The Home Office should get help from an independent panel to fix the “shambles” over police funding, MPs have said.
Earlier this year, ministers unveiled plans to overhaul the “complex, opaque and out of date” Police Allocation Formula, which distributes cash between 43 forces.
The new funding model was set to allocate central funding to police and crime commissioners (PCCs) based on local population levels and demographics, as well as the environmental characteristics of police force areas.
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But in October the department was forced to delay the reforms after a statistical error was discovered in the department's calculations.
In a report published on Friday, the Home Affairs Select Committee said that while reform of police funding was "urgently needed", a brand new formula should be devised to end "the shambles we have seen so far".
Committee chairman Keith Vaz said the recent errors, which led to a delay in changes in the formula, had "gravely damaged" the confidence of forces in securing a new arrangement.
“Police forces found themselves on a rollercoaster, where at the stroke of a pen they saw their funding allocation plummet in some cases and rise meteorically in others, with nobody able to explain why," he argued.
"We hope the assistance and advice of external experts will deliver a fair and effective funding formula."
"Amusing if it were not so serious"
The commmittee was particularly critical of the Home Office director general of crime and policy, Mary Calam, over the tone of her correspondence with Andrew White, the Devon and Cornwall PCC who spotted the error with the department's data.
"It would be amusing if it were not so serious that Mr White was able to unravel the entire funding model in a way that made the Home Office look foolish," the report said.
"It is reprehensible that the response of the Director General of the Crime and Policing Group at the Home Office, Mary Calam, to Mr White did not include any apology for the mistakes made by the Home Office, nor does it appear to address the implications of the error.
"Although Mary Calam did write later to apologise to police forces for the error, this seems to us to represent too little action, too late."
The report said the department should also have made a statement to parliament on the error, which MPs were only told about because an Urgent Question was tabled by Labour.
"It is deplorable that Home Office officials made errors in calculating the funding allocations for police force areas," the committee said.
"The minister was right to apologise to the House for the mistake. However, the Home Office was wrong not to have made a statement to parliament and wrong to have suggested that it was not an urgent matter to be dealt with on the same day in the House. The permanent secretary [Mark Sedwill] was unable to explain to us on what basis this advice was given to the speaker when the application for an Urgent Question was made in the usual way."
The Home Affairs Committee's report urged the Home Office to appoint an independent panel to oversee a revised formula, drawin on expertise from the Chartered Institute of Public Finance and Accountancy (CIPFA), the College of Policing and the Institute for Fiscal Studies (IFS).
Home Office perm sec Mark Sedwill told the committee during its inquiry that he had launched a management review to "get to the bottom" of the statistical error, and the government has said it will carefully consider the committee's recommendations.
Policing minister Mike Penning said: "We have always said that we will only be successful in achieving our aim of building a fit-for-purpose and sustainable model with considerable input from policing partners."