Policing London business plan and budget 2009-12

Report: 04
Date: 5 March 2009
By: Director of Resources on behalf of the Commissioner and the Treasurer

Summary

The draft Policing London Business Plan and Budget 2009-12 was agreed by the Full Authority for submission to the Mayor in November 2008. Following approval to the Mayor’s final 2009/10 budget proposals on 11 February 2009 and the Government announcements on the general policing grant and some specific grants, the joint committee is now asked to approve the 2009-12 Policing London Business Plan and Budget (capital and revenue) and, subject to approval by the Full Authority on 26 March 2009, for publication by 31 March 2009 as required by statute.

A. Recommendations

That members approve for submission to the Authority on 26 March 2009:

1. the 2009-12 Policing London Business Plan and budget (capital and revenue) for publication by 31 March 2009 as required by statute (Appendix 1).
2. the revised Capital Programme details projects (Appendix 3 - Exempt)
3. the revised Capital Programme prudential indicators (Appendix 4).

B. Supporting information

1. The 2009-12 Policing London Business Plan and Budget has continued to evolve in line with the objective of improving integration between the MPA/MPS Business and Financial Planning processes. MPA officers and members have been involved in the development of the final document set out in Appendix 1. That involvement can be summarised as follows:

Table 1: MPA officers and members involvement in the development of the 2008-11 Policing London Business Plan and Budget

Date	PA officers and members involvement in the development of the 2009-12 Policing London Business Plan and Budget
16 September 2008	Initial MPA/MPS Business Planning Session on the Interim Budget Submission
18 September 2008	High-level interim budget and planning information submission to Mayor agreed by joint Finance/PPR Committee
End September 2008	Informal scrutiny of developing proposals through an MPA overview group
20/27 November 2008	Draft business and budget plan submission to Mayor agreed by Finance and Resources Committee and Full Authority
11 December 2008	MPA/MPS Strategy Briefing on the Business and Financial Planning Process
18 December 2008	Finance and Resources Committee informed of Government announcements on provisional grant settlement and some specific grants
8 January 2009	Strategic and Operational Committee considered the indicative target proposals for the CPAs
29 January 2009	Full Authority considered draft 2009-12 Policing London Business Plan and asked for comments, particularly in respect of emerging targets
5 February 2009	Strategic and Operational Committee considered draft 2009-12 Policing London Business Plan and latest position on variable target setting

In addition, throughout the process, clarification/information has been provided to MPA officers and Members in respect of questions raised on the contents of the plan and budget.

2. The Policing London Business Plan reflects a number of statutory requirements as well as defining the MPA/MPS medium-term objectives, what will be delivered, the resources available to support delivery and how performance will be monitored. Once approved, a shorter, more user-friendly version of the plan will be developed in consultation with MPA officers.

Business plan

3. The Policing London Business Plan has been considered by the Authority at a number of meetings. The main changes to this final version can be summarised as follows:

• the plan now reflects the Commissioner’s agenda for the Service in terms of strategic outcomes and how we will deliver our business in terms of presence, performance, productivity, professionalism and pride
• the format has changed to make the information more accessible
• targets have been updated to reflect the latest available information
• information has been provided on Protective Services in line with statutory requirements
• information has been provided on audit and inspection in line with statutory requirements

4. As reported to the Strategic and Operational Policing Committee on 5 February 2009 the Authority is developing a strategic framework with the aim of finalising proposals for inclusion in the 2009-12 Policing London Business Plan.

Officer and Staff Numbers

5. The overall position on officer and staff numbers as reflected in the proposed Policing London Business Plan for 2009-12 can be summarised as follows:

Staffing Requirements (No. of Staff)	2007/08	2008/09 Original Budget	2009/10	2010/11	2011/12
Police Officers	30,674	31,209	32,534	32,683	32,467
Recruits	724	1,721	749	598	488
Police Staff	13,971	15,340	15,096	15,211	15,602
PCSOs	4,438	4,562	4,716	4,716	4,716
Traffic Wardens	294	309	219	219	219
Total Staffing Requirements	50,101	53,141	53,314	53,427	53,492
Special Constables	2,512	3,750	3,933	4,967	6,000
Total	52,613	56,891	57,427	58,394	59,492

The main difference in police staff numbers between the November submission and this submission relates to 75 nurses to be recruited in 2009/10 as part of Operation Herald that should have been included in the November figures.

