Police forces must cut spending by £480 million this year, prompting fears that officer numbers may fall when increasing unemployment could bring a surge in crime, The Times has learnt.

Forces are reviewing their financial plans after the Treasury raised “efficiency savings targets” from 3 per cent to 4 per cent in the Budget. The annual increase in Whitehall funding for policing was 2.7 per cent and was eaten up by pay rises.

The Metropolitan Police, the largest force, is planning cuts of £366 million over the next three years despite having to prepare for the 2012 Olympic Games. Staff costs account for three quarters of the Met’s annual budget and it has not ruled out a reduction in officer numbers.

One chief constable said last night: “Let’s stop taking about ‘efficiency savings’. We all know the state of the public finances and, on current projections, that means cuts. God knows what happens after the election.”

Ed Balls, the Schools Secretary, insisted that the Government would “keep investing” in frontline services. Asked yesterday whether Whitehall departments should be prepared for cuts, Mr Balls insisted that a recovering economy could change the picture. “Let’s wait and see what happens after 2010-11, because we do not know what is going to happen on the economy and debt interest,” Mr Balls told the Andrew Marr Show on BBC One.

“I think if we are deft and we get the economy right we can keep investing in schools, and hospitals and our police at the frontline.”

The estimate of £480 million of cuts comes from the Association of Police Authorities. Bob Jones, its chairman, said that the Police Service had a good record on savings but was being asked to find much deeper cuts. “In delivering these efficiency gains, the easiest savings — the low hanging fruit — have already been taken,” Mr Jones said. “Further savings will require police authorities to look at more radical options for reducing costs and these will invariably face a higher degree of risk.”

This year The Times reported that 19 of the 43 forces in England and Wales had already been forced to cut officer strength.

Andy Trotter, the Chief Constable of British Transport Police, said that chiefs of all forces were reviewing costs. “The largest proportion of our costs is our people and, once we’ve squeezed out all the efficiencies we can, we are faced with some very, very tough decisions on frontline staff,” said Mr Trotter, speaking for the Association of Chief Police Officers.

“We face a severe terrorism threat, the Olympic Games are just a few years away and there is the potential for an increase in crime during the recession. That’s a very difficult time to be contemplating potential reductions in police officers, community support officers and essential police staff.”

The Met, which spends £3.9 billion per year policing London, had already budgeted for cuts of £166 million over the next two financial years. But its new report says that further savings of £200 million must be found by 2012-13. The document does not outline where those cuts will be made. It states: “This [£200 million] is over and above the savings already identified and represents a challenging target for the service.”

Peter Smyth, chairman of the Metropolitan Police Federation, said that he hoped the Met would maintain the current officer strength of 32,000 until the Olympics but was concerned that there could be sharp cuts after that. “If they are going to make cuts then it goes without saying that they need to be very careful where they cut,” Mr Smyth said. “I hope the commitment to maintaining officer numbers continues and I believe there needs to be capital investment to assist the fight against crime.”

Scotland Yard said that the Met wanted to maintain a strong uniformed presence on the streets. The Met “is committed to redirecting resources whenever possible while maintaining the front line of operational policing. At this stage there is no indication that overall police officer numbers will be reduced,” a spokesman said.

With politicians of all parties emphasising the importance of neighbourhood policing and of tackling youth crime and antisocial behaviour, there are fears that the battle against serious organised crime will bear the brunt of cutbacks.

The Home Office insists that officer numbers and funding are at record levels. It says that since 1997 funding for policing has risen 60 per cent and that there are 14,400 more officers.

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