Capital programme monitoring – quarterly monitoring report – quarter 4

Report: 5
Date: 13 June 2011
By: Director of Resources on behalf of the Commissioner

Summary

This report provides Members with a more detailed review of the MPS capital programme as at the end of quarter 4 (March 2011).

A. Recommendations

That members note the quarter 4 (March 2011) outturn position for the Capital Expenditure Programme 2010/11.

B. Supporting information

Background

1. Resources & Productivity Sub-Committee members have requested that a detailed quarterly capital monitoring report be prepared, which provides more comprehensive monitoring information than that provided in Appendix 4 of the combined monthly revenue and capital monitoring report. This report provides details of the financial and non-financial impact of significant project slippages and any actions being taken to resolve any identified underlying issues.

2. This report reviews the capital out turn for financial year 2010/11. Appendices 1 to 3 provides a comprehensive analysis of the Capital Programme 2010/11 for members.

3. Information is provided in this report at programme and major project level. This adds detail beyond that provided in the monthly revenue and capital budget monitoring report, which is presented to the Finance & Resources Committee.

4. Appendix 3 shows the 2010-11 performance of projects with a whole life project budget greater than £5m.

Appendix 1 - Summary Capital Programme Monitoring Report.

6. Appendix 1 is the same appendix that is included in the monthly revenue and capital monitoring reports submitted to the MPA. It shows the overall position in terms of year to date capital expenditure, annual approved and revised budgets, annual forecast expenditure and forecast variances for each element of the capital programme. It also provides a breakdown of how the capital programme is funded.

7. Outturn expenditure for 2010-11 is £190.5m, representing 68.9% of the revised annual approved budget of £276.3m. Movements in project budgets are reflected in the revision of the 2011/12 to 2017/18 capital programme which will be reported to the Finance and Resources Committee scheduled for 6 July 2011.

8. The level of capital receipts to be applied to funding capital expenditure in 2010/11 remains at £20m. However, the MPA Finance & Resources Committee on 21 October approved the disposal of additional properties and noted that the actual level of capital receipts in 2010/11 will now reach £22.3m. The additional £2.3m has been put to reserves for use in the funding of the 2011/12 to 2017/18 capital programme.

Appendix 2 - Detailed Capital Programme Monitoring Report.

9. Appendix 2 provides a summary of individual projects or schemes of work within each provisioning strand of the Capital Programme. It has been extended to capture the detailed information requested by the MPA: specifically,

• reasons for reported variations;
• a statement regarding how underlying issues are expected to be resolved;
• the financial and non-financial impact (including associated risks); and
• information on projects being held in reserve to bring forward should any slippages occur.

Appendix 3 - Projects with budgets greater than £5m Monitoring Analysis

10. Appendix 3 provides similar information to Appendix 2 but specifically for individual projects whose overall project budget is greater than £5m over the life of the project. The revised budget for 2010-11 for these schemes total £128.5m (47%) of the total budget of £276.3m.

Capital Programme Funding.

11. The financing situation was monitored throughout the year to ensure the capital programme remained affordable and sustainable in accordance with requirements of the Prudential Code. Appendix 1 shows the funding take up in the year. We have not taken up £30.4m of expected borrowing. This means that our overall funding was within the Prudential Indicators Operating Boundary and the Authorisations limits. The actual MRP for 2011/12 will be lower than budget by approximately £1.5m as a result of the 2010/11 out turn.
12. As the funding take up was lower than planned and the under utilised values will be carried forward to assist with the funding of the programme 2011/12 - 2018/19. The detailed funding deployment will be included in the first revision of the capital programme which will be presented to the Authority in July 2011. There is £71.9m general funding available to supplement the forward programme, £30.4m from unused borrowing 2010/11 and a balance of £41.5m on the Capital Reserves account.

C. Other organisational and community implications

Equality and Diversity Impact

1. Equality Impact Assessments are completed on business group activities undertaken where there is deemed to be an impact. The equality and diversity implications are identified in business cases and reports on individual proposals through our normal decision making channels.

Met Forward

2. Met Forward recognises that the MPS has to make challenging financial decisions whilst minimising the impact on front line policing. This report outlines the current financial position against the Capital plan approved by the Authority (Policing London Business Plan, 2010-13).

Financial Implications

3. The financial implications are those set out in the report.

Legal Implications

4. This report provides financial management information relating to the capital programme, which is delegated on a day to day basis to the Director of Resources on behalf of the Commissioner. As this report is for information only, there are no direct legal implications arising.

Environmental Implications

5. There are none specific to this report.

Risk Implications

6. Risk management is integrated into the Service’s budget, business planning and performance management processes. Business Groups and Management Board monitor risks on a regular basis. This report is part of this framework commenting on the risk to delivery of the capital plan for 2010/11.

D. Background papers

None

E. Contact details

Report authors: Anne McMeel, Director of Resources, MPS

For more information contact:

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

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