Common rules for determination of police grant (Hansard, 5 July 1994)

§ Mr. Michael

We seek to ensure that the legislation allows for fairness in the determination of grant for police authorities. This is a difficult issue and at various times it has been felt that there is some unfairness in the way in which the grant is allocated—not least in areas of south Wales such as Aberdare, Merthyr, Penarth and Barry, which are currently treated as rural areas. I am sure that improvements could be made, and that the method of distribution could be fairer.

First, the new clause asks for the rules applying to the determination of grant to be common and to be applied fairly across police forces throughout England and Wales. Secondly, it asks that the rules should be understood. We propose that the Secretary of State should issue, no later than six months before the financial year, the common rules on which determinations will be made. Thirdly, we wish the Home Secretary to consult 233 persons representative of police authorities and of chief constables of forces maintained by those authorities before the common rules are determined. That seems eminently sensible and fair.

We seek to delete the part of the Bill that states: The considerations which the Secretary of State takes into account in making a determination…may be different for different authorities or different classes of authority. Some considerations may not apply to certain authorities—the difference between "urban" and "rural", and the nature of royal residences, large public buildings or venues for major events.

Such considerations affect the policing of an area, however, and should therefore be taken into account in the authorities where they apply—but the rules should be common. The applicability of the rules may vary from authority to authority, but it seems wrong to leave the extensive discretion that seems to imply that the Home Secretary could more or less make it up as he went along, varying the rules applying to the determination of grant levels without real reason and almost at whim.

In Committee, the Minister confirmed that the Home Secretary was being granted complete discretion on the distribution of grant. He said: The Bill takes special care to avoid imposing such rules and specifically provides a discretion instead of a duty for the Secretary of State to use formulae or rules to allocate grant…The Bill is also designed to provide him with a power to apply any formulae or rules to part of the total grant only, and it allows him to treat different police authorities differently. That is for good reason. That is a matter of dispute. I have suggested a way in which flexibility could be introduced to allow recognition of the different responsibilities and burdens carried by different police authorities. Surely it is wrong in principle and practice to legislate for unfairness, which is effectively what the Home Secretary is trying to do.

In Committee, the Minister alluded to work that was in hand on the means of allocating grant to police authorities. That work should have been in hand for many years. I have been commenting for five or six years on the method of distributing grant, and I am sure that some hon. Members have done so for much longer. Everyone knows that work needs to be done and proper conclusions need to be reached.

It should also be recognised that the work is effectively being conducted in private by a working group with no formal status. The Home Secretary is certainly not bound by the group's eventual recommendations; nor can there be any guarantee that the new formula for the allocation of police grant will fully accord with the formula used by the Secretary of State for the Environment to allocate police standard spending assessments.

Even at this late stage, there is no clarity about the intended treatment of the Metropolitan police in the grant distribution formula. Do the Government intend them to be subject to the same formula, or will they be treated as a separate class of police authority with a separate formula?

There is a glaring anomaly in regard to police authorities in Wales. When asked to give the SSAs of police authorities in England and Wales, the Home Secretary is able to provide those relating to England, but cannot give those for authorities in Wales; he refers that to the Welsh Office. Why does he not refer the SSAs for English authorities to the Department of the Environment?

234 I know from a conversation with the Minister of State, Lord Ferrers, that in fact the SSAs are available in the Home Office. I do not understand the secrecy about information that is readily to hand and could be given by Ministers without delay. That, however, is an anomaly within an anomaly, rather than the main thrust of the debate.

The Minister rightly recognised that it is quite unlikely any formulae could succeed from day one in fairly allocating grant to all police authorities without some modification. He said: We intend to introduce any changes gradually by mitigating to an acceptable level the year-on-year changes. However, that again calls into question the likelihood of a common formula being applied to both grant and SSAs.

The Minister argued that the application of common rules would result in police authorities suffering an abrupt and unacceptable change in funding. That is not necessarily the case. We would expect common rules to be drawn up covering both the distribution formula and any transitional damping mechanism required to mitigate its immediate effects. It should be within the competence of the Home Office to deliver such rules—in other words, common rules, and the means of moving from the present system to those rules.

