§ Charlotte AtkinsTo ask the Secretary of State for the Home Department (1) what recent advice the Audit Commission has given to police authorities on the appropriate proportion of their budget to be held in reserve; [100669]
(2) on the basis of the most recent information available, what proportion of total budget police authorities in the UK hold as reserves. [100668]
§ Mr. Charles ClarkeAn Audit Commission report published in July 1999 reported that the average police fund balance in England and Wales (including earmarked and general reserves) at 31 March 1998 was £7.6 million, which represents 6.2 per cent. of average net operating expenditure. However, the level of reserves varies greatly between authorities.
The Audit Commission also reported that the level of general reserves—that is reserves other than earmarked reserves—is often a better indicator of the financial health of an authority. I attach information published by the 113W Chartered Institute of Public Finance and Accountancy (CIPFA), showing that at 31 March 1998 police authorities in England and Wales had general reserves totalling £181 million. This represents about 2.6 per cent, of net expenditure.
The Audit Commission noted that general reserves, or balances, ranging from 2 per cent. to 5 per cent. of net operating expenditure are typically seen as reasonable by auditors. CIPFA has issued advice to police authorities recommending that general reserves or balances should be within that range, depending on local circumstances. According to CIPFA figures, 12 police authorities had general reserves below 2 per cent. of net expenditure as at 31 March 1998.
Reserves as at 31 March 1998 Net expenditure £000 Reserves £000 Percentages Avon and Somerset 152,673 2,539 1.7 Bedfordshire 58,570 1,549 2.6 Cambridgeshire 68,681 1,755 2.6 Cheshire 104,005 6,162 5.9 City of London 57,893 — 0.0 Cleveland 75,426 1,563 2.1 Cumbria 61,709 198 0.3 Derbyshire 95,641 2,423 2.5 Devon and Cornwall 155,435 6,064 3.9 Dorset 69,727 1,227 1.8 Durham 75,166 1,524 2.0 Dyfed-Powys 50,952 527 1.0 Essex 157,487 2,148 1.4 Gloucestershire 58,633 3,320 5.7 Greater Manchester 353,319 8,552 2.4 Gwent 64,598 2,123 3.3 Hampshire 180,791 7,835 4.3 Hertfordshire 93,011 3,514 3.8 Humberside 106,220 319 0.3 Kent 174,211 5,528 3.2 Lancashire 169,275 7,421 4.4 Leicestershire 98,789 3,054 3.1 Lincolnshire 66,184 522 0.8 Merseyside 224,327 7,452 3.3 Metropolitan Police 1,676,617 26,495 1.6 Norfolk 80,222 2,735 3.4 Northamptonshire 64,605 5,106 7.9 Northumbria 195,092 — 0.0 North Wales 70,920 2,036 2.9 North Yorkshire 71,840 2,873 4.0 Nottinghamshire 120,556 3,335 2.8 South Wales 159,411 3,600 2.3 South Yorkshire 166,027 6,123 3.7 Staffordshire 110,264 6,996 6.3 Suffolk 63,676 2,002 3.1 Surrey 90,976 3,975 4.4 Sussex 157,631 8,919 5.7 Thames Valley 210,333 5,130 2.4 Warwickshire 51,003 1,750 3.4 West Mercia 107,788 2,880 2.7 West Midlands 360,129 5,010 1.4 West Yorkshire 281,745 3,881 1.4 Wiltshire 58,535 10,907 18.6 England and Wales 6,870,093 181,082 2.6