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Justice Department Police Division Identity No: Police Circular No: 3/2002 Title: The Police Grant (Scotland) Order 2002 Addressed to: Chief Constables Chief Executives Dumfries & Galloway Council Fife Council Clerks to the Joint Police Boards

St Andrew's House Regent Road Edinburgh EH1 3DG Telephone: 0131-244 2156 Fax: 0131-244 2666 ann.tocher@scotland.gsi.gov.uk http://www.scotland.gov.uk Our ref: DCD/26/1 Date: 10 April 2002

Dates: Topic: Finance - Police Grant

Issued: 10/4/02

Implementation: Immediate

Impact: This Circular Supersedes Police Circular No: 4/2001

Contact(s) for more information: Ann Tocher (0131 244 2156)

Dear Colleague

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

Summary of contents: A copy of the Police Grant (Scotland) Order 2002 and accompanying Report is attached. This Order determines the amount of police grant payable in 2002-03.

BILL BARRON

The Police Grant ( Scotland ) Order 2002

1. This Order sets the amount of police grant payable to each authority or board for 2002-03. These amounts are related to budgets together with 100% grants for additional staff, DNA testing and SDEA 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 2002-03 as set out in the Determination attached to Police Circular No. 2/2002.

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 2001-02 will be paid on receipt from Audit Scotland, of the audited grant claim (Form PG1).

3. Amounts of grant for 2002-03 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 2002.

Police Division 1.1
April 2002
Scottish Executive

Police Grant ( Scotland )

THE POLICE GRANT (SCOTLAND) ORDER 2002

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 2002

THE POLICE GRANT ( SCOTLAND ) ORDER 2002

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 2002

('the 2002 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 2002-2003 and the amount of such grant payable to each such authority.

1.2 The 2002 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 2002 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 2002 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 maintain current 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 2002-03 is shown in column J of Appendix B and is calculated as follows:

2.3.1 97.5% of GAE for payments on account in respect of 2002-03 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

2.3.4 special 100% grant payments are added to the calculation (shown in columns F and G), and;

2.3.5 an estimate of the funding in respect of the Scottish Drug Enforcement Agency (SDEA) matters as mentioned in paragraph 5.2 below (shown in column H) is added to the Net Grant and Special Grant payments and;

2.3.6 each authority's share of estimated costs of common police services and non-staff costs (costs not associated with seconding officers) for the Intelligence and Operational Group (IOG) of the SDEA recovered under section 36(3) of the 1967 Act (shown in column I), is deducted.

2.4 The resulting cash limit figures for police grant are shown in column J of Appendix B. Grant payable on loan charges and capital from current revenue is excluded.2.5 In distributing GAE for 2002-2003 Ministers took account of forces best estimates of the costs that they will incur in the forthcoming year. Consequently allocations were made by meeting forces' estimates.3. Determination of Aggregate Amount of Police Grant3.1 The aggregate amount of police grant, which Scottish Ministers have determined to be made for the financial year 2002-2003, is £432,984,000 (see Appendix A ), as set out in article 2 of the 2002 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 Authority4.1 The amount of police grant, which is determined to be made for the financial year 2002-2003 to each authority, is set out in Article 3 of the 2002 Order.4.2 The amount of police grant determined for each authority for the financial year 2002-03 was determined as being in accordance with the table at Appendix A. The amount of grant is comprised of two rates of grant: 51% GAE grant calculated as described at paragraphs 4.3 - 4.4 below and 100% special grants in respect of DNA testing and recruitment of additional staff, the calculation of which is described at paragraphs 10 - 13 below.4.3 Column A of Appendix A shows the expenditure for police purposes forecast by each authority for 2002-03, other than its expenditure on loan charges and on capital expenditure from current revenue. 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 2002-03, to be received in the financial year 2003-04, a redetermination of the 2002 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 The figures in column I 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 and the non-staff costs of SDEA IOG. See paragraphs 5 and 6 for explanation.4.5 The special grant determined in respect of DNA testing and the recruitment of additional staff for each authority is added to the Net Grant figures in column E of Appendix A. An estimate of the SDEA funding (shown in column H) for each authority is added to these figures. The resulting totals, shown in column I, represent the total police grants determined to be made to each authority.5. The Scottish Drug Enforcement Agency (SDEA)5.1 By way of 100% grant, payment will be made for the 100 officers who are based in forces, and engaged in dedicated drugs duties. An estimate of the amount due to each authority in 2002-03 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 IOG. However, in determining the amount of such grant there is deducted from the total of such costs the individual police authority's share (50% in total) 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 by using Scottish Ministers' expenditure multiplied by the figure derived from calculations based on constable equivalents in a police authority area and the annual number of recorded crimes in that same area). The amounts due are based on estimates and redetermindation of police grant will ensure forces are reimbursed for actual costs less their contributions. The amount applicable to each authority is set out in the table below.

