POLICE Scotland’s budget shortfall could be down to the force overestimating the street values of drugs, according to a leading academic.

Dr Iain McPhee, senior lecturer in alcohol and drugs studies from the University of West Scotland’s School of Media, Culture and Society, believes that the police regularly over-estimate the monetary worth of drug quantities seized.

Earlier this week, Sir Stephen House, Chief Constable of Police Scotland confirmed to the Scottish Police Authority that the estimated £6 million that the force had expected as a result of the Proceeds of Crime Act (Poca), known as the Gangster Tax, had not materialised.

In their original estimates, police had expected to receive the first £2 million this month. Instead, they received £30,000. This was despite Police Scotland beating the target for recovering money under Poca by the authority.

It was, House said, due to the time taken to transfer money through the court system, degradation of the value of money and a possible over-estimating of values by police officers.

At Tuesday’s meeting, House asked: “Are we over-estimating? Is there too much of a deterioration in the value as it goes through the system? Are we being realistic in what we are expecting criminals to provide back from the state from the money that they’ve got through criminal means?”

McPhee believes that it is linked to Police Scotland’s war on drugs: “I do believe there is a clear correlation between the police over-estimating street prices and the proceeds of crimes related to the Misuse of Drugs Act 1971.

“This over-inflation infers value for money in the costs to benefits relationship. When we examine the amounts of controlled drugs seized by police activity, they under-perform poorly in relation to drug seizure targets. When these same seized drugs are calculated into street prices then it appears that police activity is value for money.  

“However, the unintended consequences of over-estimating the proceeds of crime or what is being euphemistically termed ‘degradation’ stems from their over-inflation of what drug dealers ‘make’ from the proceeds of drug crimes in the first place.”

Although Police Scotland has not revealed the process for calculating street prices, it is thought it bases its estimates on individual portions rather than quantity.  In essence, this is a practice similar to estimating the worth of a bottle of whisky as the price of the 20 or so individual glasses of whisky contained within.

This price is then used by the Crown Office when applying under Poca to have money taken from a dealer, the reality often being that the  dealer does not have the money the Crown Office and police expect, or that the dealer’s lawyer is then able to argue effectively about the amount of money the Crown can fairly take off their client. Often, to avoid lengthy court battles, the Crown will settle.

This was the first year Police Scotland had sought to fill budget gaps by using funds recovered through Poca.  The force proposed to the Scottish Police Authority that money from Poca should be included in the budget – the SPA then wrote to the Scottish Government for approval.    The Scottish Government agreed that Police Scotland could include an estimate of Poca money, but only for planning purposes.

During October’s full board meeting of the Scottish Police Authority, chief executive and accountable officer John Foley warned that no money would be raised through Poca for Police Scotland:  “The view now is that we are assuming no receipt of Poca funding and we will have to make additional savings.

“That is not to say there will definitely be  no funding but that it would be prudent to assume there most likely won’t be and that any we do get would be a bonus.”

This was then confirmed at February’s full board meeting of the authority on Tuesday.

There were serious reservations when it was first announced that the 2014-15 Police Scotland budget was to contain £6m from Poca. 

The Scottish Police Federation was worried it could look bad for the force and may result in the public questioning the underlying motives of police officers.  The money should, they believe, be given towards communities affected by crime, rather than to pay for the effective running of a police service.

John Finnie MSP, a former police officer and member of the justice subcommittee on policing, said this was an inherently unreliable source of income: “I think if you have the variable source of income that should supplement your budget rather than be a core part of the budget and it seems that notwithstanding all the financial challenges the public sector are facing, it’s a very frail approach to take to budgeting to speculate as to your income.”

A spokesperson for the Scottish Government defended the decision to add the estimates to the budget:  “Police Scotland do not rely on proceeds of crime.

“The Scottish Government agreed that the SPA could include estimates of anticipated receipts from the proceeds of crime within its 2014-15 budget for planning purposes. Police Scotland is currently forecasting that its expenditure will be on budget in the current financial year.

“The level of Poca receipts is always unpredictable and there is always a significant difference in the value obtained and time taken between assets identified for recovery and the actual receipts.”