Policing London Business Plan 2012-15

Report: 7b
Date: 24 November 2011
By: MPS Director of Resources on behalf of the Commissioner and the Treasurer 

Summary

This report includes the draft MPA/MPS 2012-15 Policing London Business Plan. It is proposed that this information is submitted to the Mayor by 18th November in line with his budget timetable. Given the financial uncertainties facing the Service it has not been possible to submit a balanced budget for 2012/13 in line with the Mayor’s guidance. Work continues to develop proposals to close the gap which may impact on officer, PCSO and staff strengths.

Please note that appendices 1 and 2 to this report are circulated as separate documents.

A. Recommendation

That Members

1. Agree the draft 2012-15 Policing London Business Plan, including capital and revenue budget proposals and supporting financial information for submission to the Mayor by 18 November in line with the budget timetable and note that at this stage of the process it has not been possible to develop a balanced budget for 2012/13 or the other two years of the plan.
2. Note the draft 2012-15 Policing London Business Plan will be considered by the full Authority on 24 November 2011.
3. Agree the annual statement regarding the 2012/13 Minimum Revenue Provision and the key Prudential Indicators calculated from the draft borrowing and spending plan.
4. Approve a provisional capital programme;
   For 2012/13 to a fully funded value of £170.9m, with an over-programming limit of £35.8m.
   For 2013/14 to a fully funded value of £130.4m, with an over-programming limit of £33.6m.
5. Note the MPA Treasurer’s Statement on the Robustness of the Estimates and the Adequacy of the Proposed Financial Reserves given at Appendix 3

B. Supporting information

Background

1. In policing the changing needs of our Capital we face challenging times and a very real shift in our operating environment. The Service is mobilising the UK’s largest ever peacetime safety and security operation to deliver a successful Olympic and Paralympic Games, against a backdrop of escalating public order pressure and the enduring threat from terrorism and from serious and organised crime.

2. We continue to make real progress in delivering significant budgetary savings on a scale not seen in decades, managing substantial change programmes to shape a leaner but still effective organisation. We are determined to do all that we can to maintain, operational capability in an environment of intense public scrutiny.

3. In developing the Policing London Business Plan 2012-15 we continue to focus on core policing outcomes for the people of London. The Commissioner has set three clear aims: to cut crime, to cut costs, and to continue to develop the culture of the organisation - our diversity and the way we relate to each other. We will look constantly to improve at all levels and to lead a service that criminals will fear. We will make the MPS the best police service in the world.

4. In achieving these aims the Commissioner has committed to Total Policing - a total war on crime, total support for victims and total professionalism from our staff. This approach focuses on crime prevention, on targeting offenders, on supporting victims, on building on the support and trust of law abiding Londoners. We will achieve this with humility, transparency and integrity.

5. Our aims are consistent with our four strategic themes, shared with the MPA, in policing London - Safety, Confidence, a safe and secure Olympics and Value for Money. In meeting our aims and our commitment to Total Policing we have set fourteen corporate objectives in the draft Policing London Business Plan 2012-15 (pages 3-4). These corporate objectives and key activities are informing ongoing work across the organisation to shape our activity for 2012/13.

6. These objectives are supported by nine key performance indicators. These were set on a 3 year basis, and remain compelling for the 2012-15 Policing Plan subject to final consideration of the impact of the Olympics on business as usual in 2012/13.

7. The MPS is working to shape a future policing model for the coming years in a way that reflects our significantly reduced budget and the emerging demands on our services. In doing this we are reviewing the core functions and structures that enable us to deliver our objectives, protecting our operational capability and the ability to provide a rapid deployment of capacity for the new challenges of public order policing.

8. To deliver this change we are focused on reducing the costs of inanimate objects and non-staff costs quickly, delivering an effective business and operational model at least cost through process improvements, shared services, exploring outsourcing and joint ventures, and only then reducing numbers of operational officers and PCSOs whilst mitigating the loss in capacity.