Structural changes

6. Since the budget submission, Management Board has agreed to the following transfer of functions from the Central Operations business group:

• The Transport Operational Command Unit has been transferred to Territorial Policing to facilitate integration with Safer Transport Teams and Operation Tyrol.
• Three units (Heathrow Airport, Palace of Westminster and Diplomatic Protection Group) have been transferred to Specialist Operations from Central Operations

The budget and business plan have been revised to reflect these structural changes.

Three Year deployment plan

7. Appendix 2 provides an explanation of how the Service’s three-year officer deployment plan operates. The Business Plan has been adjusted to provide transparency on the number of recruits on borough.

8. The numbers include some officers for DSP and Olympics activity, which are still dependent on specific grant being approved. The financial impact is cost neutral and the budget and numbers will be revised once grant approvals are known.

Capital and revenue budgets

9. Details of the proposed capital and revenue budgets have been included in Appendix 1 - the Policing London Business Plan. More information is provided in Section D.

Strategic implications

10. The budget and business plan are fundamental elements of the framework established to deliver policing priorities and strategies whilst also reflecting mayoral and Government objectives.

C. Legal implications

1. The Mayor’s component and consolidated budget requirements for 2009/10 was determined on 11 February 2009 in accordance with the GLA Act Schedule 6 Paragraph 8. This included a 2009/10 budget requirement for the MPA totalling £2,640.3m.

2. Expenditure or activities undertaken by the MPA, as a statutory body, must be based on the specific powers given to it. Expenditure should only be budgeted for activities which fall within these statutory powers and can only be spent for such purposes whether budgeted or not.

D. Race and equality impact

1. Equalities are seen as a core element of the Service’s corporate social responsibility. The MPS is committed to the adoption of an equalities performance framework which sets the standard for the mainstreaming of equalities and diversity across the Service. The Business Plan reflects ongoing equality work including increasing community trust and confidence in the police, improving the progression of women and BME officers in the Service and continuing to develop a workforce that reflects the diversity of London.

2. The MPS also undertakes a wide range of community engagement activity across London, including with traditionally ‘hard to hear’ and vulnerable communities to shape future services. This includes engagement with communities vulnerable to radicalisation, engagement to improve our understanding of the needs of migrant domestic workers, addressing the community safety issues of refugees and the development of a school-distributed youth DVD to help tackle extreme behaviour.

E. Financial implications

Revenue budget

1. The MPA budget envelope approved by the Mayor on 11 February 2009 reflects the draft submission approved by the Authority in November 2008. Since that submission was made a number of issues have arisen which will impact on the Authority’s budget over the three year planning period 2009-12. The overall position, as reflected in the final budget proposal, can be summarised as follows:

	2009/10 £m	2010/11 £m	2011/12 £m
Budget Requirement approved by Mayor on 11 February	2,640.3	2,673.3	2,706.8
Existing Pressures
Savings to be identified as per budget submission		57.5	124.5
New Pressures
Inflation
Police Staff Pay Award	1.4	2.0	2.3
Growth and Reductions
City Airport Policing – delays in legislation re income charges	3.4	3.4
Interest Receivable	7.0	7.0	7.0
Business Rates		1.5	1.5
Employer’s National Insurance			10.3
NSY Borrowing	-3.8	-3.8	-3.8
New Growth and Reductions	6.6	8.1	15.0
Net impact of budget pressures	8.0	67.6	141.8

Police Pay Award

2. The latest three year offer (2008/09 – 2010/11), which staff associations are putting to their members, at +2.65%, +2.575% and +2.575% is slightly higher than the provision of 2.5% in the budget.

City Airport Policing

3. Since the submission was made the Secretary of State for Transport has announced the likely timetable for designating City Airport and allowing the Authority to recover costs incurred in providing security at the airport. Whilst the Service will continue to make the case for recovering its costs it is now unlikely to be able to recover costs before 2011/12.

Interest receivable

4. Based on the current interest rates, the borrowing decisions on New Scotland Yard and the Authority’s Treasury Management policy agreed on 20 November 2008 in respect of placing funds at the Debt Management Office, annual income is now estimated at £2m – a reduction of £7m.

