Budget and business plan 2010/13

Report: 04
Date: 3 September 2009
By: Director of Resources on behalf of the Commissioner

Summary

This report sets out the MPS’ approach and timeline for delivering the Policing London Business Plan 2010/13 in line with the Mayor’s guidance, including MPA consultations, and provides a progress update on priorities, performance indicators and resource implications through the Interim Budget Submission 2010-13.

A. Recommendations

That

1. members note the approach and timeline for delivering the Policing London Business Plan 2010-13 in line with the Mayor’s guidance; and
2. progress towards the Policing London Plan 2010-13, particularly priorities, performance indicators and resource implications as detailed in the Interim Budget Submission 2010-13.

B. Supporting information

Context

1. The MPS approach to the 2010-13 Budget and Business Planning process remains as set out in the Budget and Business Plan 2010-13 report submitted to MPA SOP on 4 June 2009, clarifying lessons learned and indicating how the Service will secure the required cost savings.

2. The 2010-13 cycle includes a number of changes:

• The planning process and timeline have been refined and clearly communicated before the start of the planning cycle (April 2009)
• The process, including the number of financial and business planning templates, has been rationalised and further integrated
• The approach is developed more through continuous engagement between senior managers in DoR (SID and Strategic Finance) and senior managers in Business Groups
• The Business Group Business Plans are built at the front end of the cycle, allowing for a structured budget build and a clearer mapping of deliverables to Corporate Objectives and to spend
• Performance Management reporting and monitoring structures, in the form of standardised financial and performance MMRs, are being developed to track Business Group performance against promises made
• Performance improvement activity is being developed through the Service Improvement Plan and through proposed benefits tracking of new investment

3. The timeline for the 2010-13 Budget and Business Planning process remains broadly as set out in the Business Planning Guidelines 2010-13, shared with the MPA and distributed to all Business Groups in the MPS in April 2009. Updates have been made to include joint SOP and F&R committee meetings. A detailed timeline is included as Appendix 1.

4. The integrated business and budget planning process is on track, with the Corporate Strategic Assessment delivered, draft 2010-13 Business Group Business Plans in development, the MPS budget challenge well underway and progress on the Policing London Plan 2010-13 visible through the Interim Budget Submission 2010-13.

5. MPA consultation and challenge is built into the Budget and Business Planning cycle, through SOP and F&R Committees with Members and the associated Chairs brief, and through Full Authority. MPS officers meet with MPA officers regularly, both in planned monthly meetings combining budget and business planning, and through ad hoc planning meetings.

6. MPA officers are fully engaged in the 2010-11 Budget and Business planning cycle, and an overview and detail of the work in progress in developing the budget and business plan has been shared with the Authority.

Interim budget submission 2010-13

7. The priorities identified for the Policing London Business Plan 2010-13 have been developed through the 2009-10 Corporate Strategic Assessment process, taking full account of Public Consultations. They have been framed in the context of the Government’s strategy, the Mayor’s priorities and the MPA’s MetForward document. They fully reflect our statutory and legislative requirements.

These priorities are detailed as Strategic Outcomes and Corporate Objectives in the Interim Budget Submission 2010-13, attached at Appendix 2.

8. The seven corporate objectives for 2010-13 are as previously agreed by MPS Management Board (MB) on 3 March 2009 and the Interim Budget Submission 2010-13 is built around:

• Delivery of the Commissioner’s strategic outcomes and key areas of focus for the 2010/13 Corporate Objectives
• The Commissioner’s means of delivery - presence, performance, productivity, professionalism, and pride
• The key activities and initiatives being undertaken by the Service that are driving our gross expenditure of £3.6bn.

9. Within this, the principles against which budget decisions are judged remain as:

• Priority to public-facing services
• Alignment of resources to MPS corporate objectives
• Improve outcomes and minimise unit cost of delivery
• Achievability
• Identification of medium-term savings proposals, not just year one
• Understanding the impact of cost reductions elsewhere in the organisation.

Resource implications

10. In delivering a financial balanced budget, final savings identified have to be attributed to Business Group budgets. The planning approach therefore balances:

• Budgetary targets applied to individual Business Groups.
• Budgetary targets for corporate exercises, which then have to be applied to individual Business Groups

11. The 2010-13 planning process adopts a similar approach to that used for 2009-12:

• The initial guidance sent to Business Groups requires all Business Groups to identify and illustrate the impact of a target level of savings
• A number of corporate exercises are being undertaken to identify specific savings with the aim of helping Business Groups to meet their set targets and/or focus on particular services in terms of cost reduction.

