Revenue and capital budget monitoring 2010/11 – period 11

Report: 5
Date: 14 April 2011
By: Director of Resources on behalf of the Commissioner

Summary

This report provides an update on the revenue monitoring position for 2010/11 at Period 11 (to the end of February). The revenue budget is forecast to under-spend by £6.4m (0.2% of budget). However, Management Board have agreed the need to manage down expenditure to deliver an under-spend of £11m to support the 2011-14 budget position.

The Capital Programme as at the end of Period 11 (February 2011) shows year to date total expenditure of £156.9m. This total represents 56.8% of the revised annual budget of £276.3m. The forecast for the year of £199.6m represents an under-spend of £76.7m (27.8% of the revised annual budget).

A. Recommendations

Members are invited to:

1. Note the year to date and forecast position for revenue and capital budgets.

B. Supporting information

Background

1. This report provides a forecast against the revenue and capital budgets for the MPA/MPS in 2010/11 based on the position at the end of February 2011.

Additional In-year savings

2. As stated in previous reports, revenue budgets have been adjusted to reflect the £28m grant reduction notified by the Home Office and a programme of savings has been delivered by the Business Groups to mitigate this loss of grant.

3. The temporary pause in police officer recruitment has now ended. However, the period of time in which the organisation was not recruiting has impacted on the expected end of year position for police officer posts, with a reduction against the original target strength by the end of 2010/11 of 634 posts. The forecast underspend of £7m for police officer pay includes the effect of savings resulting from the pause in recruitment.

4. The Early Voluntary Departure Scheme closed on 10 December 2010. Approximately 450 staff have accepted early voluntary redundancy, and will leave the MPS before the end of the financial year. The redundancy cost of staff leaving in 2010/11 is approximately £12.4m. These costs, and the related drawdown from reserves, are not yet reflected in this report. In-year salary savings resulting from these redundancies are reflected in the forecast position.

5. After taking account of the above issues, the Service is taking action to deliver an underspend of £11m to support the 2011-14 Budget and Business Plan proposals. This flexibility is needed to manage the MPA/MPS finances in the short-term while action is taken to deliver permanent reductions to bridge the anticipated budget gaps.

Revenue Forecast by Business Group

6. Table 1 provides a summary of the revenue forecast by Business Group. Table 2 provides a comparison of the forecast outturn variances between Period 10 and 11 by Business Group.

7. Table 1 – Summary of revenue forecast against budget at Period 11

Table 1 – Summary of revenue forecast against budget at Period 11

	Full Year Budget (Version B11) £000	Forecast Outturn £000	Variance £000	Variance to Full Year Budget %
Territorial Policing	1,388,713	1,387,791	-922	-0.1%
Specialist Crime	412,281	415,646	3,365	0.8%
Specialist Operations	7,907	6,716	-1,191	-0.4%*
Central Operations	189,393	192,939	3,547	1.9%
Olympics Security Directorate	0	0	0	0.0%
Deputy Commissioner's Portfolio	55,662	54,830	-832	-1.5%
Directorate of Public Affairs	6,694	6,093	-601	-9.0%
Directorate of Information	221,020	221,245	225	0.1%
Resources	274,777	276,809	2,031	0.7%
Human Resources	186,680	182,109	-4,572	-2.4%
MPA	13,375	11,504	-1,871	-14.0%
Centrally Held	-2,756,503	-2,762,116	-5,613	0.2%
Total	0	-6,432	-6,432	-0.2%*

Table 2 - Comparison of Period 11 forecast outturn variance with Period 10 forecast outturn variance. Table 3 - Comparison of forecast outturn variance by expenditure/income type Table 4 – Police Officer Actual Strength v Target Strength Table 5 – Major budget movements actioned since Period 10 Table 6 – Reserve movements carried out between Period 10 and 11.

* = of net expenditure budget

Table 2 - Comparison of Period 11 forecast outturn variance with Period 10 forecast outturn variance.

