2001/02 budget

Report: 10
Date: 14 December 2000
By: Treasurer and Commissioner

Summary

The report sets out budget proposals for 2001/02 in the form of a continuation budget and a series of development proposals. The implications of the Government’s Finance Settlement are reported. The views of the Mayor are set out together with the MPA’s own emerging policy priorities. Budget options are presented and recommendations made as to how to respond to the Mayor’s requirement to produce a ‘component’ budget for police.

A. Supporting information

Introduction

1. At its meeting on 12 October 2000 the Authority endorsed the intermediate draft budget for 2001/02 which had been submitted to the Mayor following consideration by the Finance Planning and Best Value Committee.

2. Under the provisions of the Greater London Authority Act 1999 the Mayor is required to prepare a draft ‘component’ budget for the MPA, and other functional bodies, for inclusion in his consolidated budget. In order to meet the timetable for consultation and consideration by the Assembly the Mayor will need to have a draft consolidated budget prepared by the beginning of January. He is required to consult functional bodies before producing draft component budgets.

3. The timetable requirements mean that this meeting of the Authority has to decide what budget provision for police the MPA would want the Mayor to include in his consolidated budget. The Mayor has provided an indication of his views by way of a letter which is attached at Appendix H which is taken into account in considering budget options in paragraphs 47-48 below.

4. The Finance Planning and Best Value Committee gave preliminary consideration to the development of final budget proposals at its meeting on 21 November 2000 and an informal member workshop was held on 4 December.

5. On 27 November the government announced the provisional local government finance settlement for 2001/02. The implications of this are set out in paragraphs 7-17 below.

Progress since October

6. Since the Authority endorsed the intermediate draft budget in October work to develop the budget has continued on a number of fronts:

• We have engaged in a critical examination of the potential components of the budget, primarily through two meetings between the Treasurer and the MPS Management Board.
• Partly as a result there have been changes to the estimated costs of issues identified in the intermediate draft.
• New issues have been identified for consideration in the budget process, mainly proposals for new development.
• The MPS Management Board has provided a view on the relative priority of development proposals.
• There has been progress in developing the MPA’s policy priorities and these have been taken into account in considering budget proposals.
• The process has begun to develop an efficiency plan which will have to be extended to a three year period.
• Capital funding availability has been clarified and a capital budget for 2001/02 will be considered by the Finance Planning and Best Value Committee at its next meeting.
• The Committee has also received an opening balance sheet for the Authority and agreed the opening reserves.

Settlement and funding

Local Government Finance Settlement 2001/02

7. The Finance Settlement for 2001/02 is based on the results of the Spending Review 2000 which were announced in July. It therefore reflects an overall increase in police resources of 10.1%. The following table summarises how the additional resources will be distributed.

8. Total Standard Spending (TSS) is distributed to police authorities as police grant + SSA (Standard Spending Assessment). Only £13 m of the extra capital provision will be distributed for general use by police authorities. It can be seen therefore that barely half of the total increase will be distributed to police authorities to support police spending generally.

9. The remainder of the increased provision is earmarked for specific purposes as follows.

MPA funding

10. The MPA’s ‘Total Funding’ which is our share of TSS is as follows.

Total funding includes police grant, SSA (including capital financing), transitional grants (boundary changes) and SSA reduction grant. For the MPA it also includes the special payment for national and capital city functions which has been increased from £182 million to £191 million (4.9%). The overall result (a 5.3% increase), giving the MPA a small relative advantage compared with the national increase of 5.1%, is driven by two changes: a relative improvement from the updating of the area cost adjustment, largely offset by the loss of SSA reduction grant.

11. ‘Total funding’ is not simply a measure of central government funding because it includes a notional sum of council tax income which would be required to fund spending at SSA. In practice the actual increase in central government funding directly associated with the ‘total funding’ figure (police grant, RSG, NDR and SSA reduction grant) is 5.8% if we discount the SSA reduction grant, but only 5.1% including the effect of the loss of the reduction grant.