9. The Policing London Business Plan 2011-14 was approved by the MPA Full Authority on 31 March 2011. A balanced budget position was achieved for 2011/12 with further savings of £93m (2012/13) and £174m (2013/14) needing to be delivered to maintain the position. These budgets are based on the assumption that committed savings of £163m (2011/12), £260m (2012/13) and £323m (2013/14) are delivered in full by the Service.

10. In achieving this position the GLA maintained an overall freeze on the precept. The Mayor however realigned resources across the GLA Group and made an additional £42m available to support policing in 2011/12. These additional resources fall to £34m from 2012/13 onwards as the £8m contribution from the Collection Fund surplus was a one-off benefit for 2011-12 only.

11. Assuming that budget reductions agreed as part of the 2011-14 budget process are delivered in full, the remaining budget gap position is as indicated in Table 1. This reflects a requirement to deliver additional savings of £277m by 2014/15. This position has been calculated to include the impact of additional loss of general grant in 2014/15 (year 4 of the recent CSR) and additional pay and non-pay inflation in 2014/15.

Table 1 - Total Required Savings

12. It should be noted that the total savings required are based on current funding assumptions. Whilst there is certainty around the level of general grant received from the Home Office through to 2014/15 there is still some risk around the Communities and Local Government (CLG) element of the grant as the amount is only confirmed through to 2012/13. The assumption used in this paper is that the reduction to CLG grant for 2013/14 and 2014/15 will be the same as the published national average in line with guidance from the Mayor.

13. In assessing the delivery of new savings, Business Groups considered measures to minimise the impact of the reductions on service delivery, e.g. sharing services with other Business Groups, other methods of delivery. However, it was recognised that in delivering this level of reductions some services may need to cease.

14. Whilst work is continuing to identify opportunities to reduce non-officer/staffing costs, the immediate scope for new savings in 2012/13 is limited given the reductions already built into the budget.

15. The proposals being prepared attempt to minimise the impact of the required reductions on capability whilst recognising an operational objective to maintain officer numbers. In considering the proposals the Service has, however, been mindful of the need to challenge the balance, as reflected across business groups, within the current policing and business model to assess if it remains fit for purpose or if it needs to be changed. Given the scale of the financial challenge it is currently not possible to close the budget gap in any of the three years without further reductions in officer, PCSO and staff numbers.

The Mayor’s Budget Guidance for 2012/13

16. The Mayor’s Budget Guidance for 2012/13 was published on 27 May 2011. This required the MPS/MPA to present savings proposals for 2012/13 equal to £92.8m to balance the budget by the end of September 2011, earlier than in previous years.

17. In line with the MPS planning assumptions included in Policing London Business Plan 2011-14, the Mayor required the identification of further savings, as outlined in Table 1, by 18 November 2011.

18. Additional Mayor’s guidance was received on 27th October (see Appendix 2, Annex 2) which stated that the MPS would receive one-off additional precept funding in 2012/13 of £30m on the condition that an overall police officer strength is maintained at 32,320 until after the Olympics and then at 31,957 for the remainder of the planning period. This is the basis of the planning assumptions within the draft Policing London Business Plan 2012-15. However, it must be realised that without additional resources this strength is not affordable and there are still significant budget gaps in all three years.

19. It should be noted that if the MPS is required to maintain an overall strength of 31,957 over the planning period, it will require a fundamental change in the police and business operating model for the Service in terms of the mix between Police Officers, Police Staff and PCSOs.

Collection Fund and GLA Precept

20. As part of the 2011-14 budget process, an additional £42m precept funding was provided to the MPS by the Mayor. However, this amount was reduced to £34m in 2012/13 on the basis that an amount of £8m was related to a one-off additional surplus from the collection fund. As stated above, the revised Mayor’s guidance stated that an additional one-off amount of £30m would be made available to the MPS in 2012/13. The net increase year-on-year is therefore £22m.

