Policing London Business Plan 2011-14

Report: 13
Date: 25 November 2010
By: Director of Resources on behalf of the Commissioner and the Chief Executive of the MPA

Summary

This report seeks approval to the Draft Policing London Business Plan submission to the Mayor in accordance with his guidance for the 2011/12 GLA group budget.

A. Recommendation

That Members comment on the submission to the Mayor in respect of the 2011/12 Policing Plan and budget including the current budget gap and supporting financial statements.

B. Supporting information

The 2011-14 Planning Process

1. The MPS has developed corporate objectives, key activities, budget proposals and performance indicators against a challenging and uncertain background. The full implications of budget reductions announced in the Comprehensive Spending Review (CSR) and the Mayor’s level of precept support for the Service will not be known until December. Even then clear details may not be available, particularly on specific grants and partnership income.

2. The developing Policing Plan, therefore, remains a work in progress based on a series of best assumptions, both in terms of the budget and associated staff numbers and also the text that supports much of the activity. These will be subject to change once the implications from the review become clearer.

Mayor’s priorities and Met Forward

3. The Mayor’s priorities for 2011/12, in particular those for policing London, remain in line with those set out for 2010/11. ‘Safer London’ focuses on priorities detailed in Met Forward, on violence against Women and on serious youth violence.

4. Following discussions with the MPA Chair around the ways in which the MPA/MPS could project a shared public mission, MPS officers have been invited to comment on a refreshed Met Forward and to discuss how best to integrate this into the Policing London Business Plan 2011-14.

Policing Plan 2011-14

5. The Commissioner has proposed fourteen corporate objectives, focused on Safety, tackling violence and delivering security on our streets, improving Confidence and Satisfaction in policing services, delivering a safe and secure Olympics, and delivering significant Savings whilst still prioritising frontline policing. These are consistent with themes in the MPA Met Forward strategic framework.

6. An earlier outline of the Policing Plan 2011-14 was submitted to 12 October SOP for comment. This draft explored our operating environment, outlined the corporate objectives and key activities, and mapped these against the Mayor’s priorities and Met Forward. These objectives and activities have also been discussed at members awayday on Friday 29 October.

7. The developing Policing Plan being considered by members today is drafted in a more succinct format than previous versions. It incorporates major service improvement programmes and will include a financial plan for 2011/12. The Plan sets out how we intend deliver our outcomes in a very challenging environment, the resources available to us, and the ways in which we will manage our performance.

8. In line with member consultation around the MPS Corporate Strategic Assessment for 2011-14 this Plan signals a greater focus on a cross-functional Victim - Offender - Location approach to Safety. This intelligence-led policing approach identifies vulnerable victims and tackles problem people and problem areas to reduce crime more effectively rather than the traditional approach of addressing crime by type, such as robbery. It maintains Neighbourhood Teams at the heart of our policing model, whilst specialists focus on violent crime, serious and organised crime and counter terrorism.

9. Although the corporate objectives and key activities remain the same as the earlier draft, the text in this Plan is formatted to focus the reader on delivery of our key priorities - Neighbourhood Policing and satisfaction; Serious sexual offences, youth violence, and criminal justice; Organised crime and drugs; CounterTerrorism and the Olympics; and Value for Money initiatives. This will provide valuable strategic context and also give better insight to an enquiring public about our future direction.

10. The performance indicators shown in this Plan remain a work in progress. They will be amended with the MPA over the next few months as the emerging performance environment becomes clearer.

11. The MPS has regularly engaged with MPA officers during this planning process, including at Monthly budget meetings with MPA finance and planning officers, fortnightly planning meetings with MPA planning and performance officers, and senior officer one to one sessions.

Revenue budgets

12. The revenue position has been updated to reflect the best information currently available on the outcome of the CSR announced by the Chancellor of the Exchequer on 20 October 2010 and the guidance from the Mayor for the preparation of the draft Component budget 2011/12 as outlined in his letter dated 22 October 2010 (Appendix 2).