12. In addition to the core funding generated by our ‘total funding’, the MPA will receive grant from the Crime Fighting Fund (CFF) in 2001/02 of £38.1 million provided that the CFF recruitment targets are met. The CFF allocation reflected in the 2000/01 budget was £8.5 million.

13. In common with other metropolitan or predominantly urban forces the MPA receives no allocation from the rural policing fund. The funding for Airwave (PSRCS) in the 2001/02 settlement is the first instalment of a three year provision totalling £500 million. Allocations are being made in accordance with the implementation programme. On this basis the MPA receives no allocation until 2002/03. The Authority will then get direct funding in the two years 2002/04 of £40.7 million capital and £30.1 million revenue. In addition the Airwave funding will meet the costs of the core service which would otherwise have been top-sliced from Authority’s police grant entitlements, of which the MPA’s share would have been £37.3 million.

14. No detailed information has been provided as yet in respect of the basic command unit fund, the DNA expansion project, or the provision for NSPIS. Some additional funding may be forthcoming from the DNA provision to support a further increase in DNA sampling and more scenes of crime officers.

15. The Home Office has confirmed that the MPA will receive a special grant in 2001/02, not reflected in the settlement totals, to fund a proportion of the cost of the increase in the London pay lead agreed in June 2000. The amount has not been finally determined but the Home Office is working on the basis that it will fund 75% of the additional cost. At this stage a figure of £18 million has been assumed. The Authority should continue to press for full funding of the increased cost.

16. The MPA continues to receive loan charges grant which addresses an anomaly in relation to the historic debt position of the MPS. The amount is declining annually and will be £3.9 million in 2001/02.

17. The MPA’s central government funding for 2001/02 from all sources has increased by 8.0% as summarised in the following table.

Expenditure estimates

Current 2000/01 budget monitoring

18. The budget monitoring for the current year which is reported on a monthly basis to the Finance Planning and Best Value Committee is showing net expenditure forecast very close to budget at the end of the year. Individual areas of overspending have been reviewed in developing the budget proposals for 2001/02.

Presentation of 2001/02 budget

19. The draft budget for 2001/02 is presented in the form of a continuation budget , reflecting the cost of maintaining the present level of service, (see paragraphs 20-22) together with a list of service development proposals (paragraphs 23-41). Options are then presented for the Authority’s consideration, taking account of the central government funding and consequent impact on the council tax precept (paragraphs 49-57).

Continuation budget 2001/02

20. The continuation budget identifies the costs necessary broadly to maintain the level of service reflected in the budget for 2000/01 as inherited by the MPA. It takes account of pay and price increases, committed and unavoidable changes in costs and the impact of decisions taken before the MPA was established. It also includes efficiency savings. The continuation budget for 2001/02 is set out in Appendix A analysed over business groups. Appendix B provides an audit trail showing how the commitments included in the intermediate draft budget have been reflected in the continuation budget and identifying items which were not in the intermediate draft.

