What you need to know ahead of the Spending Review: Crime

This is the latest in our series of posts on the Spending Review with Reform. A list of previous posts can be found here.

What is the budget?

The UK has one of the most expensive criminal justice systems in the world, spending a higher proportion of GDP than any other country in the OECD. Total spending on crime amounted to £23 billion for 2009-10. However, recent research suggests that total government spending on public order and safety amounts to more than £31 billion overall.

Aside from central government funding, police authorities receive funding from the police, raised locally through council tax. In 2009-10 this amounted to just under a quarter of all police funding, or £3.1 billion a year, although there is significant variation between areas.

Where does the money go?

Criminal justice spending is primarily focused in three areas – the police force, the prison and probation services and HM Courts. Spending breaks down as follows:

Police: £12.6 billion               

Prisons: £2.5 billion

National Offender Management Service (NOMS): £4.3 billion

HM Courts Service (HMCS): £1.4 billion

Legal Aid: £2.2 billion

The main area of expenditure within the system is the people who work in it. Around 83 percent of the police budget, equivalent to £10.4 billion, and 43 percent of the Ministry of Justice budget, or £4 billion, is spent on staffing costs.

The criminal justice system headcount has grown by around 21 per cent since 2001. The police force has seen a 32.7 per cent rise in staff numbers since 1999-2010, including a 12 percent rise in the number of police officers and a 46 percent increase in civilian “police staff” numbers.

Is the money well used?

Successive reports by the National Audit Office have found that the criminal justice system fails to effectively manage resources, lacks an understanding of the costs of its operational activities and does not provide value for money for the taxpayer.

In the police force, the 43-force structure creates substantial waste, both through inefficiencies incurred by centralising functions that could best be done locally and by duplicating expenditure that could best take place at a national level. At force level, the use of police officers for roles more suited to civilian police staff, overtime costs and large numbers of expensive middle-ranking officers all create significant expense.

NOMS, originally intended as a money-saving initiative, delivers poor value for money through poor management, ineffective control over processes and contracts and insufficient links to local provision. NOMIS, the proposed single offender management IT system for prison and probation service begun in 2004, was delayed by three years, doubled in project costs and will now not fulfil its core aim of a single shared database of offenders. An NAO report in 2009 found that the many of the delays and cost overruns could have been avoided with better management.

What about outcomes?

Most indicators suggest that overall crime levels are falling, and have been since 1995. Between 2008-09 and 2009-10, both crime recorded by the British Crime Survey and by police fell, by 9 percent and 8 percent respectively. However, the proportion of crimes solved has also fallen, by 10 percent to 27 percent of all crimes.

However, crime is still high and efforts to rehabilitate criminals are failing. Compared to other developed countries, the UK remains a high-crime society, with some of the worst crime rates in the OECD for burglaries, robberies, and rape.

Re-offending is also on the rise. In March 2010, a NAO report found that re-offending within one year of release had increased for the second year in a row to 49.4 percent, or 60 percent for those on short-term sentences, at an estimated social cost of £10 billion a year. The report prompted Sir Edward Leigh, former Chair of the House of Commons Public Accounts Committee, to criticise the Ministry of Justice for failing to tackle the “merry-go-round of incarceration and criminality”.

Are the police and the criminal justice system already making savings?

The 2009 White Paper, Protecting the public: Supporting the police to succeed, identified around £100 million worth of efficiency savings in police procurement, back office IT and the overtime budget. However, the type of reform necessary to deliver sustainability and value for money in policing such as streamlining of the workforce - was absent.

A number of forces have engaged in significant workforce reform and collaboration to generate savings and rationalise working practice. For instance, Mark Rowley, Chief Constable of Surrey Police, has reduced headcount in both workforce and management structures and introduced mixed staff teams and flexible shift patterns to improve value for money. Surrey Police expects to reduce its £198 million budget by £92 million by the end of this parliament, having previously found £50 million worth of savings in the last decade. Kent and Essex police have been collaborating since 2007 on the procurement of all goods and services, including IT, stationery, vehicles, catering and forensics, saving £1.3 million annually.

While NOMS achieved savings of £171 million in 2009-10, these were found in efficiencies rather than structural reform. Prisons are one spending area where private sector investment and management has proven successful, but only 10 percent of the prison budget is spent on private sector contracts annually and just 11 out of 136 prisons in England and Wales are contracted out. Such payment-by-results initiatives as the £5 million Social Impact Bond scheme currently being trialled at Peterborough Prison offer real opportunities to shift services’ focus towards quality outcomes.

What about the Government’s plans?

The Home Office White Paper, Policing in the 21st Century: Reconnecting Police and People, proposed the introduction of elected local police commissioners to “re-establish the links between the police and the public” and improve transparency and accountability. Elected commissioners will however have less power to raise local funding through taxation than police authorities currently do, limiting their ability to control budgets according to local policing demands.

The achievement of large savings is necessarily reliant on structural reform of the workforce, which makes up around 83 percent of spending. Chief Constables are still bound by fixed shift patterns, rigid staffing guidelines and a system that favours sworn officers over civilian staff such as PCSOs.

Ken Clarke’s proposals to introduce greater use of payment-by-results in prisoner rehabilitation and “harness the innovation of the private and voluntary sectors…to cut reoffending” rightly focuses reform away from visible inputs like prison places and onto real outcomes like reoffending rates. The Justice Secretary has also identified short-term sentences as an area of inefficiency and ineffectiveness, and pledged to reduce their use. 157 underused or inadequate courts are to be closed, saving £37 million annually.

So what is real reform?

Effective reform must combine workforce reform, the introduction of real local accountability and structural reform of the police service. Real reform would mean greater use of police staff and greater freedom and flexibility granted to Chief Constables over pay and staffing decisions. Value for money will only be achieved if Chief Constables have the power to adapt shift patterns to local need, set their own overtime rates and, where necessary, reduce police officer numbers.

These new responsibilities must be accompanied by meaningful local accountability and real control of budgets. Elected police commissioners should be given real power to raise money, control spending and set a clear direction for policy in conjunction with the local police force. In parallel, the current 43-force policing structure should be reformed to embed policing locally, through the introduction of smaller policing units.

Real reform in prisons and rehabilitation must shift the debate away from inputs, such as the number of prison places, and onto outcomes like reoffending rates and rehabilitation. The Government is right to increase the use of payment-by-results in the rehabilitation of criminals, especially if the financial incentives for providers are linked to finding offenders employment and housing, as well as whether or not they reoffend. The Government should also further expand private sector prison management, moving from its current provider role to a commissioner or purchaser of services.

Will Tanner is a researcher at Reform.