Quarterly Management report - quarter 1

Report: 5
Joint meeting of the Strategic and Operational Policing and Finance and Resources Committees
Date: 23 September 2010
By: Director of Resources on behalf of the Commissioner

Summary

This paper provides a quarterly update on the MPS’ operational performance, financial position and forecasted use of resources and management of risk. It contains information for the first quarter of the financial year 2010/11.

The MPS is currently in the process of constructing the 2011-14 Budget and Business Plan. While good progress has been made, budget gaps still exist in all years in the context of the Chancellor’s statement on public sector funding and there remains uncertainty about the level of general funding. This will not be resolved until the results of the Comprehensive Spending Review are known in the autumn and the Mayor’s announcement on precept support in December. There are also significant risks relating to specific grants and other external income as partners also have to manage the impact of reducing resources.

As at the end of the first quarter, the MPS has a forecast outturn overspend of £18.1m (0.6% of net expenditure budget). Whilst Management Board has approved a range of options to drive down expenditure in order to manage the £28m reduction in revenue grant, and the £5m reduction in Counter Terrorism funding, overspends are evident in the areas of Police Staff Pay, Transport Costs, and Supplies and Services. With regard to income, uncertainty exists as to the exact levels that can be expected, principally within Territorial Policing partnership funding as partners react to increased fiscal constraints, and reduced income from Operation Reclaim.

So far this year the MPS has maintained delivery of its business plan, with clearer mitigation actions in place across our significant risks. However, the sanction detection rates of some of our Key Performance Indicators are under pressure and pressure continues in relation to both robbery and knife crime. These factors have contributed to 12 out of our 26 KPIs displaying red status. Both in year cuts and future grant reductions could well challenge further these performance levels if efficiency is not improved. The effect of budget restraint has already been seen in our ability to reach the target set for BME recruits, where budget pressures will not support any more officer intakes for the rest of this Financial Year.

A. Recommendation

That Members

1. Consider the issues raised within the report and the impact on 2010/11.
2. Remit MPS Performance Board and Governance Board to take forward further work on those areas identified.
3. Note the action proposed elsewhere on the agenda to agree a revised deployment plan to reflect the freeze on police officer recruitment prior to adjustments being made to police officer pay budget in quarter two.
4. Note the pressures on our KPIs and the choices that have been made when deciding where to target our resources (e.g. Serious Youth Violence vs. Burglary).
5. Note the actions being taken to address the rise in knife crime, which is currently (FY to end of June) missing its reduction target.
6. Accept the recommendation that reporting on the KPI relating to the “the number of Policing Pledge promises met” ceases.
7. Accept the recommendation that the KPI concerning “Percentage milestones for the Olympic and Paralympics games met” is replaced with a qualitative risk exception report.
8. Note that the MPS will be returning to the MPA with proposals for alternative measures and/or targets for confidence and BME recruitment.
9. Note the proposal to include fewer KPIs in the 2011/12 Business Plan.

B. Supporting information

Background

1. This paper draws out the key points from the attached Quarterly Management Report (QMR). The QMR provides details of the MPS’ performance, staff and officer deployment, financial outlook and risk position for Quarter One of the current financial year (2010/11). The medium term outlook considers the current financial position for the next three years.

Key, cross-cutting points to note

2. Following on from the Chancellor’s budget announcement on 22 June 2010, and the impending Comprehensive Spending Review (the results of which will not be known until October 2010), work is still being undertaken to assess the potential impacts of the spending reductions that have been highlighted to date. The results of this work will be included in future reports to the Committee. At the MPS Management Board away-day on 29 June, consideration was given to the medium-term financial position of the Revenue Budget for 2011-14. A number of detailed proposals were considered on the day and several decisions were made in terms of the development of budget proposals over the summer.

3. Subsequent to the away-day, an exercise has been undertaken by all Business Groups to review a number of things:

• To assess the level of double-count within any of the existing budget proposals
• To reassess RAG statuses where appropriate
• To identify any additional savings or growth items
• To re-categorise budget proposals where appropriate in order to provide a more meaningful analysis.