Business rates

5. The Business Rates Supplements (BRS) Bill was laid in Parliament with the intention that it should become law by 1 April 2010. The Bill provides powers for local authorities to levy additional business rates charges to specifically fund local economic development, such as infrastructure projects. The MPS has a considerable number of properties over £50,000 in the current 2005 rating list. In the absence of the 2010 rating list, which has yet to be published, the total rateable value affected is estimated at £79.7m with a total BRS liability of £1.5m from 2010/11.

Employer’s National Insurance

6. Following the review of the Treasury Post Budget Report the MPS budget will need to increase for Employers NI by 0.5% from April 2011; based on current budget figures this would see an increase in the region of £10.3m.

New Scotland Yard borrowing

7. Based on current decisions by the MPA Treasurer to use internal cash balances and limit external borrowing for the purchase of NSY to £50m rather than the original estimate of £130m there is a financial benefit of £3.8m. This is partly offset by a reduction in interest receipts. If external borrowing is increased by more than £50m, this benefit will reduce (see 10 below).

Funding identified pressures

8. Having considered the overall financial position, the Service proposes that the additional pressures in 2009/10 totalling £8m are funded from the centrally held budget. This will put extra pressure on this budget which will have to be carefully monitored throughout the year. The Service accepts that this may result in business groups having to contain some inflationary and other pressures within their approved budgets. This is, however, considered a practical and prudent approach given the work carried out in developing the 2009-12 budget to ensure business group budgets properly reflected the demands on the Service. On this basis, a balanced budget for 2009/10 is presented for approval.

9. These pressures, however, increase the savings to be identified in 2010/11 and 2011/12 in order to meet the budget guidance set by the Mayor. The budget reflects the adjustments between the business group budgets and centrally held provision for 2009/10 and the increased level of savings to be identified in 2010/11 and 2011/12. As the Authority is aware, work has already started in the Service to identify the most effective means of delivering these savings.

Other pressures

10. Work is continuing to quantify some issues which could impact on the MPA/MPS budget and which will need to be managed in year:

• Core Capital Programme Borrowing Costs
  The Capital Programme for 2009/10 currently requires an additional £50m of borrowing to support capital expenditure. Additional borrowing of £40m a year is then assumed for 2010/11 to 2015/16. It is at the discretion of the MPA Treasurer as to whether this borrowing is undertaken externally or whether the organisation uses its general cash balances to fund the capital expenditure (internal borrowing). In line with current practice the budget assumes the use of general cash balances. If the decision of the MPA Treasurer is to borrow the full amounts externally at the mid-point of each financial year, there is a potential budget pressure of approximately £0.5m for 2009/10, £3m for 2010/11 and £5m for 2011/12 (see 7 above).
• Protective Services
  The MPS has been assessing elements relating to protective services, such as Child Abuse Investigations and Serious & Organised Crime, following recent HMIC Inspections and planning improvements. The financial implications are still to be evaluated. However an initial assessment indicates that the additional resources required to meet these demands will be some £2m in 2009/10 and up to £4m thereafter. It is proposed that for 2009/10 some £2m will be earmarked in the centrally held budget to cover additional costs arising from the HMIC inspection. Access to these resources will be subject to the development of a business case and the MPA/MPS decision-making process. The financial impact in future years will be built into the medium-term financial plan once known.

Centrally held budget

11. The main adjustments made between centrally held budgets and business group budgets can be summarised as follows:

	2009/10 £m	2010/11 £m	2011/12 £m
2009/10 Budget Pressures	8.0
Contractual Inflation (DoI/Transport)	5.4	10.1	14.8
2008/09 Police Pay Award (FYE)	42.0	42.0	42.0
London Living Wage (FYE)	3.0	3.0	3.0
Total	58.4	55.1	59.8

Growth and reductions

12. The new growth and reductions identified in D1 have the following impact on the MPA/MPS growth and reduction packages included in the 2009-12 budget and business plan.

