MPS corporate governance framework update

Report: 8
Date: 15 June 2009
By: Director of Internal Audit

Summary

This report provides a progress update on the Metropolitan Police Service (MPS) corporate governance framework. It includes updates on the areas identified by the MPS Annual Assurance Statement (AAS) that enhance the MPS’ governance arrangements, on the work programme itself, and incorporates the MPS Corporate Risk Strategy implementation progress report.

A. Recommendation

That Members note the contents of this report

B. Supporting information

Background

Current corporate governance arrangements

1. The MPS continues its drive to achieve excellence in corporate governance. As such an established ‘temple’ model of corporate governance, approved by Management Board (see Appendix 1) reflects current good practice.

2. The results of a gap analysis of the MPS corporate governance framework against the elements of the CIPFA / SOLACE framework: “Delivering Good Governance in Local Government” informed the development of the corporate governance work programme. This work programme is managed and monitored through the MPS Service Improvement Board (SIB) with regular progress updates to the Performance Board and this Committee.

Summary of progress

3. The MPS continues to use the ‘temple’ model of corporate governance set out in Appendix 1. This model is supported by the corporate governance work programme, which consists of the following workstreams. The current status of each workstream is provided below with more detail set out in the Progress Update section of this report.

Existing workstreams

New workstreams

‘Business as usual’ workstreams

5. Since the MPS corporate governance framework update provided in March 2009, appropriate work has been undertaken to allow a number of workstreams to be managed as ‘business as usual’:

• Introduction of a strategy co-ordination role – The MPS has introduced the role of strategy development and strategy coordinator within the Strategy and Improvement Department (S&ID). The Corporate Strategic Assessment (CSA) has been approved by Management Board and fed directly into the planning process as part of the business group planning guidance. A review of the role of the CSA will be undertaken during 2009/10 but it is anticipated that it will continue to hold its dual role: to directly inform and evidence the plan and to provide strategic context and review MPS strategies.
• Implementation of the Taylor reforms to police misconduct procedures – The Taylor Reforms have been effective since 1 December 2009. The post-project phase continues with quarterly monitoring of performance and benefits realisation. Governance arrangements are in place to report to Management Board and the Metropolitan Police Authority (MPA) periodically.
• Formation of MetLaw reception desk – The MetLaw reception desk is now in place and working effectively. Legal Services continue to monitor the performance of MetLaw and seek ways to continuously improve the service.
• Development of corporate health organisational performance indicators – A set of 19 headline corporate health indicators are reported to Performance Board on a quarterly basis, with the remainder by exception. A report containing the outturn and quarter four data was presented to Performance Board in May 2009. The indicators are subject to ongoing review and development but have been incorporated into business group business plans for 2009/10. The indicators will be reported locally as part of business group monthly management reports and quarterly by exception to Performance Board.
• Corporate Audit and Inspection Strategy – There is continued monitoring of audit and inspection activity, the results of which are reported in quarterly updates to Performance Board and the MPA Corporate Governance Committee. The terms of reference for the quarterly meetings with both the internal and external inspection agencies have also been revised to reflect the focus on audit and inspection activity and to enhance partnership working. A review of compliance in accordance with the Audit and Inspection Protocol is to be undertaken with a view to identifying areas of improvement to embed compliance. The work to address any areas of improvement will be integrated into existing working practices.
• MPS Complaints and Compliments (policy and resource) – The reward and resolution process is now well established. The database is being used appropriately across all boroughs and relevant business groups. The first of regular quarterly analysis reports will be produced in May 2009 and will be submitted to the Citizen Focus Strategic Forum for consideration and discussion.

Progress update: Existing workstreams - Pillar One: Organisational structures & processes

Embedding risk management

6. Progress on embedding risk management is detailed in Appendix 2, the MPS Corporate Risk Strategy implementation progress report.