4. At the end of Quarter One the MPS forecast position for 2010/11 is a £18.1m overspend. This position takes into account the previously notified required savings of £33m following the in-year cut in Government Grant (general £28m, CT £5m).

5. In terms of crime performance, robbery continues to be a concern with a 5.8% increase, and it is also the major driver of the rise in knife crime, which is showing an increase to 4.1%. On a positive note there are slightly fewer residential burglaries. The Sanction Detection rates for the robbery, MV crime and residential burglary, racist and homophobic crime are significantly below their targets, while that for most serious violence is slightly exceeding its target.

6. TP are over strength whilst other operational business groups are under strength compared to their target strength for Police Officers. Workforce Planning hold monthly meetings with all Business Groups (Strategic Planning Workforce Forum) to monitor strengths against target, and business groups’ recruitment plans. The main focus of the current meetings is for each Business Group to demonstrate that it has recruitment, interview and training processes in place to achieve its year end target strength. This includes any amendments agreed in relation to proposals put forward as part of the Medium Term Financial Plan. Finance representatives are involved in these discussions. Business Groups are required to detail how any proposals for reductions in 2011/12 impact upon their target strengths for the latter part of 2010/11 in order to reach strength at 31 March 2011 that delivers their budget proposals. This will enable a revised Deployment Plan to be developed that delivers the right strength to each business group on a monthly basis through the remaining months of this financial year.

7. Workforce Planning has now transferred officers outside the normal Posting Panel process to accelerate the movement of officers between Territorial Policing and specialist groups. All business groups have now been asked to identify all vacancies they plan to fill and document the advertising, interview, selection and training process they have in place to fill these posts as soon as possible, and certainly no later than 31 March 2011. This exercise will, however, be affected by the officer recruitment freeze which has been implemented because of future budget pressures. Workforce planning will now be working with business groups to revise the deployment plan to reflect the impact of the recruitment freeze. Once this is done the budgets will be adjusted at the end of Quarter Two.

8. The TP Development Programme has a number of projects at various stages of either implementation or planning. These projects aim to deliver improvements in service delivery and cost savings. Principal among these are:

• The Response Model - to be piloted on Lambeth and one other Borough
• The Total Resource Centre
• A Detention OCU
• Reducing Front Counter provision
• Creation of a Borough and Area Intelligence Model
• Moving Integrated Borough Operations functionality to CCC
• Reducing TPHQ and SNT
• Full roll-out of Integrated Prosecution Teams
• Create a Crime Reporting Investigation Bureau model for Telephone Investigation Bureau/Crime Management Unit delivery
• Enhanced Area structure model
• Enhanced shift-working system

9. Following on from the MPS Management Board discussion on 21st July 2010 on the budget cut proposal briefing note, HR and DoR are doing some more detailed work which will provide an overview of where the MPS wants to be, and a set of planning assumptions to enable them to consider the best way to proceed and for the Commissioner to highlight the challenges involved to the Chair of the Authority and proposes additional activity to be undertaken over the summer months.

Performance Summary

Key Performance Areas (Appendix 1.1)

10. The table shows data relating to Key Performance Indicators (KPIs) as at the end of June 2010. Of these, 12 have a Red Status, 6 have an Amber status and 5 have a Green Status.

11. Trend information for the KPIs is shown in (Appendices 1.2 - 1.5). Where available, data on long-term performance trends from 2005/06 onwards has been included. (In some cases changes in crime definitions/measurement regimes mean this is not possible. As an example, the British Crime Survey Confidence question tracking the percentage of people who agree that the police and local council are dealing with Anti Social Behaviour and crime issues that matter in their area was only introduced in 2009). Appendices 1.2 and 1.3 show the trend information is provided in two different formats – firstly for a rolling 12 months and the complete discrete financial years. Our current performance on residential burglary YTD June 2010 looks good relative to the 09/10 baseline. We see -9.8% fewer offences than last year and our year end target is only a -4.0% reduction.

