London’s Metropolitan police has ‘exhausted’ its financial buffers

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London’s Metropolitan police is facing financial pressure after spending nearly three-quarters of its £443mn reserve fund since 2022 and depleting £1bn in capital raised since 2010 from the sale of property.

The force, the UK’s largest, has exhausted its buffers financing both day-to-day operations and ongoing reforms, according to police officials.

Without a significant increase in government funding next year, cuts to frontline services would be “felt by Londoners”, they said.

“The Met has been paying off the mortgage with its savings and that is not sustainable,” said one official familiar with ongoing negotiations between the Met, the Home Office and the London Mayor over next year’s financial settlement.

The Met used £238mn of the £443mn it held in reserves in 2022-23, according to London Mayor Sadiq Khan’s office. The reserves, set aside usually for unexpected expenditure, are forecast to be further depleted by at least £156mn by the end of this financial year, leaving £113mn or less in 2025-26.

On Tuesday, Yvette Cooper, home secretary, will announce £500mn of extra funding for next year to strengthen neighbourhood policing nationally, beef up the National Crime Agency and improve performance tracking.

But while the boost to frontline policing has been broadly welcomed, it was unclear how far the funds would go.

Sir Mark Rowley, Met commissioner, said last week in an interview with the BBC that the means used by successive commissioners to balance the books, such as “selling police stations, and using reserves”, had run out.

“Some pretty eye-watering cuts to the services we provide would now be required,” he added.

The Met has raised about £1bn since 2010 by selling 420 of a total of 600 buildings, according to the police officials. That capital has been used to maintain 200 remaining properties and reinvest in technology, vehicles and equipment.

“We have been selling off the estate in order to fund our capital programme,” one of the officials said.

The Met’s budget this year was £3.5bn, up 3.5 per cent on 2023-2024, with £2.6bn from central government and £956mn from local taxes. However, recent funding increases follow a decade of austerity up to 2020 when the overall police budget was cut by nearly 20 per cent.

The financial pressures of the Met are mirrored across England and Wales. Real terms police pay is down 17 per cent on 2010, according to the Police Federation of England & Wales representing 145,000 members.

Steve Hartshorn, PFEW chair, said a year ago that relations between the police and government had broken down.

Tiffany Lynch, acting chair of the federation, said that officers were waiting for the new government to redress the balance.    

She said there was a crisis of morale among staff and in staff retention, with more than 5,000 officers leaving after less than five years of service in the year to March.

The police had felt like the “forgotten service”, Lynch added.

The Home Office, which had its own budget cut by 3.3 per cent in last month’s Autumn Statement, said this year’s settlement had delivered real increases in police funding.

In a speech to the National Police Chiefs’ Council on Tuesday, the home secretary will acknowledge that public confidence in the police had been “badly eroded”, and “outdated systems and structures have left the police struggling to keep up with a fast-changing criminal landscape”.

But she will pledge to work with police leaders to “regain the trust and support of the people we all serve”, adding there was “an opportunity for a fundamental reset in that relationship”.

A spokesperson for Sadiq Khan said the London mayor had invested £151mn extra in this year’s budget for policing and crime prevention, and that since 2016 gun crime, burglary and homicides were all down.

The mayor’s office is due to publish its draft policing budget for 2025-26 in the coming week. The Home Office’s provisional settlement governing next year’s policing budget for England and Wales is due in December.