Business Group	Period 11 Forecast Variance £000	Period 10 Forecast Variance £000	Change in Variance £000
Territorial Policing	-922	693	-1,615
Specialist Crime	3,365	5,030	-1,665
Specialist Operations	-1,191	-1,187	-4
Central Operations	3,547	3,908	-361
Olympics Security Directorate	0	0	0
Deputy Commissioner's Portfolio	-832	-424	-408
Directorate of Public Affairs	-601	-278	-322
Directorate of Information	225	25	200
Resources	2,031	1,797	234
Human Resources	-4,572	-3,742	-830
MPA	-1,871	-1,575	-296
Centrally Held	-5,613	-7,700	2,087
Total MPS	-6,432	-3,455	-2,977

8. The forecast outturn variance at Period 11 is an under-spend of £6.4m.

9. The subjective position by Business Group is at Appendix 1. The overall position for the MPS is at Appendix 2.

10. Territorial Policing – An underspend of £0.9m –0.1% of budget
The overall position is made up of a number of subjective variances. These include a forecast overspend on Police Officer Pay (£3.7m) following expectations of a strength position above that which has been budgeted; a forecast under-recovery of Specific Grants (£3.6m) (matched by reduced expenditure) where costs for Special Constables have been less than originally expected, reducing the level of funding required; a forecast overspend on Police Staff overtime (£0.7m) relating to the Central Communications Command; a forecast overspend on Premises Costs (£0.6m), relating to minor works, insurance and the purchase of additional forensic cold storage; a forecast under achievement of Income (£1m) relating to an understrength position within the Safer Transport Command at the beginning of the year and reduced immigration income. These are offset by underspends on Police Staff Pay (£5.8m), relating to Project Herald, reflecting an understrength position for Designated Detention Officers and Custody Nurses and within Supplies and Services (£4.1m) relating to reduced expenditure on Police Uniforms, local publicity, office supplies, external consultants and local IT procurement.

11. There has been an overall favourable movement of £1.6m from the position reported at Period 10. This movement is primarily within PCSO Pay (£0.7m) where the forecast has been revised downwards following the receipt of improved staff data, and Police Staff Pay (£0.6m) where the forecast has been reduced to recognise savings arising from an internal Vacancy Review Panel established in the Business Group. Additionally there has been a favourable movement of £0.4m in Supplies and Services.

12. Specialist Crime – An overspend of £3.4m - 0.8% of budget.
The forecast overspend is principally within Supplies and Services (£5.1m) relating to payments to external agencies, Mobile Data costs (telephone investigations) and Forensics expenditure. This is partially offset by an under-spend on Police Officer Overtime (£2.5m) where strict controls have been imposed on all OCUs, and also due to a forecast underspend on the corporate tasking budget.

13. There has been an overall favourable movement of £1.7m from the position reported at Period 10. This is primarily due to a favourable movement of £1.1m in Police Officer Overtime, due to a re-evaluation of the forecast for the Corporate Tasking budget. And within Transport Costs (£0.4m) due to a reduction in the forecast for overseas travel.

14. Specialist Operations – An underspend of £1.2m – 0.4% of budget.
Police Officer Pay is forecast to be underspent by £5.0m, due to an understrength position as a result of the temporary pause in recruitment, partially offset by an under achievement of Income (£3.2m) which relates chiefly to the vacant posts which would be externally funded. Police Staff Pay is forecast to be underspent by £3m, due to vacancies within the directorate and Employee Related Expenditure is forecast to underspend by £1.9m relating to vacant seconded officer posts. These underspends are offset by an overspend on Police Overtime of £3.2m, due to additional costs generated by events such as the General Election and high profile visits to the UK.

15. There has been a minor favourable movement from the forecast position reported at Period 10.

16. Central Operations – An overspend of £3.5m – 1.9% of budget.
The overspend is principally within Police Officer Pay (£1.8m) following expectations of a strength position above that allowed for during central budget realignment. There is an under-recovery of Other Income of £0.8m, due to a reduction in the number of officers being deployed at sporting events. Additionally there is a forecast overspend in Police Officer Overtime, due to the Territorial Support Group’s use of overtime to compensate for a below-strength position, and an increase in operational demand upon Firearms units.

17. There has been a minor favourable movement from the forecast position reported at Period 10.

18. Olympics Security – A nil variation.

19. Deputy Commissioner’s Portfolio – An underspend of £0.8m, 1.5% of budget.
The underspend is primarily in Police Staff Pay (£1.2m) relating to staff vacancies, many of which relate to the G20 civil actions team. In line with the agreed policy, the underspend relating to the G20 team will be used to fund an increase in contribution to the third party claims provision which is reflected within the Supplies & Services forecast. There is also an overachievement of Income by £0.5m, where Legal Services have exceeded targets relating to damage claims. Additionally, there is an underspend in Police Officer Overtime, due to management efforts to drive down expenditure in this area.

