Police Federation

FOI 00184 - Rebate to members


Request:

Received:28 August 2019

Given that the Police Federation were sitting on at least 70 million pounds in 2015 can it be explained as to why no rebate to members was ever given? Is the Police Federation still sitting on this vast amount of money and if not where has it gone?


Response:

Responded:25 September 2019

The Independent Review, commissioned by the Police Federation of England and Wales (PFEW), identified 36 recommendations, which were adopted in full. PFEW has been working diligently to implement all recommendations. We are proud to report that, as an organisation, we have fundamentally changed how we operate.

Recommendation 36 addresses the points raised in your question, which recommended a one-off reduction of 25% in subscription income once the Rank Committees were no longer operating, as it was expected there would be savings realised of £3.64m per annum. Furthermore, a second reduction should be considered based on an affordability assessment.

The Independent Review estimated 2015 as the year the national rank committees would be disestablished. It was not until 2018 that this exercise was completed. The financial picture at that time was combined central cash reserves of £17.5m with an operating cash deficit in 2017 of (£4.7m). Furthermore, between the years 2014-2018 the Joint Central Committee (JCC) now National Board (NB) incurred total operating cash losses of (£19.6m). This was driven in large by the reduction of 20,000 police officers.

The Independent Review recommended a reduction in subscription income of 25% for one year. The finance policy at the time for income sharing between the Branches and JCC was 30/70. It is unclear whether the proposed reduction would be shared with Branches or absorbed in full by the JCC. Recommendation 36 also did not consider the personal tax effect of a rebate, whether Branches could afford a rebate, or who should receive the rebate (existing members, past members, new members, or to establish a qualifying status for eligible members).

PFEW subscriptions were last increased in 2011. Between 2011 - 2018 police pay has increased on a compounded basis by 6.2% - offering a real wage benefit to Members when compared to PFEW subscriptions of 0%. Secondly, retail prices have increased over the same period by 25% - these costs have been fully absorbed by PFEW.

Based on the financial resources available in 2015, PFEW would have made a significant financial error of judgement if it had reimbursed 45% of its centrally retained cash back to Members. The result would have been a significantly weakened financial picture for 2015 and the years following, and as a result a significantly weaker organisation to represent members.

PFEW considers its strategy of freezing subscriptions for at least 8 consecutive years, whilst also fully absorbing 25% price increases over the same period, as delivering real value to Members and, in turn, fulfilling the requirements of Recommendation 36.

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