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Dates: Topic: Finance - Police Grant

Issued: 1/4/04

Implementation: Immediate

Impact: This Circular Supersedes Police Circular No: 4/2003

Contact(s) for more information: Ann Tocher (0131 244 2148)

Dear Colleague

Purpose of the circular: To inform Chief Constables of the commencement of The Police Grant (Scotland) Order 2004 on 1 April 2004.

Summary of contents: A copy of the Police Grant (Scotland) Order 2004 and accompanying Report is attached. This Order determines the amount of police grant payable in 2004-05.

Yours sincerely

BILL BARRON

The Police Grant (Scotland) Order 2004

1. This Order sets the amount of police grant payable to each authority or board for 2004-05. These amounts are related to budgets together with 100% grants for officers based in forces engaged in dedicated drugs duties, and also a share of the costs of forces seconding officers to the SDEA. These payments are net of an adjustment for the recovery of expenditure for common police services in 2004-05 as set out in the Determination attached to Police Circular No.6/2004.

2. The Department will make payments of police grant in 12 instalments amounting to 97.5% of the estimate of police grant based on the budget set by each authority or joint board. The 2.5% retention for 2003-04 will be paid on receipt from Audit Scotland of the audited grant claim (Form PG1).

3. Amounts of grant for 2004-05 can be varied if outturn expenditure is different from forecast, but grant will not be paid above the cash limit.

4. The accompanying Report states the considerations Scottish Ministers took into account in determining the amounts of police grant set out in the Order.

5. The Report sets out the cash limit for each authority, the calculation of amounts of grant in the Order and the distribution of Grant Aided Expenditure among authorities.

6. The attached Appendix sets out for convenience the circulars already issued in 2004.

Police Division 1
April 2004

THE COMMON POLICE SERVICES (SCOTLAND) DETERMINATION 2004

The Scottish Ministers, in exercise of the powers conferred by section 36(3)(b) of the Police (Scotland) Act 1967( [1]) and after consultation with the Joint Central Committee and such bodies or associations as appear to them to be representative of the police authorities or of chief constables or superintendents in accordance with section 36(4) of the said Act of 1967, hereby make the following determination:

Citation and commencement

1. This determination may be cited as the Common Police Services (Scotland) Determination 2004 and shall come into force on 1st April 2004.

Interpretation

2. In this determination-

"the Act" means the Police (Scotland) Act 1967;

"constituent authority" has the same meaning as in section 51(1) of the Act;

"financial year 2004-2005" means the financial year commencing on 1st April 2004;

"police authority" does not include a constituent authority;

"recoverable expenditure" means the amount of the expenditure incurred by the Scottish Ministers which is to be recovered in terms of paragraph 3;

"Statistical Return Form MKQ" means the form( [2]) in respect of each quarter of a year beginning in 2000 which was transmitted by the chief constable to the Scottish Ministers pursuant to section 47(1)(a) of the Act( [3])which is prepared in accordance with the list of crimes and offences having effect in the relevant year which is set out in Appendix 2C of the Criminal Statistics Handbook issued to police authorities and any reference to the "Statistical Return Forms MKQ for 2000, 2001 and 2002" is a reference to the aggregate of the four quarterly forms in respect of the years 2000, 2001 and 2002 respectively.

Application

3. This determination makes provision for the recovery from police authorities and joint police boards of 50 per centum of the aggregate amount of the expenditure (including Value Added Tax), incurred by the Scottish Ministers under section 36(1) of the Act in the financial year 2004-2005 in contributing by way of financial assistance, grant or otherwise, to the maintenance of the facilities and services of the Operational and Intelligence Group of the Scottish Drug Enforcement Agency other than in relation to the costs of salaries and allowances of constables seconded by Chief Constables to that Group.

Amount payable

4.-(1) The proportion of the recoverable expenditure of the Scottish Ministers which is to be paid to the Scottish Ministers by each police authority and joint police board shall be the aggregate of the amounts (including Value Added Tax) payable by that police authority or joint police board which is calculated in accordance with paragraph 5.

(2) Where the aggregate of the amounts (including Value Added Tax) payable by police authorities and joint police boards calculated in accordance with paragraph 5 is less than the sum representing the recoverable expenditure of the Scottish Ministers, the balance shall not be recoverable.