20. There has been a favourable movement of £0.4m from the position reported at Period 10.

21. Directorate of Public Affairs – An underspend of £0.6m - 9% of budget.
This is chiefly within Supplies and Services (£0.6m), where a review of publicity campaigns has been completed, and has led to a forecast under-spend position.

22. There has been a minor favourable movement of £0.3m from the position reported at Period 10.

23. Directorate of Information – An overspend of £0.2m, 0.1% of budget.

24. There has been a minor adverse movement of £0.2m from the position reported at Period 10.

25. Resources Directorate – An overspend of £2m - 0.7% of budget.
The overspend is principally within Premises Costs (£4.3m) and relates to facilities management costs. Additionally, there is a £2.9m forecast overspend on Capital Financing Costs, resulting from borrowing undertaken earlier than originally anticipated. These are partially offset by an under-spend on police staff pay (£2.3m), due to vacant posts, and a forecast over achievement of Income (£1.7m) relating to rent and service charge recovery.

26. There has been a minor adverse movement from the overall position reported at Period 10.

27. Human Resources – An underspend of £4.6m - 2.4% of budget.
The underspend is principally within Police Officer Pay (£3.3m) due to vacant seconded officer posts in Holding Branch (matched by an under-recovery of income for seconded officers), in Police Staff Pay (£3.1m) due to vacancies in most units within the Directorate and in police staff overtime where costs in Catering Services and the Vehicle Recovery Examination Service are being managed down. The under-spend is partially offset by an under achievement of Income in Catering Services, due to temporary closure of some canteens due to the refurbishment programme and a general fall in sales.

28. There has been a favourable movement of £0.8m in the forecast position from that reported at Period 10. This relates mainly to a favourable movement of £0.6m within Other Income, and relates to accounting adjustments required to reflect the value of donated assets, and an increase in sales receipts from the auction of seized cars.

29. Metropolitan Police Authority – An underspend of £1.9m - 14% of budget.
This is mainly attributable to savings from vacant posts following a reorganisation towards the end of last financial year and a more recent review of Audit Risk & Assurance where some posts were removed from the organisation structure. The results also include a one-off refund of rent and service charges from the landlord in respect of new lease arrangements and prior year building works not carried out.

30. There has been a minor favourable movement of £0.3m from the position reported at Period 10.

31. Centrally Held Budgets – An underspend of £5.6m - 0.2% of budget.
The forecast underspend relates principally to Police Officer Pay, following a reduction in anticipated costs for Special Priority Payments and various receipts for corporate income, such as VAT refunds.

32. There has been an adverse movement of £2.1m from the position reported at Period 10. This is primarily within Police Staff Pay, reflecting a reduction in the central credit adjustment required where Business Group forecasts had been overstated in the previous forecast, and the provision for additional costs on the THR projects.

Revenue Forecast by expenditure/income type

33. Table 3 compares the forecast outturn variances for Period 11 and Period 10 by expenditure/income type.

Table 3 - Comparison of forecast outturn variance by expenditure/income type

	Period 11 Forecast Variance £000	Period 10 Forecast Variance £000	Change in Variance £000
Police Officer Pay	-7,018	-6,935	-83
Police Staff Pay	-17,752	-17,594	-159
PCSO Pay	-1,182	-502	-680
Traffic Wardens' Pay	-22	-12	-10
Total Pay	-25,975	-25,043	-932
Police Officer Overtime	1,094	1,108	-14
Police Staff Overtime	-632	-1,163	532
PCSO Overtime	-39	-253	215
Traffic Wardens' Overtime	98	99	-1
Total Overtime	521	-210	731
Total Pay & Overtime	-25,454	-25,253	-201
Employee Related Expenditure	-1,671	-1,327	-344
Premises Costs	4,452	4,474	-23
Transport Costs	-1,915	-1,054	-861
Supplies & Services	958	2,644	-1,686
Capital Financing Costs	2,915	2,915	0
Total Running Expenses	4,738	7,652	-2,914
Total Expenditure	-20,716	-17,601	-3,115
Income - interest Receipts	-119	-68	-50
Income - Other	4,344	4,852	-508
Total Income	4,226	4,783	-558
Discretionary Pension Costs	830	422	408
Net Expenditure	-15,661	-12,396	-3,265
Specific Grants	9,229	8,940	288
Net Revenue Expenditure	-6,432	-3,455	-2,977
Transfers to/from Earmarked Reserves	0	0	0
Transfers to/from General Reserves	0	0	0
Total MPS	-6,432	-3,455	-2,977

