10 February 2017
Policing policy is not devolved to Wales; however, the Welsh Government delivers an element of the annual funding as part of a three-way system that also involves the Home Office and council tax. Police forces also have access to special and specific grants and other income sources.
Under the Police Reform and Social Responsibility Act 2011 Police and Crime Commissioners (PCCs) replaced police authorities in each police force area (outside of London), with the first elections held in November 2012. More recently, PCC elections were held alongside the Assembly Elections in May 2016. PCCs appoint the chief constable, set local policing priorities and set the budget and council tax precept.
The Police settlement is derived in a two-stage process with a provisional settlement released in line with the Welsh Government’s draft budget and a final settlement in line with the final budget. The four Welsh police forces are consulted on the provisional police settlement, before agreeing the final settlement. The National Assembly for Wales must then approve this funding. As part of this process, the settlement will be debated in plenary on Tuesday 14 February 2017.
Final Police Settlement 2017-18
For 2017-18, the overall funding allocated to PCCs in Wales has been set at £349.9 million. This represents a 1.4% reduction from the 2016-17 settlement and is a 1.4% reduction for each of the four PCCs. The overall funding is outlined in table 1 below:
Table 1: Police Revenue Funding – Total Central Support
Within the £349.9 million allocation, the Welsh Government’s element is £138.7 million. This can be broken down further and comprises funding from the Revenue Support Grant (£85.8 million) and Non-domestic rates (£53 million). The remaining £211.2 million funding is provided through the Home Office. The sources of Police funding are outlined below:
Home Office Police Grant
In England and Wales, the main source of income for police forces is the central UK government grant made available through the annual Home Office Police Grant Report. The Home Office Police Grant is general revenue funding and is not ring-fenced. It is paid directly to PCCs. The Police Allocation Formula determines the allocation of central government funds between the 43 police force areas of England and Wales. This is based on the estimated workload of each police force area, including crime related activity, policing special events, policing sparsely-populated areas and population and socio-economic factors. The Home Office has recently reviewed its funding formula for police forces, which will continue to be a needs-based formula. As has been the case in recent years, the Home Office has again decided to overlay its needs-based formula with a floor mechanism. This ensures all police forces in England and Wales can expect to receive the same percentage reduction, this year this is 1.4%.
Funding from the main grant is subject to “damping”, which in 2017-18 will redistribute £12.2 million from South Wales and £417k from Gwent to Dyfed Powys (an additional £5.1 million) and North Wales (an additional £7.4 million). The PCCs for Dyfed-Powys (£3.6 million) and North Wales (£2.4 million) also receive top-up grant.
Welsh Government formula grant/ Police Revenue Settlement
In Wales, the equivalent funding previously provided by the UK’s Department for Communities and Local Government in England is devolved to the Welsh Government. The Welsh Government funding to PCCs still forms part of the local government finance settlement and is paid under provisions of the Local Government Finance Act 1988 and must be approved by the National Assembly for Wales.
Council tax precept
Each police force can also raise additional revenue funding through council tax precepts. The elected PCC in each police force area determines the annual level of the police precept, which is added to residential council tax bills. A greater proportion of police funding comes from council tax in Wales than in England; 37% compared with an average of 24% in England in 2015-16. There is also much less variation between the Welsh police forces than in England. PCCs are known as major precepting authorities. Whilst they set the precept, the funds are collected on their behalf by local authorities. In 2016-17 the Police element of council tax amounted to approximately 16% of the total, average, council tax bill in Wales.
The Welsh Government has the power to cap excessive council tax rises (generally considered to be anything over 5%).
Specific and special grants
There are also a smaller number of special and specific grants that are ring-fenced for national policing priorities. The Home Office provides a series of specific and special grants in addition to the Police Main Grant. This funding comes from the Home Office resource departmental expenditure limit crime and policing group. Some of the grants are funded by top-slicing the Police Main Grant, that is reducing the funding available for general revenue funding through the Police Main Grant to pay for some specific grants. The largest element of this is the Counter Terrorism Police Grant; other grants include the Police Special Grant and the Police Innovation Fund.
Police forces can also charge for some of their services. The main source of income from fees and charges is through charging for special police services. These are police services provided over and above core policing at the request of a person or organisations, such as football matches and music concerts. The basic powers to charge for services are set out in the Police Act 1996. Police forces are prevented from making a profit on special police services and for some types of event are prevented from recouping 100% of costs.
More information regarding how each element of police funding is calculated can be found in the Local Government Finance Report (No. 2) 2017-18 (Final Settlement – Police and Crime Commissioners). Welsh Government has published the financial tables and other information regarding the police settlement on their website.