London Assembly Budget & Performance Committee – Pre Budget report

21. A summary of the main issues raised in the pre-budget report are provided below:

• Additional savings beyond those required to cover the budget gap should be set aside to reinvest in shared service initiatives (further details of the MPS shared services savings are provided in Annex 10 of the Supporting Financial Information)
• The Mayor’s budget should set out shared services projects with the proposed savings.
• The Mayor should provide a full account of the costs of the recent disturbances and their budgetary impact. (see paragraphs 47 - 49).
• The Mayor should provide details of any long-term borrowing that the budget assumes to fund expenditure. (this is provided in Annex 13 of the Supporting Financial Information)
• The Mayor should include sufficient information on savings proposals to allow the impact on operational capacity to be assessed. (this is provided in Annex 3 of the Supporting Financial Information).

22. The majority of these requirements are met within the information attached as part of the draft 2012-15 Policing London Business Plan and Supporting Financial Information.

Shared Services

23. The MPS is committed to a shared services approach with others, if the business case is compelling, and we recognise the opportunities and challenges of shared services across the GLA group, nationally and internally as a policing region.

24. The Policing London Business Plan recognises that collaboration with other police forces, partnerships and shared services are becoming increasingly important. Internal and external Shared Services programmes have the potential to deliver major benefits in improved services at less cost for the MPS at a time of increasing fiscal constraints. Longer term options could involve being a strategic provider of services, sharing platforms and infrastructure and outsourcing non-core capabilities (alone or with a partner organisation).

25. Efficient policing is a major driver of better value for money. This includes more effective deployment of warranted officers and staff to improve operational capability, and a review of pay and conditions. A new national framework for policing is proposed, with better collaboration between forces to tackle serious criminality and a new National Crime Agency to combat organised crime and deliver border policing. The MPS is contributing towards the development of these proposals. The MPS is however the only regional police force in England and internal collaboration in the MPS is therefore equivalent to several other Forces collaborating on the delivery of specific functions. Internal and external collaboration has been successfully embedded into how the MPS operates. It is business as usual for the Service, and is built into the corporate objectives for senior managers in the MPS.

26. The Mayor’s advisor for Budgets & Performance has set a savings target for the GLA group of £450m over two years from the sharing of services and collaborative procurement. The aim is to deliver £150m savings in 2012/13, with a further £150m of new savings in 2013/14, to give total savings of £450m. As part of the 2011/12 Mayor’s budget process, fifteen potential Shared Services workstreams were identified. These workstreams include the areas shown in Annex 9 of Appendix 2 (Supporting Financial Information) together with a summary of committed MPS savings already built into the Services’ budget in respect of these functions. Whilst these savings are not explicitly dependent on shared services or collaborative procurement, such an approach is seen as one of the ways of delivering the significant savings identified. The requested information was submitted to the Mayor’s office at the end of September. This included savings on collaborative procurement totalling £101.6m since 2008/09 as detailed in Annex 9 of Appendix 2.

27. The additional Mayor’s guidance received on 27th October stated that new savings targets for shared services and collaborative procurement would be issued once the Mayor has completed the analysis of the individual functional bodies’ submissions. A report has been considered by the London Assembly Business Management & Administration Committee on 3rd November that considered the submissions of the functional bodies and discussed next steps. In the last few days, the MPS has received notification from the Mayor’s Advisor on Budgets and Performance that additional information is required from the MPS to supplement the information submitted in September. This work is currently in progress and a response will be provided to the Mayor in the near future.