12. However, there is a significant risk of ending the year off target if/when we do not buck the expected seasonal trend in the winter months. Whilst typically, we see burglary levels from November to February between 5% and 11% higher than the year average, the profile for burglary levels through 2009/10 was different. Following some substantial investment in Operation Bumblebee from October onwards in 2009, we bucked the normal seasonal trend. We went from 10.3% up vs. 08/09 to end of October, to ending the year only +2.9% up. Hence comparing ourselves with last year's baseline will be challenging.

13. This year we do not intend to invest so strongly in combating the expected winter rise in burglary through Bumblebee, due to other priorities such a Serious Youth Violence. Much of the work we did last year will have helped build capability in Boroughs to combat burglary and improve cross-Borough working, however, without the extra resources; levels are still expected to rise. Our current risk assessment is that we need to be tracking around -14% in the first half of 10/11, while we are comparing with a relatively poor baseline from 09/10, in order to retain a favourable year end position.

14. Robbery continues to be a concern with a 5.8% increase, though personal robbery does tend to go up in the summer months. Robbery is also the major driver of the rise in knife crime, which is showing an increase to 4.1%. Operation Blunt 2 (which includes Operation Vinco) continues to be the focus of the MPS efforts to combat violent crime.

15. The strategic approach to robbery continues to be an intelligence-led focus upon geographic crime hotspot areas and those suspects who represent the highest risk of offending. The approach is intended to:

• Maintain BOCU focus within TTCG process to identify geographic areas of vulnerability mapped against timings of offences; e.g. after school hours
• Arrest, prosecute and convict individuals who commit violent crime, whether as individuals or as part of groups (gangs);
• Appoint an MPS lead on enforcement, ensuring that tactics recognise and respond to the concerns and expectations of the community

16. Within the delivery plan of the Anti-Violence Strategy, the MPS will use an intelligence-led approach to ensure a more holistic and effective management of vulnerable victims, the most harmful / dangerous offenders, and key locations. The victim, offender, location and time (VOLT) model will be adopted across all business groups that focus on most serious violence, domestic violence, hate crime, harassment, assault with injury and common assault, serious sexual offences and personal robbery. This model will allow us to target resources to achieve the greatest impact. The board will also identify ways to improve coordination within our operational practices.

17. The MPS also recognises that we cannot tackle violence and its causes on our own; partner agencies, voluntary groups, communities, parents and others all have a vital role to play. Central to the strategy is working with partners to set up a London Strategic Violence Board to ensure:

• Co-ordination - activity across the MPS and London is coordinated and complimentary, minimising duplication.
• Person-centric activity - enabling a more holistic and more effective management of vulnerable victims, the most harmful / dangerous offenders, and key locations.
• Cost-effectiveness (Value for money) - the MPS and all other public services are being asked to do more with less. Targeting core problem areas and those who cause the most harm to Londoners will reduce the long term costs of violence to all the agencies involved.

18. Motor Vehicle (MV) Crime (theft of, theft from and Sanction Detection rate) are all missing their targets. Both theft of and from a motor vehicle are showing small increases on the FYTD compared to last year but both are at their second lowest levels for the FYTD since 1998/99. However it is the first time since 1999 that the FYTD figure for theft of an MV has not shown a decrease. The SD rates for both types of crime are at the lowest for the last 6 years, as is the charge rate for MV crime. When deciding where to place resources, Management Board may consider that Motor Vehicle Crime is not a priority and that the targets for this particular crime should be reduced. Nevertheless, as MV crime forms part of Serious Acquisitive Crime (SAC), and as the trend in theft of a MV has reversed, this may mean that a reduced focus on MV crime would result in increasingly unfavourable SAC figures.

