Agenda item

The Panel considered a report of the Police and Crime Commissioner (PCC) which provided an update on the financial position for 2025/26, an updated MTFP including an update on the assumptions, an update on the pressures facing the policing area over the MTFP and progress made towards the efficiency savings target. A copy of the report, marked ‘Agenda Item 6’, is filed with these minutes.

In introducing the report, the PCC thanked the Chairman and the other members of the Panel for their contribution towards a joint letter which had been sent from him and the Panel to the Secretary of State with responsibility for policing. The letter had outlined concerns relating to financial pressures faced by the Force, victim support, and community safety within LLR. The PCC and the Chairman agreed that the response which had been received had not outlined solutions to the issues raised.

Arising from discussion, the following points were raised:

(i)         With regards to efficiency savings and closing the budget deficit gap, the PCC stated that a number of areas for possible efficiency savings had been identified by the Office of the Police and Police and Crime Commissioner (OPCC) and the Force, within the 2025/26 budget. Many of the savings had either been realised, or were on track to be realised, with exception of two areas. One of which was a £1.4m saving relating to reorganisation of police staff roles. It was noted that only £1m of this would be realised. The other area related to a £0.4m underachievement of income relating to the recharge of officers to regional collaborations, as a result of the officer establishment reducing for the unit. However, the PCC stated that additional grant income had been awarded which had reduced the funding gap by £2m. A further £0.5m had been realised from debt charges and £0.3m non-pay savings relating to national ICT costs and online rental charges. This resulted in the overachievement of the savings target by £0.9m.

(ii)        A question was raised regarding a 10% increase in ICT costs and whether steps would be taken in order to mitigate future inflation risks for technology related expenditure. In response, it was explained that inflation was not applied as a blanket rate across all contracts. Each contract was reviewed individually, and its specific inflation mechanism was taken into account. Known inflation factors within contracts were built into the MTFP wherever possible. The best available information and historical trends were used in order to estimate future ICT costs. It was noted that some ICT costs related to national systems, such as the Police National Database, where the Force had no control over pricing. Forecasting these costs was often difficult because increases had been inconsistent year to year. Information on national charges often arrived late in January, making timely budgeting challenging.

(iii)       Concern was raised relating to the longstanding and recurrent nature of the Force’s financial challenges, noting that similar issues had been highlighted consistently over several years by both the current PCC and their predecessor. This included underfunded police pay awards, pension contributions, and employer National Insurance costs. It was emphasised that these funding gaps had increasingly resulted in greater reliance on the policing precept. The PCC acknowledged these pressures and confirmed that further detailed correspondence had recently been submitted to Government outlining the extent of the underfunding, reflecting similar representations made in previous years. The Panel remained concerned that despite repeated efforts, many of the same financial issues persisted. The PCC stated that an updated position would be outlined within the proposed 2026/27 budget and precept, which would be presented at the meeting on 4 February 2026.

(iv)      In response to a question asked, the PCC confirmed that the OPCC utilised the Public Works Loan Board in order to secure borrowing at the most favourable and risk‑averse rates available.

(v)        With regards to the Neighbourhood Policing Uplift, the report stated that a total of 56 FTEs would be recruited in 2025/26 (23 officers, 21 PCSOs, and 12 Staff). It was noted that the reference to 12 staff related to non‑policing personnel employed to backfill roles when police officers or PCSOs had been moved into frontline neighbourhood policing. This mechanism ensured that frontline neighbourhood policing could be strengthened without leaving other operational areas understaffed.

RESOLVED:

That the update on the financial position for 2025/26, be noted.