2007/08 budget submission – bridging the gap

Report: 7a
Date: 25 January 2007
By: A/Director of Resources and Treasurer

Summary

This report updates members on the 2007/08 Budget and the Mayor’s request for additional savings.

A. Recommendation

That members agree the plan for funding the MPS £8.0m contribution to the overall GLA £8m budget gap.

B. Supporting information

Introduction

1. The Authority has previously agreed a budget submission identifying a budget gap of £16.2m, compared to the Mayor’s budget target of £2,524.5m announced on 7 November 2006.

2. The draft budget required delivery of savings totalling £65m, plus a further £16.2m to balance the budget. There are significant items in the savings list that will require firm management and difficult decisions.

Savings process

3. The savings and efficiencies already included in the budget have been through a rigorous process. Individual MPS business groups were instructed to include 2% savings in their business plans for each of the three years of the plan and also to exemplify a further 3% savings in 2007/08 for consideration. The savings put forward by business groups have been reviewed in detail by MPS Investment Board and MPS Management Board and then by two rounds of the informal MPA Chair’s Scrutiny Group.

4. The focus has remained firmly on the delivery of front-line policing and the decision made to prioritise this will give reassurance to the public the MPS serves. The budget challenges have meant that difficult choices have had to be made regarding resources for next year, but in order to move forward the focus has been on the alignment of all activities to the seven strategic priorities: citizen focus; counter-terrorism; security and protection; safer neighbourhoods; criminal networks; capital city policing; information quality and access and Together. Investment regarding the movement of resources and additional funding has been informed by the need to deliver on the strategic priorities and has particularly ensured the focus again remains on front-line policing; that services are citizen focused; that the safer neighbourhood programme is financially sustainable throughout the year and for continued support for counter terrorism.

5. Although financial pressures continue to mount and 2008/09 and future years will be challenging, the budget has been constructed to maintain and protect the Authority’s hard won financial stability. This successful financial management has been recognised in the external auditor’s annual letter for 2005/06 and continued emphasis will be placed on protecting this position through robust budget setting, monitoring and action during 2007/08.

6. Despite these budget pressures the 2007/08 budget will provide some additional growth on new initiatives including the drive for transformation of the service through the modernisation programme, £44m additional resources for the full year roll out of safer neighbourhoods and the continued development of the safer neighbourhood programme for larger wards. The priority given to the continued early rollout of Safer Neighbourhoods has resulted in meeting the target that all wards will have a full complement of 1 sergeant, 2 officers, 3 PCSOs by December 2006. By the end of April 2007, 2151 PCSOs will be posted to safer neighbourhood teams across 32 boroughs and 630 teams.

7. Overall the budget process has ensured front line policing has been protected. The overall position is that there is an increase of 270 police officers in next year’s budget.

8. The decision to allocate resources to the delivery of strategic priorities whilst improving efficiency has included agreement with TfL to supply PCSOs for Transport Safer Neighbourhoods Teams, income of £7.5m has been added to the financial envelope to recognise the funding to provide 378 PCSOs to work on transport safer neighbourhood teams. The income generated through this initiative will part fund the cost of putting police staff into the integrated borough operations functions at boroughs, so that police officers can be released back to front line policing duty.

9. Front counter services are to be delivered by extending the role of the Police Community Support Officers (PCSO) to the role of Station Reception Officer (SRO), thereby creating the new post of Station Community Support Officers (SCSO). The project aims to deliver an improved and highly visible service to local communities.

10. Additional resources have been received in support of counter-terrorism with an extra £15m being received from the Home Office (HO). The MPS has also supported this by the restructuring of the protection functions and aligning resources to increase capacity with the function receiving an extra £23m.

11. SCD was restructured to rationalise business, afford greater flexibility, responsiveness and increase the focus on our priorities. Therefore our resources will be targeted to support the newly formed Command areas. They consist of criminal networks; homicide and other serious crime; child abuse and economic crime; covert policing and intelligence; forensic services; strategic development; and business support.

Mayoral response to the MPA budget submission

12. The Mayor issued his GLA Group Budget and precepts consultation document on 15 December. The consultation document proposes a budget requirement for the MPA of £2,540.7M in 2007/08. This is £16.2M higher than his target for the MPA issued on 7 November (£2,524.5m). As mentioned in paragraph 2 above, Members will recall that the budget submission was presented to the Mayor with a £16.2M budget gap.

