Police Property Act Fund

Report: 07
Date: 22 April 2010
By: Director of Resources on behalf of the Commissioner and the Treasurer

Summary

This report on the Police Property Act Fund (PPAF) provides:

• A summary of the 2008/09 annual accounts;
• The 2009/10 grant budget outturn;
• Proposals for the allocation of the 2010/11 grant budget

A. Recommendations

Members are invited to:

1. Note the report on the 2008/09 annual accounts for the Police Property Act Fund.
2. Note the outturn of the 2009/10 grants budget.
3. Approve proposals for the allocation of the 2010/11 grants budget.

B. Supporting information

Background

1. The Police (Property) Act 1897 and subsequent Police (Property) Regulations 1997 apply to property that is in the possession of police where the owner of the property cannot be identified and where no order of a competent court has been made.

2. Subject to the provisions of the 1997 Regulations the proceeds of all sales are retained separately in the Police Property Act Fund (the PPAF). The income derived from funds invested is added to and becomes part of the PPAF.

3. The PPAF may then be used to meet the expenses incurred in the conveyance, storage, safe custody and sale of the property and to make payments for charitable purpose. The PPAF meets direct cost expenditure, such as auction costs, and a notional annual administration charge of £200,000 to the MPS.

4. Additionally cash that has been seized for the purpose of a criminal investigation and retained in order to establish its lawful owner and where there are reasonable grounds for believing that it has been obtained in consequence of an offence is held in the Detained Monies Account (DMA). Detained money is retained until directions are received from a Court or, if a case does not reach a hearing, from the officer in the case. This does not include cash sums seized and detained under the Proceeds of Crime Act 2002 (and subsequent amendments) and administered separately within Finance Services.

Annual Accounts 2008/09

5. Two sets of annual accounts are prepared recognising the distinction between the DMA and sums that are appropriate to the PPAF. In accordance with financial safeguards established by Finance Committee in February 2004 copies of the PPAF and the DMA 2008/09 annual accounts have been submitted to the MPA Treasurer. A summary of the PPAF income and expenditure account 2008/09 and balance sheet as at 31 March 2009 are set out at Appendix 1.

Report on the PPAF Grant Budget 2009/10

6. On 23 April 2009 Finance and Resources Committee agreed a 2009/10 grant allocation of £300,000 to boroughs. Of this allocation £291k has been spent.

7. A breakdown of the 2009/10 grant allocations and details of awards made are attached at Appendices 2 and 3.

Detained Money Account – sums retained for over six years

8. The Finance Committee of 20 April 2006 was advised that legal advice had established that detained money in police possession in excess of six years where no claim has been received could safely be considered as PPAF money. In line with this advice at 1 April 2008 sums detained in the twelve months to 31 March 2002 were reclassified resulting in a transfer of £499k from the DMA to the PPAF (this sum can be identified in the financial statements summary at Appendix 1) Additionally, at 1 April 2009 sums detained in the twelve months to 31 March 2003 were reclassified resulting in the transfer of £1,919k from the DMA to the PPAF.

Proposals for the Allocation of the Grant Budget 2009/10

9. Boroughs have been advised that any 2009/10 awards not allocated to projects will be withdrawn and redistributed in 2010/11.

10. Appendix 2 shows a 3% underspend of £9k against the borough 2009/10 grant allocations.

11. The transfer of funds from the DMA, outlined at paragraph 8, increases the sums available for allocation. The 2008/09 income and expenditure account at Appendix 1 confirms that the fund had a surplus of £610k. Early indications for 2009/10 are for a further surplus of £1.7m giving an estimated fund value at 31 March 2010 of £3.9m. However income streams to the PPAF are uncertain particularly income received from the sale of seized property. The MPS view is that income from sales is unlikely to match previous levels and that a prudent approach should be taken in setting the budget for grant allocations. This will allow for regular and consistent future allocations to boroughs.

12. It is proposed that the 2009/10 underspend of £9k and an additional £591k should be allocated in 2010/11 giving a total allocation of £600k. Additionally for 2010/11 an approach has been received from the Royal Parks Operational Command Unit for initiatives to support local projects. While this OCU has different priorities to the London Boroughs it is proposed that £10k is allocated to Royal Parks taking the total allocation to £610k. As with all applications those received from Royal Parks will be closely monitored to ensure compliance with PPAF criteria.

13. In determining the allocation to Boroughs it is proposed that the PPAF formula is again used. This formula was established in 1998 and is based on Borough statistics for five variables with equal weighting:

• Population
• Unemployment level 16 to 24 year age range
• Deprivation factors
• Recorded offences
• Recorded offences 10 to 16 year age range

14. The PPAF formula was devised specifically to underpin the specific aims and objectives of the PPAF. Grants are to assist victims of crime, assist those vulnerable to crime and to divert people, especially the young, away from crime. The data for each of these elements across the boroughs was updated in 2006 and provides the allocations set out at Appendix 4.

Summary

15. The MPS proposes for 2010/11 that:

• the 2009/10 underspend of £9k is withdrawn and redistributed.
• the underspend and an additional £601k provides a total of £610k
• £600k is allocated to Boroughs and £10k is allocated to Royal Parks.
• the allocations to Boroughs are again based on the PPAF formula percentages as shown in Appendix 4.
• current practice continues and boroughs are advised that these funds are available for 2010/11 and that any underspend will be withdrawn at year end for reallocation in future years.

C. Race and equality impact

1. Grants are awarded to organisations whose work encourages the development of positive relationships between members of the local communities and the police, especially those sections of the community which are currently under-represented in the MPS, to improve informed community engagement in the policing of London.

2. Organisations awarded grants should also promote equality and diversity both in their employment practices and service delivery and should not seek to promote or oppose any religion or religious belief.

D. Financial implications

1. There are no financial implications in relation to the Metropolitan Police Authority Fund. The financial implications for the Police Property Act Fund are addressed above.

E. Legal implications

The role of the MPA in the administration of the Police Property Act Fund is to:

1. nominate an auditor;
2. set the amount of compensation to be paid to persons delivering property to the police;
3. direct the investment of the money held in the PPAF;
4. authorise the MPS to retain property (other than money) for police purposes; and
5. determine the amounts to be paid for charitable purposes

The MPA’s responsibilities are delegated to MPS Director of Finance Services subject to certain consultation and reporting requirements.

The Treasurer of the MPA receives a copy of the PPAF annual accounts and must be consulted regarding policy and contentious issues.

This report is submitted as part of this governance process and no legal implications arise.

F. Background papers

• Finance Committee 20 April 2006
• Finance Committee 17 April 2008
• Co-ordination and Planning Committee 7 December 2006

G. Contact details

Report author(s): Paul Daly, Director of Exchequer Services

For more information contact:

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

Abbreviations:

DMA

Detained Monies Account

PPAF

Police Property Act Fund

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