Spending rule changed for South Yorkshire Police after £65m error

South Yorkshire Police will use money from its reserves to meet day-to-day expenses after financial errors left the force with a £65m hole in its budget.

The mistakes were discovered in 2024 after the former functions and responsibilities of the police and crime commissioner (PCC) role were transferred to the region’s mayor, Oliver Coppard.

Policing minister Sarah Jones MP gave the force permission to use up to £17m from long-term capital reserves, and said that without the exception, it would have been unable to police effectively.

The errors found included repayments had not been made for five years, and upcoming repayments had been missed out of spending plans or wrongly allocated.

In a letter to a Home Affairs Select Committee, Jones said allowing the flexible spending – called a capitalisation direction – for 2024/25 “reflects a rare and exceptional set of circumstances”.

These include “historic accounting issues and ongoing costs related to legacy issues, including legal settlements”, she said.

Allowing capital funding, for long-term fixed assets like buildings, to be spent on revenue costs such as bills and salaries, is unusual.

Reasons for this include the spending types being taxed differently, and the fact that recording them incorrectly can misrepresent profits and assets.

Kilvinder Vigurs, deputy mayor for policing, said the capitalisation direction had given SYMCA “time to reorder its financial affairs whilst protecting frontline services”.

“The identification of the accounting and budgetary omissions does, however, place material strain on the financial health of the South Yorkshire Police Fund,” he added.

He said SYMCA and SYP had set about resolving the issues with “pace and transparency”.

SYMCA, which oversees the force and sought out the direction on its behalf, said the budget gap had come as a result of a “fundamental error in accounting practices in the office of the former PCC,” Dr Alan Billings.

But Billings said although the PCC was “nominally responsible” for finance, it had been the police force who had carried out the work.

He told the BBC he had not been aware of any errors and had been “astonished that external auditors didn’t pick this up”.

The errors amounted to a failure to comply with minimum revenue provision (MRP), a mandatory charge for local authorities to repay debt for certain projects.

After they were discovered, SYMCA issued a report under section 114 (2) of the Local Government Finance Act in relation to the force, signifying unlawful spending had taken place.

SYMCA and the force then set a balanced budget, meaning there was “no intention nor requirement” to consider a notice under subsection three of S114.

Branches of local government like SYMCA cannot go bankrupt, but the issuing of a S114 (3) is generally considered to be equivalent.

The force’s chief constable, Lauren Poultney, said: “Through efforts to secure more funding, agreeing sustainable repayments, and implementing savings, we have set a balanced budget.

“The force is not bankrupt, and the public can be reassured that policing in South Yorkshire remains responsive and focused on keeping communities safe.”

SYP is the first police force in England to have a S114 notice issued in relation to it.

Coppard ordered an independent review by the Chartered Institute of Public Finance and Accountancy in 2024, which SYMCA said was in its final stages.