Implementation of Developing Resource Management programme

7. The Developing Resource Management (DRM) programme, launched in July 2008, specifically focused on delivering efficient, controlled projects primarily in the areas of Finance, Procurement and Strategy and Improvement. The purpose of the programme is to embed a rigorous set of control processes that will provide the foundation for the delivery of projects on time and the monitoring of benefits from those projects. Details of progress on the workstreams are set out below.

8. Contract Compliance and Management (CCM) – Identified contracts have been loaded onto a database (pending being uploaded to the corporate SAP system) giving the Service visibility of 97% of contracts in value terms. A process has been put in place to make sure this database is properly maintained. The first wave of systems enhancements to support the CCM objectives is on-track to be delivered on 8 June 2009.

9. Strategic Procurement Planning (SPP) – SPP has identified 35 procurement opportunities, which are being validated with the business groups as part of the Service’s budget and business planning process.

10. The Purchase-to-Pay workstream has established a clear route for the delivery of the 80% compliance target by mid-2009. This includes ensuring that key non-SAP systems and processes are assessed against agreed compliance criteria. The workstream has delivered a number of road shows across the Service to support compliance and the use of appropriate routes to purchase for all goods and services.

11. The Scheme of Delegation workstream has been preparing for the data collection to support the deployment of the full Scheme Solution – covering all financial approvals in APEX (an IT system which replaces the paper-based method of processing invoices), Enterprise Buyer Professional (EBP) and MetFin – in quarter three of 2009/10. The key implementation activities and processes have been validated with business group business managers and the team have aligned timings with the TP Finance and Resource Review implementation team.

12. Finance and Resources (F&R) Review – Recruitment to fill the revised F&R structure within Territorial Policing (TP) will be completed in June 2009 and Directorate of Resources (DoR) in July 2009. The workstream is continuing to work closely with other corporate change programmes, for example Transforming Human Resources (THR), to consider and address organisational staff implications. The first TP F&R cluster is due to go live in July, the second in September 2009 and the third in quarter four 2009/10, once THR has been implemented in December 2009. Service level standards are being developed in conjunction with both customers of F&R and service providers, which will lead to an agreed set of key performance indicators. The workstream is now preparing a transition approach to ‘business as usual’ following project closure later in the year.

13. Partnership - The Partnerships toolkit has been completed and launched on the MPS Intranet. The workstream is currently establishing a structure and ongoing process to ensure sustainability and ongoing refinement of the toolkit and sharing of partnership good practices. A ‘Best Practice’ network is being established with a central contact point within S&ID to provide support to establishing, managing and improving Partnership practices within the Service.

Provision of detailed information on emerging market hotspots, especially around specialisms and specialist professionals

14. Some evidence has emerged of market premia in roles in technology and commercial property and there is continuing high turnover among procurement professionals, despite the enhanced salary arrangements implemented in 2008.

15. Human Resources (HR) have appointed a project manager to undertake a three month project, between May and July, to engage with stakeholders and identify market and structural issues to be taken forward during the term of the current 2008-10 pay settlement for implementation from August 2010.

Review of Expenses Policy

16. Following the working party held in March, the MPS have continued to progress development of the expenses policy and standard operating procedure (SOP) and engaged the Trade Union Side (TUS), Federation and Superintendents' Association. Other work has included realigning the overseas travel and expenses guidelines as a SOP with an overarching policy. The next step will be to address other expense related policies and SOPs so there are clear guidelines and a consistent approach. The target date for implementation is 31 May 2009.

17. This project is unlikely to generate cashable savings of any magnitude, although there may be some savings at the margins in terms of improved process, better understanding of what expenses can be claimed and a more efficient process flow of claims.

18. A large element of police mileage claims are currently submitted by dog handlers. A range of alternative transport options are being considered in consultation with Transport Services aimed at improving road safety and reducing risk – if implemented this will impact on mileage claims.

Existing workstreams - Pillar Two: Reporting and involving the MPA & stakeholders

Review of all forms of public engagement and consultation

19. Deputy Assistant Commissioner (DAC) TP Capability and Review has taken over the DAC role covering Community Engagement under the Citizen Focus workstreams. A meeting is due to be held with leads from all business groups, including the MPA to renew the strategy and further develop the measurements to support the drive in confidence.