19. Confidence (Appendix 1.4 & 1.5) - The latest results go to the end of the 2009/10 and show that the Confidence in Local Policing results have exceeded its ambitious target of 51.4%. Overall satisfaction levels, however, stand at 78.1% for the year to the end of March 2010, below the target of 80%. Satisfaction among white victims is 78.8% and 73.9% for BME victims. It should be noted that data relating to the first quarter of 2010/11 will be available in October.

20. Following the Home Secretary’s announcement on 29 June that “I am scrapping the confidence target and Policing Pledge with immediate effect”. SOP Committee on 16 September considered the MPS’s response to the abolition of the Policing Pledge and concerns around the current British Crime Survey (BCS) single confidence measure. Work led by TP is ongoing to develop methods of gauging public confidence and satisfaction, alongside and complementing the BCS measures. Existing measures that assess performance against the Policing Pledge will be revised and re-aligned to methods developed for reviewing MPS customer confidence and satisfaction against promised standards of service. The Home Secretary’s announcement on the single public confidence target and the Policing Pledge provides a unique opportunity to refocus both operational activity and performance management products. Hence, it is recommended that performance against the 2010/11 KPI relating to “the number of Policing Pledge promises met” is no longer reported. The MPS will return to the MPA with its proposals on a police specific confidence measure. Note that the overall long term satisfaction trend for the MPS has remained flat with performance between 76.8% and 79.1% since 2005/06 compared to forces in our MSF group which have improved from an average of 78% in 2005/06 to 84% in June 2009 - a six point improvement. A Confidence and Satisfaction Board has been set up, meeting monthly, with the purpose of increasing the confidence and satisfaction of Londoners using a co-ordinated MPS approach.

21. Knife crime remains a challenge for the MPS, up 4.1%, with 130 more offences than the same period last year (FYTD 2010 Vs FYTD 2009) and is missing its 2010/11 target of -4.0%. However, the number of knife crimes where a knife has been used to injure continues to fall, down -5.9% compared to the same period last year. This is being driven by the rise in knife robberies which are up 10% on last year. The 6% drop in knives used to injure is supported by 3% drop in knife violence against the person offences. Knife robbery also drives the increase in Serious Youth Violence through youth victims. Of concern is the level of youth homicide (ages 1 - 19), which currently stands at 10 (FY to 11.07.2010), compared to 5 (FY to 11.07.2009). Of the 10, 6 are by sharp instruments.

22. The steps that are being taken to improve performance include:

• Op Protect additional resources and planning by boroughs for the end of term dates and bank holidays. Includes use of Air Support Unit for high risk schools and parks.
• Knife crime tactics have centred upon homicide prevention particularly in the 13-19 age range. Blunt 2 has included robbery in its focus and developed Op Vinco which provides 26 Q cars in the 13 Blunt Boroughs with the aim to detect and reduce robbery and consequently knife crime and victimisation.
• Knife Enabled Group meet fortnightly, chaired by DAC Owens, to ensure a robust and co-ordinated response is being made by the 13 Blunt BOCUs. In intervening weeks, a Commander led group is held to analyse tactics and best practice at Chief Inspector level.
• Op Shavour is targets continental coaches with significant weapon carriage by those from Eastern Europe. Particular concern to KF (Newham). STC lead. Op Shavour ran on 30th June resulting in 6 coaches being stopped, amongst other weapons, 5 CS type incapacitants were recovered.
• Serious Violence Team deployed to review knife crime investigations
• Blunt 2 task force regularly invite school pupils to a day at SOR where various tours and activities are carried out.
• Rolling programme of knife arches and hand held scanners as a preventative tool. The primary message is to create a hostile environment for those carrying a knife.

23. A KPI agreed with the MPA at the beginning of 2010/11 was “Percentage milestones for the Olympic and Paralympics games met”. The Headline Performance report to July’s SOPC outlined the problems with using this measure as a way of monitoring the achievement of a safe and secure Olympic and Paralympic Games - many of which are not within the control of the MPS. The milestones come under the Olympic Safety & Security Plan which is led by the Home Office. In place of this existing KPI, Performance Board receives a Risk exception report. This details if any of the top risks identified by the MPS’s Olympics Security Directorate have triggered certain tolerances (e.g. becomes an issue, risk score (likelihood x impact) changes by +/- 10%). It is recommended that the MPA adopts the same reporting regime in place of the existing “milestones” KPI.