Force	Payment Due for 100 Officers	Payment Due for Seconded Officers	Deduct Police Authorities Shares of IOG Seconded Officer Costs	Total Amount Due
Central Scotland	£100,000	£177,000	£119,000	£158,000
Dumfries and Galloway	£60,000	£105,000	£76,000	£89,000
Fife	£120,000	£477,000	£168,000	£429,000
Grampian	£160,000	£430,000	£263,000	£327,000
Lothian and Borders	£360,000	£1,145,000	£470,000	£1,035,000
Northern	£100,000	£219,000	£114,000	£205,000
Strathclyde	£940,000	£2,481,000	£1,301,000	£2,120,000
Tayside	£160,000	£396,000	£204,000	£352,000
TOTAL	£2,000,000	£5,430,000	£2,715,000	£4,715,000

5.3 The total amount due to each force is shown in Appendix A, column H. This has the effect of increasing the total grant payment due to each force shown in column I of Appendix A, and these figures appear in article 3 of the 2002 Order.6. Common Police Services6.1 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. They 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. The amounts, which they intend to determine, are shown in Appendix C.6.3 The amount of police grant payable under section 32 of the 1967 Act is, (for 2002-2003) inclusive of the gross amount which they intend to recover by virtue of section 36(5) in respect of expenditure on common police services.6.4 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-determination7.1 Scottish Ministers propose that, when they receive the audited accounts of each authority's actual expenditure for police purposes, for 2002-03 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 2002-2003 would not exceed the cash limit applicable to that authority, (as shown at 8) as a result of this re-determination.8. GAE Cash Limits8.1 The GAE cash limit applicable to each authority is set out in the following table: -

Force	Cash Limit
Central Scotland Joint Police Board	£18,821,000
Dumfries and Galloway Council	£11,831,000
Fife Council	£22,770,000
Grampian Joint Police Board	£36,768,000
Lothian and Borders Joint Police Board	£76,506,000
Northern Joint Police Board	£22,362,000
Strathclyde Joint Police Board	£198,663,000
Tayside Joint Police Board	£32,478,000

8.2 The cash limits have been determined by Scottish Ministers apportioning to each authority part of £822,122,000, which Scottish Ministers have estimated to be the aggregate amount of GAE for police purposes for the financial year 2002-2003.8.3 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 and SDEA IOG non-staff costs (i.e. costs not associated with seconding officers to the IOG).8.4 The figures shown in Appendix A, column A, are based on the budgets agreed by police authorities for 2002-03. 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 and SDEA IOG non-staff costs. 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 J in Appendix B. The net grant figures in Appendices A and B are identical as a result of the authorities setting their budgets at the GAE level available.9. Grant Aided Expenditure9.1 The aggregate amount of GAE was apportioned among authorities and the settlement for 2002-03 has been allocated along similar lines to those adopted for the 2001-02. To arrive at the distribution for 2001-02 forces were invited to submit detailed estimates of their needs for the year ahead. After consultation with the Association of Chief Police Officers in Scotland (ACPOS) Ministers agreed on the proposed estimates submitted by police authorities.