Crime formula

5. The amount to be paid by each police authority and joint police board shall be calculated in accordance with the following formula, namely-

where

E is the sum representing 50 per centum of the aggregate expenditure (including Value Added Tax) incurred by the Scottish Ministers on those items in the financial year 2004-2005.

R is the percentage figure given by the formula-

;

A is the number representing the annual average of the number of crimes occurring in-

(a) the case of a police authority (not being a constituent authority), the police area for which the relevant police force was maintained as at 31st December 2002; or

(b) the case of a joint police board, the police area or, as the case may be, combined area for which the relevant police force was maintained as at 31st December 2002,

for the period of 3 years ending on 31st December 2002 which were recorded by the police force and shown in the Statistical Return Forms MKQ for 2000, 2001 and 2002, but excluding crimes of "offending while on bail" (code 39/006 in the Scottish Executive Justice Department Classification of Crimes and Offences ( [4])) and offences specified in Groups 6 and 7 in all of those forms;

B is the number representing the annual average of the number of offences specified in Groups 6 and 7 of the Statistical Return Forms referred to in letter A above occurring in that police area for the period of 3 years ending on 31st December 2002 which were recorded by the police force and shown in those forms;

C is the aggregate number for all police forces in Scotland of the summation of the calculation made for the purposes of letter A above in respect of each such police force; and

D is the aggregate number for all police forces in Scotland of the summation of the calculation made for the purposes of letter B above in respect of each such police force.

Calculation of formula

6. Any calculation required for the purposes of this determination shall be-

(a) expressed to 4 decimal places;

(b) rounded to the nearest ten thousandth of a per centum; and

(c) any 20 thousandth of a per centum shall be rounded upwards.

This determination is subscribed as follows:-

It is signed by David Henderson

________________________________

Head of Police Division 1
Scottish Executive
at Edinburgh on March 2004

Before this witness:-

Signature of witness __________________________

Full name of witness __________________________

Address of witness __________________________

__________________________

__________________________

Scottish Executive

Police Grant (Scotland)

THE POLICE GRANT (SCOTLAND) ORDER 2004

Report by the Scottish Ministers under section 32(6) of the Police (Scotland) Act 1967

Laid before the Scottish Parliament by the Scottish Ministers March 2004

THE POLICE GRANT (SCOTLAND) ORDER 2004

1. Introduction

1.1 In accordance with section 32 of the Police (Scotland) Act ('the 1967 Act') as substituted by section 45(1) of the Crime and Punishment (Scotland) Act 1997 ('the 1997 Act'), the Scottish Ministers have made the Police Grant (Scotland) Order 2004

('the 2004 Order'). This Order determines the aggregate amount of police grant to be made to police authorities (not being constituent authorities) and joint police boards ('authorities') for the financial year 2004-2005 and the amount of such grant payable to each such authority.

1.2 The 2004 Order is laid before the Scottish Parliament in accordance with section 32(8) of the 1967 Act (as read with section 118 of the Scotland Act 1998 ('the 1998 Act')), which provides that the Order is subject to negative resolution procedure.

1.3 This Report is prepared under section 32(6) of the 1967 Act. It states the considerations, which Scottish Ministers took into account in making the determinations, which are contained in the 2004 Order. This Report is laid before the Scottish Parliament in accordance with section 32(9) of the 1967 Act (as read with section 121(2) of the 1998 Act) at the same time as the 2004 Order is laid.

2. Police Grant Aided Expenditure (GAE) and process of calculating grant at 51%

2.1 Police Grant Aided Expenditure (GAE) is an estimate of the expenditure required by police forces to provide the required levels of service. Police authorities set the budgets for their respective forces and those budgets may be set at, above or below GAE.

2.2 Subject to the matters mentioned in paragraphs 4 and 5, Scottish Ministers pay police grant of 51% of the net eligible expenditure incurred by forces up to the GAE total. The constituent local authorities provide the balance. If net expenditure exceeds GAE the constituent local authorities meet in full the costs incurred over and above GAE. If net expenditure is less than GAE the unspent portion of police grant remains unclaimed.

