Meeting of the Parliament

Meeting date: Tuesday, June 7, 2016

Official Report 861KB pdf

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Topical Question Time

The next item of business is topical question time. Question 1, in the name of Jackie Baillie, has been withdrawn.

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Police Scotland (Financial Difficulties)

To ask the Scottish Government what assessment it has made of financial difficulties at Police Scotland following the departure of its director of financial services. (S5T-00010)

The Scottish Government is committed to protecting the police resource budget for the entirety of this session of Parliament, delivering an additional £100 million of investment over the next five years. We have also provided an additional £55 million of reform funding in 2016-17.

The departure of the director of financial services is a matter for the board of the Scottish Police Authority and Police Scotland. The Scottish Government has no role in the matter.

One of the most significant driving factors behind the establishment of Police Scotland was promised cost efficiencies. With this on-going development and the warnings in last year’s Audit Scotland report about a potential £85 million shortfall in the policing budget by 2018-19, what analysis has the Government made of the impact that its broken promise will have on front-line services, particularly in rural communities such as Dumfries and Galloway?

I am not entirely sure whether the member is aware that Audit Scotland’s report has been overtaken by events. The report referred to the financial situation in the previous spending review period and did not take into account the funding allocations that have been arrived at by the Scottish Government. For example, the report took no account of the additional £55 million of funding as part of the reform budget to which I have just made reference. It also worked on the assumption that no further financial savings would be achieved in Police Scotland, but that is exactly what the reform budget is there to do—to invest in areas in order to get greater efficiencies. The financial position that was set out in the Audit Scotland report does not reflect the situation following the spending review.

I hope that that will reassure the member about the actions that the Scottish Government is taking to continue to invest in our police service in Scotland. We certainly do not copy the approach that has been taken by his colleagues in England and Wales, which has resulted in the loss of almost 17,000 police officers.

Does the Scottish Police Authority have a long-term financial strategy, as was recommended in the Auditor General’s report in November 2013 and again in her report of December 2015?

Again, that is a matter that has been overtaken by events, because the SPA has set out its initial version of its long-term, 10-year financial strategy, which will take it up to 2025-26. I understand that the SPA intends to revise the strategy further in the next few months. The matter will be progressed by the SPA, which has set out its initial approach for its long-term financial strategy, as was recommended—and rightly so—by Audit Scotland.

On Police Scotland’s finances, the cabinet secretary will be aware of today’s press story that Police Scotland’s redundancy bill has come to £34 million so far. More than 1,000 civilian staff have lost their jobs since the creation of the national force. Does he acknowledge that the arbitrary target for officer numbers on which the Scottish National Party and the Tories reached agreement after the 2007 election has contributed to the haemorrhaging of skilled civilian staff, forcing officers to undertake jobs that they were not trained for? In some cases, that has caused real harm.

In reforming policing, we always made it clear that there would be areas of overlap. When eight forces came together into one, it was inevitable that certain aspects that were being provided in one area would be ones that had already been delivered in another. The necessary consequence of that has been a change in Police Scotland’s staffing levels. As part of the reform journey, we were clear that there were areas of duplication and that that would result in Police Scotland having a lower level of staff than we had across the eight forces.

The redundancy programme is there to allow those staff who find themselves in posts that are no longer required as a result of the reform programme to take early retirement or voluntary redundancy. The member will also acknowledge that we have an agreed position of no compulsory redundancies. That is the approach that the SPA is taking forward.

The member should recognise that the up-front investment of some £33 million that has been put into voluntary redundancy and early retirement packages will release some £33 million each year going forward. That has been a necessary part of the reform approach to ensure that resources are diverted into more effective areas of policing, rather than being used in areas that no longer have to be covered or are being duplicated elsewhere. We will continue to work with Police Scotland so that it can take that reform programme forward. That is exactly why we have provided an extra year of the reform budget in this financial year—to assist Police Scotland in the reform programme that it has been taking forward over the past three years.

Will the cabinet secretary say how much Police Scotland is required to pay annually in VAT?

The member may be aware that Police Scotland is the only force in the United Kingdom that is required to pay VAT—or that is unable to reclaim VAT. Of the 44 other police forces in the UK, none is required to pay any VAT. It is exactly the same for our fire service in Scotland. The situation is costing the Scottish taxpayer between £25 million and £30 million per year. That is the equivalent of approximately 1,000 members of staff.