28. Work is continuing with the GLA and functional bodies to identify the savings linked to shared services programmes within the MPS and with other external bodies including the GLA group

Service proposals

29. The submitted proposals indicate an emerging theme of savings with the potential to impact across a number of Business Groups or the entire MPS. These are on top of existing Major Change Programme Plans such as Corporate Real Estate, Finance & Resources 2, Business Procurement Plans and Human Resources realignment to the Deputy Commissioner’s Portfolio and the Directorate of Resources, which are already in train to deliver savings from MPS-level synergies and efficiencies. These new themes include:

• Extending Territorial Policing operational support services across groups of Boroughs or as pan-London services in future years, building on existing projects to increase existing benefits.
• Rationalisation of functions across the MPS (e.g. Chemical, Biological, Radiological & Nuclear; Intelligence).
• Managing demand for specialist units (e.g. Horses, Dogs, Air Support Unit etc).
• Exploring a move to a national provision of language services by Customer and Commercial Services.

30. A number of the proposals relate to themes that apply to a number of Business Groups, i.e. intelligence, performance etc.

31. As stated earlier, the Service was required to set out proposals that would deliver total additional savings of £277m by 2014/15. Details of the proposals with the total amounts of savings proposed for 2012-15 are provided in Annex 3 of Appendix 2. Whilst savings have been identified at Business Group level they reflect the impact of major change programmes that have been carried out across the Service.

32. In addition to the savings shown in Table 2 below, the 2012-15 Policing London Business Plan also includes committed savings from the 2009-12 to 2011-14 Policing London Business Plans, these include reductions for inanimate costs including the following:

• Estate Management (£141m)
• Human Resources (including Training £188m)
• ICT (£342m)
• Catering (£49m)
• Finance and Resources (£33m)

33. On the basis of the proposals currently contained in this report, the financial position is summarised in Table 2 below.

Table 2 - Revised Budget Gap

Growth

34. Annex 3 in Appendix 2 also provides details of items where additional funding is required. The main items are:

• The additional costs for the policing of the Diamond Jubilee celebrations (see paragraph 35).
• Savings arising from reform of Police Staff Terms and Conditions deemed to be no longer achievable in the original model offset by other additional savings on the police staff pay budget. Other options for delivering future savings are currently being explored.
• Reduced savings in 2012/13 regarding the Training major change programme.
• Additional Information Technology costs including contractual inflation.
•  Under-achievement of the 2010/11 target year-end underspend.

Diamond Jubilee

35. The Diamond Jubilee celebrations will take place in June 2012 and will involve four days of planned celebrations (including two bank holidays). There is currently no specific additional budget provision in 2012/13 for the costs of the celebrations. Whilst detailed costings have not yet been undertaken, it is reasonable to assume that the costs will be will in excess of those of the recent Royal Wedding (£3.6m additional costs), possibly up to four times more (approximately £15m). Unless the MPS is provided with additional funding for this event, there will be an additional budget pressure in 2012/13 which is reflected in the budget gap of £85.5m identified for 2012/13.

Reserves

36. The approved 2011-14 budget & business plan identified a draw-down of the general reserve (including the emergency contingency fund) over the period to balance the budget. In total, £28m will be draw-down over the three years and this will reduce the level of the general reserve to £42.6m by the end of 2013/14 This equates to approximately 1.5% of the MPS’s net revenue expenditure and is in line with the policy accepted by the Authority as a planning assumption for the 2011-14 Policing London Business Plan. If the remaining general reserve is used to fund Kirkin/Withern or RDA costs, the MPS will need to reverse the planned draw-down and start to build growth into the current planning process to reinstate the general reserve to an acceptable level. This would increase the budget gap further (see paragraphs 47-49 re Kirkin/Withern and Riot Damages Act costs).

37. In terms of earmarked reserves, it is anticipated that there will be significant draw-downs over the next two financial years with an estimated remaining balance (excluding the emergencies contingency fund) of £53.2m by the end of 2013/14 (assuming that the forecast underspend in 2011/12 of £5.7m is added to the budget pressures reserve). The MPS is likely to require approximately £50m a year for the next phase of the voluntary redundancy programme and therefore any unused earmarked reserves will need to be set aside for this purpose. Annex 5 of Appendix 2 provides further detail of the earmarked reserves and the estimated balances in the future.