34. The main forecast variances from budget are set out below.

35. Police Officer Pay – an underspend of £7m – 0.4% of budget.
Table 4 provides details of actual, forecast and target Business Group strengths and shows the variances between the target and forecast strength and between the current and forecast strength. The table now shows an additional 193 Trainee Police Officers who joined the organisation on 14 March, following the end of the temporary recruitment pause. Additionally, 89 Seconded Officers from other Forces, who are posted within Specialist Operations, have been included in the table. The actual strength position for 28 February shows that the MPS is under strength by 620 posts from the original target, which contributes to the forecast under-spend position. Forecast strength generally includes the effects of the previous temporary recruitment pause but, whilst the budgets have been realigned, some Business Group forecasts anticipate variances to the deployment assumptions and predict overspends against the revised budgets. A balancing credit forecast of 131 posts is included within Centrally Held to achieve the overall year-end target strength of 32,457. Appendix 3 shows the variance in Police Officer numbers from the deployment plan by Business Group since Quarter 1 of 2009. This shows that Territorial Policing remains above the deployment plan whilst most other Business Groups are below the deployment plan targets.

36. There has been a minor favourable movement of £0.1m from the position reported at Period 10.

Table 4 – Police Officer Actual Strength v Target Strength

Business Group	Target Strength at 28 Feb 2011	Actual Strength at 28 Feb 2011	Target Strength for 31 March 2011	Forecast Target Strength as at 31 March 2011	Variance between target strength and forecast	Variance between forecast strength 31 March 2011 & Actual strength 28 Feb 2011
Territorial Policing	21,008	21,242	21,037	21,203	166	-39
Trainees	0	0	0	193	193	193
IPLDP Students	256	5	264	0	-264	-5
Specialist Crime	3,980	3,838	3,980	3,871	-109	33
Specialist Operations	3,773	3,578	3,828	3,573	-255	-5
Central Operations	2,740	2,724	2,740	2,700	-40	-24
Olympics Security Directorate	196	170	196	231	35	61
Deputy Commissioner's Portfolio	397	351	397	347	-50	-4
Directorate of Public Affairs	0	0	0	0	0	0
Directorate of Information	76	63	76	64	-12	1
Resources Directorate	6	4	6	4	-2	0
Human Resources	567	404	567	403	-164	-1
Centrally Held	0	0	0	-131	-131	-131
Total MPS	32,999	32,379	33,091	32,457	-634	78

37. Police Staff Pay - An underspend of £17.8m – 2.8% of budget.
Territorial Policing has a forecast under-spend of £5.8m, chiefly linked to the Project Herald under-spend on nurses and Designated Detention Officers. Additionally, there are significant vacancies within the Human Resources, Specialist Operations and Resources Directorates.

38. There has been a minor favourable movement of £0.2m from the position reported at Period 10.

39. PCSO Pay - An underspend of £1.2m - 0.8% of budget.
This is primarily within Territorial Policing, where an overspend position earlier in the year has been reversed due to the current understrength position.
40. There has been a favourable movement of £0.7m from the position reported at Period 10. This movement is primarily within Territorial Policing, where the forecast has been revised downwards by £0.7m following the receipt of improved staff data.

41. Traffic Warden Pay - A minor overspend.

42. There is a minor favourable movement from the position reported at Period 10

43. Police Officer Overtime – An overspend of £1.1m – 1% of budget.
The forecast overspend is chiefly within Specialist Operations (£3.2m), relating to additional costs stemming from the General Election, and costs arising from large scale events. Additionally, Central Operations have a forecast overspend of £1m, which relates chiefly to additional activity by firearms officers. This is partially offset by a forecast under-spend in Specialist Crime (£2.5m), where strict controls have been placed on all OCUs.

44. There has been a minor favourable movement from the position reported in Period 10.

45. Police Staff Overtime – An underspend of £0.6m – 2.1% of budget.
The forecast underspend is principally within Human Resources (£1.3m), and relates to under-spends within Catering Services and Vehicle Recovery, where costs have been managed down. This is partially offset by an overspend of £0.7m in Territorial Policing, due to staff shortfalls and operational demands at the Command and Control Complex.

