specific grants in addition to this.

Specific grants for police authorities

As well as general grant, police authorities will receive additional funding through several specific grants for particular schemes. Some of these grants will be available to all forces in England and Wales, others to specific forces to help meet their particular requirements. Funding for some of these initiatives will be available on a matched funding basis.

The main specific grants are:

• Crime Fighting Fund: this will continue for the three years 2003/04 to 2005/06. Police officers recruited between April 2000 and March 2003 through the CFF will continue to be funded at 100%. There will be funds for the recruitment of a further 600 officers in 2003/04 and more in the subsequent two years. Officers recruited in 2003/04 and future years will be funded at 75%;
• Airwave: further funds will be available for the start-up operational costs of authorities taking Airwave in 2003/04 and to enable those forces who have the Airwave service to purchase additional menu services. The Home Office will continue to meet the core charges for the service provider. Additional capital will be available to police authorities.
• Counter Terrorism: In addition to the £47 million for the MPA, counter terrorist funding for the police forces in England announced in this year’s budget will be maintained. This will ensure that the police service will continue to be effectively resourced to meet its counter terrorist commitments. This complements existing funding streams for security and counter terrorism;
• Basic Command Unit (BCU) funds: £50m for BCU’s, that are at the forefront of local policing. Grants will be targeted towards forces with BCU’s in high crime areas to help reduce crime in partnership with Crime and Disorder Reduction Partnerships;
• Police Negotiating Board (PNB): the pay and conditions package agreed by PNB is fully provided for in the settlement. The package introduces new elements into police pay such as payments for the most experienced officers who can demonstrate a high level of professional competence and extra rewards for officers in the most difficult and demanding posts. A separate special grant is available to underpin the PNB proposals for special priority payments.
• Community Support Officers (CSOs): funding will be available to support the costs of CSOs who will free up police officer time, will play a crucial role in providing reassurance and who will have some powers to deal with low level crime and anti-social behaviour. The provision will fund in full CSOs recruited in 2002/03 and fund those recruited in 2003/04 at 50%.
• Rural Policing Fund: £30 million is again provided for the particular needs of forces with the most widespread populations. There has been no change to the method of allocation. Data changes have been applied as usual which accounts for the year-on-year variations in allocations for authorities.
• Street Crime Initiative: £25 million of additional funding is being made available to support continued police operations against street crime. Of this, just over £18.7 million will be allocated between the ten street crime forces: Avon & Somerset, Greater Manchester, Lancashire, Merseyside, Metropolitan Police Service, Nottingham, South Yorkshire, Thames Valley, West Midlands and West Yorkshire. Allocations are set out in Table 3. Some £6.3 million will be held in reserve. Its distribution will be determined by February 2002.

Police authority capital

The Home Secretary and I intend to allocate provision of capital grant and supplementary credit approvals of approximately £180 million in 2003/04. Within this allocation funds will be set aside for a second Premises Improvement Fund to which forces may bid for funds specifically to improve the working conditions of police officers.

In addition capital grants for the introduction of Airwave will be made available to those authorities taking up the radio communications service in 2003/04. Similar arrangements were made for 2002/03.

There will be capital provision for the case and custody project of the Criminal Justice IT system. This will be supported by resource funding as well.

Up to £40m is being made available to support the capital costs of developing the Metropolitan Police Authority’s Command Control and Communications Information (C3i) System.

Central spending on policing

The main specific items are the DNA expansion programme, the National Strategy for Police Information Systems and the Airwave contractor’s core charges. In addition, provision is made for the costs of organisations supporting policing, mainly the Police Information Technology Organisation (PITO), Centrex (the Central Police Training and Development Authority) and scientific and technical facilities.

Efficiency

The settlement continues to take account of the Home Secretary’s commitment to improve efficiency and effectiveness in the police service. Future police grant allocations will be considered in the light of police authorities meeting the 2% efficiency improvements. The PNB agreement includes a service-wide target to secure a 15% reduction in overtime expenditure over the three years from 2003/04. Implementation of activity based costing in forces will be another factor considered when assessing the efficiency target.

Conclusion

We are keeping our promise to the police and public to match reform with investment. A fortnight ago we published the first National Policing Plan which sets out strategic national priorities for the police service. With this settlement we are delivering our investment in the police service by providing the resources to help the police do their job more effectively. The police service is receiving the resources to benefit from an historic pay and conditions deal and an action plan to cut bureaucracy. At the same time both the police service and the public will continue to benefit from record police numbers that are helping to deliver on high visibility policing targets and to reduce the fear of crime.

Table 2: Police grant allocations by English police authority (minimum funding before specific grants)

Table 3: Provisional allocation of Street Crime Initiative funding

Appendix A: Police - Specific and Special Grants 2003-04

Appendix B: 2003/04 settlement implications

This appendix is also available as a PDF document.

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