Minutes

Minutes of the special meeting of the Finance and Resources Committee held on 20 November 2008 at 10 Dean Farrar Street, London, SW1H 0NY.

Present

Members

• Steve O’Connell (Chair)
• Reshard Auladin
• Faith Boardman (Deputy Chairman)
• Dee Doocey
• Graham Speed
• Richard Tracey

MPA officers

• Catherine Crawford (Chief Executive)
• Jane Harwood (Assistant Chief Executive) (item 6)
• Ken Hunt (Treasurer)
• Peter Tickner (Director of Internal Audit)
• Ruth Hastings Iqball (Committee Services)

MPS officers

• Alan Croney (Director, Property Services)
• Anthony Doyle (Director of Procurement Services)
• Alan Gibson (Child Protection & Economic Crime, Specialist Crime Directorate)
• Tim Godwin (AC, Territorial Policing)
• Simon Hart (Acting Director, Financial Services)
• Chris Jarrett (BOCU Cdr, Greenwich) (item 20)
• Anne McMeel (Director of Resources)
• Patrick Phillips (Deputy Director of Information), Jon Pritchard (Director, IT Procurement) , Peter Ross (Director, Programme Delivery)

62. Apologies for absence

(Agenda item 1)

Apologies were received from Cindy Butts, Kit Malthouse and Deborah Regal.

63. Declarations of interests

(Agenda item 2)

No declarations of interest were received.

64. Minutes of the meeting of the Finance Committee held on 23 October 2008 and 5 November 2008

(Agenda item 3)

The minutes of the meetings held on 23 October and 5 November (Part 1) were considered.

Resolved – That the minutes of the meetings of the Finance Committee (Part 1) held on 23 October and 5 November be agreed and signed as a correct record.

65. Sub-committees – appointments and terms of reference

(Agenda item 4)

The Committee received a report inviting it to confirm appointments to its Sub-Committees and their terms of reference (ToR). Reshard Auladin was additionally appointed to the membership of the Resources Sub Committee.

The Chairman stated that the agreed ToR could be considered again in the light of experience.

Resolved - That

1. with the addition of Reshard Auladin, the membership of the Resources Sub-Committee, as set out in the report, be confirmed and that Faith Boardman be appointed its Chairman;
2. the membership of the Productivity and Performance Sub-Committee, as set out in the report, be confirmed and that Deborah Regal be appointed as its Chairman; and
3. the terms of reference for the two sub-committees and the Estates Strategy panel as set out in appendix 1 be ratified.

66. Revenue and capital budget monitoring report 2008/09 – period 6

(Agenda item 5)

A report was received providing an update on the revenue and capital budget monitoring position for 2008/09 at Period 6 (to the end of September). Approval for budget rephasing and changes to the capital financing plan were also sought, to recognise changes to the 2008/09 Capital Programme. The Acting Director, Financial Services, noted that the recommendation 2 referred to paras 44 to 54, not 36 to 46 as stated in the report.

Members asked if work station costs had been calculated twice and about unplanned expenditure on furniture. They were told work stations had not been counted twice but reported twice, and lessons had been learnt in relation to furniture purchase. Members were dismayed that there had been overspends on police overtime and expenditure on consultants. A briefing paper on the latter was requested. Members commented on the overspend of £1.2m due to kennelling dogs seized under the Dangerous Dogs Act. They were informed that a report would be received by Strategic and Operational Policing Committee on the reasons behind this increase. AC Godwin stated that a legislative review was needed. The Chairman added that responsibility for dog control had passed to local authorities, which were also bearing additional costs. Members noted that with the change in responsibility for stray dogs from the police should have led to savings for the MPS.

The discrepancy in officer strength against target strengths was noted. Members were told that the target strengths were unachievable, and would slip by one intake in the year. Members asked about the overspend of £3.6m, 18.3% of budget, for Transport Projects. Briefings were asked for on this and C3i. Members were provided with more information on the underspend in the Olympic /Paralympic budget by the Director of Resources.

Faith Boardman, as Chairman of the Resources Sub Committee, stated that it was her intention to have a briefing on procurement, IS/IT and estates issues at meeting of the Sub Committee so members might get up to speed on these subjects.

Resolved – That

1. the year to date and forecast position for revenue and capital budgets be noted;
2. changes to capital budgets and the capital financing plan as set out in paragraphs 44 to 54 be approved; and
3. members receive briefing papers on expenditure on consultants, transport projects and C3i.