12. The Interim Budget Submission reflects the budget gap between the approved budget for 2009-12, updated for pay and price increases for 2010/13, and the lower funding envelope included in the Mayor’s budget guidance for 2010-13.

13. The resultant budget gap is £67.6m, £202.7m and £263.0m in each of the years of the 2010-13 budget. MPS Management Board has carried out an initial challenge on 2010-13 budget proposals and has commissioned more work to be carried out before consideration of the full budget submission in September 2009. These proposals will be subject to Authority scrutiny in October and November before submission to the Mayor.

Performance management

14. A new performance management model is being developed in the MPS, whereby high quality insightful analysis will be considered by Performance Board; all performance stakeholders work with consistent sets of data; trends and issues are identified early; research and in-depth analysis is commissioned effectively; and the expected impact of interventions is considered in the context of resource usage.

15. This will enable more informed decision-making, will help us understand and improve progress against the strategic outcomes (confidence, safety, improvement) and the 5Ps, and will create transparency on resource allocation and how it is driving performance. We will specifically link resource allocation with outcomes and focus analyses and performance conversations on high-priority areas including productivity.

16. Several important strands of work are underway:

• Performance MMRs and financial MMRs are being developed for 2009/10 Business Group reporting
• Several strands of work are aligning resource use against performance outcomes, including Police Objective Analysis (POA)
• A group of performance management practitioners has been formed to support effective performance management across the MPS
• Corporate Health Indicators are being re-assessed for validity
• Operational Indicators are being reviewed, both in the 2010-13 Business Group plans and for corporate objectives.

17. A review of 2009/10 Headline Indicators has been undertaken to ensure that they properly reflect corporate objectives and areas of focus for 2010/11. The proposed set is shown on Page 20 of the Interim Budget Submission 2010-13.

18. The Headline Indicators are designed to address performance across the whole spectrum of MPS work to ensure that all areas of critical activity are focused upon. Where possible each of the proposed key indicators for 2010/11 remains aligned to the National Indicator Set (NIS) and/or linked to Assessment of Policing and Community Safety (APACS), and to the MPS’ Corporate Health Indicators (CHI).

19. Strategic leads, represented by their Business Groups, have suggested suitable Headline Indicators for 2010/11, with input from S&ID, PIB and others. However, work will continue to define potential targets to November 2009 and we will work closely with MPA colleagues in developing our plans.

20. 19 Headline Indicators are proposed in the Interim Budget Submission 2010-13, taking into account the presentations of MPA officers and comments received during the 2009-12 cycle.

C. Race and equality impact

;The proposed planning framework will help to ensure that race and equalities implications are properly reflected in future business plans and budgets. The planning process will be subject to an Equalities Impact Assessment.

D. Financial implications

This report sets out the financial framework within which the Service needs to operate to ensure the Authority sets a financial budget. The proposal aims to ensure the efficient and economic use of resources in the delivery of an effective policing service.

E. Legal implications

1. The Greater London Authority Act 1999, as amended, sets out the requirements of the GLA to calculate the budget requirements for the Mayor and the Assembly and four functional bodies. The budget requirement for each body is calculated by determining the difference between projected expenditure and projected income including specific Government grants. In order for the GLA to estimate the sums required by the MPA/MPS, the MPA/MPS must provide information to the Mayor and Assembly to facilitate this. The Mayor is required to consult with the MPA/MPS prior to setting the final budget.

2. To help assist budget setting and fulfil meeting the priorities within the Policing Plan, the budget and business development process is a key element to ensure there are sound financial plans within which the MPA/MPS priorities and objectives are adequately funded.

3. Expenditure or activities undertaken by the MPA/MPS as statutory bodies must only budget for activities that fall within its statutory powers. There are also positive duties under S3 Local Government Act 1999 to secure the continuous improvement in the ways functions are exercised having regard to a combination of the economy, efficiency and effectiveness. This report identifies steps under the budget and business plan process will be taken to ensure best value is achieved in the delivery of policing services.

F. Environmental impact

The proposed planning framework will help to ensure that environmental sustainability issues are properly reflected in future plans and budgets.

G. Background papers

• Budget and Business Plan 2010-13, MPA SOP 4 June 2009

H. Contact details

Report author(s): Paul Clarke, Strategy and Improvement, MPS

For more information contact:

MPA general: 020 7202 0202
Media enquiries: 020 7202 0217/18

Appendix 1

Business planning timetable 2009-10 - timeline

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