Implications of the workforce changes of the Service proposals and the Mayoral ambition

38. Table 3 shows the net reductions in Police Officer/Staff and PCSO numbers included in the Service proposals by activity and the additional officers required to meet the Mayor’s ambition. It should, however, be noted that budget gaps currently exist for each of the three years of the planning period (2012/13 £85.5m; 2013/14 £144.8m; 2014/15 £226.2m). Closing these gaps will impact of officer, PCSO and staff strengths.

Table 3 – net impact on workforce numbers by activity for 2012-15

Police Officers - before budget gap closed

Police Staff - before budget gap closed

PCSOs - before budget gap closed

39. The revised establishment for police officers, as set out in Table 3, still reflects a budget gap and in the absence of additional Government grant or precept income, the Service would have to plan a significant reduction in officer/PCSO strength.

40. The recruitment activity, necessary to achieve the mayoral ambition to maintain a police officer strength of 31,957 throughout the planning period, has been developed and could deliver the required 32,320 officers by 31 March 2012 if the Service has certainty about future funding in a timely manner. The recruitment requires an ambitious training schedule for selected MSC and PCSOs alongside an advertising campaign to attract skilled and experienced police officers from other Home Office forces. However, if additional funding is not identified, the plans are sufficiently flexible to allow the Service to pause or stop all recruitment activity. It should also be noted that recruitment activity will be paused during the Olympics period.

41. The ongoing assessment of potential wastage over this period suggests that retirement levels will remain high and the impact assessment undertaken within the Business Groups has indicated risk areas at various ranks and skill profiles. Promotion and training activity has been planned to address the shortfalls and meet the operational demands within the Business Groups.

42. The revised establishment of 31,957 has a total of 5,397 (at an approximate cost of £280m) posts that are funded through specific grant and third party agreements. The Service must ensure that these posts are filled as a matter of priority to ensure all funding is recovered and to avoid further pressures on the budget gap during this period. If funding for these posts is withdrawn, officer numbers will be reduced.

Police Staff Establishment

43. The approved 2011-14 Policing London Business Plan included a reduction of police staff posts from a revised establishment of 15,178 in 2010/11 to a planned establishment of 14,130 by 2013/14, i.e. an overall reduction of 1,048 posts. These reductions have been largely delivered by Phases 1 to 2c of the MPS’s approved voluntary departures programme.

44. In addition, the current 2012-15 budget proposals will reduce the establishment further, i.e. to an overall establishment of 13,575 by the end of 2014/15 (9,450 Operational support staff and 4,125 Business support staff). Future phases of the voluntary departure programme will, subject to funding, deliver the required reduction in posts. In overall terms, police staff establishment will reduce by approximately 11% between 2010/11 and 2014/15. This compares to broadly maintaining police officer establishment over the same period. It should be noted that the 2012-15 budget process is not yet completed and budget gaps still exist in all years, therefore further reductions in establishment will be necessary.

PCSOs

45. The approved Deployment Plan 2011-14 for PCSOs shows an establishment of 3,725 for 2012/13. The revised establishment at 31 March 2013 is 3,444. This reduction will be managed through police officer recruitment as the PCSO group have been specifically targeted, and this together with natural attrition should avoid the need to resort to early departure.

46. Further reductions will take place in 2013/14 and 2014/15 where numbers will decrease by 25 posts delivering a new establishment of 3,419. The revised establishment includes 949 funded posts (at an approximate cost of £33m) that are funded through third party agreements. If funding for these posts is withdrawn, PCSO numbers will be further reduced.

Pressures

Operation Kirkin/Withern & Riot Damages Act (RDA)

47. The current forecast for the additional costs of policing the recent London disturbances (Operation Kirkin) and the subsequent investigation (Operation Withern) is £90m. In addition, the latest value of claims received under the RDA is £198m (£16m of uninsured claims and £182m of insured claims) with an additional £91m of claims related to non-RDA activity such as consequential losses. The overall cost is however expected to rise as some claims at present only include provisional amounts.

