Economics of the Police: Recruitment, Retention and Finance

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.

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.