Economics of the Police: Recruitment, Retention and Finance

Lead Research Organisation: Institute for Fiscal Studies
Department Name: IFS Research Team

Abstract

The project will focus on three broad areas of policing:

(i) it will measure the quality of police officer recruits using an innovative data set, and examine how this quality is affected by local labour market conditions, such as wages in alternative occupations in the local area. This anonymised data set provides pass/fail marks and test scores for a variety of assessment procedures used during the compulsory national assessment of would-be recruits to the police service, matched to individual characteristics. This data set has been provided to us by NPIA - now the national College of Policing. The project will match this data set to further local police area characteristics. This research will directly impact on several questions relating to public pay - the trade-off between pay and quality of public service; the case, if any, for greater local pay variation in the public sector; and so on.

(ii) it will examine the factors that affect the retention rates of police officers. The primary focus will be on exits into retirement (since exit rates of police officers are low until their late-forties); on the management of ill-health (early retirement); and of what career choices are made by retired police officers. This will be of direct relevance to the ongoing reform of the pension and retirement provisions for police officers, and, more generally, to the deployment and 'second career choices' of older workers.

(iii) it will assess the scope for local discretion over spending on police officers and the deployment of police officers. The police service is financed by a mixture of central funding and local tax ('the precept') raised via the levy of council tax. The share of police funding varies widely across police authorities. This reflects two broad groups of factors: differences in taxable capacity across council tax jurisdictions and, conditional on central grant allocations, differences in the demand for police services across local area. The research will seek to understand the relative importance of these factors using a variety of proxy measures of taxable capacity and demand derived from published data and accounts provided by CIPFA. Given the recent election of Police and Crime Commissioners, and an increasing emphasis on decentralisation of decision-making on police budgets, this topic will be of interest to both academics and policy-makers at the national and local level.

Planned Impact

The proposed research into the economics of the police should have major impacts in a number of ways.

Police spending is a significant component of public spending (around £12 billion or around 4% of centrally managed public spending). Capping spending on the police and, more generally, fundamental reform of the police service, has been high on the policy agenda of the Coalition administration. It is likely to remain so even after the next Election. As the Principal Investigator was an advisor to the Home Office-commissioned Winsor Review on police remuneration and conditions, and because the Institute for Fiscal Studies is widely acknowledged for its expertise in the fields of public spending and public finance, we would anticipate that the results of the research would be of great interest to policymakers, commentators and politicians. This is particularly the case because spending on the police service has received much less academic attention than other areas of spending such as health and education. Hence, our research findings, while especially relevant for public policy makers and analysts concerned with police issues, will also be of more general interest to those involved in researching and in managing public sector labour markets, such as the Pay Review Bodies (including the proposed new Police Pay Review Body).

Organisations directly involved in policing with whom we have particualrly good contacts are HM Inspectorate of Constabulary (HMIC) and the Chartered Institute of Public Finance and Accountancy (CIPFA); we believe that our analysis of this public sector labour market would also interest HMT, the Cabinet Office, and the Office of Manpower Economics. In addition, at the local level, we ultimately expect interest in the research from Police and Crime Commissioners, who both oversee the management of local policing and who also have responsibility for local budgeting including setting the local precept (which is one of the foci of the research).

We will present our results on recruitment at an early stage to the College of Policing, which is the new professional body providing the knowledge base for modern policing (see http://www.college.police.uk/) established in 2012 and which has provided us with a unique data set. We would also present results to the policing unit within the Home Office. Both these public organisations, and CIPFA, have been extremely helpful in providing data to the proposed project although budget constraints within the current austerity targets have meant that they have been unable to provide any finance. From our point of view, however, funding through ESRC provides us with a degree of academic detachment in the design and implementation of the research project.

In addition to disseminating our results within these public organisations and independent or quasi-independent bodies, we intend to publish our work in academic journals and research papers, initially using IFS's working paper series and website, which is widely accessed by academics. Because the area of research is relatively novel, and because of our good contacts with academic networks, we would expert the research outputs to gain widespread attention, especially among academics in the fields of public finance and labour economics. Indeed some preliminary research on police retirement and pensions by the investigators was presented at a National Bureau of Economic Research conference in summer 2012 and will be published in the leading international journal in public economics later this year. We would anticipate that at a minimum the programme of research will generate two or three academic papers that are publishable in top academic journals, as well as a number of working papers and research reports.
 
