Police cuts: Government halts funding reforms after admitting calculation errors

Policing minister Mike Penning announced that he would delay the process for 2016/17

(Getty)

The Government has dramatically halted its controversial police funding reforms after the policing minister Mike Penning apologised to Parliament for an “embarrassing” error in its calculations.

The mistake, revealed by The Independent, affected grants worth millions of pounds and meant police forces across the country could have potentially ended up with wildly different amounts of money than they had been told they could expect under the reforms.

Mr Penning announced that he would delay the process for 2016/17 and would consult further with police and crime commissioners after Labour’s Keith Vaz, the chairman of the Home Affairs Committee, tabled an urgent question in the House of Commons on 9 November.

It came after the error was revealed in a letter sent on 5 November by Mary Calam, the director general of the Home Office’s crime and policing group, to the office of Devon and Cornwall Police and Crime Commissioner (PCC) Tony Hogg, who has been challenging the Government on the figures.

Mr Penning, who told MPs he was informed about the mistake on 6 November, said: “Within this process, I’m sad to say there has been a statistical error made on the data that has been used.

“While this data does not change the principles that were consulted on, the allocation provided to the forces was never indicative. We recognise this has caused a great deal of concern for police forces around the country. I and the Government regret this mistake and I apologise to the House.”

Mr Penning announced the new funding formula in July in a bid to correct the “complex and opaque” way in which Whitehall funds are assigned to police forces. (Getty)

He said police funding reforms would still be brought forward, but were being delayed “at the present time”. Falling short of agreeing to calls from Labour for a full independent panel to review any future funding proposals, he added: “We will listen carefully, get it right and make sure the mathematics is right so that I’m not in this embarrassing situation again.”

Mr Penning announced the new funding formula in July in a bid to correct the “complex and opaque” way in which Whitehall funds are assigned to police forces. Critics say some forces will lose tens of millions of pounds a year.

The Independent revealed exclusively on 3 November how six police and crime commissioners and London’s deputy mayor of policing and crime had threatened legal action against the Home Office unless ministers listened to their “grave concerns”.

It was later also disclosed by The Independent that police chiefs had been forced to pay out thousands of pounds to hire financial consultants to analyse the Home Office figures, which appeared not to add up.

Other forces trying to understand the Government’s analysis also had to pay a private company, London-based CACI, for access to demographic data used by the Home Office to determine nearly a third of the total grant they would receive.

On 6 November, it was revealed that the Home Office had been using an “older classification” of that privately-held data in its calculations, but was planning to use an “updated measure” in determining police forces’ final funding allocations.

Keith Vaz called on the Home Office to establish an independent panel to consisting of “experts who understand the importance of sharing data” (Getty)

Both of these data classifications are used to assess levels of urban deprivation and are normally used by retailers to understand their customers.

The Independent has now learned that, while both data sets are updated annually, the “older” classification is based on 2001 census data and the “updated” version is based on the 2011 census.

The Metropolitan Police, which was set to lose £184m under the Government’s proposals, would lose only £3m under the new assessment. But other forces would lose out if new figures were used. North Yorkshire, which was expected to lose £3.5m, would lose an additional £6m, according to figures released by Devon and Cornwall’s PCC.

Mr Vaz called on the Home Office to establish an independent panel to consisting of “experts who understand the importance of sharing data” and who are “able to count and understand mathematics, unlike some officials in the Home Office”.

He told Mr Penning: “This entire process has been described by PCCs and others as unfair, unjust and fundamentally flawed. What started out with good intentions is rapidly descending into a farce. To call it a shambles would be charitable. There is a very real prospect that a number of forces are planning to take the Government to court.”

Shadow policing minister Jack Dromey told Mr Penning he should apologise to the public for the Home Office’s “omni shambles”. He said: “This would be laughable if it was not so serious. Get a grip and get it right.”

Labour now wants the Government to reimburse police forces for the money they have paid to access the privately-held data. Liberal Democrat leader Tim Farron had also called on Home Secretary Theresa May to halt the process.

Police and crime commissioners across the country last night reacted with delight at Mr Penning’s announcement, but warned that hard negotiations still lie ahead.

Andrew White, chief executive of the office of Devon and Cornwall PCC, which has paid around £2,000 to access the data, said: “We believe it was the straw that broke the camel’s back and the process has been wholly discredited.”

Lancashire’s PCC Clive Grunshaw, who has also been challenging the figures, said: “The whole process has been badly handled and that is something I have been saying all along. This is not the end and we also face significant, if not devastating, cuts in the Comprehensive Spending Review.”

Explainer: How the error was made

The error in the Government’s calculations is centred on its use of a data tool known as Acorn, which is owned by a London-based company called CACI.

Devon and Cornwall Police and Crime Commissioner Tony Hogg wrote to the Home Office to raise concerns over its figures, and was told by Mary Calam, director general of the Home Office’s crime and policing group, that an “older classification” of data had been used. An “updated measure” would be used in determining forces’ final funding allocations, she said.

It is understood that the “older classification” – known as “hard pressed” – is based on 2001 census data and the “updated” version – known as “urban adversity” – is based on the 2011 census.

Both of the data classifications, which are each updated annually, are used to assess levels of urban deprivation.

It is understood some PCCs had bought the “urban adversity” data in a bid to understand the Home Office figures, but they now believe that the sums did not add up because officials used the “hard pressed” data instead.

A spokesman for CACI said: “CACI has not been involved in any of the recommendations made in this instance.”