2007/08 Budget Submission (Corporate Business Plan)

Report: 6
Date: 30 November 2006
By: Director of Strategy Modernisation and Performance, A/Director of Resources for the Commissioner and the Treasurer

Summary

This report updates members on the integrated business planning framework and provides an opportunity for members to provide feedback on the draft corporate business plan. Members are also asked to approve the draft corporate business plan, following amendments, as suitable for submission to the GLA on the 30 November.

A. Recommendation

That members

1. Provide feedback and agree the draft corporate business plan at Annex A, following amendments, as suitable for submission to the GLA on the 30 November; and
2. Consider the observations of the Finance Committee that it wishes Full Authority to further consider the approach to use of reserves (paragraphs 10 & 11).

B. Supporting information

Integrated Business Planning Framework

1. The integrated business planning framework reflects a developing process which aims to ensure that resource decisions are driven by strategic priorities and business need. In Spring 2006, following the Chair of the Authority’s initiative, a review of the financial planning framework was undertaken to determine how financial planning could better support the MPS, and, specifically, how it could be better aligned with the improved strategic planning process.

2. This review resulted in the design of a new financial planning framework. The MPS has made significant strides in working towards this, both in terms of progress made in approving new investment and in business/financial planning. Nonetheless, there are substantial lessons to be learned from this modernised process, and a review of the lessons learned and proposals for strengthening the integrated framework for 2007/08, including the capital budgeting process, will be presented to the Finance and PPR Committees early in the New Year.

3. Regarding new investment, the Approvals process requires every significant investment to demonstrate how the change will contribute towards achieving the MPA/MPS’ strategic priorities and outcomes. This now includes approval points by Investment Board at certain times throughout the change process, through to the realisation of identified benefits.

4. The 2007/08 business planning process required every business group to write a business plan in which they were asked to outline their main activities and to demonstrate how these supported the strategic priorities and outcomes. They were also expected to align their financial and human resources to their delivery plan.

5. One of the outputs of this planning process is the three-year corporate business plan, which outlines what the MPA/MPS plans to deliver in support of the priorities, together with the resources required. The business planning process continues to evolve and will be further developed in subsequent years to improve the alignment of resources to service delivery. The draft corporate business plan is shown at Annex A. The draft corporate business plan was presented to the joint Finance/PPRC meeting on the 9th November (without the financial information), and the draft has been amended to incorporate the feedback received from members.

The corporate business plan

6. The corporate business plan has three main purposes:

• To set out how the strategic priorities contained within the corporate strategy will be delivered over the next three years, and how business groups will contribute to their achievement
• To ensure the content of the plan meets the requirements of the business plan submission to the Mayor. This includes the financial projections (e.g. clearly identified increases in the base budget, including major initiatives and service improvements, expected changes to the funding base and efficiency savings).
• To present to the MPA, public and other stakeholders how the corporate strategy will improve service delivery to Londoners, meets their needs and demonstrates that tax-payers’ money is being appropriately spent.

7. The 2007/08 corporate business plan will form the budget submission to the Mayor in November. In order for the document to be suitable for an external audience the business plan will then be adapted to form the Annual Policing Plan which will be published on the 31 March 2007. Members are asked to provide feedback and to agree the draft corporate business plan, following amendments, as suitable for submission to the GLA on the 30 November 2006.

8. At the joint Finance/PPRC meetings on the 21 September and the 9 November, members noted the development work being undertaken; and agreed that the corporate business plan be submitted to the Full Authority meeting on 30 November.

Financial Information

9. Details of the capital budget are contained within the capital programme update report presented to Finance Committee on 23 November and the summary programme together with supporting schedules are attached to the business plan. Details of the revenue budget 2007/08 – 2009/10 are being presented separately in a new style of presentation that accords more with a business planning approach. The Finance Committee received a detailed update report at its meeting on 23 November. The present submission currently shows a budget gap of £16.2M compared to the Mayor’s budget target of £2,524.5M, announced on 7 November. This target reflected an increase of 4.1% on the original 2006/07 budget requirement.