46. There has been an adverse movement of £0.5m from the position reported in Period 10. The movement is principally within Territorial Policing, where year-end costs have now been more accurately included in the forecast, and Command and Control Complex duties are forecast to increase due to planned demonstrations.

47. PCSO and Traffic Warden Overtime – A minor variation.
There has been a minor adverse movement from the position reported at Period 10.

48. Employee Related Expenditure – An underspend of £1.7m - 4.9% of budget.
The forecast underspend is primarily in Specialist Operations (£2m) due to vacant seconded officer posts, matched by a reduction in income.

49. There has been a minor favourable movement of £0.3m from the position reported in Period 10.

50. Premises Costs – An overspend of £4.5m –2% of budget.
The forecast overspend relates principally to Facilities Management costs within Property Services. Savings of £4m have been delivered as part of the overall savings required to meet the reduction in Home Office grant funding, and the over-spend within premises is being managed within the overall Resources position.
51. There has been a minor favourable movement from the position reported in Period 10.

52. Transport Costs - An underspend of £1.9m - 2.9% of budget.
The underspend is primarily within Specialist Operations, due to a reduction in overseas travel for protection officers and as a consequence of staff vacancies.

53. There has been a favourable movement of £0.9m in the forecast from the position reported at Period 10. This is primarily within Specialist Crime, where the forecast for Overseas Travel has been reduced to a more realistic position.

54. Supplies and Services - A minor overspend of £1m - 0.2% of budget.

55. There has been a favourable movement of £1.7m from the position reported in Period 10 reflecting revised forecasts within most Business Groups.

56. Capital Financing Costs – an overspend of £2.9m - 7.7% of budget.
The forecast overspend relates to increased interest charges resulting from borrowing which was undertaken earlier than originally anticipated for cash flow purposes.

57. Interest Receipts – a minor over-achievement.

58. Other Income - A forecast under-achievement of £4.3m – 1.4% of budget.
The under-achievement is principally within Human Resources (£4.1m), where income recovery for secondments is below budget (matched by reduced Police Pay expenditure); Specialist Operations relating to Aviation Security (matched by reduced expenditure); and Territorial Policing relating to an under-strength position in the Safer Transport Command at the beginning of the year and reduced immigration income.

59. There has been a favourable movement of £0.5m from the position reported in Period 10. This is chiefly within Human Resources, and relates to accounting adjustments in compliance with IFRS to recognise the value of donated assets (matched by a corresponding increase to appropriation account costs reported within Supplies and Services).

60. Discretionary Pension Costs - a forecast overspend of £0.8m - 2.5% of budget. The forecast overspend relates to an unanticipated increase in Police Officer ill health retirements and the discovery of some previous underpayments which have now been rectified.

61. Specific Grant – forecast under-achievement of £9.2m – 1.6% of budget.
This is primarily within Specialist Operations (£4.5m) where under-spends have led to reduced grant from ACPO TAM. There is also an under-recovery in Territorial Policing (£3.7m) where costs for Special Constables are less than expected, having been budgeted to achieve a strength of 6,667 against current expectations that are closer to a strength of 5,000. This has therefore reduced the required level of funding that had been expected. In the Olympics Security Directorate, a forecast under-recovery of £3.3m is in line with expenditure expectations.

62. As the year end strength for PCSOs is anticipated to be below the grant funded target of 4,562, the MPS are corresponding with the Home Office to ensure full retention of the PCSO Grant. This is on the basis that whilst the PCSO strength has been below the target level, there has been a compensating over strength position, and therefore additional expenditure, in terms of Police Officers within Neighbourhood Policing. In addition, 193 PCSOs joined the police officer recruitment intake on 14 March 2011 and the strength figures ensure that the MPS is in the appropriate position to deliver the savings recently presented as part of the Mayor’s Consolidated Budget for 2011/12. There is, however, a risk that Home Office may require up to £11.8m of the PCSO Grant funding to be returned (£21k for each PCSO below the target). This risk is not reflected in the forecast.

63. There has been a minor favourable movement of £0.3m from the position reported at Period 10.

64. Budget movements The MPA/MPS Business Plan was approved by MPA Strategy and Operational Committee on 1 April 2010. Since that time budget amendments have been made for a number of reasons. Appendix 2 shows the subjective budget movements that have been required in the time between the original budget submission and the presentation of this report.

The major budget movements undertaken since Period 10 are shown below in Table 5.