2.3 Distribution of GAE among authorities is shown in column A of Appendix B. The cash limit of police grant payable to each authority for 2004-05 is shown in column H of Appendix B and is calculated as follows:

2.3.1 97.5% of GAE for payments on account in respect of 2004-05 is calculated (shown in column B); (a 2.5% retention amount is held back each year)

2.3.2 51% of that figure is then calculated (shown in column C);

2.3.3 the 2.5% retention amount deducted from the prior year calculation (shown in column D) is added; and this total is known as net grant;

2.3.4 an estimate of the funding in respect of the Scottish Drug Enforcement Agency - Operational and Intelligence Group (SDEA - OIG) (shown in column F) is added to the Net Grant and;

2.3.5 each authority's share of estimated costs of common police services recovered under section 36(3) of the 1967 Act (shown in column G), is deducted.

2.4 The resulting cash limit figures for police grant are shown in column H of Appendix B. Grant payable on loan charges is excluded.

2.5 In distributing GAE for 2004-2005 Scottish Ministers took account of forces' best estimates of the costs that they will incur in the forthcoming year in respect of pensions and travel warrants; levels of core GAE for each authority in 2003-04; and interim recommendations from the Police GAE Working Group for additional increases to some forces. See paragraph 9 below.

3. Determination of Aggregate Amount of Police Grant

3.1 The aggregate amount of police grant, which Scottish Ministers have determined to be made for the financial year 2004-2005, is £485,820,000 (see Appendix A ), as set out in article 2 of the 2004 Order.

3.2 In determining the aggregate amount of the police grant, Scottish Ministers aggregated the amounts determined to be made to each authority in the Order.

4. Determination of Police Grant to Each Authority

4.1 The amount of police grant, which is determined to be made for the financial year 2004-2005 to each authority, is set out in Article 3 of the 2004 Order.

4.2 The amount of police grant determined for each authority for the financial year 2004-05 was determined as being in accordance with the table at Appendix A. The amount of grant comprises 51% GAE grant calculated as described at paragraph 4.3 below; and additional grants in respect of the SDEA - OIG, the calculation of which is described at paragraph 5 below.

4.3 Column A of Appendix A shows the expenditure for police purposes forecast by each authority for 2004-05, other than its expenditure on loan charges. In making this determination, Scottish Ministers are entitled to exclude certain categories of expenditure by virtue of section 32(4) of the 1967 Act. The amount of forecast expenditure in Column A is reduced by 2.5% as shown in column B. On receipt of audited accounts for 2004-05, to be received in the financial year 2005-06, a re-determination of the 2004 Order will be made. (see section 7 below). This element of the grant is then calculated at 51% of the figure in column B the result of which is shown in column C. The 2.5% deducted from the prior year (shown in column D) is then added to the figure in column C and the total is shown in column E. The figure in Column E is known as the Net Grant.

4.4 An estimate of the SDEA - OIG funding (shown in column F) for each authority is added to these figures. The resulting totals, shown in column G, represent the total police grant determined to be made to each authority.

4.5 The figures in column G of Appendix A are higher than the cash limit figures shown in the table at paragraph 8 below because they include a sum in respect of the share of common police service expenditure . See paragraph 6 for explanation.

5. Officers Working with or on Secondment to the SDEA-OIG

5.1 In addition to Net Grant, £2 million will be paid towards the cost of 100 officers who are based in forces and engaged in dedicated drugs duties. This payment is made on a 100% grant basis, and no part of it is recoverable. An estimate of the amount due to each authority in 2004-05 is set out in the table below.

5.2 Police authorities will be given an additional amount of grant amounting to the estimate of the costs of forces seconding officers to the SDEA - OIG. However, deducted from that are individual police authority's shares (50%) based on the Common Police Services (CPS) formula as shown in the table below. (Under the CPS formula, costs are apportioned to the individual police authorities and joint police boards in accordance with the annual number of recorded crimes and offences in each police authority area). The amounts due are based on estimates and redetermination of police grant will ensure forces are reimbursed in full for actual costs less their contributions. The amount applicable to each authority is set out in the table below.

5.3 The total amount due to each force is shown in Appendix A, column F. This has the effect of increasing the total grant payment due to each force shown in column G of Appendix A, and these figures appear in article 3 of the 2004 Order.