Description The project was intended to focus on three broad areas of policing:

(1) the quality of police officer recruits using an innovative data set obtained from the College of Policing;

(2) the determinants of the retention rates of police officers (primarily, by examining exits into retirement and into other occupations), using whatever data could be made available from the Home Office and other sources;

(3) the scope for local discretion over spending on police officers and the deployment thereof. This arises from the capacity of local police authorities (now Police and Crime Commissioners - PCCs), within limits, to raise local finance from the local police precept which is levied in conjunction with the local council tax. We obtained data from the Chartered Institute for Public Finance and Accountancy (CIPFA) and the ONS to examine this issue.

In the event, we believe that the main contributions within the grant period came from projects (1) and (3). Project (2) was built on existing work that we had undertaken (Crawford and Disney, Journal of Public Economics, 2014) and led to an IFS Briefing Note with some new results (https://www.ifs.org.uk/publications/8824) but the main contributions came elsewhere.

Significant Achievements

(1) Our output 'Wage regulation and the quality of police office recruits' (https://www.ifs.org.uk/publications/7937) which is now under 'revise and resubmit' with a major economics journal, uses a novel data set to examine the effect of local area characteristics (relative 'outside earnings', amenity value and policing characteristics) to examine the quality of police applicants to police forces. This work, which also looks at intrinsic applicant quality, has been presented and discussed not just in academic settings but to the Home Office, College of Policing and others. During the duration of the ESRC project, the College announced that it would take further steps to improve recruit quality by changing professional requirements for applicants.

(2) A second research paper is about to be published as a working paper, and submitted to an academic journal: 'The determinants of local police spending'. It uses a novel combination of CIPFA and ONS data to examine differences over time in the growth of the local police precept. It shows that much of the variation in police precept can be explained by 'economic factors' such as local real income, the real tax price etc. This paper has also been presented in several academic conferences (e.g. Royal Economic Society) and will be discussed at (already arranged) future meetings in the Home Office, CIPFA etc. This is an ongoing political debate (see next paragraph) where we expect to have further influence.

(3) We have published several paper reports and briefings on police funding as a whole (e.g. https://www.ifs.org.uk/publications/8051). This work has gained press attention and invitations to meetings with the Home Office, Police Foundation etc. Crawford (Co-Applicant) has spoken to a committee of PCCs. Disney (PA) is currently a member of a high-level Home Office Steering Committee considering reforms of police funding.
Exploitation Route As indicated, we believe that this has been a successful and influential project which will provide both academic refereed outputs and an input into current policy contexts, which include a debate about the reformed requirements for police officer recruits, the allocation of central funding across police forces, and the issue of the optimal mix between central funding of police forced and local funding ('the police precept'). The last point in turn feeds into the much more substantial issue of local versus central autonomy in the provision of local services - what in the United States is termed 'fiscal federalism' - one in which IFS is also involved in its consideration of the reform of the finance of local government.

We have established IFS as a 'go to' institution for media, PCCs, government agencies and academics in the forefront of the economics of policing in the UK (in contrast to crime and criminology, where there are well-established academic networks).

Ongoing contact with the College of Policing suggests that our work on quality of police applicants will play a part in modifying entry requirements.

Our discussions with Home Office officials and with CIPFA on funding- and in particular on the determinants of the police precept - are likely to continue to beyond 2017 as a result of public debate that will arise as a result of the current official review of police funding.