Table 5 – Major budget movements actioned since Period 10

Description of Budget Move	Amount £000
Within the Directorate of Resources, a movement from Premises Costs to Capital Financing Costs relating to the IFRS requirement re accounting for PFI buildings (the budget move has been agreed in 2011/12 via approval of the 2011-14 Business Plan).	14,334
From Specialist Operations to the Directorate of Public Affairs, for Counter Terrorism publicity campaign.	300
From Central Operations (Supplies and Services) to Directorate of Resources (Premises Costs) relating to the Gravesend Training Facility.	230

65. Movements in Reserves The reserve movements carried out since Period 10 are shown below in Table 6.

Table 6 – Reserve movements carried out between Period 10 and 11.

Reserve description	Amount £000
Within Specialist Crime, a drawdown from the Technical Support Unit (TSU) Transformation Reserve for purchase of TSU vehicles (Operational Costs)	303
Transfer to SIP Fund Reserve from Specialist Crime for Project Delta (Modernisation Programme)	250

Capital

Summary position as at the end of Period 11 (February 2011)

66. Appendix 4 sets out expenditure for the 2010/11 Capital Programme as at the end of Period 11 (February 2011). Expenditure during February was £19.7m. Cumulative year to date expenditure is £156.9m, representing 56.8% of the revised annual approved budget of £276.3m.

67. The revised approved budget of £276.3m includes a budget of £33.2m in respect of capital investment for the 2012 Games. Olympic capital budgets were based on outline project business case submissions to the Home Office and include optimism bias within the costings. As costs were refined and contracts secured, the level of optimism bias was reduced and Olympic grants awarded excluded optimism bias. Budgets have not been amended to reflect the cost revisions, which accounts for the vast majority of the under spend. Expenditure is on track to ensure delivery for the Games.

68. At the moment only £13.3m is expected to be provided for capital expenditure in respect of the 2012 Games in 2010/11. As a result of this there is an £19.9m reduction in planned expenditure. Therefore, a more realistic target for comparison of (a) cumulative expenditure to date; and (b) forecast expenditure at year end; would be an adjusted approved budget sum of £256.4m.

69. The latest forecasts predict spend for the year to outturn at £199.6m, a £6.9m reduction from the forecast given at the end of Period 10 (January 2011). This is £76.7m below the target expenditure figure of £276.3m. With expenditure to date of £156.9m, a spend of £42.7m is necessary during Period 12 (March 2011) to deliver the forecast.

70. The forecast capital receipts sum for 2010/11 is £22.3m. Of this amount £16.8m has been received. The MPA has previously agreed that only £20m of the capital receipts will be used to finance capital expenditure in 2010/11. The remaining £2.3m will be used to fund investment in 2011/12.

71. As part of the measures to bridge the revenue expenditure funding ‘gap’ in 2011/12 & 2012/13, it has been agreed by the MPA that £20m of capital expenditure planned to be financed by way of revenue contributions (RCCOs) during 2010/11 will now be funded by additional borrowing. This decision has been reflected in the revised annual approved budget funding figures shown at Appendix 4. The revenue savings achieved will be ‘centrally held’ pending use during 2011/12 and 2012/13.

72. Property Based Programme – An overall underspend of £18.6m is forecast - 20.5% of the revised annual budget. This is an increase in the forecast underspend from January 2011 of £0.9m.

As previously advised, following a detailed review of all projects, several have been reduced/re-phased to align with the new corporate estate strategy. In addition, delays in lease negotiations are impacting on planned refurbishment works. There has also been a delay in refurbishment works at New Scotland Yard and Cobalt Square due to changes in building requirements and extension of tendering procedures. As a consequence of this, it is expected that these works and other projects will not be completed until 2011/12.

73. Information Based Programme – An overall underspend of £47.4m is forecast - 34.7% of the revised annual budget. This is an increase in the forecast underspend from January 2011 of £4.5m.

The forecast reflects the ongoing review of all Directorate of Information projects and programmes to identify as realistically as possible what it is necessary to deliver during the remainder of this financial year. A number of projects have been delayed into the next financial year due to problems associated with the purchase of appropriate hardware and extended commercial negotiations. Schemes affected include the CCC Appointments System (£2.2m); the Messaging Project (£6.4m); the Virtualisation Project (£2.7m); IPI (£3.3m); Real Time Communications Improvements (£10.2m); PYXIS (£2.5m) and Identity and Access Management (£2.5m). The overall delivery of the IT programme has been disrupted whilst Procurement Services sought legal advice to ensure the correct interpretation of the Sprint Framework. The Sprint Framework dated 4th April 2011 will reflect a change to the Police Act mandating use of SCC (Technology Solutions Provider) for all commoditised hardware.

