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In its July 2011 report 'Adapting to Austerity', Her Majesty’s Inspectorate of Constabulary (HMIC) said: "The police service… is facing its biggest financial challenge in a generation." One year on, HMIC’s second report updating on the state of police budgets is expected to be published in the near future and will offer a perspective on how the service is adapting to that challenge. A timely one too, as since taking over as Head of the ACPO Finance and Resources Business Area, I too have been taking stock of where the service is in delivering the budget cuts brought about by the Comprehensive Spending Review (CSR) covering April 2011 to March 2015.

As usual in the financial work there are complexities. The October 2010 CSR imposed a 20 per cent cut of central government grants to police forces in real terms. ‘Real terms’ means after allowing for the effects of inflation. To put it in everyday parlance, if your pay were cut 10 per cent and all prices rose 5 per cent during the year, by the end of the year your spending power would be 15 per cent worse (15 per cent worse in real terms). The police budgets have been cut by around 14 per cent which, together with the impact of inflation means that overall, police budgets are 20 per cent less in real terms. A cut of this scale provides a very significant challenge to police forces who want to maintain and even improve their services to the public. As 81 per cent of police spending is, on average, spent on staff then the budget cuts fall very heavily on staff numbers.

The impact of the 20 per cent budget cut is compounded by being front-loaded as opposed to being evenly spread over the four year period. The cut is made 6 per cent in 2011-12, 13 per cent by 2012-13, 17 per cent by 2013-14 and 20 per cent by 2014-15. So, as you can see, the biggest cut is in the first and second years. The advantage of this is that forces take significant initial steps to save money and a degree of stability then arrives later in the CSR period, but the disadvantage is that as police officers cannot be made redundant (only retire), then savings from declining officer numbers occur gradually throughout the period and a very severe cut is needed to police staff numbers to achieve the saving imposed.

The HMIC ‘Adapting to Austerity’ report assessed that staff numbers would need to fall by 34,100 in total including 16,200 police officers, 16,100 police staff and 1,800 PCSOs. As there are so many fewer police staff than officers to begin with this means a much greater percentage cut to police staffing.

Forces have tried very hard to protect what are being called front-line services, such as Neighbourhood Policing or Response Policing Teams but also those less visible to the public such as Counter Terrorist officers or detectives, at the expense of what is being called 'the back office': administrative and support services. This does not mean that overall front-line staffing is increasing, it is not. But as it is falling less quickly than back office staffing, the proportion (or percentage) of the total staff made up by the front-line is increasing.

Latest information suggests that forces are delivering more savings than they needed to balance the 2011-12 budget, which will allow them to fund the costs of change (for example, redundancy costs) and to ease the pressure on later years. They also have plans to deliver the savings in 2012-13 which is the financial year that started in April and the majority have pretty good plans on how to deliver the savings in the last two years of the CSR. Of course looking forward, spending cuts continuing into the next Parliament are now being talked about and the Government will need to think very carefully about any further cuts in future spending reviews given the demands on policing if the recession continues to bite.

Of note is the fact that most forces are also delivering reduced levels of crime and anti-social behaviour, together with higher public confidence figures. That is a record for the police service to be proud of, and it will be interesting to see how it is reflected in HMIC next snapshot report.

Assistant Chief Officer Nigel Brook is Director of Finance at West Yorkshire Police and Deputy Head of the Finance and Resources Business Area.