Use of reserves

10. The Finance Committee at its meeting on 23 November received an update report on the revenue budget and resolved to request the full Authority to consider the use of reserves in the budget process. The committee was informed that considerable attention has been focussed during the year on the need to maintain flexibility in the availability of the Authority’s reserves to support Operation Overt. The committee had previously agreed the approach to dealing with the additional costs of Operation Overt (now estimated to be c.£22M), in preferred priority order was to minimise the additional spending in the first instance, seek additional funding from government, deliver additional underspend or use existing reserves as a last resort. Members were advised that negotiation concerning the possibility of additional grant were continuing with the Home Office. The Finance Committee reiterated its view that the level of the General reserve and Emergency/Contingency Fund (standing at 1.7% of net revenue expenditure) was one which they supported maintaining. The Finance Committee was also advised that it was now anticipated that the projected 2006/07 budget overspend in the core budget was now expected by the MPS to be in balance by the end of the financial year.

11. The Finance Committee made the following observations for consideration by the full Authority. Without at this stage identifying any detailed financial figures and pending the resolution of the discussions on the possibility of financial assistance from the Home Office, that the authority’s reserves only be used as a last resort, and that pending this every effort be made by the MPS to undertake a managed underspend to offset the additional costs of Operation Overt, and in particular the need for Specialist Operations to manage their budget in view of the new normality now being faced. If necessary the managed underspend to be implemented across the current and next financial year, with temporary use of reserves to assist this process.

Performance information

12. During 2006/07, the MPA and MPS identified 13 critical areas for improving performance using the Policing Performance Assessment Framework scores and the Public Service Agreements. These will provide a link into the proposed next generation of PPAF, known as Assessments of Policing and Community Safety (APACS). Work is currently being undertaken by the Home Office to identify new Public Service Agreements and other performance regimes for 2008/09. The 13 critical performance areas are included within the draft corporate business plan.

13. Effort has gone into streamlining the number of targets to enable focused activity on the critical areas where improved performance is required. It also takes account of key areas of operational development, for example in respect of neighbourhoods with high level of criminality, and other critical work not adequately covered by the Policing Performance Assessment Framework. It also allows the MPS to take into account issues raised by the HMIC baseline assessment and any future issues highlighted by APACS.

14. SMPD will be working alongside other business groups to develop objectives, measures and targets to underpin the strategic priorities for 2007/08. The MPA will be consulted as part of this development activity.

Review of the strategic priorities

15. The Policing London Strategy 2006-09 and Annual Policing Plan 2006/07 was published in March 2006. It has set the direction and strategic priorities for the MPS over the next three years. The document was developed through a process of information gathering that included public, partner and internal consultation throughout 2005 and took account of the Government and Mayor’s priorities to ensure that the MPA’s three-year strategy reflected the needs of London.

16. A draft of the National Community Safety Plan for 2007/08 has now been received. The MPS’ strategic priorities and outcomes are closely aligned to Government’s five key strategic priorities for the police service for 2007/08.

17. It is intended that, whilst the MPA/MPS’ strategic outcomes should remain the same, the seven strategic priorities would be reviewed as part of the annual refresh of the Policing London Strategy to ensure that the strategy remains meaningful and reflects the future needs of Londoners. The continuation of the strategic priorities was agreed by MPS Management Board in June 2006 and PPRC members in September. These are shown in Figure 1, together with the MPS Management Board member with lead responsibility for delivery and are included within the draft corporate business plan.

C. Race and equality impact

There are no issues directly impacting on race and equality in this paper, although there are equality considerations within the business plan, particularly in relation to service delivery and diversity of the workforce.

D. Financial implications

There are no specific financial implications arising from this report, although the way in which MPS finances are aligned to delivering the strategic priorities forms the basis for the integrated strategic/financial-planning framework as described in paragraph 1.

E. Background papers

None

F. Contact details

Report author: Angela Emery, Ross Daniels, Met Modernisation Programme and Adrian Lovegrove, Finance Services, MPS.

For more information contact:

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

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