Growth	2009/10 £000s	2010/11 £000s	2011/12 £000s
Operational support	40,448	43,448	52,348
Operational services	12,770	15,037	16,353
Support services	29,850	47,850	50,750
Income Generation / Loss	8,290	8,290	8,290
Corporate Provisions	10,537	13,017	15,617
MPA	909	1,191	1,326
Grand Total	102,804	128,833	144,684

 

Reductions	2009/10 £000s	2010/11 £000s	2011/12 £000s
Operational support	-27,069	-27,969	-27,969
Operational services	-12,373	-13,510	-18,611
Support services	-48,702	-60,642	-59,062
Income Generation / Loss	-17,468	21,209	-24,011
Corporate Provisions	-32,972	-36,987	-35,949
MPA	-967	-917	-917
Grand Total	-139,551	-161,234	-166,519

Details of the growth and reduction proposals included in the November submission can be accessed at www.mpa.gov.uk/committees/mpa/2008/081127/06.htm.

Variations on Mayor’s budget guidance

13. In making the budget submission the MPA was required to illustrate the impact of a +/-0.25% on the Mayor’s Guidance. This equated to +/-£6.6m on the main submission. The Mayor’s budget, as finally approved, contained neither of these variation packages. The £6.6m growth package included the following initiatives:

Youth Initiatives	£m	£m
Enforcement	1.5
Prevention	2.0	3.5
Technical Support Unit		3.1
		6.6

Given the new pressures that are having to be managed within the budget now proposed, these initiatives will not now be progressed unless alternative funding sources can be identified during the year.

Specific grant – general

14. Historically specific grant income has been included in centrally held budgets whilst the expenditure to which it related was included in business group budgets. To facilitate transparency the budget now matches income to expenditure in business group budgets.

Specific grant – Olympics and Counter-Terrorism

15. Announcements are still awaited on 2009/10 grants for the preparation for the London 2012 Olympic and Paralympic Games and for Counter-Terrorism activity. The budgets will be changed to reflect announcements when made by the Home Office.

Business group budget allocation

16. Based on the issues identified above, the Policing London Business Plan includes analyses of budget allocations by business group (objective – p33) and by type of spend (subjective – p32). The final budget, now presented for approval, provides the basis for budget monitoring in 2009/10. Following Authority approval these budgets will be submitted to Management Board members for sign-off and notified to budget holders. Regular monitoring reports will be made to Investment Board and the MPA Finance and Resources Committee.

17. The significant budget changes since the November submission are:

• Cessation of Operation Safeguard – resulting in lower overtime (approximately £12.4m) and lower income from the Prison Service for accommodating Prison Service clients in MPS cells.
• Movement of specific grants into Business Groups from centrally held budgets
• Structural changes as described in Section B
• Budget pressures recognised as described earlier in the report (e.g. City Airport Income loss)

Budget requirement

18. The MPA/MPS budget requirement for 2009/10 is £2,640.3m as set by the Mayor. The year on year budget movements, as compared to the information included in the Mayor’s budget can be summarised as follows:

Changes to Spending Plan	2009/10 Mayor’s Budget £m	2009/10 Current Submission £m	Variance
2008/09 budget requirement	2,595.0	2,595.0	0.0
Changes due to:
Inflation	88.5	81.9	-6.6
Net growth in existing services and programmes	27.0	-11.4	-38.4
New initiatives and service	30.2	33.7	3.5
New reductions and efficiencies	-92.3	-88.9	3.4
Change in specific grants	-8.1	30.0	38.1
2009/10 budget requirement	2,640.3	2,640.3	0.0

The variation between the analysis in the Mayor’s budget and the current submission are explained primarily by the fact that the Mayor’s budget is comparing movements from the revised 2008/09 budget whereas the MPS is comparing movements from the original budget. Other variations are explained below:

• Inflation – budget reduced to fund 2009/10 budget pressures
• Net growth in existing services and programmes – reduction in Olympics and CT expenditure compared to the estimates in 2008/09 to reflect reductions in specific grant approvals
• New initiatives and service improvements – net movement of reduction in interest receipts and loan financing costs for additional borrowing for the purchase of NSY
• Savings and efficiencies – reduction in income assumptions for City airports policing
• Changes in specific grants – reduction in Olympics and CT grants compared to the estimates in 2008/09 (with a subsequent reduction in expenditure)

2008/09 Outturn

19. The outturn reflects the position as reported to the Authority at Period Nine and includes the transfer of £22m to reserves to support the 2009/10 and 2010/11 capital budget.

