Review of the National, International and Capital City (NIC) functions of the MPS

Report: 7
Date: 30 November 2006
By: Director of Strategy Modernisation and Performance Directorate on behalf of the Commissioner

Summary

This report summarises the review of the National, International And Capital City (NIC) functions undertaken by the MPS, carried out at the request of the Commissioner and under the direction of Mr Bob Whalley, referred to as the ‘Whalley’ Report, which is given as exempt Appendix 1 (see item 12).

A. Recommendation

That

1. the NIC Review’s findings and recommendations be noted;
2. members consider how best to ensure the full implications of this Review are properly factored in by the Home Office and other funding decision makers in both the short and medium term; and
3. give consideration to the Chair taking this issue up with the Home Secretary, in writing, as a matter of urgency.

B. Supporting information

Definitions of NIC functions

1. The following definitions were applied to the identification and subsequent mapping of NIC activities.

2. National: A policing activity that results from a legislative requirement or duty that is undertaken for the benefit of the United Kingdom.

3. International: A policing activity that results from a legislative requirement or duty arising from multi-lateral or bi-lateral formal or informal agreements.

4. Capital City: A policing activity that results from a legislative requirement or duty arising from the role of London as the capital of the United Kingdom.

Mapping of NIC functions

5. Maps of National and International functions and of London and Capital City functions are contained in the Whalley Report, which is given as exempt Appendix 1.

The London dimension

6. The NIC Review highlights the following:

• The security challenges facing London, London’s increasing role as a world city, and the combination of social and ‘big city’ factors.
• The extra resource implications which are demonstrably more onerous than those of any other big city.
• The fact that extra finance to cater for this was last fully assessed in 1997.

The changing environment for the MPS

7. The following developments are expected to impact on the level of demand placed on the MPS for the provision of NIC policing services.

Development of London

8. The Mayor’s and Government’s aspirations to develop London as a world and national iconic city, including host city for the World Student Games in 2008, and for the 2012 Olympic and Paralympic Games.

International and home-based terrorism

9. The ongoing urgent, specific and direct threats to London and the UK from international and home-based terrorism.

Serious and organised crime

10. The arrival of the Serious Organised Crime Agency (SOCA) will have a major effect on the MPS, particularly in view of the Home Office’s budgetary constraints. This situation will be exacerbated by the evolving nature of serious and organised crime occurring in and around London that will necessitate new approaches from law enforcement agencies.

Cost estimates for NIC functions

11. The costs incurred by the MPS, compared with income for the financial year 2005/06, for the delivery of NIC functions, are estimated to be as follows:

1. Expenditure: £652.4M
2. Income: £496.4M

12. The significant point to note is that the MPS commitment of resources to the spectrum of NIC-related activity appears to have exceeded income for these functions by £156M in the financial year 2005/06. However, it should also be noted that Activity Based Costing (ABC) provides an alternative means of estimating costs for NIC activity and, at the time of the Review, the latest ABC estimates available were for 2004/05 and these amounted to £484.6M. Since completion of the Review report, the ABC estimates for 2005/06 are now available and these indicate £505.5M for NIC activity. However, when comparing ABC-derived cost estimates with the methodology used to generate the above-mentioned estimate of £652.5M, it should be noted that ABC estimates are based on the results of a rolling three-year programme of activity sampling and analyses which are then applied to current cost centre data. Consequently, in addition to the uncertainties associated with activity sampling, the current ABC analysis does not take full account of the escalating security situation faced by London since the summer of 2005, since the most recent analysis relies on activity data for Specialist Operations and Specialist Crime Directorates captured prior to May 2005.

Prospects for funding

13. The Home Office sees no prospect of real growth in the Special Payment. The levels of counter terrorist grant, announced by the Home Secretary in January 2006, are unlikely to be re-opened within the period covered by the announcement. The DSP funding formula will continue to cover some but not all of the costs of the posts to which it relates. The Home Office faces a flat settlement overall, in real terms. The major new element will be funding provision, yet to be determined, for the 2012 London Olympic and Paralympic Games.

Proposed way forward

14. Recent London Evening Standard headlines ‘We’re £150m short due to terror burden, says Met’ (20 October 2006) serve to highlight the London public’s concerns about the issues raised by the NIC Review. At the current time the Review report has been submitted, through the Home Office Police Finance Unit, to Her Majesty’s Inspectorate of Constabulary (HMIC) for independent assessment. The Authority will be appraised of the progress with this assessment, in order to inform its ongoing decision-making and action.

Abbreviations

DSP

Dedicated Security Post

HMIC

Her Majesty’s Inspectorate of Constabulary

SOCA

Serious and Organised Crime Agency

C. Race and equality impact

No impact on race and equality issues.

D. Financial implications

No immediate financial implications; however, there are potentially very significant budgetary implications for the future provision of NIC policing services.

E. Background papers

None

F. Contact details

Report author: Mike Boyles, MPS

For more information contact:

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

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