Mayor’s Budget Guidance 2011/12

Report: 6
Joint meeting of the Strategic and Operational Policing and Finance and Resources Committees
Date: 1 July 2010
By: Treasurer

Summary

This report summarizes the Mayor’s budget guidance issued for the 2011/12 budget planning round.

A. Recommendation

That

1. Members note the mayor’s budget guidance for the 2011/12 budget planning round, and the implications for the MPA budget.

B. Supporting information

Mayor’s budget guidance

1. The Mayor’s budget guidance for 2011/12 was issued on 11 May 2010, together with a letter from the Mayor to the Chief Executive of the Authority. A copy of this is enclosed as Appendix 1, and the budget guidance is enclosed for members as Appendix 2. It is also available on the website.

2. There is significant change to the budget guidance for 2011/12 from earlier years. Principally driven by public expenditure restraints, the Mayor’s Budget guidance has been issued earlier than normal, and the MPA/MPS base budget proposals for the three year period 2011-14 need to be submitted to the Mayor by 30 September 2010, two months earlier than normal. Unlike previous years there will be no interim budget submission.

3. The purpose of the early deadline is to ensure that the MPA, along with other members of the GLA group, are in an optimum position to respond when the announcement of grant figures from the Government is made. This will also ensure that the statutory consultation on the GLA Group budget, which starts in December, will be able to focus on making amendments to the ‘base budget’ and taking into account the grant announcements.

4. Key dates in the process are:

• Budget guidance issued on 11 May by the Mayor, revised if necessary in light of emerging issues
• Budget development by functional bodies
• Submission on MPA/MPS approach to delivering efficiencies from co-operating with others, outsourcing, partnerships and shared services by 30 July
• Budget and business plan submitted by 30 September
• Preliminary draft budget proposals issued by the Mayor for consultation with each of the functional bodies by 22 October
• A formal response to the budget proposals before 19 November
• Mayor’s formal draft budget proposals considered prepared and issued for general consultation from 15 December to mid-January
• Assembly consideration of budget proposals from 15 December through to 10 February

Policy Priorities

5. The Mayor’s vision “to make London the best big city in the world” is to be delivered through focusing on the following six ambitions:

• Competitive London
• Effective transport capability
• Renewed London
• Fairer London
• Safer London
• Honest Government

6. The business plan and budget needs to reflect, where appropriate, how the MPA/MPS intend to deliver these priorities. However, the guidance recognises that in the current economical climate growth to support Mayoral priorities will be limited and functional bodies must concentrate on delivering savings. Further details on the Mayoral priorities are due to be provided at a later date.

Budget Proposals

7. To prepare for future Government grant announcements and to allow formal consultation, budget proposals are required from the functional bodies by no later than 30 September, two months earlier than previous years. These must include the following:

• A detailed 2011/12 ‘base budget’ and preliminary 2012/13 and 2013/14 revenue budgets, including full and robust savings options
• Exemplifications of the impact of additional savings for 2011/12 where appropriate
• A detailed three year Capital Spending Plan for 2011-14

8. The Mayor will then draw up his budget proposals by 22 October and circulate these to functional bodies for comments by 19 November. Our response will include completed business plans consistent with the Mayors budget proposals and any significant matters that need to be raised. Given the deadline for responses it is proposed that delegated Authority is given to the joint SOP and Finance and Resources Committee due to take place in November.

9. The Mayor’s draft component budgets will then be subject to wider consultation expected to commence on or around 15 December. It is expected that by this date key Government grant announcements for the functional bodies will have been made and it is anticipated that the Mayor’s draft component budgets will be able to incorporate the impact of these announcements, including savings exemplifications provided as part of the budget process but not incorporated into the Mayor’s October draft budget.

Financial Planning Guidelines

10. In light of public expenditure restraints, and current uncertainty about the exact scale of restraint required for 2011/12 and future years the Authority is asked to prepare a budget assuming the following budget requirement:

• 2011/12: £2,645.9M – a cash reduction in grant of 1.5% from 2010/11 (as per existing plans). Also savings exemplifications for a budget requirement of £2,615.5M, a cash reduction in grant of 3% and a budget requirement of £2,574.9M a cash reduction in grant of 5%
• 2012/13 Budget requirement of £2,619.4M a cash reduction in grant of 3%
• 2013/14 Budget requirement of £2,589.9M a cash reduction in grant of 4.5%
• Capital Spending Plans 2011-14 – Best estimate

11. Part of the budget process will be a review of the reserve requirements. The Treasurer will report to the Authority in November with an overview of the Authority’s reserves to 2014 and this will form the basis of identification of any resources available to assist the budget submission in due course.

C. Race and equality impact

The Mayor’s budget guidance gives particular emphasis to equalities issues and delivering on equalities is seen as a pre-requisite for achieving sustainability.

D. Financial implications

The Medium Term Financial Plan and Budget will provide approval for expenditure and income during 2011/12 and future years.

E. Legal implications

None given.

F. Environmental impact

None given.

G. Background papers

• Mayor’s budget guidance 2011/12

H. Contact details

Report author: Bob Atkins – Treasurer MPA

For information contact:

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

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