Reserves

20. The organisation is forecast to have the following revenue reserve balances at 31 March 2009:

• Earmarked Reserves - £185.3m
• General Reserve - £46.8m

21. Currently, there has been no use of reserves specifically assumed in the 2009-12 budget to support Service spend. Revenue reserves are cash backed balances, held on the balance sheet until they are spent or released for other purposes. As such, they can only be spent once, and are not part of the ongoing base budget.

22. It is expected that £22m will be drawn-down from earmarked reserves during 2009/10 (£13m) & 2010/11 (£9m) to support the delivery of the Capital Programme. This £22m will be appropriated to an earmarked reserve as part of the 2008/09 accounts closure process and represents the planned (and currently forecast) underspend for the year.

23. The general reserve balance as at 31st March 2009 is forecast to be £46.8m, which is approximately 1.8% of the 2009/10 net revenue expenditure figure of £2,640.3m. In line with MPA policy, when the Emergencies Contingency Reserve (£23.1m) is taken into account the general resources available total £69.9m which represents 2.6% of the 2009/10 Net Revenue Expenditure.

General policing grant

24. The final settlement for the general policing grant was announced in January for 2009/10 at £1,978.3m together with provisional grant settlements for 2010/11 of £2,027.7m. The settlement was in line with the provisional grant settlement announced in December. This announcement does not affect the Authority’s budget requirement as set by the Mayor.

Home Office Efficiency and Productivity Strategy

25. The Home Office Efficiency and Productivity Strategy for the Police Service for the period 2008 – 11 resulted in the target for cashable savings increasing to 3% of gross revenue expenditure per annum (previously 1.5% of net revenue expenditure). Home Office guidance states that the value of the target is compounded, net of cashable efficiency or productivity gains worth 9.3% of 2007/08 Gross Revenue Expenditure, to be achieved by the end of 2010/11. For the MPA/MPS, based on a 2007/08 outturn of £3,349m, the total efficiency savings target, over 3 years, equates to £311.4m. The current forecast for the period to 2010/11 is £408.1m.

26. The MPA/MPS has a strong record in delivering efficiency plans and targets and in implementing significant change programmes. The MPS has identified savings that contribute to the 2009/10 position - projected savings of £139.6m in 2009/10 rising to £166.5m in 2011/12 are included in current planning assumptions.

27. The Service has reviewed and adapted its approach to delivering efficiency, productivity and change to ensure continuous improvement is integral to business planning. This has involved developing a fifth strategic outcome, ‘The right services at the right price’, and a seventh strategic objective – ‘Lead and Manage our Service’, and establishing a medium-term Service Improvement Plan (SIP) and associated governance arrangements. The 2009-12 SIP reflects the:

• Service’s focus on reducing support costs and overheads
• Areas of service improvement requiring investment
• The long lead-in time required to deliver real change

The MPA/MPS continues to work with other members of the GLA Group to explore the efficiencies available from joint working. Significant benefits derived from initiatives such as joint procurement with TfL will be pursued through the SIP.

Olympic and Paralympic Games Security

28. The budget and business plan reflects the current functions of the Olympics Security Directorate. Discussions are ongoing with the Home Office as to the location of these functions. The structure of these functions will change in 2009/10 with some transferring to the Home Office and the MPS activity being split between CO, which will manage the MPS implementation programme, and business groups responsible for operational delivery. Once final decisions have been taken, the business plan and budget will be revised. The financial impact of such decisions is currently expected to be cost neutral to the MPA/MPS.

Borrowing and Capital Spending Plan 2009/10 – 2015/16

29. The 2009-16 Capital Programme and Budget is set out on p34 to p36 of the Policing London Business Plan (Appendix 1). As previously reported, the decline in the property market has had a significant and adverse effect on the size of the proposed capital programme. Details of the capital programme now proposed are provided in Appendix 3 (exempt). Since November work has continued to prioritise schemes within the resources anticipated to be available to the Service. This has required hard choices to be made in respect of schemes which cannot currently be afforded. Some £19m of projects in 2009/10 have been excluded from the capital programme with this figure standing at £26m in 2010/11. Over the seven year term of the capital plan £169m of potential demand cannot currently be included in the budget due an inability to finance this scale of programme. The main changes since the November submission are set out below:

IT Schemes

30. DoI has reprioritised projects to ensure that key areas of work in support of major technology initiatives are undertaken in sufficient time to avoid any decrease in operational performance. This reprioritisation has resulted in an increase of £9.07m in IT projects for 2009/10. This increase is offset, in part, by an expectation of increased Government grant in 2008/09 in respect of IT support to the Olympics security plan.