13. The Mayor has noted in his consultation document that, ‘prior to preparing the document the Mayor sought views from the MPA on a budget requirement which was lower than the proposal in the consultation document. However, due to the scale of the additional work the Metropolitan Police Service is now involved in, the MPA have advised that so far it has not been possible to secure a lower target. Indeed the figures could have been higher as funding of additional costs of security operations during the year has yet to be settled.”

14. To restrict increase in the GLA council tax precept the Mayor has asked the GLA group to look for additional savings, and a target of at least £8m for further budget reductions is being sought.

Further savings

15. The MPS has reviewed the potential level of contributions that could be delivered. The MPS plan to contribute the full £8m towards this savings target.

16. The £8m savings are in additional to the already challenging savings identified as part of the 2007/08 budget. The aim has again been to protect front-line policing. The £8m MPS contribution is made up from 2 strands. The first strand is savings being delivered by a review of other budgets and policies, the second from charging TfL for services.

17. Savings delivered by the review of other budgets and policies

• Further capitalisation of Staff Costs - £2m
  In line with standard accounting practice the MPS is moving towards capitalising appropriate staff costs. The 2007/08 budget already reflects some capitalisation and a further work has identified the potential to capitalise a further £2m. This has minor implications for the capital programme.
• Additional Investment Income - £1m
  A further review of the cash flow in 2007/08, increases in the base rate during 06/07 and the likelihood of further increases in 07/08, would suggest it is possible to reflect this increase.
• Non pay inflation - £1m
  Further review of the non-pay inflation proposals indicate that a small reduction in the allocation can be achieved. By limiting the amount available for non-pay inflation budget managers are being required to deliver further efficiencies.

18. Savings Delivered by charges to TfL

• TfL charging for services - £4m
  The principle has been agreed that TfL will fund extra services to be provided for road and transport network functions; this will be in specific areas of Traffic OCU and TOCU+.

The £4m savings can be broken down as:

Existing Traffic OCU Partnership activities - £2.0m. The extra work will cover areas such as:

• Develop relationships with external groups and explore new and innovative road safety solutions in partnership;
• Film London – provide single point of conduct for Film London and ensures appropriate response to requests for police assistance;
• Motor Cycle Tasking Team – Provide Bikesafe London to motorcyclists to reduce KSIs (killed and seriously injured) and improve rider standards, acting as a signpost to further training. Will also provide Scootersafe London;
• Traffic Management Unit – lead and manage 16 Traffic Management constables who are employed as the focal point for Safer Neighbourhoods liaison and problem solving, liaison with the 32 Borough Road Safety Officers, and to advise on engineering solutions.

TOCU+ by increasing the focus teams - £2.m

• This is the continued expansion in resources to increase activity of the TOCU

The principle has been agreed that TfL are able to pay the MPS for this extra service with the focus being extra activity on the road and transport network functions. (This has been agreed by the Commissioners of each organisation).

19. The implications of the ‘TfL Charging for Services’ are that the extra service must be delivered within current level of resource if it is to be a saving. Therefore officers will need to be transferred or allocated to the function via aid to deliver the new work. This operational impact will need to be worked through, but broadly it would require 66 officers to be redeployed (66 officers at £60k = £4m). The full operational impact of this is still being assessed.

The full implications of the arrangements with TfL are still being worked through and discussions with TfL are very much in the early stages, with Commander Hussain currently leading.

20. The additional funding from TfL is still in very early stages of negotiation and there is a risk the saving may not be delivered or only part delivered. This will be monitored as part on the continued work in finalising the 2007/08 budget. If this saving cannot be delivered options on how to manage the budget will be reported back to the MPA.

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 savings options, particularly in relation to service delivery and diversity of the workforce. The equality impacts have been considered as part of the savings proposals.

D. Financial implications

The specific financial implications are as set out in the paper.

E. Background papers

None

F. Contact details

Report author: Sharon Burd, A/Director of Resources, MPS; Ken Hunt Treasurer, MPA.

For more information contact:

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

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