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Council Tax Capping (Surrey)

I thank my hon. Friend. He is right. In 1997, Surrey police received £96 per head of population in Government grant. Twelve years later, in 2009, Surrey residents received £93 per person in police grant. That is a real-terms reduction of 39—not quite 40—per cent. Surrey police force and the Surrey policy authority have reached their tipping point, and operational policing in Surrey can no longer be protected from the cumulative effects of more than a decade of underfunding, let alone any capping or re-billing. Last month, the former Home Secretary gave a commitment to maintain increased funding for the police grant, which she said would enable the Government at least to maintain police numbers. That may be true across the whole nation, but it is certainly not true in Surrey, and it will be even less true with capping, re-billing and the progressive annual tightening of the budget. Of course, there is an argument over the figures. Last year, the Secretary of State set out a net budget requirement increase of 4.82 per cent., but the actual increase in the net budget requirement was 3.82 per cent. This year, the increase in the precept levied by Surrey police was 4.89 per cent., but to my surprise, I discovered that the Department for Communities and Local Government claimed that the precept had risen by 7.07 per cent. The Department based that on a notional precept, and the idea of a notional precept is key. There is also an argument over reserves. Surrey police have reserves of £9.4 million, much of which is clearly not available, because, technically, only general reserves are available for expenditure. Those reserves stand at £5.6 million, or 2.6 per cent. of the budget, but HMIC and the Audit Commission insist that that be lifted to 3 per cent. That, too, will have an impact, on top of the capping and the re-billing expenditure. As someone who has, in the past, been involved in programmed expenditure cuts, I am abundantly aware of the fact that one of the worst effects of capping is that it is applied at the beginning of, or during, the financial year in question. That means that cuts in expenditure at a late stage in the financial year must compensate for the failure to achieve a full-year effect from the beginning of the financial year—in simple terms, the percentage cut must be higher to achieve the full-year effect. With the prospect of capping in mind, the authority began setting this year's budget in July 2008. The budget was carefully calculated and took account of the principles set out by the Secretary of State. The idea of a notional precept was raised, and Surrey police finance officials shared their concerns with lawyers from the Department for Communities and Local Government. The lawyers confirmed in writing that""there is no requirement on the Surrey police authority to calculate the notional level of Council Tax (based on the notional budget requirement) 2008/09 and Surrey police authority will set their budget requirement and their precept for 2009/10…in the normal way"." To avoid capping and its effects, the authority carefully calculated the budget. Three days before setting the budget, the Department announced a notional 2008-09 budget and a notional band D council tax. That left the police authority with the threat of capping. Given that the cuts arising from capping were late and unplanned, they had an extra detrimental effect on the force. In the past financial year, the Surrey police work force was 4,229-strong. The continuing prospect of capping means that the authority must produce a progressive extrapolation of financial constraints, which produces a series of cuts as the Surrey police authority calculates its manpower for the years 2009-10 to 20012-13. That commences with the loss of 159 personnel this year, with a total loss of 373 personnel by the end of the process, and that is before designation and re-billing.