Property Services

31. As indicated in the November submission, Property Services has now adjusted the Safer Neighbourhoods Programme spend profile to ensure that its delivery can be more effectively managed over three years. This reflects a movement of spend and related resources from 2008/09 to 2009/10.

Overprogramming

32. The proposed programme includes a significant element of overprogramming to ensure the Service spends to the approved budget. However, given the uncertainty in respect to some of the funding sources, expenditure will have to be managed carefully in-year to ensure overall spend is contained within the available resources.

33. The level of overprogramming is particularly high on the IT programme and the sustainability of the assumptions made for 2010/11 and beyond will have to be tested during 2009/10 to ensure the DoI programme can be contained within the approved IT budget.

34. The overprogramming on the property programme is less significant. However, given the potential causes for delay on schemes in this programme which lie outside of the Service, there is a need for flexibility in terms of bringing schemes scheduled to spend in 2010/11 forward when there are delays in schemes scheduled to spend in 2009/10. Again, this process will need to be managed carefully to ensure overall expenditure does not exceed available resources.

2008/09 Outturn

35. The proposed programme and budget for 2009/10 and beyond reflect the current assessment of the 2008/09 outturn. The future programme and budgets will need to be reviewed and revised once final outturn figures are known. A further report on the revised programme and budget will be submitted to the Finance and Resources Committee in June/July 2009.

Funding

36. The proposed funding of the capital budget for 2009-12 can be summarised as follows:

Proposed Expenditure	2008/09 £000 Budget	2008/09 £000 Forcast	2009/10 £000 Proposed	2010/11 £000 Proposed	2011/12 £000 Proposed
Main programme	196,788	299,889	178,728	129,083	120,313
Olympics/Paralympics	24,893	3,620	27,066	34,199	11,790
Counter-Terrorism	19,400	8,461	10,350	12,200	7,400
Capital spending plan	241,081	311,970	216,144	175,482	139,503
Funding Sources
Police Capital Grant	42,408	42,408	38,442	38,442	38,442
Other grants & Third party contributions	4,128	9,665	7,000	0	500
Capital Reserves
Main programme	15,020	49,171	35,019	13,391	0
C3i programme	7,895	7,045	2,000	2,500	0
Investment Board Funds/RCCO	0	0	10,444	3,900	0
Capital Receipts	84,783	20,000	20,000	20,000	40,000
Partnership Funds/RCCO	2,554	2,554	15,823	10,850	1,371
Specific grants
London 2012 Games	24,893	3,620	27,066	34,199	11,790
Counter-Terrorism	19,400	8,461	10,350	12,200	7,400
Borrowing	40,000	169,046	50,000	40,000	40,000
Total Funding	241,081	311,970	216,144	175,482	139,503

The main changes since the November submission are:

• The forecast for 2008/09 in respect of the main programme has been adjusted to reflect the purchase of New Scotland Yard, which will be financed through internal cash balances or external borrowing (see D7).
• Forecast expenditure in 2008/09 and 2009/10 in respect of the Olympics/Paralympics and Counter Terrorism have reduced and the specific grant to finance these areas have been adjusted accordingly.
• The proposed financing of the 2009/10 capital expenditure programme reflects the expected grant of £7m from the Home Office to support IT spend: and increased use of reserves - funds carried forward from 2008/09 - following the reprofiling of the Safer Neighbourhoods Programme Budget by Property Services.

37. The proposed budget, as previously reported, assumes increasing borrowing by £10m to a total of £50m in 2009/10 to support capital expenditure. However, it should be noted that additional borrowing involves additional revenue costs. The impact on the Revenue Account from borrowing can be summarised as follows:

• Minimum Revenue Provision - MRP (This is a charge to the Revenue Account in each of the years after the capital expenditure is incurred for all items funded by additional borrowing
• Interest Charges on the loan (These can vary in terms of the length and type of the loan taken out, which include maturity, annuity and equal instalments of principal loans)
• Interest Earned on cash balances (If the loan were taken out, at a time when cash balances were in credit, then any monies borrowed would increase cash balances, which could be invested externally e.g. money markets, DMO or on call Bank Accounts. These options vary in the amount of interest that could be earned)

38. Historically the Authority has funded its capital programme primarily from internal borrowing. In the current financial environment the Authority has less flexibility in this regard and is more likely to need to go to the market for borrowing support.

