Budget and business plan 2010-13

Report: 15
Date: 8 June 2009
By: Director of Resources on behalf of the Commissioner

Summary

This report sets out the proposed approach for delivering the 2010-13 Budget and Business Plan in line with the Mayor’s guidance and the increasingly constrained financial environment.

A. Recommendation

That members note the approach for delivering the 2010-13 Budget and Business Plan in line with the Mayor’s guidance.

B. Supporting information

Background

1. The current Policing Plan for 2009-12 was approved by the MPA (26 March 2009) ready to be published before 31 March 2009. The final budget has recognised a number of new pressures, which have been identified and built into the policing plan.

2. A number of other pressures have been identified but not yet quantified:

• Protective Services – HMIC reports the need to increase capacity. Approximately £2.4m will be required in 2009/10 to cover this demand with a £1m contribution earmarked from centrally held budgets and the remaining £1.4m being contributed from the base budget of the Specialist Crime Directorate (SCD). The full year-requirement from 2010/11 will be approximately £4.8m with £1m earmarked from centrally held budgets and the remainder funded by SCD. This position is being kept under review against the earmarked provision of £2m originally set aside in centrally held budgets.
• Borrowing costs linked to core capital programme and dependent on decisions by the MPA Treasurer.
• The re-phasing of Operation Herald.
• The Olympics and associated costs.
• Increasing officer/staff numbers and the related accommodation requirements.
• Depletion of the residential estate and the impact on rental income.
• Delays in property disposals and the associated impact on maintenance and management costs.
  

3. Given this background, in moving into the 2010-13 planning process, it would be sensible to assume the need to identify new savings against the 2009/10 budget of:

This is over and above the savings already identified and built into the budget and represents a challenging target for the Service, i.e.:

Approach for the 2010-13 planning process

4. The MPS has now set its approach to the 2010-13 Budget and Business Planning process.

5. The Budget principles against which budget decisions are currently judged are:

• 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.

The MPS have agreed that these principles remain fit for purpose for the 2010-13 planning process.

6. The MPS Commissioner has also outlined three key areas as the Service’s agenda during his term in office:

• Confidence
  • convincing communities through engagement that we are on their side
  • delivering the service they want
• Safety
  • reducing and solving crime
  • being intolerant of any violence
  • securing our streets
• Improvement
  • delivering the right service for the right price

7. These aims will be realised over the next five years through:

• Presence – the presence of our officers in our communities
• Performance – in improving public safety and confidence
• Productivity – in the effective and efficient use of our resources
• Professionalism - in taking personal responsibility for our actions
• Pride – in our policing, in our uniform, and in our service delivery.

8. The Strategy and Improvement Department is working to develop these themes into a five-year 2010-14 strategy for the MPS. A strategic model is being developed that converges the five P’s, the themes of Safety, Confidence and Improvement, as well as Home Office, Mayoral and MPA strategic imperatives.

9. This will be part of a refreshed approach to the development of business group business planning, which will be facilitated by SID engaging directly with business group SMTs.

10. In this way the MPS will ensure a coherent and holistic approach to leading and co-ordinating the business efficiently and effectively. Appendix 1 sets out the strategic outcomes and objectives included in the 2009-12 Budget and Business Plan.

Business Planning 2009-12 Lessons Learned

11. Two reviews of the 2009-12 Budget and Business Planning process have been undertaken and some changes are proposed for the 2010-13 planning and budget process. The first review, led by Commander Richard Morris, addressed strategic issues, whilst the second covered four key themes in working with MPS Business Groups.

12. 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
• The process, including the number of financial and business planning templates, has been rationalised as far as is practical.
• 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

13. Public consultation to inform the MPS’ 2010-13 corporate Objectives and Business Planning have been derived from a range of sources:

• MPA/MPS public consultation on policing priorities
• MPS Youth Survey
• Public Attitude Survey
• Annual London Survey (GLA)
• Transport for London – Community Safety Pla
• Survey of Londoners (London Councils)
• Policing Priorities of bordering police authorities.