The research can be taken forward in several ways. First we continued the revision of project papers for academic publication using funding from the ESRC=funded Centre for the Microeconomic Analysis of Public Policy at IFS. In particular, we have data which should allow us to extend the analyses of revenue-raising and police recruitment to examine the effects of these on variations in police performance. These papers were ultimately published in refereed economics jounrals but also presenetd to a range of audiences, both academic and others including the Home Office and the College of Policing. Since that time, other bodies including the Assoication of Chief Constables and the College have come to us for advice on, for example, recruitment standards and remuneraion levels.
Second, we may be able to utilise any extension to the ongoing funding of IFS's work on local government reform which is funded by a consortium led by Capita and CIPFA to examine local funding of the police in the wider context of 'fiscal federalism' in the UK.
Sectors Government, Democracy and Justice,Security and Diplomacy

URL https://www.ifs.org.uk/people/profile/6
 
Description We have established IFS as a 'go to' institution for media, PCCs, government agencies and academics in the forefront of the economics of policing in the UK (in contrast to crime and criminology, where there are well-established academic networks). Ongoing contact with the College of Policing suggests that our work on quality of police applicants will play a part in modifying entry requirements. The Cheif Constables' Association have also been in contact concerning remuneration levels of police entrants. Finally, the lead resaercher has been involved on advisory bodies to the Home Office which have attempted (so far unsuccessfully) to revise the police funding formula. Our discussions with Home Office officials and with CIPFA on funding- and in particular on the determinants of the police precept - are likely to continue to beyond 2017 as a result of public debate that will arise as a result of the current official review of police funding.
First Year Of Impact 2015
Sector Communities and Social Services/Policy,Government, Democracy and Justice,Security and Diplomacy
Impact Types Economic,Policy & public services

 
Description Disney: Appointed as advisor and subsequently member of steering committee in Home Office concerning attempts to reform the police funding formula. Much of the research was also presented on separate occasions to the Home Office, the College of Policing and other policing bodies. Crawford: addressed meeting of Police & Crime Commissioners (2016) on changes to police financing system.
Geographic Reach National 
Policy Influence Type Participation in a advisory committee
Impact The reform of the police funding formula is ongoing as of late 2017/early 2018.
 
Description Graduate-level police entry requirements: College of Policing analysis 
Organisation College of Policing
Country United Kingdom 
Sector Academic/University 
PI Contribution Professor Disney has been advising the College of Policing on the internal assessment of the new graduate-level requirement for police officer training (either as a policing degree entry requirement, or as a transition course for other degree subjects or as in-house training for non-degree level entrants). This is (in part) a consequence of the research into the determinants and consequences of the quality of police entrants (now published) in this ESRC project, since the College is both familiar with its contents and recognises the authors as authorities on the subject.
Collaborator Contribution The input from Professor Disney concerns not so much the quality standard of entrants (which has become College of Policing policy since a consultation was launched in 2017) but in the assessment and evaluation of this policy: viz (1) advice on the time-costs to individual police forces of training and retraining entrants to the required standard and (2) (ongoing) effectively a cost-benefit analysis of the provisions of the new entry-level policy, since the burdens of extra training will fall unevenly across policy forces given entry mix etc.
Impact Not likely to be in the public domain.
Start Year 2018
 
Description Academic conference presentation on 'Wage regulation and the quality of police officer recruits' 
Form Of Engagement Activity A talk or presentation
Part Of Official Scheme? No
Geographic Reach National
Primary Audience Other academic audiences (collaborators, peers etc.)
Results and Impact The presentation stimulated discussion and questions afterwards.

The discussion was useful for developing the working paper on the same subject.
Year(s) Of Engagement Activity 2015
URL http://www.ifs.org.uk/publications/7938
 
Description Conference: The determinants of local police spending 
Form Of Engagement Activity A talk or presentation
Part Of Official Scheme? No
Geographic Reach National
Primary Audience Other audiences
Results and Impact "The determinants of local police spending" was presented by Rowena Crawford and Richard Disney at the Institute for Fiscal Studies RES in March 2016
Year(s) Of Engagement Activity 2016
 
Description Conference: Understanding local police spending 
Form Of Engagement Activity A talk or presentation
Part Of Official Scheme? No
Geographic Reach National
Primary Audience Other audiences
Results and Impact Understanding local police spending held at the Public Economics (PEUK) conference, Pembroke College, Oxford on 8 September 2016, presented by Rowena Crawford, Richard Disney and Polly Simpson.
Year(s) Of Engagement Activity 2016
URL http://www.ifs.org.uk/publications/8692
 
Description Online article: Funding the thin blue line 
Form Of Engagement Activity A magazine, newsletter or online publication
Part Of Official Scheme? No
Geographic Reach International
Primary Audience Public/other audiences
Results and Impact The page was viewed around 400 times during the first two weeks after its publication. It received 12,500 impressions on Twitter and 100 people clicked on the link.