39. Based on the revised capital programme for 2009/10 to 2015/16 an updated set of prudential indicators are attached in Appendix 4. These indicators take account of the recent purchase of the freehold of New Scotland Yard as well as the adjustments to the capital programme since the November business plan.

F. Background papers

• November 2008 – 2009–12 Business Plan and Budget Submission to Mayor
• February 2008–2009/10 GLA Consolidated Budget

G. Contact details

Report author(s): Anne McMeel, Director of Resources, MPS and Ken Hunt, MPA Treasurer

For more information contact:

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

Appendix 2

Briefing note – Police Officer Deployment Plan

Prior to the 2008-11 Budget and Business Planning process the MPS deployment plan allocated budgeted workforce targets (BWTs) between business groups with the intention of providing resources to meet those allocations. The deployment plan operated on an annual basis and the BWT was effectively correct only on the 31 March of each year (the target date for achievement of the BWT). The effect of a BWT is that people viewed it as the full staff number to be achieved at the beginning of the year, not the end. Given that BWTs could only be set once budgets were confirmed (i.e. in March) and it takes at least six months to recruit, let alone train a PC, this was always an erroneous view. The Service, therefore, could not meet these allocations (until year end) for a number of reasons, i.e.:

• the time required to recruit and retain officers
• the one year budget cycle meant any changes in officer numbers took some time to deliver as the deployment plan was subject to sharp peaks and troughs which affected the Service’s ability to plan and deliver recruitment programmes
• the demand to fill posts in specialist business groups tended to result in vacancies being held predominantly by TP as the experienced resources required came from TP

All police officers join the MPS through the Initial Learning and Development Programme (IPLDP), delivered through the Territorial Policing (TP) business group. The replacement of wastage across the Service, therefore, starts with new officers coming into TP on the IPLDP, as does much of any growth in police officer numbers across the MPS. Under the borough-based police officer training programme introduced in August 2008 all recruits provide a visible police presence and are closely linked to the borough to which they will be posted.

To improve the management of police officer numbers more effectively across the Service, the MPS moved to a three year deployment plan from 1 April 2008 based on target strength numbers. Target strength is the level of resources that will actually be available to business groups rather than the more abstract BWT. This more medium-term planning approach is allowing the Service to:

• plan and manage recruitment and training programmes more effectively over three years
• reduce vacancy levels across all business groups
• provide business groups with more certainty on the timing of deployments to their units
• provide more effective protection to TP

The new three year deployment plan process will see the Service significantly reduce the number of officer vacancies from 4% in 2008/09 to 1% in 2011/12. This equates to approximately 900 more officers in post across the Service.

Based on the current planning assumptions the change in police officer numbers (police officers and police recruits) is set out below:

	2008/09	2009/10	2010/11	2010/11	+/-
Police Officers – TP	20,726	21,411	21,225	21,027	-301
Police Officers – Rest	10,662	11,123	11,458	11,440	+778
Police Officers - Total	31,388	32,534	32,683	32,467	+1,079
Police Recruits	1,542	749	598	488	-1,054
Total	32,930	33,283	33,281	32,955	+25

The principal reasons for the movement in police officer numbers are:

• the impact of the roll-out of Operation Herald
• additional posts to be funded jointly with local authorities
• additional posts within a number of specialist business groups
• a reduction in the number of recruits coming through the IPLDP
• other growth and reductions agreed as part of the 2009-12 budget

The reduction in growth by 2011/12 mainly reflects the net impact of Project Herald. This new staffing model which aims to deliver a more efficient and safer custody environment will involve the reduction of 550 officers over three years and the introduction of some 700 Dedicated Detention Officers and 200 nurses and staff. The released officers will be redeployed within the approved deployment plan.

The planning approach now adopted is expected to result in 1,079 more non-IPLDP officers being deployed across the Service by March 2012.

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