9.1.1 Staff. (£557,463,000) was distributed in accordance with estimated expenditure provided by police forces for 2002-2003.

9.1.2 Property, transport and administration. (£76,648,000) was distributed in accordance with estimated expenditure provided by police forces for 2002-2003.

9.1.3 Police pensions. were distributed in accordance with estimated expenditure provided by police forces for 2002-2003. This assessment was divided into two parts:

· pensions excluding commuted sums, (£95,434,000) for pension payments under the Police Pensions Regulations 1987 ('the 1987 Regulations'), apart from payment of commuted sums, distributed in accordance with estimates of expenditure by each force for 2002-2003; and

· commuted sums, (£26,618,000) for lump sums commuted in accordance with regulation B7 of the 1987 Regulations distributed in accordance with estimates of expenditure by each force for 2002-2003.

9.1.4 Rent and housing allowances. (£35,134,000) This assessment was distributed in accordance with expenditure by each force for 2002-2003 on rent and housing allowances paid under the Police (Scotland) Regulations 1976.

9.1.5 Travel warrants. (£400,000) This assessment of related only to payments made by Northern Joint Police Board and Strathclyde Joint Police Board in respect of the outer island travel allowance in those police areas and is received only by those two boards. It was distributed in accordance with estimated expenditure provided by police forces for 2002-2003

9.1.6 Non-Domestic Rates (NDR) Liability. (£10,425,000) This assessment was introduced for 2000-2001 due to the ending of Crown Exemption for NDR from April 2000 for police properties. It was distributed in accordance with the estimated expenditure provided by forces for 2002-2003.

SPECIAL GRANT PAYMENTS

10. In addition to the above police authorities will also receive by way of 100% grant payment towards expenditure to support DNA testing and the recruitment of additional staff. The total amount payable to authorities in 2002-03 is £9,450,000.

11. The amount of the 100% police grant is included in the figures set out in Article 3 of the 2002 Order. The amount applicable to each authority is set out in the following table for DNA testing and the recruitment of additional staff:-

Force	DNA Testing	Additional Staff
Central Scotland Joint Police Board	£63,000	£378,000
Dumfries and Galloway Council	£40,000	£239,000
Fife Council	£74,000	£446,000
Grampian Joint Police Board	£116,000	£693,000
Lothian and Borders Joint Police Board	£246,000	£1,479,000
Northern Joint Police Board	£72,000	£434,000
Strathclyde Joint Police Board	£634,000	£3,804,000
Tayside Joint Police Board	£105,000	£627,000
Total	£1,350,000	£8,100,000

12. The total special grant available for the recruitment of additional staff this year has increased from £7.9 million to £8.1 million an increase of £200,000 or 2.5% over the provision made available in 2001-02. Accordingly each force's grant has increased by 2.5% over the provision made last year. In the financial year 2000-01 £7.9 million of additional grant was made available for additional staff recruitment. This was distributed on the same basis as the GAE funding for that year, i.e. the GAE figure for each authority (less provision for unavoidable costs, such as pensions, commuted sums and non-domestic rates) was calculated and each authority's percentage share of the total operational costs of the eight police forces was then calculated. The grant for the recruitment of additional staff was then allocated in the same proportions. An identical proportional share has been applied in the allocation of this years £8.1 million special grant.13. The special grant available for supporting DNA testing was apportioned in exactly the same way as the grant for the recruitment of additional staff. That is in proportion to each force's share of total operational costs. In 2002-03 the grant for supporting DNA testing remains at the same level as it was in 2001-02 with funding of £1.35 million. Accordingly each force's grant remains unchanged in 2002-03

Scottish Executive Justice Department
Police Division
March 2002