6. Common Police Services

6.1 Each authority's share of that part of Scottish Ministers' expenditure on common police services which they will recover under section 36(3) of the 1967 Act may be deducted from police grant payable to the authority under section 32 of the 1967 Act. The Scottish Ministers are empowered to do this by virtue of section 36(5) of the 1967 Act.

6.2 Scottish Ministers intend to determine, under section 36(3)(b) of the 1967 Act, the amounts payable by authorities in respect of their share of the expenditure on common police services, which in 2004-05 consists of non-staff costs and support staff costs of the SDEA - OIG. The amounts, which they intend to determine, are shown in Appendix C.

6.3 Other services previously funded as Common Police Services will in 2004-05 be fully funded by Scottish Ministers.

6.4 The amount of police grant payable under section 32 of the 1967 Act is, (for 2004-2005) inclusive of the gross amount which they intend to recover by virtue of section 36(5) in respect of expenditure on common police services.

6.5 The effect on authorities is just the same as if the amount of police grant payable under section 32 had not included any amount representing the share of expenditure on common police services and the power under section 36(5) had not been exercised.

7. Proposed Re-determination

7.1 Scottish Ministers propose that, when they receive the audited accounts of each authority's actual expenditure for police purposes, for 2004-05 they will re-determine the aggregate amount of police grant to be made for that year.

7.2 It is proposed that the amount of police grant to be paid to each authority for the financial year 2004-2005 would not exceed the cash limit applicable to that authority, (as shown at 8) as a result of this re-determination.

8. GAE Cash Limits

8.1 The GAE cash limit applicable to each authority is set out in the following table: -

8.2 The cash limits have been determined by Scottish Ministers apportioning to each authority part of £938,954,000, which Scottish Ministers have estimated to be the aggregate amount of GAE for police purposes for the financial year 2004-2005.

8.3 The calculations of the figures in the above table are shown in Appendix B, which include a sum in respect of the share of common police service costs.

8.4 The figures shown in Appendix A, column A, are based on the budgets agreed by police authorities for 2004-05. The net grant figure in column E includes an estimated sum, determined by Scottish Ministers under section 36(3) of the 1967 Act, as recoverable for common police services. The figures shown in Appendix B, column A are the amounts determined by Scottish Ministers, as GAE. Police grant will be paid up to the amount determined and shown in column H in Appendix B. The net grant figures in Appendices A and B are identical as a result of the authorities setting their budgets at or above the GAE level available.

9. Distribution of Grant Aided Expenditure

9.1 For 2004-05, the apportionment between police authorities of the aggregate amount of GAE was calculated, by agreement with the Association of Chief Police Officers in Scotland (ACPOS) and the Convention of Scottish Local Authorities (COSLA), on the basis of interim recommendations from the Police GAE Working Group. The apportionment was carried out as follows:

9.2 The component for pensions and commuted sums (£142,764,000) was apportioned to authorities on the basis of forces' estimates, approved by ACPOS, of their requirements in 2003-04.

9.3 A component for travel warrants (£350,000) was provided to Northern Joint Police Board and Strathclyde Joint Police Board on the basis of their estimated requirements. This component relates to the outer island travel allowance in those police areas and is received only by those two boards.

9.4 The remainder was regarded as core GAE (£795,840,000). £2,900,000 of this total was allocated to those authorities which the Working Group's provisional findings suggested might be under-resourced in comparison with the national average. £300,000 was divided on advice from ACPOS in order to equalise the estimated benefits to forces from the contracting out of prisoner escorting. The remainder was allocated in proportion to the distribution of core GAE in 2003-04.

Scottish Executive Justice Department

Police Division

March 2004

([1]) 1967 c.77; section 36 was substituted by section 46 of the Crime and Punishment (Scotland) Act 1997 c.48.

([2]) A copy of Form MKQ and the list of crimes and offences set out in Appendix 2C of the Criminal Statistics Handbook may be obtained free of charge from the Scottish Executive Justice Department, Criminal Statistics Unit, Branch 2, 1WR, St Andrews House, Regent Road , EdinburghEH1 3DG.

([3]) Section 47(1) was amended by the Police and Magistrates' Courts Act 1994 (c.28), section 62.

([4]) A copy of the Classification may be obtained free of charge from the Scottish Executive Justice Department, Criminal Statistics Unit, Branch 2, 1WR, St Andrews House, Regent Road, EdinburghEH1 3DG.