• Column 2 of Appendix A, 2000/01 budget, incorporates the changes agreed by the MPS Management Board prior to July which were reported to the Authority at its first meeting on 10 July. This included the use of £3.3 million of cash surpluses reflecting an increase of that amount in the ongoing base budget. It also includes two items which were separately identified in the intermediate draft budget submission: increased expenditure on forensic and DNA testing (£6.3 m), and the estimated full year cost of the MPA (£1.0 m).
• Column 3, budget adjustments, reflects the results of the review recently completed by the MPS to identify budget changes consequent upon the Met’s internal reorganisation to focus on Borough-based policing. The resulting net budget increase of £8.5 million relates primarily to the additional resources for the serious crime group in SO and the emerging costs of carrying out Best Value reviews. There is also a self-balancing adjustment to reflect the reduction in officer secondments to the former MPD areas affected by the boundary change and other self-balancing transfers of responsibilities from TP to Personnel and Resources Directorates. The detail is shown in Appendix B.
• Column 4 of Appendix A shows cashable efficiency savings. These are included at 0.5% of the overall budget (£9.2 m) but at this stage specific confirmed savings represent only about one quarter of this target. Proposals for cashable savings submitted within the MPS amount to £12 million. These include projects in property services and improved processes in complaints investigation. Work is in hand to confirm compliance with HMIC definitions and detailed audit trails. In parallel revised specific cashable savings targets are being set for all business groups, which will allow for savings already identified and will exclude operational constable and sergeant posts in order to focus on reducing overheads rather than front line operations. This process is expected to deliver the budget target but without any significant margin.
• Column 5 includes the effect of committed and unavoidable changes in MPA/MPS costs. These are further detailed in Appendix B together with a comparison against the committed changes included in the intermediate draft budget. Some of the intermediate draft commitments have been reduced whilst others have been re-classified as development bids.
• Within the committed changes there is provision for a 15% increase in the levies payable to NCS and NCIS (£5.043 million). Budget proposals published by the two national bodies would require an increase in the MPA budget of £15 million, an overall increase of about 50%. The proposals are subject to consultation and a robust response has been sent on behalf of the MPA. The Home Secretary will make a decision on the levies early in January. A further provision of £5 million has been included in the development proposals in Appendix D but as a low priority compared with other development proposals. At the end of the day the distinction is artificial because the Authority will be obliged to pay whatever is finally approved.
• Also included in Column 5 is the provision for pay and price increases and the full year effect of the increased London pay lead. We have revised downwards the provision for 2001 pay awards from 3.5% to 3.0 % in line with the actual settlements in 2000. This is a tight provision and any excess cost will have to be met within the final approved budget. The provision for price increases has also been reviewed.

21. The total continuation budget for 2001/02 is £1,992.491 million which is an increase of £150.058 million (8.1%) over the approved cash limit for 2000/01. This increase can be summarised as follows:

A subjective analysis of the continuation budget is shown at Appendix C including an explanation of the main causes of the year-on-year variations.

22. Direct comparison on this basis with the intermediate draft budget submission is complicated by differences in treatment of individual components as between commitments and new service increases. However a broad comparison could be made between the intermediate draft, excluding the policy contingency, and the continuation budget plus the cost of recruiting and paying for 1,050 extra officers during next year. The latter figure is £2,009.5 million compared with the intermediate draft of £2,030.1 million. The difference represents the extent to which the intermediate draft has been reduced as a result of subsequent reviews by the MPS and the Treasurer.

Development bids

23. Appendix D summarises proposals for development of services. Appendix F comprises detailed justifications for the development bids.

There are two major issues in relation to the development part of the budget: the increase in police officer numbers; and the need to address recruitment and retention of civil staff through improvements in pay. These issues are therefore set out in some detail in the following paragraphs. The MPS Management Board’s views on the development proposals are also reported.

Priorities

25. Proposed priorities for inclusion in the Authority’s Policing Plan for 2001/02 have been considered by the Finance Planning and Best Value Committee and circulated widely to interested parties by the MPA Chairman. A copy is included at Appendix E. The development proposals have been assessed against the priorities as shown in Appendix D.

Additional police officers

26. In approving the intermediate draft budget Members indicated their wish to see a substantial increase in police officer numbers. A sum of £16.5 million (including provision for pay awards) was reflected in the intermediate draft which would enable budgeted manpower to increase to 26,650 by the end of 2001/02 an increase of 1,050 over the original budget provision for 2000/01 and 250 more than would result from the CFF allocation alone. The financial provision represents a half year cost on the assumption that recruitment would be at a constant rate through the year.

27. We have recently been required to indicate to the Home Office any amendment to the expected recruiting levels against the CFF in the light of current experience. The Commissioner has responded reducing the CFF recruitment numbers in the current year by 150 and increasing the target for next year by 150. This does not therefore alter the target for achievement by the end of 2001/02 but does recognise the recruiting difficulties experienced in the current year.