67. Draft business plan/interim budget submission

(Agenda item 6)

Members considered a report setting out the proposed the draft Policing London Business Plan 2009-12 and supporting budget information for comment. The Chairman stated that the plan and supporting information would be considered by full Authority on 27 November 2008, and then submitted to the Mayor in accordance with his budget guidance. He also spoke of the Mayor’s steer in relation to flexing of 2.5.

Members noted that little reduction in front line services was proposed, but that 216 officers were being lost to Territorial Policing. They were informed that this was as a result of changes brought about by Operation Herald, and officers being replaced by nurses in custody suites.

Resolved – That

1. the draft Policing London Business Plan 2009-12 and supporting budget information be commented upon;
2. the statement (Appendix 3) by the MPA Treasurer (the Chief Finance Officer under the Local Government Act 2003) on the robustness of the estimates made for the purposes of the calculations and the adequacy of the proposed financial reserves be noted;
3. it be noted that the draft Policing London Business Plan 2009-12 and supporting budget information would be considered by MPA Full Authority on 27 November 2008; and
4. it be noted that, once approved by the Authority, the draft Policing London Business Plan 2009-12 and supporting budget information would be submitted to the Mayor in accordance with his budget guidance.

68. Reserves/robustness of the estimates

(Agenda item 7)

The Treasurer introduced a report setting out the position in relation to earmarked reserves prior to the final draft budget submission. It reviewed the possible use of earmarked reserves to aid the budget or redirection to new priority areas and brought into focus for the first time the possibility of using 2008/9 revenue underspends to create new earmarked reserves. The report also provided members with information on the robustness of the estimates and the adequacy of the reserves, so that members had authoritative advice available when they make their decisions on the budget submission. The Chairman noted that he had specifically requested the review of earmarked reserves.

Members queried the comment in para. 9 that £156,959 was no longer required for child protection. Officers agreed to provide more information on this issue. Members agreed that the MPS deserved recognition for getting to the financial position it was in and that reserves should not be released without a very good business case. They were reminded that reserves could only be released via the Authority.

The report noted that the Pump Priming Fund has been identified as being available for release by the MPA. The Fund had been instigated by MPA members when there appeared to be opportunities to develop better ways of managing the forensic science budget, which included new capital build, which was no longer likely. They were told a revenue solution was now being sought and that a revised business case be submitted before the funding was released, but at present Pump Priming Fund should remain.

Resolved – That

1. the review of earmarked reserves and their existing use be considered;
2. the transfer of £0.47M earmarked reserves, no longer needed for their identified use, to the General Reserve pending further decisions be noted; and
3. the advice on the robustness of the estimates and adequacy of reserves, be endorsed, and referred to the full Authority.

69. 7 Year capital programme

(Agenda item 8)

This report provided information on progress achieved in the preparation of the draft seven-year borrowing and capital spending plan 2009/10 to 2015/16 and outlined the work undertaken to ensure an affordable capital programme was achieved. The proposals reflected the impact of the significant decline in the property market on the Authority’s ability to generate capital receipts and account was also taken of investment requirements associated with the Olympic/Paralympic Games in 2012 and new counter-terrorism initiatives. The plan was required as part of the overall budget submission to the Mayor of London. The report had been circulated to members with less than five clear working days’ notice, however Chair agreed to receive it as an urgent item under the provisions of section 100B (4b) of the Local Government Act 1972 as it was relevant to consideration of item 6.

Members felt it was a significant report in the current financial climate and a reasonable way of moving forward. It was agreed the Resources Sub Committee should review the plan once a quarter in depth. The exempt appendix stated that the continuation of government support to existing debt commitments was crucial to the sustainability of the MPA’s borrowing policy. In answer to questions, the Treasurer confirmed that he had no indication that the Government’s position would change on supported borrowing. Members also asked about advice taken on the movement of markets and capital receipts and were assured it was. In relation to the Safer Neighbourhood Programme, it was noted that the programme of acquisition of bases would be take place, albeit the bases will be kept empty for a period. They were assured the bases would not be fitted out prior to occupation. Members were concerned about the Olympic legacy and noted that this would considered by the Olympic / Paralympic Sub Committee.

