Article from Police Review
The Government has no choice but to deal with the deficit. It is in the whole country's interests, including police officers and their families, that we do so. Failure to tackle Britain's overspend would mean higher interest rates, threatening the recovery, and deeper cuts down the line. We didn't cause the deficit, and police officers didn't either, but the unavoidable truth is that we have to tackle it now.
The police service spends over £14 billion of public money a year. So we can't exempt it from making savings. I've heard it said that the police got a poor funding deal compared to, say, defence. But that's not true. We all know that the armed forces are having to make savings, involving very difficult choices, too. The comparison is false because policing gets a quarter of its income from local taxpayers.
No force will actually have a 20 per cent reduction in their overall funding. If forces freeze their precept this year, but increase it in line with official forecasts over the next three, they will on average face a 14 per cent real terms reduction in their funding. That means that they will have 6 per cent less cash in four years' time. The reductions are challenging, but manageable. And if forces make the savings in the right way, they can protect frontline policing services for the public.
When 80 per cent of police expenditure is spent on people, forces have to look at their overall pay bill to save money. We are driving savings in the non-pay areas as hard as we can - for instance, we want a renewed focus on procurement and IT to save £350 million a year. But we can't ignore pay.
We are asking everyone in the public sector earning above £21,000 a year to accept a two year pay freeze. Of course I appreciate that no-one welcomes their pay being frozen, but the savings - another £350 million a year - will be crucial to help forces to protect jobs.
We are also having to take some tough but essential decisions on pensions. There is a real need to rebalance the increasing cost of public sector pensions. The current system is unsustainable, where increased costs fall largely on the taxpayer
In his interim report, published in October, Lord Hutton found that the value and cost of a public service pension have increased by around a third over the last 50 years because of longer life-expectancy. Most of these extra costs have been met by the taxpayer.
I know that police officers and staff, like others, are concerned about the prospect of increased pension contributions. While I recognise that officers pay high pension contribution rates compared to other public service workers, it is also true that contributions are paid over a shorter period than others - 30 or 35 years - and that police pension schemes provide very valuable benefits.
In his interim report, Lord Hutton published analysis that explored the relative benefits of public service schemes. Even taking into account the high contribution rates paid by officers, the value of their pension schemes is higher than all other major public service schemes, except the armed forces. So I do not believe that it would be fair to exempt police officers from increased contributions when others in the public sector, including those earning less, are being expected to pay more.
Lord Hutton's final proposals include setting a new Normal Pension Age of 60 across the uniformed services, including police officers. The Government recognises that the position of the uniformed services, including the police, will require particularly careful consideration. We will set out proposals in the autumn, and any changes to police pensions would be subject to the usual consultation process with the Police Negotiating Board.
The key underlying principle for all these decisions is fairness. All public sector workers are being asked to take their fair share of the burden. And incidentally, since I have been asked this question by many officers, politicians are certainly not exempt.
Ministers have taken a 5 per cent pay cut and a pay freeze for the next five years. MPs' allowances have been reformed, our pensions are about to be, and we have just agreed to a pay freeze. It is right that we should play our part.
There is also an issue of fairness as between the public and private sectors. Many people who work for companies have already experienced the harsh impact of the downturn. And we need to be fair to taxpayers, too.
That is why we asked Tom Winsor to look at police pay and conditions. His view was that the existing arrangements for police remuneration are outdated and unfair.
I am concerned that the Police Federation is drawing officers' attention to the allowances which Winsor recommends should go, while conveniently ignoring the new benefits which he proposes. It is true that Winsor proposes a net saving, rising to some £200 million a year. This is 2 per cent of the pay bill. But he suggests that the majority of savings should be ploughed back into new benefits, such as allowances for officers who work antisocial hours or have particular skills.
So it's simply not true that every officer would lose from Winsor. Many would gain. I would encourage officers to read Winsor's report for themselves and to fill in his online ready reckoner so that they can see the true impact of the proposals on their own pay packages. His proposals will now be considered in the Police Negotiating Board. We will listen, and consider its recommendations carefully.
I understand the concern of officers about the potential combination of pay and pension changes. But when others in the public sector would be affected, too, I do not believe that it would be right, as some have suggested, to exempt the police from the difficult decisions which we are having to take. Indeed, to do so could damage the important relationship between the police and the public they serve.
I'm sorry to hear it said that the action we are having to take on funding and pay means that we don't value the police. Nothing could be further from the truth.
I am a fierce supporter of the police. Last week, for instance, I was vocal in backing the officers who protected the public and property, facing totally unacceptable personal attack, when violence broke out on the streets of London.
I am determined to help officers to do their job in every way I can, whether it's by reducing bureaucracy, dealing with inefficiencies in the criminal justice system, or eliminating targets and central direction that gets in the way. I want to restore professional discretion and give officers the space to exercise their judgement. And I want to encourage high quality training and a new focus on skills. That's what Peter Neyroud's report on leadership and training is about this week, and we'll now consult on his ideas.
I am well aware that, in common with others who work in the public sector, we are asking officers to tighten their belts. I particularly feel for the police staff and some officers whose jobs may be going altogether.
But, taken together, the savings from a pay freeze and Winsor would amount to over half a billion pounds a year. If forces aren't able to save this sum, they will be forced to make deeper cuts, equating to around another 10,000 police officer jobs. That is the stark but simple choice.
The police do difficult and dangerous work. They cannot strike. We MUST recognise this, treat officers fairly and pay them well. We must continue to value, in the Prime Minister's words, the finest police service in the world. But we must also take some tough decisions and do the right thing for the whole country. I hope that officers will recognise that.