Police forces in England and Wales are each given funding from 3 main sources:
Department for Communities and Local Government (DCLG) or the Welsh Assembly Government
police precept component of local council tax
Since 2013 to 2014, DCLG formula funding was paid to local policing bodies by the Home Secretary. This is as a result of the government’s decision that local policing bodies should be funded from outside the business rates retention scheme.
In addition to government grants and police precept, police and crime commissioners also generate income from charging for policing commercial events (this includes sporting and entertainment but excludes charity and some small community events) and from investments (both interest and dividends).
Police allocation formula
The main police grant was distributed using the needs-based police allocation formula in 2013 to 2014.
Since then it has been distributed by the current methodology of applying uniform percentage changes to core grant funding for each PCC.
The revised financial management code of practice for police and crime commissioners and chief constables was laid in Parliament in October 2013.
The code provides clarity around the financial governance arrangements within the police forces in England and Wales and builds on the policing protocol issued by means of the Policing Protocol Order 2011.