On consultation, the Minister argued that the requirement to consult formally on grant distribution would lead duplication and confusion if the Government, through two Departments, were seen to be consulting twice on the same matter." — [Official Report, Standing Committee D, 26 May 1994; c. 294–95.] Elsewhere in the discussion, the Minister was keen to draw a clear distinction between the grant and SSA allocations. As I have said, in the case of relations with the Welsh Office and the Department of the Environment the Minister is more than willing to act in completely different ways.

The Minister cannot have it both ways—or, it seems, three or four ways. By putting the consultation on police grant on a similar footing to revenue support grant and SSAs—which is the purpose of amendment No. 116—greater consistency might be achieved. Those are simple, straightforward practical amendments, that seek to bring a degree of dependability and consistency to the way in which the grant to police authorities is calculated. I commend them to the House.

§ Mr. Charles Wardle

This is not a case of legislating for unfairness. We had a full debate on the subject in Committee and I made the Government's position absolutely clear. We believe that adopting common rules to allocate police grant would prevent us from funding the Metropolitan police in a suitable, satisfactory and adequate fashion, and from introducing funding changes gradually.

I explained in Committee why we cannot accept an amendment saying that the Home Secretary's determination should be governed by common rules. Reference to common rules implies that the same rules must be applied to each police authority, and that cannot be squared either with the funding of the Metropolitan police, which we all agree requires additional funding for a range of national and capital city functions, or with introducing any funding changes gradually so as to avoid large swings in resource allocation.

235 The Bill specifically provides discretion rather than a duty on the part of the Secretary of State to use the rules to determine the allocation of grant. It lets him treat different police authorities differently. I appreciate that, as the hon. Member for Cardiff, South and Penarth (Mr. Michael) has said, the provisions are wide, but they are essential to achieve the flexibility of funding necessary to accommodate both the funding of the London force and the gradual move to formula funding.

The provision is practical and, for that reason, I cannot accept what the hon. Gentleman said. I appreciate that the motivation behind the amendment is to ensure that the Secretary of State allocates police grant with the maximum possible input from those directly affected by the decision, but, as I have explained, there are real practical difficulties with the new clause. The proposed new section 30A(2) of the Police Act 1964 would require the Home Secretary to consult on the common rules.

However, as the House knows, the Secretary of State for the Environment already consults local government on the amount of revenue support grant to be paid to local authorities. The hon. Member for Cardiff, South and Penarth mentioned that. A similar, although not precisely identical, process is undertaken by the Secretary of State for Wales. Under the new police funding regime to be introduced by the Bill, the consultations will include the allocation of standard spending assessments to the new police authorities.

There is, of course, a parallel between those allocations and the way in which Home Office specific grant will be distributed between authorities. If we were to consult on the distribution of police grant, that would duplicate an element of the consultation already undertaken within the Department of the Environment. Potentially at least, it would be a recipe for confusion if we were to consult twice, and even more so if, in each group, some of those consulted were the same as those in other groups and some were not. I hope that the House will appreciate that this is a difficult area, and we cannot give the commitments that the hon. Gentleman seeks, so I urge the House to reject the new clause.

I shall now deal briefly with amendment No. 43, in the name of the Home Secretary. It would make a small change to clause 30, which provides for the new police authorities to receive initial financing grant before they take over their full responsibilities. Under clause 30, the Secretary of State will be able to make grants to the new police authorities during the current financial year. That will give them, once they are set up, the financing necessary to operate in parallel with the existing police authorities until April next year. It will also enable them to spend money on gearing up the police forces for whose maintenance they will assume full responsibility next April, and to fulfil their full management tasks.

As currently drafted, clause 30 allows the Home Secretary to make the initial financing grants to the new police authorities in respect of expenditure incurred by them, and it means that the grant cannot be made after the expenditure is incurred. We now consider that it would be prudent to ensure that grant can be paid where necessary before the expenditure in respect of which it is made has been incurred. For that reason, I commend the Government amendment to the House.