28. There is no development bid purely for additional police officers, except for an increase in the average number of recruits in training at any one time consistent with a total increase over the year of 1,050. Appendix G identifies the items in the continuation budget and the development proposals which include provision for additional officers. 165 extra officers are provided for in the continuation budget at a full year cost of £6.0 million. The development bids include specific proposals, which together with the additional recruits in training require 369 officers above current levels, making a total additional officers of 534. The bids also assume full year funding for these posts. The total funding, in the continuation budget and the development proposals is £16.2 million compared with the £16.5 million required to meet the pay costs of 1,050 new officers. It would therefore be possible for the Authority to approve the specific budget provisions set out in Appendix G and thereby provide broadly sufficient funding for the recruitment of 1,050 new officers.

29. An alternative approach would be for the Authority to approve a specific budget provision to recruit 1,050 new officers during 2001/02. This would add £16.5 million over and above the 2000/01 approved budget, of which £6.0 million is already provided in the continuation budget for 2001/02. This would produce planned officer totals of 25,600 at 1 April 2001 and 26,650 at 31 March 2002.

30. The recruitment of these officers will require careful consideration of how they should be deployed between the needs of Boroughs and other significant command areas, including the Diversity Directorate, additional firearms officers and those officers required to train the new staff. As the planned expenditure represents a gradually increasing workforce total, there would need to be a careful balance of vacancies across the organisation. These are operational decisions for the Commissioner but he Authority could choose to ask the Commissioner to provide a manpower deployment plan which shows an opening and closing total officer allocation and the balance of deployment across the various units of the organisation, with a continuing emphasis on first line staff, whether at Boroughs or elsewhere. The budget provision for new officers would then be allocated in accordance with the planned manpower deployment, having regard to existing provisions for 2000/01.

31. The budget should also provide for the development proposals aimed at supporting recruitment and training of the additional officers included at items 17, 20 and 25 in Appendix D. These total £4.750 million, including inflation, but that includes £1.295 million in respect of police officer costs leaving non-officer costs of £3.455 million. Also included in the development proposals under IT expenditure is provision of £3.0 million for technology to support the additional officers (item 13 in Appendix D).

Civil staff pay

32. There are currently 828 civil staff vacancies out of a workforce total of 11,110 (7.5%). (The budget assumes a 2% vacancy rate.) The position continues to deteriorate and on current trends the vacancies could reach 1,000 by the end of the current financial year. This represents a significant loss of capacity. Furthermore the key nature of some of the vacancies, particularly in communications rooms and on station receptions, means that police officers are having to cover. At present 170 officers are filling such civil staff vacancies and this again could rise to 200 by the end of March 2001.

33. There is strong evidence to suggest that this situation is the result of poor pay. In 1995, when civil staff were last at about full strength in the MPS, pay levels broadly equated to average pay in London. MPS civil staff pay is now some 10% below the average. Some attempt has been made to alleviate the position with the use of market-related allowances for specific groups of staff. However these are only short term, temporary arrangements and have not always proved adequate in addressing the specific problems.

34. A significant improvement in civil staff pay is required if the MPS is to be able to recruit and retain staff so as to achieve full strength. This would improve the effectiveness of support to operational policing, it would release officers presently covering civil staff vacancies to return to operational duties, and it would provide the opportunity for further civilianisation of tasks currently carried out by police officers.

35. The Human Resources Committee is looking at a range of options including simplification of the current MPS location allowance and an increase in its value, improvement in the pay for the basic recruitment grades and a fundamental review of the MPS pay and grading structure. Estimated costs are inevitably provisional at this stage but the cost of the first two items, ie increased location allowance and an uplift for recruitment grades will cost up to £20 million. The outcome of the grading structure review is more speculative but could be up to £10 million.

