By Alison Dewhirst, CIPFA Police Advisor
It's well known that police finances have faced difficulties as a result of austerity, and that this manifests more prominently in certain areas of the country than others. Being held accountable through audit is key if police forces are to effectively manage their finances amid tight budget restrictions that have only amplified as a result of COVID-19.
Like local authorities, police and crime commissioners' offices are highly complex organisations providing a wide range of services to the public, which are vital to the common good. Like other public sector organisations, they have been confronted with budget cuts as a result of a decade of austerity. The government has made promising steps in recent years to mitigate the impact of austerity on police forces, such as Operation Uplift, which laid out the intention to hire 20,000 new police officers throughout the country. This initiative comes with its own set of challenges but has progressed regardless of the difficulties presented by the pandemic.
As local authority budgets have been stretched, so too have those of PCCs. With less funding to go around, and increased demand and resources stretched thin, forces have had to make difficult decisions to cope with the new environment that they find themselves in. Some forces are currently facing sizeable increased costs due to personal protective equipment (PPE) and ICT, though their PPE costs are being reimbursed by the government.
With big changes on the horizon, and a new review that will propose new powers to tackle crime in their areas, it's crucial that PCCs are effectively audited to ensure that taxpayer funds are being allocated and managed in the right ways.
The Redmond Review into local authority audit was announced in the summer of 2019, long before the financial problems associated with COVID-19 began, and is anticipated to report soon. This review intends to address the problems of the audit system for local authorities in England and is relevant to policing as well as councils. There have been concerns in policing around cost, quality of audit and transparency.
In addition, the National Audit Office has launched its new Code of Audit Practice this year, setting the framework in which local audit firms operate. The NAO is also currently working on auditor guidance notes, which will contain the detail of how the proposals will work. There could be a real shift in emphasis on value for money, moving from a binary opinion to a much more nuanced view, which will hopefully address issues at a much earlier stage.
Local authority funding is at a crossroads. Although PCCs and police forces are not quite in the same situation, it will be interesting to see how the new audit regime, together with the recommendations of the Redmond Review, will ensure local authorities and police can get the most out of external audit and how auditors can ensure financial probity, accountability and sustainability in the longer term.