Claims of 'accounting errors' rejected as £65m South Yorkshire Police black hole row escalates
“The crux of this issue is a difference of professional judgement between former finance officers of the Office of the Police and Crime Commissioner and the incoming finance officers of the Mayor”
The controversy over South Yorkshire Police’s £65m financial ‘black hole’ has deepened with the county’s former Police and Crime Commissioner challenging the findings of a report into the issue.
Dr Alan Billings stood down as PCC when that responsibility was transferred to the newly formed South Yorkshire Mayoral Combined Authority, headed by Mayor Oliver Coppard.
Mr Copppard’s team discovered a ‘missing’ £65m in the force’s accounts, a sum found to have accumulated between 2018 and 2024.
The former Office of the Police and Crime Commissioner borrowed £65m for investments into police kits, vehicles and IT services but it was later discovered that £16m worth of repayments had been “missed” and a further £49m of future charges had not been included in future police budgets.
An investigation by the Chartered Institute of Public Finance and Accountancy found layers of problems - with errors from finance staff, those responsible for oversight not trained to spot problems in key areas and a warning of irregularities from an outside body also ignored.
But Dr Billings has answered the criticisms and called for the report to be withdrawn.
He has issued a statement saying: “The crux of this issue is a difference of professional judgement between former finance officers of the Office of the Police and Crime Commissioner and the incoming finance officers of the Mayor.
“It is not about “accounting errors” but a disagreement about deliberate and permissible choices - which the report at one point acknowledges.
“My officers chose to finance £65m of capital spending - items such as vehicles, IT, buildings - from existing funds rather than borrow.
“This saved thousands of pounds in interest charges and enabled police to get on with their job.
“This was fully understood by the police and auditors at the time and over subsequent years.
“This is why auditors signed off the finances year on year.”
Dr Billings criticised CIPFA for not speaking to him or his senior staff during their investigation.
He also questioned why CIPFA, which is a membership organisation rather than an independent firm of accountants, was asked to carry out the review, claiming a conflict of interests.
“Despite the alarmist rhetoric when this investigation was initiated, police finances have been managed - without additional funding from the Government - surpluses have been recorded and budgets balanced,” he said.
“This has been a protracted, costly and unnecessary exercise that could have been resolved by conversations with appropriate people.”
The situation had “hung unfairly” over him and his most recent finance officers, he said.
“It now serves little purpose and should be withdrawn,” he added.
But in response, to Dr Billings’ statement today, the South Yorkshire Mayoral Combined Authority said the former PCC was “factually wrong”.
The authority said: “Dr Billings, who was Police and Crime Commissioner at the time these errors were made, the former OPCC Chief Executive and the OPCC Finance Officers who were in post at the time, were given the opportunity to feed into the review and CIPFA have explained why their points were rebutted in light of the review's findings.
“£65m was spent on essential equipment and investment into the police estate. Investment of this kind, called capital spending, is often financed through borrowing and repaid over a longer period to help make the costs more affordable. However, the issue arose as the OPCC financed this spend through internal borrowing arrangements but made no accounting or budgetary provisions, known as minimum revenue provision or MRP, for repayment of the debt. This was contrary to the legal requirement to do so and contrary to the OPCC’s own approved policy.
“This led to significant issues in South Yorkshire Police's finances which is why the Government have since issued two capitalisation directions and we have received special dispensations from auditors to step outside normal processes.
“On the fundamental point of the accounting practices CIPFA are clear that the assumption the OPCC made was incorrect, and not a matter for professional judgement. In their report they say that: “A key assumption—that MRP applied only to external borrowing—was incorrect. This error, introduced early in the period under review, was embedded into routine practice and accepted year-on-year without challenge or reconsideration. In any event, no accounting or budgetary provision was made in relation to the £65m of financed investment over the period in question."
“It is important to restate and for public of South Yorkshire to understand that the independent, expert CIPFA review concluded that historic accounting and budgetary errors arose from a misinterpretation of statutory accounting guidance, compounded by weaknesses in financial governance and scrutiny arrangements at the OPCC over a number of years. SYMCA’s position remains that the Chartered Institute of Public Finance and Accountancy, as the professional body for public finance professionals in the public sector, was highly qualified to undertake this review.”