48. The Home Office have indicated that applications for support from Police Authorities will be considered as special grant applications and Authorities will need to demonstrate the impact on the overall financial position of the Force. This potential liability relates to the value of claims paid to insured businesses by insurers and under-insured claimants. The cost of claims from uninsured businesses and individuals will be reimbursed to the MPA by the Home Office in full.

49. The current planning assumption is that these costs will be met in full by the Government. To the extent any of the costs of the policing operation and the Riot Damages Act (RDA) claims fall to be met by the MPA/MPS the financial flexibility for dealing with future budget gaps will be significantly reduced.

Operations Appleton/Weeting/Elveden

50. Operations Appleton (MPS Public inquiry Support Team), Weeting (phone hacking) and Elveden (allegations that MPS officers were paid by News of the World) continue under the command of the Deputy Commissioner’s Portfolio and Specialist Crime Directorate. There will be a two-part public inquiry that will be led by Lord Justice Leveson, considering phone hacking, police corruption and media regulation..

• Stage one will cover: The culture, practices and ethics of the press, their relationship with the police; the failure of the current system of regulation; the contacts made, and discussions had between national newspapers and politicians; why previous warnings about press misconduct were not heeded; and the issue of cross-media ownership.
• Stage two of the inquiry will look into the extent of unlawful or improper conduct at the News of the World and other newspapers, covering phone hacking and payments made to police officers for information, as well as the wider implications of the relationship between the police and the press.

51. To support the MPS preparation for the public enquiry, a small team has been set up within the Deputy Commissioner’s Portfolio who have carried out a scoping exercise to determine the operational requirements. It should be noted that no growth proposal has been included for these operations as they will be internally resourced. Operations Appleton & Weeting are estimated to cost £8m per year from 2012/13.

Other Pressures

52. Given the uncertainties relating to the delivery of planned savings, resilience of £25.4m a year was built into the approved 2011-14 budget. This provision is being held centrally and not allocated to Business Groups even when budget pressures emerge. Every effort is being made to manage such pressures within existing budgets.

53. There are a number of potential pressures to be managed over the coming three years that will be a potential commitment against the budget resilience, for examples.

• Early departures - there will be additional costs associated with the voluntary departures programme that are well in excess of the current level of funding (see paragraphs 37 and 59).
• Discretionary pension costs - a challenge has been made to the way the MPS calculates injury pensions resulting in a potential ongoing budget pressure.
• Change programmes - It is inevitable given the scale of reductions required and the timescale for developing the 2011-14 budget that there would be variations on the budget assumptions for these programmes as business cases were developed, interdependencies and overlaps between programmes were identified and the timetable for delivery was tested. This has resulted in some of these savings being removed in their current form.
• Public Order events - it is likely that further unbudgeted costs will be incurred in the future as new demonstrations are staged throughout London.

54. The Service’s aim remains to retain the budget resilience provision in order to support the delivery of major change programmes in 2012/13 and beyond. In particular there is a need to make provision for more early departures.

The Olympics

55. In aaddition to other pressures, 2012 is the year of the London Olympic and Paralympic Games. The Games commence on 27 July 2012 and close on 12 August 2012 with the Paralympics running from 29 August to 9 September 2012. MPS Olympic activity will stretch either side of these dates, for example for policing the Olympic torch relay, with the operation running for over 100 days. With peak day demand being approximately 9,000 shifts. Given the complexity of the operation to police the Games, the plans are under constant review. The cost estimates of the Games included in this submission are therefore subject to change.

56. There are Olympics related activities planned in every London Borough and policing such events will effectively be business as usual during 2012/13. Specific abstractions for the Games will be kept to a minimum but may have an effect upon performance and potentially a cost impact. The Home Office is committed to providing funding for additional MPS Olympic costs but the challenge is to ensure all these costs are considered in advance to minimise any impact of the Games on the MPS budget.