14. There are considerable similarities in the priorities highlighted across the sources examined, even though the methodologies vary. Findings from these consultations indicate that Anti-Social Behaviour (ASB) is the issue of greatest concern for Londoners. Concern with groups of youths ‘hanging around on streets’ or in public areas was frequently mentioned. This also appears to be an issue that extends to forces bordering the MPS. Violent crime, police accessibility/visibility, and drug use/ activity were also rated high in a number of studies and consultations.

15. Anti-social driving and road safety was rated as a top priority within the Public Attitude Survey and TFL's Community Safety Plan but was not a priority for young people. It was also considered as the second most important priority by the respondents of the MPA/MPS consultation and has featured in this over the past three years. Though considered to be a lower priority by the respondents to the MPA/MPS consultation, terrorism and burglary were often rated as top policing priorities in other consultations.

16. Young people were more likely to prioritise violent and street crime as issues they were most concerned about – previous research has found that youths are more likely to be victims of violent crime, theft, and robbery than any other crime types [1].

17. The contents of the 2010-13 Business Plan will be driven by:

• The five year MPS Strategy (‘Challenges for 2010-14: MPS Corporate Strategy Development’ – Management Board 3 March 2009). The Strategic Intelligence Assessment (which was considered by the Performance Board in February 2009) is a key input to the corporate strategic assessment
• The delivery of the Commissioner’s three strategic outcomes (Confidence, Safety and Continuous Improvement) and reflect means of delivery (presence, performance, productivity, professionalism, pride).
• The key activities and initiatives being undertaken by the Service that are driving our gross expenditure of £3.6bn.

18. Performance measures and targets will be significantly streamlined and focused on supporting scrutiny of the activities and initiatives being undertaken by the Business Groups.

19. A timetable for the planning process is set out in Appendix 2. An update of this timetable will be produced for Business Groups on a monthly basis.

Securing the Required Cost Savings

20. In delivering a financial balanced budget, it must be recognised that the final savings identified have to be attributed to Business Group budgets. The planning approach therefore needs to balance:

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

21. A similar approach to that used for the 2009-12 budget is proposed for the 2010-13 planning process, i.e.:

• 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 reductions.

22. The two areas of corporate activity are:

• Progressing the Service Improvement Plan (SIP).
• Understanding cost drivers for the highest areas of spend and identifying options for reducing those costs.

SIP Programmes

23. The Service Improvement Board is currently reviewing the SIP programmes and projects. The focus is on identifying and securing realistic cost savings on the projects in the plan. External support has been brought in to assist Business Group leads to deliver the projects with the best potential for savings. Business Group leads are also being asked to identify milestone savings, which can be achieved during the lifetime of the project.

Cost Drivers

24. HMIC has identified three main areas (Premises, Supplies and Services and Transport) where our costs are considered high against our Most Similar Forces. This analysis complements a preliminary analysis, as set out in Appendix 3; of high spend areas for 2008/09 (ten months). Our approach will be to rank the costs in the areas highlighted in Appendix 3 and, in consultation, identify the main cost drivers. Having understood the drivers, we will develop new cost saving initiatives and supplement existing SIP projects or add new projects to the SIP programme for development and delivery.

25. In progressing this work, care will need to be taken to ensure new savings identified:

• Do not double count against savings already included in the budget or identified in the SIP programme and/or Business Group proposals.
• Reflect real budget reductions as opposed to reductions in overspendings.

Growth

26. As previously identified, some pressures have already been identified which could impact on future budgets. However, every effort needs to be made to keep growth to a minimum. Every £1 of growth means an extra £1 of savings to be identified. The impact of growth and reduction proposals will be reflected in the final budget submission.

C. 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 requirements for each body are 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.

D. Environmental impact

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

E. 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.

F. 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.

G. Background papers

• Policing London Business Plan 2009-12

H. Contact details

Report author: Anne McMeel, Director of Resources, MPS

For information contact:

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

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