Sponsorship received in 2009/10

Report: 08
Date: 23 September 2010
By: Director of Resources on behalf of the Commissioner

Summary

This report informs Members about the level of sponsorship income received by the MPS during the financial year 2009/10 as well as current stewardship and financial reporting arrangements.

A. Recommendations

That

1. Members are requested to note the contents of this report.

B. Supporting information

Introduction

1. This report follows previous reports presented to the Communities, Equalities and People Committee (CEP) during 2009/10 in respect of sponsorship and partnership:

• The Sponsorship and Grant Aiding of Voluntary Projects and One-Off Events, 16 July 2009, agenda item 14;
• The Funding through the MPS of Partnership, Multi Agency and Third Sector Projects and Programmes 2008-09, 10 September 2009, agenda item 4, and
• The Management and Accountability of MPS Partnership, Multi Agency and 3rd Sector Programmes 12 November 2009 item 12.

2. The report provides Members with an update on the levels and types of sponsorship received by the MPS during 2009/10, as well as current financial reporting arrangements. The MPS definition of sponsorship applied in this report includes goods and services-in-kind as well as financial sponsorship. (See Appendix 1 for the full definition).

3. The MPS views sponsorship from the private and public sectors (within an appropriate governance framework) as a positive and useful source of income and support to supplement existing grant funding and income. This view is consistent with that held by ACPO. The current Income Generation Unit (IGU) was formed in 2003 (although a sponsorship team had existed in the MPS since 1997) to support innovative income generation within Business Groups, whilst at the same time promoting effective stewardship in the management of partnership, income generation and sponsorship activities.

4. The MPS complies with MPA Financial Regulations in the management and accounting of all sponsorship activity and has in place policy and guidance to be used by the whole organisation. The ‘Management of Sponsorship, Trading and Events Policy’ provides clear guidance on the legislation surrounding the acceptance of sponsorship and includes certain recommendations to ensure activities comply with legislation and are appropriate for the policing service. The policy reflects the Home Office and Association of Police Authorities (APA) approved ACPO income generation guidelines and has been integrated into MPS processes for some time. Strict governance arrangements are in place to ensure sponsorship does not influence future contractual arrangements.

Sponsorship in 2009/10

5. Table 1 (below) provides a summary of sponsorship received; totalling £4.62m in 2009/10, compared with £4.75m in the previous year. A detailed analysis of the major sponsors is provided in Appendix 2. During 2009/10 cash sponsorship was received by the MPS for a number of initiatives both local and corporate. The largest single sponsorship agreement was between the Specialist Crime Directorate (SCD) and the Association of Payment and Clearing Services (APACS) (£2.27m) and represented funding towards a dedicated fraud investigation unit.

6. SCD has entered into more sponsorship agreements compared with other Business Groups with other examples being funding from various companies through the Construction Equipment Association for a dedicated Plant & Agriculture Equipment National Intelligence Unit (£180k) which investigates theft of large value equipment from building sites and farms. The Police eCrime Central Unit also receives Home Office funding which is supplemented by in-kind sponsorship from companies such as McAfee and 7Safe for services that support the work of disrupting online crime. This area is likely to grow in the MPS during the lead up to the Olympics and Paralympics Games in 2012.

7. In further support of the benefits of such sponsorship, Members should note that a former unit within SCD, the Vehicles Fraud Unit, was funded by sponsorship (£300k) from vehicle hire companies through the Finance Leasing Association and was so successful in the ability to retrieve large numbers of stolen hire cars and disrupt the criminals, that the activity was extended nationally under the direction of the ACPO lead in Warwickshire.

8. For many BOCUs, sponsorship is often received in support of Safer Neighbourhood Teams (SNT), frequently in the form of funds to purchase or lease a vehicle.

9. In respect of in-kind sponsorship, one of the key sponsorship areas during in 2009/10 was the Employer Supported Policing (ESP) Scheme with services-in-kind valued at just under £1m. Under this Scheme, local employers are encouraged to allow their staff paid leave to work for the Metropolitan Special Constabulary. Many of the organisations within this Scheme also provide sponsorship for regular police officers to patrol the vicinity of the sponsors. The best example is the Exchange Shopping Centre in Ilford where the management company sponsors a full time officer and a number of the shops have signed up to the ESP Scheme. Another example of in-kind sponsorship is one hundred licences from McAfee for anti-virus software. These are being offered as incentives to MPS employees answering a survey on the security of MPS data.

10. Another useful area of sponsorship is for the MPS conferences. Events that are either MPS activities or MPS led ACPO events generate income from sponsors and exhibitors to offset the cost of running the event. This allows for the education of staff and the sharing of best practice at reduced cost to policing budgets.

Table 1 - Summary of Sponsorship

11. Members will note that the figures shown in Table 1 (above) show a slight decline in sponsorship in 2009/10 compared to the previous year. This is also reflected in Appendix 2 which clearly shows that the majority of the MPS regular sponsors have reduced the amount of sponsorship provided between years. In the present economic climate, this trend is likely to continue for some time, as organisations in the public and private sectors restrict the amount available for sponsorship. In 2010/11 the IGU will be considering ways to maintain the current levels of sponsorship, by providing more tangible benefits to sponsors in terms of improving the visibility of logos and offering exclusivity rights within appropriate and acceptable limits. The IGU will also be working with the private sector and creating links with industry leads to improve opportunities for sponsorship, as well as offering more support to ACPO colleagues where potential sources exist.