57. Inevitably there is a degree of risk around the Olympic security costs. Costs are based on the best available estimates but should planning assumptions change then costs may vary. Processes are being developed to provide weekly financial reporting during the Games thus allowing timely notification of any financial pressures. In addition discussions are ongoing with the Home Office around flexibility for Olympic budgets in 2012.

58. The Home Office has confirmed that no additional Olympic funding will be available in 2013/14 and existing plans assume that all significant Olympic activity will cease by 31 March 2013. However a number of IT systems have been put in place, both within and without the MPS estate, to meet MPS Olympic demand. The MPS is establishing whether there is an operational requirement for maintaining any of these IT systems after the Games and this requirement will then be reviewed in the context of the Corporate Real Estate Programme and the budget pressures outlined in this paper.

Voluntary Departures and Redundancy Update

59. The latest position with regards to the early departures programme is contained in the Supporting Financial Information at Annex 6 on Appendix 2 with information on funding from Reserves at paragraph 36 and within Annex 5 of Appendix 2.

Employment Relations Environment

60. At the meeting of the Human Resources and Remuneration Sub - Committee on 14 July 2011, the committee were informed of the current employee relations challenges facing the MPS. In summary the paper referred to the ‘mood music’ shifting into anxiety and frustration from workplace representatives and their members around the amount and pace of change against a back drop of a pay freeze and external reviews into pay and conditions discussed in the Winsor and Hutton Reviews.

61. The MPS management side has regular meetings with representatives from the Trade Unions and Police Officer Associations as a means of consultation on employment related issues. However there is raised tension with the Trade Unions in regard to the current early departures and proposed reforms to existing terms and conditions for Police Staff. This has resulted in two unions disengaging from negotiations on both pay and early departures.

Governance

62. Under the Police Reform and Social Responsibility Act 2011, the Metropolitan Police Authority is being replaced, on or about 16 January 2012, with the Mayor’s Office for Policing & Crime. However it is unclear at present exactly how such arrangements might affect future budget requirements. In this paper it is assumed for now that the impact of these proposals will have no ongoing unfunded net additional cost to the combined organisations. A reserve of £2m was created by the MPA during 2010/11 to fund potential transitional costs. Any increase in ongoing funding requirement as a result of the final proposals (for instance if multiple audits are required) will have a detrimental impact on the budget gaps set out within this paper.

Capital Programme

63. The detail of the capital programme is contained within the 2012-15 Policing London Business Plan and within Annex 13 of Appendix 2. The programme is currently a work-in-progress and further development of the detail of the individual projects will continue until March 2012.

Next Steps

64. It is not possible, at this stage, to submit proposals to the Mayor which close the budget gap for 2012/13 and beyond. Work is continuing to develop proposals which, as far as is practical, safeguard operational capability. The level of future budget gaps will also depend on the outcome of discussions with the Government and Mayor on the level of government grant and precept support available to meet existing and future operational pressures.

65. In this context the MPA/MPS are continuing to work with the Mayor in making the case to Government on the exceptional operational pressures faced by the Service during the planning period.

66. On the basis of the information currently available, proposals to close the budget gaps in future years will involve further reductions in officer and staff establishments.

67. During September 2011, eleven budget scrutiny meetings were undertaken by the MPA in respect of the developing budget proposals. Each focused either on an MPS Business Group, the Capital Programme or the Balance Sheet. A comprehensive pack was provided to MPA members focusing on high level operational and financial matters, along with a summary of the MPS-wide financial position at that time.

68. Prior to the meetings, and in response to the packs provided, the MPS received and responded to 41 questions from the MPA Chair of the scrutiny meetings. Following the meetings the MPS has received 35 actions which are now either complete or approaching completion.

C. Other organisational & community implications

Equality and Diversity Impact

1. The planning framework for 2012-15 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 2012-15, based on assessment against our corporate objectives and against key equalities and diversity issues, will be available before publication of the Policing Plan in March 2012. A draft Equality Impact Assessment is provided with the Supporting Financial Information (Annex 12) highlighting consideration of equalities issues in this budget and business planning cycle.