Safer Neighbourhoods panel training and business / youth engagement

20. The second round of Safer Neighbourhood (SN) ward panel training has now commenced and is due to be completed in November 2009. The subject matter includes a phase one overview, the extended police family, anti-social behaviour and partnership. The MPS now looking at a possible phase three training and are consulting with ward panels and the Communities Engagement Project on subject areas.

21. Under the Presence strand we are now working towards delivering 32 town centre teams over the next two years. These teams will be predominantly Metropolitan Special Constabulary (MSC) officers.

22. The Joint MPS/City of London Police Business Policing Model is still in progress. The initial research stage is complete and we are now moving into the implementation phase with the Victoria Corridor (Westminster) and London Bridge (Southwark) trying out a range of engagement/enforcement activities targeted towards the issues identified at the research stage. The evaluation and final report stage is due in December 2009.

Existing workstreams - Pillar Three: Standards of behaviour

Enhanced MPA / MPS Fraud and Corruption Awareness Strategy

23. Management Board agreed the need to raise awareness of internal fraud within the MPS, which will contribute to overall effective corporate governance and a joint training programme was agreed with the MPA. The aim of the fraud awareness programme was both to raise fraud prevention awareness and provide information on the level of internal fraud awareness, which will help the MPA and MPS develop their governance framework.

24. In December, a survey questionnaire was issued to a random selection of police officers and staff. Following the outcome of this survey the MPS and MPA worked with the Audit Commission to develop the workshop programme. The selected staff were then invited to attend workshops, which were held throughout January, February and March 2009.

25. The Audit Commission is currently drafting a report for the MPA and MPS on the Raising Fraud Awareness workshops.

New workstreams - Pillar One: Organisational structures and processes

Management Board operating framework

26. S&ID is progressing the implementation of the corporate decision making recommendations, previously a workstream within the DRM programme. This includes piloting the business case template and investment approval process in Directorate of Information (DoI), making changes to the current corporate board structures and terms of references and enhancing the decision-making support infrastructure in S&ID. Work is also being undertaken to incorporate the governance arrangements of the five Ps – Presence, Performance, Productivity, Professionalism and Pride – into the corporate decision making framework.

Performance against Business Group Business Plans

27. The Planning, Performance and Improvement (PPI) team within S&ID have issued a pre-populated draft Monthly Management Report (MMR) template to all business groups, which highlight the key business group deliverables, measures and targets contained in 2009-12 Business Group Business Plans. The team held discussions with business groups on the purpose and benefits of MMRs and offered ongoing support in collating the first return, which was provided in May 2009. There will be monthly reviews of performance with all business groups by a combined PPI/Finance team from June 2009.

Organisational learning

28. Organisational capability is seen as a key driver in delivering improved performance and productivity. The Service continues to develop its model of organisational learning and an update was provided to the MPA Strategic and Operational Committee on 8 June 2009. This developing model of capability and organisational learning is part of the wider MPS performance management framework which will include the development of a capability review model which enables peer assessment and internal benchmarking.

Non-compliance framework

29. A framework for dealing with non-compliance in respect of the management of MPS resources has been developed primarily dealing with mis-spend on goods and services, expenses, travel and loss of goods. The framework incorporates management action and an escalation process for addressing instances of non-compliance. Management Board agreed the framework along with an implementation plan for embedding the framework into the MPS performance management framework in May 2009. The MPS will now focus on implementing the framework by increasing awareness of the required standards for personal responsibility for the safekeeping of Service assets and engaging the trade unions.

Review of MPS Environment Strategy and development of Corporate Social Responsibility / Sustainable Development Strategy for 2010-13

30. A management review of the MPS Environmental Management Programme for 2008/09 was completed and discussed at the Environmental Strategy Steering Group in April. A full impact assessment will be completed as part of the collation of the Environment Report 2008/09, where analysis of data (including corporate health indicators) will inform future strategy. The report is expected to be published in September 2009.