Resolved – That

1. the present position regarding financing of the draft borrowing and capital spending plan 2009/10 to 2015/16 (Appendix 1 refers) be agreed;
2. a revenue contribution of £22m to an earmarked reserve in 2008/09 and from the Investment Board Fund (2009/10 £9.9m; 2010/11 £3.9m) to fund the proposed capital programme be agreed;
3. the use of capital reserves of £29.6m in 2009/10 and £13.4m in 2009/10 to support the proposed capital programme be agreed;
4. the annual statement regarding the 2009/10 minimum revenue provision payments and the key prudential indicators calculated from the draft borrowing and capital spending plan 2009/10 to 2015/16 (Appendix 2 refers) be agreed;
5. subject to 1 to 4 above, the draft borrowing and capital spending plan 2009/10 to 2015/16, and inclusion of the latter within the Authority’s budget submission to the Mayor of London (Appendices 3A – 3D refers) be agreed;
6. it be noted that the capital programme will be subject to further review; and
7. the Resources Sub Committee should review the plan in depth once a quarter.

70. Treasury management half-year review 2008/09

(Agenda item 9)

The Director of Resources introduced a report providing a review of treasury management for the 6-month period ended 30 September 2008. It reviewed current developments in 2008-09 and recommended changes to the 2008-09 treasury management strategy. She noted that this was a regular half yearly update. The Treasurer outlined some of the difficulties encountered in banking in the current economic climate, including funds placed with the MPA’s banker RBS, investing and banking, difficulties in dealing with late receipts which could not be placed elsewhere and the lack of alternative options if the credit rating was to move in adverse direction.

The reported stated that the ‘The names of institutions being monitored and institutions that are removed from the counterparty list will be advised to the MPA Treasurer. Equally, the Treasurer will be advised when an institution is no longer being monitored or when an institution is to be added to the counterparty list.’ Members requested that the Treasurer be immediately advised. The Director of Resources’ assured members this was the case.

Resolved – That

1. the proposed revisions to the Treasury Management Strategy be agreed:
   • revised Fitch credit ratings and counterparty list
   • the addition of Moody’s credit ratings
   • revised counterparty limits
   • use of the Debt Management Office facility for approximately 25% of the investment portfolio
   • the addition of UK Nationalised Institutions
   • limiting the term of investment to 3 months; and
2. the report and the budgetary implications be noted.

71. Proceeds of Crime Act (POCA)

(Agenda item 10)

The latest quarterly report of the Payback Programme Board (PPB) was received. The MPS was congratulated on its achievements, and members asked what they could do to support and encourage the scheme as an anticrime incentive. It was also noted that despite its large contribution to obtaining the ‘payback’, the rewards were shared equally with other agencies. It was felt unlikely the Home Office would change the system as the prison building programme was predicated on POCA funding. It was suggested that the Mayor of London might be asked to lead a campaign for police services to retain more money. The MPA would work with the MPS to prepare a case for a greater share of POCA monies.

Resolved – That the update be note.

72. Event management futures project

(Agenda item 11)

The MPS asked that this report be considered in part 2 of the agenda as it related to the business affairs of the Authority. This was agreed.

73. Exclusion of press and public

(Agenda item 12)

Resolved - That under section 100A(4) of the Local Government Act 1972 the press and public be excluded from the meeting for the following items of business on the grounds that they involved disclosure of exempt information as detailed in paragraphs 3 and 7 of Schedule 12A to the above Act.

Summary of decisions made on exempt items

72 Event management futures project (continued)

(Agenda item 11)

Members received a report informing them of the proposed acquisition of a new and comprehensive end-to-end events management solution, which would be accompanied by extensive business process re-engineering, particularly within CO11 Public Order and the Lambeth Special Operations Room. Procurement was agreed.

74. Icelandic Investments

(Agenda item 13)

The Committee had previously received a report informing them of deposits it had with the Icelandic bank, Landsbanki when it was nationalised on 8 October 2008. Members received a report informing them of the background to the investment and proposing a further course of action.

75. Command and Control (C&C) infrastructure upgrade

(Agenda item 14)

The Committee considered a report seeking MPA approval to the procurement of an upgrade of the C&C infrastructure the procurement was agreed.

76. Oracle unlimited licence agreement

(Agenda item 15)

A three year Unlimited Licence Agreement with Oracle was agreed.

77. Multifunctional devices and printing in the MPS

(Agenda item 16)

The award of a new contract for self-use photocopiers and multi-functional devices was agreed.

78. London Strategic Co-ordination Centre capability

(Agenda item 17)

Various decisions in relation to the location and fitting out of a London Strategic Co-ordination Centre (SCC) were taken.

79. Update on the approved patrol base scheme for Greenwich borough

(Agenda item 18)

Committal to construction of the patrol base element of the development was supported.

80. Exempt minutes of the meetings held on 23 October and 5 November 2008

(Agenda item 19)

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