Stewardship and reporting arrangements

12. In 2009/10 all sponsorship arrangements were recorded in a central database of sponsorship held by the IGU. This includes financial transactions as well as assets, goods-in-kind and services-in-kind. The financial management of all sponsorship income received by MPS is subject to the standard MPA Financial Regulations and MPS Standard Operating Procedures. For sponsorship income, written agreements are put in place between the MPA and the Third Party. It is then the responsibility of the respective B/OCU finance team to ensure that the existing corporate financial procedures are used to process any monies received. Finance units are instructed that all sponsorship income must be recorded against the appropriate general ledger code set up for this purpose. Relevant guidance and reminders of the requirement to code sponsorship income correctly are issued periodically within the financial forecasting guidance issued by Finance Services. Quarterly reconciliations take place of general ledger records against data held within the IGU central sponsorship database.

Disclosures in the Statement of Accounts

13. The Financial Reporting Standards require that donated assets above the MPS capitalisation thresholds of £5,000 will be shown on the Balance Sheet in the MPA Statement of Accounts at ‘fair value’ and the income will be immediately recognised in the Revenue Account.

14. Details of sponsorship income, assets and goods and services-in-kind need only be disclosed in the notes to the Statutory Accounts, where such amounts are material. In the case of the MPS the amount of sponsorship received is not material in terms of assisting users to make informed judgments about the MPS future revenue and net asset position and no formal disclosures are made in the MPS Statutory Accounts.

C. Other organisational & community implications

Equality and Diversity Impact

1. The funding received has been used to support a broad range of activities. There are no indications that the use of these funds has had any adverse affect on any single section of the community.

Consideration of MET Forward

2. Sponsorship activity, as described in this report, has been developed to provide additional resources which supplement existing grant funding received in directly supporting policing aims and objectives.

Financial Implications

3. This is an update report and there are no direct financial implications arising from this report, which focuses primarily on sponsorship received in 2009/10. The total amount of sponsorship income in 2009/10 was £4.62m (£4.75m in 2008/09). Detailsof this funding are set out in Appendix 2.

4. This report is submitted for consideration in accordance with the Authority’s Financial Regulation 11.

Legal Implications

5. There may be legal implications arising from individual grants, loans or sponsorships, however, as this is an information report there are no direct legal issues arising from the recommendations.

6. Income generation activity is primarily covered by the Police Act 1996. The acceptance of gifts and loans is covered by section 93(1), and the acceptance of sponsorship is covered by section 93(2). Gifts of money or other property may be accepted on terms that appear appropriate to the police authority in connection with the discharging of any of its functions. These gifts may also include terms providing for commercial sponsorship.

7. The acceptance of sponsorship for non-core policing activities is intended to extend and enhance police force services to the community. Care must be exercised when accepting gifts of money; loans or sponsorship to ensure the correct balance is maintained between the legitimate business aims of the sponsors or donors and the police authority. There are a number of restrictions placed by legislation and internal controls, such as: the capping of sponsorship; compliance with the MPA’s financial regulations; and annual reporting requirements by the police force to the MPA setting out details of all gifts, loans of property and sponsorship received. Proper financial records and controls will therefore allow for scrutiny in the way the police force delivers its functions, demonstrate transparency, and minimise the risk of offending the integrity and propriety of the police.

8. Procurement services and legal services should be consulted, where appropriate, in relation to individual cases to advise on procurement and contractual matters.

Environmental Implications

9. There are no environmental issues associated with this report.

Risk Implications

10. The MPS views sponsorship from the private and public sectors (within an appropriate governance framework) as a positive and useful source of income and support to supplement existing grant funding and income. The acceptance of sponsorship for non-core policing activities is intended to extend and enhance police force services to the community. Care must be exercised when accepting gifts of money; loans or sponsorship to ensure the correct balance is maintained between the legitimate business aims of the sponsors or donors and the police authority. Strict governance arrangements are in place to ensure sponsorship does not influence future contractual arrangements.

D. Background papers

None

E. Contact details

Report author(s): Karim Mahamdallie, Finance Service, Director of Business Support., MPS

For more information contact:

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

Appendix 1

Sponsorship definition

Sponsorship

The donation or loan of equipment, services, cash or expertise usually in return for publicity and / or logo branding e.g. the use of a vehicle for non-core activities with the sponsor's logo on the side.
Sponsorship can be defined from the following areas:

1. Donation/arrangement to use sponsor’s assets;
2. Donation of cash. (e.g. from a company);
3. Donation / loan of equipment. (e.g. computers/mobiles/vehicles);
4. Secondment of personnel;
5. Donation / loan of services. (e.g. printing);
6. Contribution from a company towards a project. (e.g. project supported by consortium of local authorities & local businesses).

The donation or loan of equipment may also be provided for testing purposes by the relevant branch or OCU to ascertain its suitability for use by the MPS, e.g. the loan of a car to Transport Services for testing.

Appendix 2

Major sponsorship items received by the MPS in 2009/10 (2008/09 shown for comparative purposes)

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