We have repeatedly made it known to the UK Government that that discriminatory approach to Police Scotland is entirely unacceptable and that it should treat Police Scotland in the same way as every other police service across Great Britain and Northern Ireland is treated. Police Scotland should be treated with parity and allowed to reclaim VAT.

The only reason why that has not been taken forward is that UK ministers cannot be bothered to lift a pen to make sure that action is taken to redress what is an extremely unfortunate situation that discriminates against Police Scotland.

Does the cabinet secretary believe that morale in the police has improved or deteriorated following the establishment of Police Scotland and the subsequent financial problems that the service has experienced?

I will try my best to answer the member’s question. There is no doubt that there are serious issues around morale in Police Scotland, which were highlighted in the staff survey that was published towards the end of last year. The new chief constable has made it clear that a key part of the work that he will be taking forward is making sure that the issues of concern that were raised in the staff survey are addressed. Police Scotland, along with the SPA, is taking forward a range of work to address the concerns that have been raised by staff.

As I am sure that the member will recognise, when any major organisation goes through significant reform there are consequences that can have an impact on staff morale. His party was supportive of the creation of a single force in Scotland. The chief constable and the SPA have set out clearly the course of action that they will take to address the issues that were highlighted in the staff survey.

The cabinet secretary and my colleague Oliver Mundell both mentioned the Auditor General’s report. The Auditor General said that the 2014-15 SPA accounts were

“incomplete, of poor quality and were subject to substantial changes.”

She went on to say:

“This is exceptional in our wider experience of auditing public sector accounts.”

To use the cabinet secretary’s own words, has he lifted a pen—or has there been any action since the Auditor General made that statement—to get the Scottish Government and the SPA to work together to ensure that such a substandard set of accounts is not presented in future, to allow us to have proper scrutiny of Police Scotland’s budgets?

Again, the member is slightly behind the curve, because action has already been taken to address those very issues.

The first part of that was addressed in the Government’s police governance review, which was taken forward by the chair of the SPA, and which set out the need to make sure that the accountable officer—who is the chief executive of the SPA—is in a position to undertake the actions that are necessary to deal with police finance matters.

The SPA has also set out its financial strategy, which was published towards the end of March this year, and which sets out the course of action that it is taking.

A range of actions have been taken forward, and I have no doubt that the SPA and the chief constable will continue that programme of work to address the concerns that Audit Scotland raised.

What support has the Scottish Government had from the other parties in the Parliament to end the farce of Police Scotland being singled out to pay VAT, unlike any other police force in the United Kingdom?

I hope that all members recognise the situation in which Police Scotland finds itself, in being discriminated against in that way by the UK Government. The situation is completely unacceptable.

I know that there has been finger pointing and that it has been said that we knew before we created Police Scotland that the situation would arise. I often hear excuses from Conservative members and others, who say that it arose because we created a single force. However, if that is the case, why does the Police Service of Northern Ireland, which is a single force that covers Northern Ireland, have the right to reclaim VAT? Exactly the same situation applies to the fire service.

The Conservatives were happy to give Highways England VAT exemption when they created it. I note that heads are down on the Conservative benches. Maybe Conservative members will start to stand up for Scotland’s and Police Scotland’s interests at some point and ensure that Police Scotland is treated fairly and in exactly the same way as every other police service in the UK is treated, by being given the right to reclaim VAT. The situation costs the Scottish taxpayer between £25 million and £30 million a year.

Will the cabinet secretary confirm that the full cost of Police Scotland, including the VAT, is covered from the Scottish block grant, and that if our police force no longer had to pay VAT it would be wholly reasonable for the cost of the VAT to be removed from the calculation of the block grant?

That is the warped way in which the Conservative Party wants to look at the issue. The reality is that most emergency services in the UK, including police services, are given the right to reclaim VAT, and Police Scotland is the only service in the whole of the UK that is not able to do that. Given how often Alex Johnstone is keen to demand that the Scottish Government does X, Y and Z, I would have thought that he would be big enough to stand up to his colleagues in Westminster and say, “Put this right and ensure that Police Scotland is able to reclaim VAT, just like any other police force in the UK.”