Contents
This page contains press release 41/03, in which the MPA announces it is facing a pensions time bomb that will stretch London’s policing budget to the limit and affect overall provision of police services in the capital.
Warning: This is archived material and may be out of date. The Metropolitan Police Authority has been replaced by the Mayor's Office for Policing and Crime (MOPC).
See the MOPC website for further information.
Police pensions – MPA calls for immediate action to avert future financial crisis
41/03
9 June 2003
The Metropolitan Police Authority is facing a pensions time bomb that will stretch London’s policing budget to the limit and affect overall provision of police services in the capital.
This is the conclusion drawn from an independent report debated by the Authority’s Finance Committee today. It identifies continuing growth in costs of future police pensions, with accelerated increases from around 2005/06 and again from 2009/10, reflecting recruitment peaks thirty years previously. The financial impact will also be aggravated by the one-off cost of commuted lump sums payable to higher numbers of retiring officers.
The cash increase over the period up to 2012/13 is £266 million (110%), an average annual increase of 7%.
Graham Tope, Chair of the Finance Committee, said:
“Because the police pension scheme is unfunded, pension costs have a critical effect on the Authority’s finances which will rise dramatically in the very near future. The report we have debated today envisages the need for annual budget increases of 6-7% over the next decade.
“We have no guarantee that government grants will be increased adequately to pay for these costs. This means that there could be a substantial hike in the council tax. This, we believe, would be unfair on the citizens of London.
“A pension reserve could help to smooth the annual impact and the Finance Committee has today agreed to begin to set aside sums for this purpose.
“It is clear the Authority has to act now as there are only three years to secure such a reserve before the first peak year of 2005/06.”
An early briefing on this issue will be provided to the GLA to inform the Mayor’s forward budget planning, specific information from the actuaries’ review will be sent to the police expenditure forecasting group which is preparing evidence for the next public spending round (SR2004) and directly to the Home Office.
Notes to editors
1. Metropolitan Police pensions currently account for approximately 10% of the annual budget – in 2002/03 this was £248,500,000.
Send an e-mail linking to this page
Feedback