Financial Implications

3. Financial implications are outlined in Section B of this report. The budget and business plan proposals reflect the Commissioner’s objective of protecting, as far as is practical, operational capability and delivering a balanced budget in 2012/13.

Legal Implications

4. This report relates to the Policing London Business Plan 2012-15 which has been jointly prepared by the MPS/ MPA, and which is required to be issued by the MPA before the next financial year, in accordance with section 6ZB of the Police Act 1996 and the accompanying regulations.

5. This report also forms part of the budget development and consultation process to ensure there are sound medium to long term financial plans, and it is intended to be submitted in draft form to the Mayor by the 18 November.

6. The Greater London Authority Act 1999, as amended, sets out the requirements of the Mayor to calculate the budget requirements for the four functional bodies, which includes the MPA. 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 Mayor to estimate the sums required by the MPA/MPS, the MPA/MPS provides information to the Mayor and London Assembly to facilitate this. The Mayor is required to consult with the MPA/MPS prior to setting the final budget.

7. 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.

8. The MPA/MPS as statutory bodies must only budget for activities that fall within its statutory powers. Further, the Authority is under a positive duty 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, and to ensure policing services are undertaken in the most efficient and effective manner. Any proposals to close the budget gap from savings made from a reduction in staff/officer posts is likely to result in significant employment law issues. People Services and the Directorate of Legal Services, as appropriate, will need to be engaged to ensure compliance with any statutory or regulatory requirements in relation to any redundancy or redeployment matters.

9. Any further legal implications arising from the proposed policing plan and budget and business development process will be reflected in the final report to the Full Authority.

10. In future, the Mayor’s office will only be required to consult the Commissioner in respect of the Policing & Crime Plan (which will set out the strategic objectives and replaces the Policing Plan) under section 6 of the Police Reform & Social Responsibility Act 2011(“the Act”), and the Commissioner will, as under existing legislation, need to have regard to this plan in exercising his functions (s8(4)).

11. It is however anticipated that the MPS will continue to prepare a London Policing Business plan for submission to the Mayor’s office as part of the budget development process under s4(5) of the Act, as the MPS holds all the information in relation to the resources it has to meet the strategic objectives.

Consideration of Met Forward

12. The MPA’s strategic direction setting document, Met Forward, recognises that the MPS has to make challenging financial decisions whilst minimising the impact on front line policing. This report provides an assessment of current budget gap and potential impact on staffing establishment as part of the Policing London Business Plan 2012-15 process.

Under the Police Reform and Social Responsibility Act 2011 the Metropolitan Police Authority is being replaced, on or about 16 January 2012, with the Mayor’s Office for Policing and Crime (MOPC). The Mayor’s Office will be required, within 12 months of the Mayoral elections, to produce a Police and Crime Plan setting out MOPC’s Police and Crime objectives.

Environmental Impact

13. The proposed planning framework will help to ensure that environmental sustainability issues are properly reflected in future plans and budgets. The MPS “how we police” report 2011, published on the MPS internet site, details our progress against our Corporate Social Responsibility strategy and incorporates the previous Annual Environment Report.

Risk Implications

14. There are significant risks inherent in delivering policing services within the current legislative and financial environment as described in this report and in the Supporting Financial Information Annex 11 Risk Assessment. These will be managed as part of the 2012-15 Business planning process. This will ensure the MPA and GLA are aware of implications to policing from the reduction in future years funding.

D. Background papers

The following Appendices are separate documents:

• Appendix 1 - Draft Policing London Business Plan 2012-15
• Appendix 2 – Supporting Financial Information (this includes some information which appears as an exempt appendix.
• Appendix 3 - Treasurer’s Statement on the robustness of the estimates and the adequacy of the proposed financial reserves.

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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