When the time comes to renew your CAA ATPL(H) you currently have the option to renew with a JAR licence or a CAA one. Therefore your old ATPL will become a new ATPL with the CAA. The paperwork didn't go into enough detail to indicate that conversion to a JAR licence would entail dropping back to a CPL(H) equivalent. However, most police pilots with ATPL(H)'s have enough hours to obtain a JAR ATPL.
Anyway, that aside, until the market dries up with ATPL pilots, no-one is going to take a CPL pilot in their place. Given the choice, you go for the most experienced guy for the job...value for money etc. Eventually someone will take on a CPL pilot either because of a lack of ATP pilots or because they think they can pay CPL pilots less money
The military are currently paying their helo pilots to take ATPL exams, so unless this pool dries up, it looks unlikely that many CPL's will find themselves in a position to take a job with the police world...sorry.