Contents
Report 11 of the 26 Jul 01 meeting of the MPA Committee and presents the Mayor's guidance on the development of the 2002/03 budget.
Warning: This is archived material and may be out of date. The Metropolitan Police Authority has been replaced by the Mayor's Office for Policing and Crime (MOPC).
See the MOPC website for further information.
2002/03 budget guidance
Report: 11
Date: 26 July 2001
By: Treasurer
Summary
The report presents the Mayor's guidance on the development of the 2002/03 budget with commentary on specific implications for the MPA.
A. Recommendation
To note the guidance issued by the Mayor for development of the 2002/03 budget.
B. Supporting information
Introduction
1. At its last meeting the Authority received a report on the process proposed by the Mayor for the development of the 2002/03 budget. The Finance Planning and Best Value Committee subsequently considered the proposals in detail and agreed the medium term financial forecasts for submission to the Mayor. A copy of the submission has been circulated to all members of the Authority.
Budget guidance
2. Detailed guidance notes for the submission of the 2002/03 budget have now been received and see Appendix 1. (The draft schedules for the budget submission referred to in the notes see Appendix 1.) A budget steering group was held with the Mayor on 11 July 2001 attended by the Chair of the MPA and the Chair of the Finance Planning and Best Value Committee supported by MPA and MPS officers. The guidance notes had only been received by most attendees on the same day and were not therefore discussed in detail.
3. The following paragraphs identify the key elements of the guidance with comments relevant to the MPA.
Timetable (paragraphs 2.1-2.6)
4. The detailed budget has to be submitted to the Mayor by 26 October. The Finance Planning and Best Value Committee will consider a draft budget at its meeting on 4 October with the final version to be approved by the full Authority on 25 October. Provision is made for subsequent amendments in early December following the announcement of the local government finance settlement, in mid-January following consultation and through the Mayor's dialogue with the Assembly.
5. Authority and Committee dates in December have been reviewed so that an amended budget can be submitted to the Mayor by 10 December. Details. The Finance Planning and Best Value Committee is also scheduled to meet on 17 January 2001 which will provide an opportunity for a review of the budget in the light of consultation.
6. Arrangements are being made for the Chair and Deputy Chairs of the Finance Planning and Best Value Committee to scrutinise budget proposals during September before the draft budget is prepared.
7. The work required to produce the budget to timetable has been planned and additional resources secured to support the process.
Policy objectives (paragraphs 3.1-3.3)
8. The overall objective of the MPA and MPS to make London a safer city is clearly set within the Mayor's vision for London.
Business plans (paragraphs 4.1-4.2)
9. Functional bodies are expected to have business plans covering the period to 2004/05 which set out the priorities that are reflected in the budget and medium term forecasts. For the MPA the business plan will be the product of the existing planning process and the developing work on the corporate strategy. The Finance Planning and Best Value Committee has already agreed an acceleration of the planning process for the current year to ensure that priorities can be aligned with budget development, whilst recognising that both plan and budget will be subject to a process of continuing refinement after the detailed budget submission on 26 October. It is essential that the plans and priorities are now developed in a medium term framework.
Budget submission requirements (paragraphs 5.1-5.9)
10. The Authority will have to demonstrate satisfactory progress on developments included in the 2001/02 budget. These are the subject of detailed monitoring.
11. The submissions will need to distinguish clearly between the cost of maintaining present policies, including committed changes, and new initiatives. This split was reflected in the Authority's submission of medium term financial forecasts.
12. New initiatives will be expected to satisfy criteria set out in paragraph 5.2.6 of the guidance notes. Although these do not make specific reference to the MPA's priorities it has to be assumed that the latter can be justified within the 'general mayoral policies'. A rigorous supporting analysis will be required for all new initiatives.
13. Submissions will have to demonstrate that 2001/02 budgets have been analysed for savings. For the MPA this will be supported by the 2000/01 outturn review and through detailed monitoring of current year's expenditure against budget.
14. Efficiency savings will have to be reflected in the 2002/03 budgets. There was an agreement last year that efficiency savings for the MPA should increase from 2 per cent in 2001/02 to 3 per cent in 2002/03 and 4 per cent in 2003/04. The target for the current year is being achieved by a mix of cashable efficiencies and non-cashable productivity gains. The cashable element was increased from 0.5 per cent to 1 per cent in the final budget approval.
15. It will be permissible to meet the increased target for 2002/03 with a mix of cashable and non-cashable savings but the Authority will have to exemplify the impact of finding the full 3% (approximately £60 million) by cash savings. Given the significance of manpower costs in the budget this would not be achievable without reductions in staff numbers, which in the case of police officers would clearly conflict with other policy objectives.
16. The contract for the first tranche of reviews under the Efficiency and Effectiveness Review Programme will commence in August and resulting savings should accrue in 2002/03. Best Value should also be delivering savings in that timeframe.
17. Detailed information as to how the budget will progress equalities issues is specified in paragraphs 5.5.1-5.5.2 of the guidance notes.
18. Information is specifically requested on reserves and on risks facing the organisation and their potential impact on the budget.
Conclusion
19. The guidance will be reflected in the detailed budget presented to the Authority for approval at its meeting on 25 October.
C. Financial implications
The budget will set the framework for expenditure in 2002/03.
D. Background papers
None.
E. Contact details
This author of this report is Peter Martin.
For information contact:
MPA general: 020 7202 0202
Media enquiries: 020 7202 0217/18
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