Briefing Note (BN179)

Funding the English & Welsh police service: from boom to bust?

Date: 17 November 2015
Publisher: Institute for Fiscal Studies
ISBN: 978-1-911102-02-1
DOI: 10.1920/BN.IFS.2015.00179

Spending on the police in England and Wales was cut by 14% in real terms between 2010–11 and 2014–15. This briefing note, funded by the Economic and Social Research Council, places these spending cuts in the context of the large spending increases over the 2000s, and explores the differences between police forces in how they fared over these two periods.

Executive summary

  • Police spending in England and Wales is financed from two main sources: grants from central government, and a component added to local council tax called the police precept. Some police forces are much more reliant on grant funding than others. For example, in 2010–11, Surrey Police received 54% of its revenue from grants, while Northumbria Police received 88%.

  • Between 2000–01 and 2010–11, total police spending increased by 31% in real terms. This was mainly due to increases in precept revenues, which increased from 17% of total revenues to 25%.

  • The forces that saw the biggest increases in police spending over the 2000s were those that increased revenues from the precept by the most. North Yorkshire more than tripled its precept revenues between 2000–01 and 2010–11 and saw overall revenues increase by more than 50%, whereas Northumbria increased precept revenues by only a third and saw overall revenues increase by just 14%.

  • In marked contrast to the 2000s, police grants were cut by 20% in real terms between 2010–11 and 2014–15, and total police spending fell by 14%. Because some forces are much more reliant on grant funding than others, the cuts to spending power varied substantially across forces: Surrey Police saw its revenues fall by 10% between 2010–11 and 2014–15, while Northumbria Police saw its revenues fall by 19%.

  • The forces least reliant on grant funding in 2010–11 were also those that raised most revenues from the precept over the 2000s. Therefore, the forces that saw the biggest cuts to spending between 2010–11 and 2014–15 also typically saw the smallest increases over the 2000s.

  • The forces that increased their precept revenues most over the 2000s generally had lower levels of spending per person in 2000–01. This meant there was convergence in levels of police funding per person across England and Wales between 2000–01 and 2014–15.

  • Why some forces increased precept revenues by so much more than others remains an important question. It could be a result of the formula for allocating grants not adequately reflecting relative need. Or it could be due to local preferences. Understanding these different motivations will be crucial for the Home Office as it seeks to reform how grant funding is allocated between forces going forward.