With permission, Mr Speaker, I would like to propose to the House a provisional police funding settlement for 2019-20. I do so at a time of real pressure on our police system, with demand rising and becoming increasingly complex and resource intensive. Across the country, police officers and staff are working exceptionally hard in demanding and often risky conditions. They have the respect and thanks of this House, but they need more than that—they need additional support to help them do their job.
Last year, Parliament approved a funding settlement that resulted in £460 million of additional public investment in policing, including £50 million more for counter-terrorism and £280 million more for local forces from the precept. That meant that every force’s funding was protected in real terms this year, and overall public investment in policing this year is more than £1 billion higher than three years ago. As a result of last year’s settlement, most police and crime commissioners set out plans to either protect or enhance frontline policing. I also indicated last year that our intention was to provide a similar settlement in 2019-20, subject to improved efficiency, productivity and financial transparency. I am pleased to confirm that the police have met those conditions, and there is an agreed plan to deliver £120 million in commercial and back office savings by 2020-21. Forces are developing digital plans, including deploying mobile technology more ambitiously to use police time more productively, and every police and crime commissioner has published a financial reserves strategy.
However, the Government recognise that two things have changed since I stood at the Dispatch Box one year ago. First, cost pressures have risen, public sector inflation has increased and the police are facing challenges in meeting new costs such as in forensics and increased employer contributions to safeguard public pensions. More significantly, demand pressures have risen. There has been a major increase in the reporting of high-harm, previously hidden crimes such as child sexual exploitation. The challenge from serious and organised crime networks is growing. Through the serious violence strategy we are bearing down on the worst spike in serious violence and knife crime that we have seen in this country in a decade. Digitally enabled and online crime remains a major challenge for our police, and meanwhile, as we are all aware, the threat from terrorism has escalated and evolved.
The first role of Government is to protect the public, and as crime changes, so must the police. We are determined to ensure that the police have the powers and resources they need to respond to changing demand. Therefore, the Home Secretary and I would like to go further than I indicated last year. As the Home Secretary has signalled over the course of the year, police funding is his No. 1 priority, and he and I have been working closely with our colleagues across Government to agree a comprehensive settlement. Today we are proposing a settlement that could see public investment in policing rise by up to £970 million in 2019-20, depending on the actions of police and crime commissioners.
Let me break that very large number down for the House. First, instead of the flat cash grant that I indicated last year, we want to increase Government grants to police and crime commissioners by £161 million. Every police and crime commissioner will have their Government grant funding protected in real terms, and the package includes £14 million to recognise the specific extra costs and financial challenges of policing London.
On top of that, we will allocate additional grant funding of more than £150 million specifically to help the police manage what, since the 2016 Budget, have been unexpected increases in their contribution to public sector pensions.
We have also listened to requests from police and crime commissioners for more flexibility around levels of police precept. This settlement empowers police and crime commissioners to raise council tax contributions for local policing by £2 a month for a typical household, which is £24 a year. If that flexibility is fully utilised, the result will be just over £500 million of additional local investment in local policing. We do not take that decision lightly, because we know money is tight for many people. The decision to raise local tax will be up to locally elected police and crime commissioners, and they will have to make a case to their electorate and be accountable for delivery of a return on that public investment.
On top of the proposed increase in core grant and a doubling of local precept flexibility, we propose investing more in the fight to protect our constituents against terrorism and serious organised crime. As my right hon. Friend the Chancellor announced at the Budget, funding for counter-terrorism policing will increase by £59 million next year to £816 million, which is £160 million more than we planned at the last spending review. We also intend to match the new serious and organised crime strategy with £90 million of much-needed resources to tackle threats including economic crime, child sexual exploitation, fraud and cyber-crime.
This settlement combines increased central funding with increased local contributions to local policing. It enables the biggest investment in frontline policing since 2010, and the start of the journey to get this country back to living within our means. It will allow PCCs to manage their costs while maintaining their plans to recruit and fill capability gaps, not least when it comes to detectives. It will strengthen our capabilities in the fight against serious and organised crime and terrorism.
Alongside that increased investment in the frontline against crime, we will also maintain our existing level of public investment in building national police capabilities and upgrading police technology for the benefit of local forces. We will invest £175 million in the police transformation fund next year. A major priority for us is supporting the police to make the most of the digital opportunity to improve contact with the public and manage police time more effectively. We are also developing the first national programme to support the wellbeing of stretched frontline officers. We support Police Now, which is attracting fresh talent into neighbourhood policing and supporting the role of detectives.
Alongside the police transformation fund we will invest £495 million in technology programmes that will upgrade critical infrastructure such as police databases and the emergency service communications network. Taking everything together, the settlement means that as a country we will be investing up to £14 billion in our police system next year, if all police and crime commissioners use full precept flexibility. That would represent increased public investment of £2 billion compared with 2015-16.
With increased public investment comes an increased responsibility to improve efficiency and effectiveness, and to show the public what difference their investment is making in terms of greater deterrence for criminals, better outcomes for victims and safer communities. To make the most of the new investment we are announcing today, we will work with the police on ensuring the delivery of the efficiency savings we have identified. We want greater ambition in the use of digital mobile working to improve productivity. We also want to ensure that the major capability gaps that the independent inspectorate identified, on detectives and investigations, are filled, and that there is greater co-ordination of important work to tackle serious and organised crime.
Of course, support for our police is not all about spending taxpayers’ money, and we are also supporting them through new powers. We are working on a cross-party basis to strengthen legislation on offensive weapons, just as we worked on a cross-party basis to strengthen protections for emergency services workers. Let me be clear: our commitment to supporting the police to deliver for the public is for the long term. Come the forthcoming comprehensive spending review, the Government will be prepared to invest appropriately in police capacity, capability and professional confidence, but that must come with greater local accountability of directly elected police and crime commissioners, and a commitment to accelerate the pace of change to ensure that British policing remains the best in the world.
As we have indicated, this settlement is the last before the next spending review, which will set long-term police budgets and address how resources are allocated fairly across police forces—I know that is of great interest to many Members across the House. This Government’s priority is the safety of the public. We understand that our police face increased demands, and we are determined to respond to the threats from terrorism, organised crime and serious violence. We are today announcing a major investment in the capabilities that the police need to respond, and we are rightly challenging them to spend that money well and continue on the path of reform and modernisation. I conclude by expressing my gratitude and that of the Government to police forces around the country for their exceptional attitude, hard work and bravery, and I commend this statement to the House.