MPS Management Board view of development proposals

36. The MPS summary of development bids (ie., those growth items which will enhance and/or modernise service levels) is attached at Appendix D.

37. The bids are grouped according to the MPS Management Board’s view of how well they support the Met’s overall Mission, Vision and Values. Within each grouping (Very High, High and Medium) bids are simply ranked in descending order of size. No priority is implied. A fourth grouping (Other) lists additional budget pressures or potential resources which the MPS need to be aware of in forming an overall view. It is the Met’s view that these pressures should be funded by the Home Office, except for the Mayor’s Capital City Events where the view is that until further details of the Mayor’s wishes are known, any budget provision is speculative.

38. The growth bids include both on-going and non-recurring bids. The MPA may take a view that some items could be funded for a further year in the absence of other external funding, but that the bid is not permanently added to the base budget so that service levels fall back to those pertaining prior to such funding. This could provide flexibility through recycling of budgetary resources to address service demands in future years.

39. The cost of each development proposal on Appendix D is shown both gross and excluding the element relating to additional police officers. This will allow proposals to be added to a budget option which has already included additional officers as a separate total provision.

40. The MPS Management Board has considered, refined and reduced this list during the weeks since the interim budget submission was made in September. Two full formal budget scrutiny meetings of the Management Board have been held on the mornings of 6 and 8 November, and a number of informal and delegated meetings over the past three weeks since these in order to reduce the list to that now presented. Management Board received a short formal update at its last monthly meeting on 29 November.

41. A brief description of each development bid is attached at Appendix F.

Reserves

42. The Finance Planning and Best Value Committee has agreed a level of reserves in the opening balance sheet at 3 July 2000. The revenue reserves include earmarked reserves in respect of estimated existing liabilities to pay lump sum pension transfer values in respect of former staff affected by outsourcing arrangements already in place, and also a proportion of the current potential liability to meet police pension commutations. This leaves other potential future liabilities not covered by reserves. A general reserve of just 1% (£20 million) has been created to meet exceptional unforeseen demands. The Committee consider that this is an inadequate level of reserves for an organisation with an annual turnover of £2 billion, a view which will be brought to the attention of the Home Office. At this stage there is no specific proposal to build up the reserves through next year’s budget although the position will have to be kept under regular review.

Capital programme

43. The Finance Planning and Best Value Committee has agreed a five year capital funding profile. At its next meeting on 19 December the Committee will approve the capital budget for 2001/02 and before the beginning of the next financial year a five year capital programme. The estimated impact on the revenue budget of the capital programme has been included as appropriate in this report.

Medium term position

44. In the new year we intend to carry out a review of the medium term financial position in order to facilitate longer term financial planning. This will identify future financial commitments and pressures over the next 3-5 years. Additional commitments flowing forward directly from the 2001/02 budget will include the full year cost of new officers, although specific grant will be provided in respect of officers recruited under the Crime Fighting Fund.

Base budget review

45. It has not been possible in the short time available to develop the budget proposals for 2001/02 to examine and validate the base budget of £1,842 million. This should be done as part of the Best Value review programme but that will take five years. We need to be getting behind the base budget figures in a much shorter timescale than that. We therefore propose to develop a process for a rolling review of base budgets at a relatively high level in order to identify where more detailed work could be productive. This will have to be coordinated with other review activity including that resulting from the Mayor’s proposals.

Options

The Mayor’s views

46. The Mayor has set out his views on the police budget in a letter to the Chairman of the MPA dated 1 December 2000 (copy attached at Appendix H). He specifically asks the MPA to develop a budget to resource:

1. The continuation budget, representing the current level of activity;
2. An increase of 1,050 officers, linked explicitly to visible front line policing and recruitment of black and ethnic minority officers;
3. A package of measures to address recruitment and retention of civil staff; and
4. Independent consultants to commence a three year programme of reviews of efficiency and effectiveness of resource allocation to fund future service developments.