The research received wide coverage, including on the BBC (http://www.bbc.co.uk/news/uk-34881198) and in the FT (http://www.bbc.co.uk/news/uk-34881198).
Year(s) Of Engagement Activity 2015
URL http://www.ifs.org.uk/publications/8051
 
Description Police funding and the police workforce 
Form Of Engagement Activity A talk or presentation
Part Of Official Scheme? No
Geographic Reach National
Primary Audience Policymakers/politicians
Results and Impact This presentation was given at a conference organised by the Office of Manpower Economics on 21 September 2017.
Year(s) Of Engagement Activity 2017
URL https://www.ifs.org.uk/uploads/Presentations/police_workforce_funding_rb.pdf
 
Description Police recruit quality and wage regulation 
Form Of Engagement Activity A talk or presentation
Part Of Official Scheme? No
Geographic Reach Local
Primary Audience Other academic audiences (collaborators, peers etc.)
Results and Impact This talk was gvein by Richard Disney at Sussex University on 20 May 2015.

The seminar was intended to discuss findings of the results with other academics.
Year(s) Of Engagement Activity 2015
URL http://www.ifs.org.uk/uploads/Presentations/Disney_20_05_2015.pdf
 
Description Police recruit quality and wage regulation 
Form Of Engagement Activity A talk or presentation
Part Of Official Scheme? No
Geographic Reach National
Primary Audience Policymakers/politicians
Results and Impact This was a seminar given at the Home Office on 23 April 2015.

The talk was to inform the Home Office about our findings on recruitment and wage levels in the police force.
Year(s) Of Engagement Activity 2015
URL http://www.ifs.org.uk/uploads/Presentations/Disney_23_04_2015.pdf
 
Description Police recruit quality and wage regulation 
Form Of Engagement Activity A talk or presentation
Part Of Official Scheme? No
Geographic Reach National
Primary Audience Professional Practitioners
Results and Impact This was a talk at the College of Policing in Harrogate, given by Richard Disney on 19 May 2015.

The talk was given to explain the results of our research to police professionals.
Year(s) Of Engagement Activity 2015
URL http://www.ifs.org.uk/uploads/Presentations/Disney_19_05_2015.pdf
 
Description RES Presents: The Economics of Policing 
Form Of Engagement Activity A talk or presentation
Part Of Official Scheme? No
Geographic Reach Regional
Primary Audience Public/other audiences
Results and Impact "RES Presents" is a series of events for the general public featuring renowned economists discussing topical issues. RES Presents takes place during the Annual Conference. In 2018 Professor Richard Disney and others presented a seminar with the general public in Brighton, to coincide with the Annual Conference, on 'policing and crime'.
Year(s) Of Engagement Activity 2018
 
Description The demand for police spending: Understanding the local police precept in England and Wales 
Form Of Engagement Activity A talk or presentation
Part Of Official Scheme? No
Geographic Reach National
Primary Audience Professional Practitioners
Results and Impact A talk entitled "The demand for police spending: Understanding the local police precept in England and Wales" in a special session on crime & policing at the Royal Economic Society Annual Conference, March 2018, held at the University of Sussex
Year(s) Of Engagement Activity 2018
 
Description Video: The economics of policing 
Form Of Engagement Activity A broadcast e.g. TV/radio/film/podcast (other than news/press)
Part Of Official Scheme? No
Geographic Reach National
Primary Audience Media (as a channel to the public)
Results and Impact A video presented by Professor Richard Disney, made on behalf of the Royal Economic Society, on policing. It has appeared on Twitter etc. See: https://www.res.org.uk/resources-page/res2018-the-economics-of-policing-richard-disney.html
Year(s) Of Engagement Activity 2018