London's cash-strapped police must find £130m per year to pay extra pensions costs despite 'end of austerity'

London’s police force faces £130m of new costs every year due to a government change in the way officers’ pensions are run.

The money – enough to pay for some 2,000 officers – would be pulled from the Met’s coffers just as it is being pushed to find almost £1bn of savings up to 2021.

News of the blow has prompted London Mayor Sadiq Khan to write to Theresa May warning that further tightening the finances of London’s police will likely have an impact on their ability to fight violent crime.

It comes just two weeks after the prime minister declared that the end of austerity had arrived, as she promised spending would now come to prop up ailing public services.

In his letter, seen by The Independent, the mayor wrote: “As you will know, the government have forced the Metropolitan Police to make huge savings in recent years and these cuts have had real consequences on the streets of London and across the UK.

“While the causes of crime are complex, there is no doubt that government cuts to police and youth services have contributed to the rise in violent crime we have seen in recent years.

“The government funds over three quarters of the Met police budget – and I won’t apologise for urging you to do the right thing and give our police the funds they desperately need to keep us safe.”

The government has taken a decision to reduce the discount rate which applies to future pension payments from three per cent to 2.4 per cent.

Home Office officials have informed forces that they expect this to result in an increased employer contribution of £165m in 2019-20 and £417m in 2020-21.

If these figures are correct the Met have estimated it will represent a £43m unfunded cost in 2019/20 and then £108m in 2020/21 and the years which follow.

London Mayor Sadiq Khan

On top of this there are likely to be further costs associated with an increase in employer contributions to police staff pensions – with the Met’s current estimate putting them at around £9m in 2019/20, then £22m in 2020/21 and beyond.

Mr Khan said he was “grateful” to the government for the increased precept flexibility provided for in the 2018/19 police funding settlement.

But he argued that the new costs from the pensions changes could be double the amount of additional revenue that can be raised on top of the existing precept.

He added: “I cannot continue to ask the Met to absorb unfunded pressures imposed by central government as a result of policy decisions.”

Mr Khan also pointed out that the cost to the London Fire Brigade, again estimated on the basis of information provided by the Home Office, is likely to be about £20m a year from 2020/21.

A Home Office spokesman said the department would work closely with police and fire services to “understand the impact on the frontline” and had already made clear that the Treasury fund the new costs in 2019/20.

He went on to say that the Home Secretary had promised to prioritise police funding at the spending review in 2019, adding: “We will work with police forces and fire and rescue services to understand the impact this change will have upon them.

“The government is committed to continuing to ensure that the police and fire and rescue services have the resources they need to do their vital work.”