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Finding savings to tackle inflation is becoming harder for police forces

Charlotte Radford, Police Advisor for CIPFA (Chartered Institute for Public Finance and Accountancy), explains the impact of escalating prices on police force budgets

Inflation affects everyone and everything. From families struggling to make ends meet to companies facing higher costs for raw materials, no one is immune. With inflation now at 9.4%, the highest level in a generation, many of us are asking when this upward trajectory will ever end?

Across the UK, the entire public sector will be faced with difficult decisions about how they can manage their budgets. Whether that’s heath care from the NHS or social care and waste collection from the council.

The police forces are also a key part of the public sector, providing essential services. They too will be under huge pressure. Soaring fuel prices and increased vehicle maintenance costs are just two significant impacts that the police, and all emergency services, will be dealing with.

In February, when all UK police forces set their budgets for the year, a range of assumptions were made. These included budgeting for a pay award of between 2% and 3.5% and an assumption that inflation would be between 2% and 4%.

Recent forecasts are predicting overall inflation will rise above 11% in the next 12 months, with petrol and diesel at record highs and energy costs already having increased by more than 50% since the start of the year.

With budgets set and the only increase in government funding being for the 20,000 additional police officers as part of the uplift programme, inflation is placing enormous pressure on police force budgets. To mitigate the rising costs, significant levels of savings will unfortunately have to be made.

The scope for delivering such savings is limited. There cannot be a reduction in police officers if the uplift programme is to be delivered. Forces are therefore having to use their financial reserves, reduce non-frontline police staff numbers or cut expenditure in other areas. These areas are where the savings delivered by policing over the last 10 years of austerity have already come from, meaning yet more savings in these areas will be increasingly difficult to find.

In recent years, precept freedoms have been used by a number of police and crime commissioners to help meet inflationary cost pressures by increasing council tax at a local level. There is a recognition within local authorities of the burden this puts on those paying council tax. It’s widely expected that the significant rise in inflation will mean this will need to be considered in coming years, particularly if the increase in police officer numbers generated by the uplift programme is not to be reversed.

For all public sector organisations, there is no single answer to how to tackle inflation. A combination of approaches will be needed which focus on being dynamic and flexible. Solutions may include adjusting savings plans, negotiating with suppliers and reviewing recruitment. It will also be important to have organisation-wide conversations about how best to cut costs, rather than just looking at single departmental budgets.

Many public sector leaders will not have experienced such inflationary pressures before. Let’s hope they don’t have to experience them for too much longer, although sadly there appears to be no end in sight.

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