31. In addition, a Corporate Social Responsibility (CSR) Manager has been appointed subject to security clearance. The CSR Manager will provide additional resource to aid the development of the CSR strategy and move reporting from ‘environmental’ to wider sustainability elements, as well as integrating through the business plan process.

Service Improvement Plan

32. The MPS continues to develop its Service Improvement Plan as part of its business planning and performance management process. The Plan covers both capability/capacity and productivity/efficiency issues. The Plan includes a number of key programmes which are already being delivered and work is currently underway to examine the key cost drivers in the Service as a means of identifying the key programmes to be included in the Plan in support of the 2010-13 business plan and budget.

Business charge card

33. Barclaycards were introduced as the new business charge card in May 2008, with tighter criteria for the cardholder to account for their expenditure within 30 days. Table 1 below shows the number and value of those items of Barclaycard expenditure still outstanding as at 15 May 2009.

Table 1 – Outstanding Barclaycard expenditure at 15 May 2009

The total spend on the Barclaycard scheme in May 2009 is £413,000, 21% lower than April 2009.

34. The additional controls put in place on MPS business charge cards include:

• reduced time to account for expenditure
• greater local control over cards and
• better local visibility through improved management information.

These controls continue to work well with fewer items not accounted for in time by cardholders and quicker, more effective, management intervention/escalation when cardholders do not account for expenditure in accordance with the timetable or the applicable rules and procedures.

35. A further lessons learned review will take place by the DPS and MPA Internal Audit to ensure the operation of the revised procedures continues to address all the issues identified in ongoing investigations.

New workstreams – Pillar Three: Standards of behaviour

Introducing the Equality Standard

36. The Equality Standard for the Police Service (ESPS) has been developed by the MPS in conjunction with the National Police Improvement Agency (NPIA). The ESPS is now being field tested by 11 forces. The MPS will participate in this process. The Diversity and Citizen Focus Directorate will co-ordinate and support the running of four trials at Enfield, Richmond, Specialist Firearms Command (CO19) and HR. These commenced in May and will last for three months. The national project team will then evaluate the results with a view to implementation of any revised ESPS in the late autumn.

C. Race and equality impact

The model of corporate governance set out in this report is based on the principles of openness; integrity; accountability and equality. The development of the framework therefore should have a positive race and diversity impact by ensuring that these principles inform the way in which the MPS operates. Furthermore, improved communication of the corporate governance framework aims to help staff understand how to apply these principles in their day-to-day work.

D. Financial implications

The work streams identified will be delivered within approved budgets.

E. Legal implications

1. The MPA are under a statutory duty to prepare and publish an Annual Governance Statement (AGS), under regulation 4 (2) of the Accounts & Audit Regulations 2003, as amended by the Accounts & Audit (Amendment) (England) Regulations 2006. The AGS is a general certification about governance issues, which is the primary responsibility of the MPA as police authority.

2. In order that the MPA can discharge its statutory duty referred to in paragraph 1 above, the MPS provides its certification to the MPA by submitting an Annual Assurance Statement (AAS), as recommended by CIPFA/SOLACE guidance “Delivering Good Governance in Local Government-Interim Guidance Note for Police Authorities and Forces in England and Wales (2007”) (“The Guidance”), which demonstrates how aspects of governance have been implemented within the police force.

3. The Corporate Governance Framework provides the supporting information which evidences that the MPS will ensure it has robust systems in place that demonstrate it is adhering to the strategic direction set by the MPA, and is delivering good governance through the delivery of many operational and financial aspects within a delegated framework, in accordance with Guidance and best practice.

4. Compliance with the Corporate Framework will also assist in raising standards, reduce risk of legal challenge and build public confidence by ensuring the MPS operates in a transparent manner.

F. Background papers

• Appendix 1 – The MPS Corporate Governance Model,
• Appendix 2 – MPS Corporate Risk Strategy implementation - progress report

G. Contact details

Report author: Tanya Panchal and Alan Hughes, Strategy and Improvement, MPS

For information contact:

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

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