47. In addition equalities related expenditure should be highlighted in the budget with specific reference to enhanced staff development initiatives to increase representation of ethnic minorities and women at all levels in the MPS, and a Best Value review of equalities.

48. Although not referred to in his letter it is clear from other public statements that the Mayor is prepared to raise the precept significantly in order to raise resources to address these specific issues in the police budget. A figure of a 60p per week increase in the council tax has been mentioned. A large increase in the precept for police in 2001/02 is unlikely to be repeated in future years.

Budget options

49. To assist Members in considering what budget level they would want to recommend to the Mayor a number of budget options have been developed. These are not intended to be exclusive and Members may decide on a level which is not specifically illustrated here. If so it will be necessary to provide comparable information in the meeting to ensure that the decision is properly founded. The selected options are described in the following paragraphs and summarised in the subsequent table.

50. Option A shows the effect of setting a precept increase in line with inflation. 3% has been used in this case since that is the inflationary provision for pay included in the continuation budget. The resulting budget would be £1,978.5 million, an increase over 2000/01 of 7.4%. However this is £14 million lower than the continuation budget. Undoubtedly it would be possible to shave some budget provisions in the continuation budget but the gap could probably only be bridged by reductions in police officer numbers. CFF funding would be placed in jeopardy leading to a requirement to make even greater expenditure reductions to make up lost grant whilst maintaining the precept increase at 3%.

51. Option B is the continuation budget, totalling £1,992.5 million. Clearly this would only provide for the maintenance of current levels of service. There would be an increase in police officer numbers of 165, the majority in the Serious Crime Group. The cash limit would increase by 8.1% and since this is only marginally in excess of the increase in central government funding the amount required to be raised from the precept would only increase by 8.7%. This option would not support the MPA’s own priorities or meet the views of the Mayor.

52. Option C provides for the recruitment of 1,050 extra officers over the original budget provision for 2000/01. 165 additional officers are already provided for within the continuation budget with a full year financial provision of £6.0 million. It is therefore necessary to add £10.5 million to provide for the half year cost of 1,050 officers of £16.5 million. The non-police officer costs associated with recruitment initiatives should also be included in this option (see paragraph 31 above). The budget under this option would therefore be:

Option C represents a 9.1% increase over the 2000/01 budget and would require a precept increase of 15.7%. It would clearly be possible to set a lower police officer recruitment target than 1,050. However it would not make sense to go much below a target of 800 extra officers since if we fell below that number we could start losing CFF grant. An increase beyond 1,050 is probably unrealistic given the challenges of recruitment and training.

53. Option D would address the question of civil staff pay as well as the recruitment of additional police officers. In this case provision of £20 million has been included which would fund the specific initiatives relating to location allowances and recruitment grades. The Authority would need to consider how it would find additional resources to fund the outcome of the grading structure review. This option reflects the main points referred to in the Mayor’s letter. Addition of a provision of £1 million to meet the cost of independent consultants would meet all his specific points. The resulting budget would be £2,030.5 million, an increase of 10.2% over the current year. The precept would increase by 24.2%.

54. Option E is the same as Option D except that it includes the total potential cost of measures to improve civil staff pay of £30 million. The total budget is £2,040.5 million, an increase of 10.8%, with an increase in the precept of 28.3%.

55. Option F is based on the Mayor’s statement that he would increase the precept by 60p per week. After discussion with GLA officers it has been assumed that the 60p increase would be applied fully to the police precept ignoring the liability to meet council tax benefit subsidy costs (which would be substantial). The precept under this option would increase by nearly 35% and this would allow a budget of 2,056.3 million. This would represent a budget increase of 11.6%.

56. Finally Option G is based on a budget which adds all the development proposals in Appendix D to the continuation budget. The resulting budget of £2,085 million is an increase of 13.2% over 2000/01. The precept would increase by 46.5%, £41.72 per year, which is well in excess of the figure quoted by the Mayor.