13. As a result of the CSR announcement there will be a 20% real or 12% cash reduction in the total 2010/11 budget for policing of £9.7bn over the coming four years. This amount includes the CLG and the Welsh Assembly elements and accounts for both general and formula grants and specific grants. The reduction is front loaded in profile over four years (i.e. 6%, 13%, 17%, 20%) which is a 5.8% reduction in real terms or a 3.9% cash reduction in year 1. It was also indicated that if Police Authorities choose to increase the precept at the current Office of Budget Responsibility (OBR) forecast level, then on average police budgets would see real terms reductions of 14% over the next four years.

14. The Mayor’s guidance issued on 22nd October indicated that the MPS should prepare a draft component budget for 2011/12 of £2,589.6m. This was based on the confirmation in the CSR that central government funding for policing provided by the Home Office will fall by 20% in real terms over the planning period and by approximately 4.1% in cash terms in 2011/12. However, it has since been agreed between the MPA and the Mayor’s office that the draft component budget can be increased by £5m to £2,594.6m for 2011/12 based on a likely reduction of 3.9% in general grant rather than the 4.1% originally assumed. Once the provisional settlement is announced in December, the Mayor will be reviewing this figure and it is possible that reductions or increases could occur.

15. The Mayor has also requested that

• the MPS assumes a precept freeze in 2011/12
•  the MPA consider a real term reduction of 7.1% in 2011/12

16. Against this target for Net Revenue Expenditure (NRE) of £2,594.6m, the MPS currently has a planned NRE of £2,628.6m. This represents a budget gap of £34m in 2011/12.

17. The Mayor’s guidance issued on the 22nd October stated that at this stage there is no requirement to set out planning figures for future years after 2011/12. It is likely that these figures will be issued later in the budget planning process once the provisional Local Government Finance Settlement (which is expected to provide indicative grant allocations for 2011/12 and 2012/13) has been announced.

18. Further clarification on the scale of the cuts is expected in December when the Government announces the policing grant settlement and specific grants and the Mayor announces his level of precept support for the Service. Even then the detailed impact on our resources will not be known for some months in terms of formula distribution and announcements by government on specific grants and by partners on other income streams.

19. The Policing London Business Plan and Budget will continue to be developed as more information becomes available. Approval by the Authority to the full Policing Plan for the next planning period must be before 31 March 2011.

20. The HR impact of the current proposals is set out in Appendix 2, the supporting financial information.

21. The Commissioner has been clear our approach is focussed on:

•  Doing all we can to maintain our operational capability;
•  Delivering efficient and effective support services at the lowest possible cost;
•  And making the most productive use of our operational assets.

This means:

• Reducing our inanimate costs (vehicles, buildings etc) as quickly as possible (we are on track to remove 20% of our costs in those areas over the coming three years, including 25% of our estate costs);
•  Ensuring our business model is as lean as is practically possible (over 80% of our planned Service Improvement savings per annum from 2013/14 are from support services); and only then
•  Reducing operational officers and PCSOs and mitigating the loss in capacity, for instance through process re-engineering and working with others, however the MPS has aimed to deliver operational savings through savings in overtime (£15m planned by 2013/14) and allowances (£16m by £2013/14);
•  Treating our officers and staff fairly and with dignity as the Service shrinks.

It is, however, inevitable that the Service will shrink over the next planning period and the Authority has agreed to set aside funds (£53.2m) in a budget pressures reserve to help fund the cost of departures from the Service. This has been created by merging a number of existing earmarked reserves that are either no longer required for their original purpose or were created to facilitate modernisation and efficiency initiatives.

22. The impact of the proposals in this submission can be summarised as follows:

Note (1): this establishment could be affected (see paragraph 23 and 24) by:

• loss of specific grant and other income -350 to -520
•  reducing budget gap -328

As identified in Appendix 2 the Service proposes to change the current policing model by converting 1,400 PCSO posts into police officer posts to maintain and improve operational capability. There will, however, be an impact on functions previously carried out by PCSOs, e.g. victim support, front counters, safer schools and royal parks. Reductions in these areas may impact on our confidence levels.

23. As indicated in Appendix 2 it is not possible to precisely determine, at this stage, the impact of the withdrawal of specific grants and other income streams. The current planning assumption is, however, that where income streams are withdrawn costs will be reduced. This would, therefore, result in reduction in officer and staff numbers. Based on our best analysis of the likely reductions in specific grant & other income over the medium term, a further reduction in police officers of between 350 and 520 posts, in Police Staff of between 120 and 170 posts and in PCSOs of between 240 and 330 could occur in 2011/12. These numbers are likely to change when further clarity becomes available on these funding streams in December and January.