The increase in the forecast underspend is mainly attributable to Identity and Access Management project (£2.5m); Mettime (£1.6m) and the ERP Solution (£1.7m).

74. Transport Based Expenditure – An overall underspend of £4.7m is forecast - 21.6% of the revised annual budget. This is an increase in the forecast underspend from January 2011 of £0.4m.

The main Transport programme is showing an underspend of £7.0m. As previously noted, this was caused by changes to the procurement process that halted the replacement of vehicles. It was previously advised that a procurement process was being agreed that had delayed the purchase of motor vehicles this financial year. Purchasing was being undertaken by seeking competitive tenders on batches of vehicles using the National Procurement framework. A procurement process has now been agreed for future vehicle purchases. However the new orders will take time to process and therefore the process is not in place early enough to enable the budgeted motor vehicle replacement programme to complete as expected this financial year.

As previously reported, the £7.0m underspend in the main programme is offset by additional vehicles (£2.3m) being purchased from revenue contributions on behalf of the Transport OCU, and other users. These purchases were contracted before it was recognised that changes were required to the procurement process.

75. Other Plant & Equipment Expenditure - An overall underspend of £0.3m is forecast - 57.2% of the revised annual budget. There has been no change in the forecast from last month.

This is a minor variation in cost terms

76. Language Programme − An overall underspend of £2.9m is forecast - 57.2% of the revised annual budget. This is an increase in the forecast underspend from January 2011 of £0.4m.

The Language Programme has experienced delays as a result of problems experienced in meeting procurement and project management milestones. There have been more delays identified in the provision of the necessary technology to facilitate this programme, which has led to a reduction in the forecast for this financial year.

The scheme expects that unspent monies from this financial year are carried forward to meet planned expenditure. This Programme has ring-fenced funding from the Service Improvement Plan Fund.

77. Safer Neighbourhoods Programme – An overall underspend of £16.2m is forecast - 72.0% of the revised annual budget. There has been no change in the forecast underspend from last month.

78. Olympics/Paralympics – An overall underspend of £19.9m is forecast - 59.9% of the revised annual budget. This is an increase in the forecast underspend from January 2011 of £0.8m.

As previously advised, the Olympics/Paralympics Programme is funded by specific grant and each project is subject to Home Office approval following the submission of individual business cases. After a review of the Olympics Programme initial estimates, which included Home Office Optimising Bias, the forecast has been reduced for the current financial year. There is no loss of outputs, or programme slippage. The adjustment is due to improving estimate accuracy.

C. Other organisational and community implications

Equality and Diversity Impact

1. Equality Impact Assessments are completed on business group activities undertaken where there is deemed to be an impact. The equality and diversity implications are identified in business cases and reports on individual proposals through our normal decision making process. The in-year reductions to reflect withdrawal of Government grant are not permanent adjustments to the Service’s base budget. Permanent reductions in the light of the Comprehensive Spending Review will be reflected in the 2011-14 Policing Plan and Budget and will be subject to EIAs as appropriate.

Consideration of MET Forward

2. Met Forward recognises that the MPS has to make challenging financial decisions whilst minimising the impact on front line policing. This report outlines the current financial position against the budget approved by the Authority (Policing London Business Plan, 2010-13) and identifies additional savings to address the deficit.

Financial implications

3. The financial implications are those set out in this report.

Legal implications

4. DLS advice to be obtained as appropriate in relation to paragraph 70 (Transport procurement process) and any legal issues arising in respect of procurement processes generally and as appropriate in relation to MPS compulsory redundancies. There are no further legal issues arising.

Environmental implications

5. There are none specific to this report.

Risk Implications

6. Risk management is integrated into the Service’s budget, business planning and performance management processes. Business Groups and Management Board monitor risks on a regular basis. This report sets out the financial risks and pressures currently being managed by the Service.

D. Background papers

• Policing London 2010-13 Business Plan

E. Contact details

Report authors: Nick Rogers, Director of Finance Services, MPS

For more information contact:

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

Send an e-mail linking to this page

Feedback