57. The illustrative budget options are summarised in the following table.

Conclusions

58. The Authority has to respond to the Mayor’s views. Options D and E reflect the Mayor’s wishes for what the budget should cover. The Authority will be conscious from this report that there are many other competing demands for budget resources. Unless there was to be a substantial reduction in the amount provided to address civil staff pay those demands cannot be considered without an increase in the precept around the level quoted by the Mayor.

59. Option F (60p per week precept increase) would provide headroom of £26 million above Option D or £16 million above Option E. In either case this would cover the remaining non-police officer costs of those items given a ‘very high’ priority rating by the MPS Management Board in Appendix D. More of the ‘high’ priority items could be included if the civil staff pay provision was limited to £20 million. But in neither case would it be possible to fund more than a proportion of ‘high’ priority items.

60. From examination of Appendix D it is very clear how important the ‘very high’ and ‘high’ priority proposals are. They include for example:

• completion of the funding for the Diversity Directorate
• continuation of the successful volume crime initiatives funded by the Home Office in the current year
• essential improvements to IT
• the ability to increase forensic testing
• improvements to communication
• improvements to consultation flowing from the Best Value review
• resources to resolve outstanding murder inquiries

It is the Commissioner’s view that, while it is vital that additional monies are expended on extra officers and recruiting and retaining civilian staff, the organisation cannot become efficient without additional expenditure on information technology and on forensic retrieval. The information technology growth bids are designed specifically to release officer time for operational work.

61. However there remains one substantial uncertainty in the shape of the final increased cost of the NCS/NCIS levies. At present £5.043 million is included for this in the continuation budget. The potential increase is up to £15 million. The Home Secretary is not due to make a decision on the levies until early January. Given the potential scale and range of this outstanding issue, and its significance in relation to the final margin for budget decision, it may be appropriate to defer decisions on the allocation of the remaining balance of the budget until January when we know the outcome of the Home Secretary’s decision on the levies. At the same time information should be provided on the equalities content of the 2001/02 budget in accordance with the requirement in the Mayor’s letter.

62. The potential shape of a decision at this stage therefore would include:

• Agreement to the continuation budget
• Agreement to providing for the recruitment of an additional 1,050 officers above the original provision for 2000/01, with the Commissioner reporting back with a manpower deployment plan (see paragraph 30)
• Agreement to making provision to address civil staff recruitment and retention and an indication as to whether this should be provided at £20 million (Option D) or £30 million (Option E).
• If the Mayor is minded to set a precept increase around 60p per week, ie Option F, agreement to the remaining ‘very high’ priorities in Appendix D
• Deferment of a final decision about the allocation of the remaining budget balance until the position on NCS/NCIS levies has been clarified.

B. Recommendations

1. That the Authority consider the 2001/02 budget proposals and options in this report in the light of its own emerging priorities, the views of the Mayor and the funding implications.
2. That the Mayor be informed that the Authority wishes to establish the budget for 2001/02 on the lines set out in paragraph 62 above as modified by Members.
3. That consequently a further report be presented to the Authority in January 2001, or the Finance Planning and Best value Committee depending on the timing of the Home Secretary’s decision on NCS/NCIS levies, to address the final allocation of the budget, manpower deployment, and budget provision for equalities.

C. Financial implications

The budget will provide the financial framework for expenditure in 2001/02.

D. Review arrangements

There will be a further report on budget allocation during January.

E. Background papers

The following is a statutory list of background papers (under the Local Government Act 1972 S.100 D) which disclose facts or matters on which the report is based and which have been relied on to a material extent in preparing this report. They are available on request to either the contact officer listed above or to the Clerk to the Police Authority at the address indicated on the agenda.

• MPS Finance Department Budget Files
• MPA Treasurer’s Budget Files.

F. Contact details

The author of this report is Peter Martin.

For information contact:

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

Appendix E: MPA emerging priorities 2001/2002

Proposed external priorities

Proposed internal priorities

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