24. There would also be an impact on officer numbers in terms of bridging the current budget gap of £34m in 2011/12. Based on meeting eighty percent of the budget gap from reducing staffing costs, the impact would be 328 police officers, 68 PCSOs and 189 police staff.

Business planning and budget guidance 2011/12

25. The draft Policing London Business Plan, with supporting financial statements, will be submitted to the Mayor on 19th November 2010 following today’s members briefing and approval under delegated authority at this SOP/F&R. The Plan will NOT include targets for 2011/12.

26. As agreed the Authority will be asked to formally sign off the developing Policing Plan at key stages. MPS officers remain available to discuss the Plan in informal sessions. The Planning timeline between December 2010 and March 2011 remains, at this time, as agreed in May 2010.

C. Other organisational & community implications

Equality Implications

1. The planning framework for 2011-14 will help to ensure that equalities and diversity implications are properly reflected in budget and business plans. Throughout the planning process Business Groups have been encouraged to consider the impact they have on internal and external communities and therefore develop activities that reflects the Service's commitment to equality and diversity issues.

2. An Equality Impact Assessment on the final Policing London Business Plan 2011-14, based on assessment against our corporate objectives and against key equalities and diversity issues will be available in time for the publication of the plan in March 2011.

Financial Implications

3. Whilst the budget and business plan proposals reflect the Commissioner’s objective of protecting, as far as is practical, operational capability. They do not meet the Mayor’s guidance of delivering a balanced budget in 2011/12.

4. The reduction targets included in the submission on inanimate objects and our business support model are ambitious and are in addition to reductions already built into the budget. It is not, therefore, considered practical to deliver further reductions in those areas in 2011/12.

5. The current proposals result in a budget gap against the Mayor’s guidance of £34m. The impact of having to close this budget gap, in terms of operational capability, is highlighted in paragraphs B22 to B24.

6. It is not possible to determine at present the level of specific grants and other income streams that will be available over the next planning period. However, the potential impact in terms of operational capability is highlighted in B22 to B24.

7. It should be noted that there are still many uncertainties regarding the level of funding available to the Service over the next planning period. Even the level of general police grant available for 2011/12 will not be clarified until the provisional grant and the arrangement for grant floors and ceilings are announced in December. The budget submission, therefore, reflects the best information currently available and may have to be amended once more information is available in December.

Legal Implications

 8. The Greater London Authority Act 1999, as amended, sets out the requirements of the GLA to calculate the budget requirements for the Mayor, and the Assembly and its four functional bodies. The budget requirements for each body are calculated by determining the difference between projected expenditure and projected income - including specific Government grants. In order for the GLA to estimate the sums required by the MPA/MPS, the MPA/MPS must provide information to the Mayor and Assembly to facilitate this. The Mayor is required to consult with the MPA/MPS prior to setting the final budget.

9. To help assist budget setting and fulfil meeting the priorities within the Policing Plan, the budget and business development process is a key element to ensure there are sound financial plans within which the MPA/MPS priorities and objectives are adequately funded.

10. Expenditure or activities undertaken by the MPA/MPS as statutory bodies must only budget for activities that fall within its powers. There are also positive duties under S3 Local Government Act 1999 to secure the continuous improvement in the ways functions are exercised having regard to a combination of the economy, efficiency and effectiveness. This report identifies steps under the budget and business plan process that will be taken to ensure best value is achieved in the delivery of policing services.

Met Forward Implications

11. The developing Policing London Business Plan 2011-14 is drafted in full consideration of Met Forward and follows the same themes and outcomes for policing London.

Environmental Impact

12. The proposed planning framework will help to ensure that environmental sustainability issues are properly reflected in future plans and budgets.

HR Impact

13. The HR impacts are set out in paragraphs 19-22 of this report.

D. Background papers

• Appendix 2: Supporting financial information

E. Contact details

Report author: Anne McMeel (Director of Resources), MPS

For information contact:

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

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