24. The MPA is already aware that the target on the KPI concerning “Percentage of Police Officer recruits from BME groups compared to the percentage of people from BME groups in the economically active population” is under pressure. Given the current economic climate and a significant fall in numbers of officers leaving the Service, there are more candidates than projected vacancies for police officers. This has resulted from having to clear a back-log of PCSOs from the current group to whom we have made commitments - and the diversity of this group does not match the BME target. The MPS will be bringing proposals to the MPA on modifications to the target and/or KPI measure.

25. The MPS remains of the view that with so many measures it is difficult for us to maintain a focus, and for the public to understand clearly our key priorities. For example, we still report against the broad category of knife crime, which the public perceive as "stabbings" and impacts on public confidence. We would prefer to reduce the number of KPIs to allow narrower focus and propose that next year fewer KPIs be included in the Business Plan.

Deployment of Officers and Staff (Appendix 2.1)

26. The first quarter position shows that officer strength is within 30 of the budget target strength. PCSO strength is 57 below target, which reflects individuals being accepted on to IPLDP intakes earlier than originally planned. Police Staff are 73 under strength even with the inclusion of temporary staff covering vacancies. MSC strength is 209 below target strength although this has now been re-profiled and encouragingly, applications are now exceeding the numbers required to achieve the year end target.

27. It is clear that most business groups are delaying recruitment pending the outcome of the 2011-14 Policing London Business Plan process in order not to appoint to posts that may be deleted in the near future. Whilst it is not yet known exactly which posts will be affected, it is clear that the future budget constraints will have a major impact. Consequently, an officer recruitment “freeze” has been implemented. This is anticipated to reduce police officer numbers to approximately 900 below the original March 2011 target of 33,091. Once the actual impact is known at business group level, selection processes will need to be accelerated to bring each business group up to its new target strength and budgets will be revised to reflect the new target strength at the end of Quarter Two. As part of Quarter Two we will include an update on a paper due to Management Board in the near future on the recruitment freeze.

28. Similarly, with police staff a star chamber has been established to ensure all appointments, whether permanent or temporary staff are fully justified and do not adversely impact on future budget proposals.

Policing Objective Analysis Headcount (Appendix 2.2 and 2.3)

29. The attached appendices show the headcount position against the Policing Objective Analysis (POA) codes. This allows us to see trends in the movements in functions carried out by police officers and police staff, and are produced using national guidelines. The appendices show a variance of the position at the end of Quarter One against the position at the beginning of the year, for both Operational Policing and Support Functions. At this stage it is important to note that work is being carried out on the Operational Performance Measure (OPM) data that underpins this information, in order to verify this data, but until then, provides a good indication of the current roles carried out.

30. Some significant variances arise, including:

• Recoding of staff within DOI has shown a movement from ICT to Specialist Investigation within Operational Policing
• The movement of student officers coded to training moving to operational roles on Borough
• A significant increase in the number of Special Constables within Local Policing reflecting the successful recruitment campaign
• An increase of 77 staff in finance type roles is as a result of corrections to the allocation of OPM codes throughout the year, when clearer information was received on actual FTEs

12 Policing Activities Head Count (Appendix 2.4 and 2.5)

31. In Appendix 2.4 and 2.5, we have also included the current position in terms of our headcount against the six policing activities and seven support activities. Work has been carried out to update this model, and the information is produced using the OPM code that employees are coded to.

32. The most significant movement relates to:

• An increase in the number of MPS Special Constables by 386.
• An increase in Finance staff as a result of corrections to the allocation of OPM codes during the year.
• A decrease of 224 in Corporate Development/Performance Strategy following a detailed analysis of the posts to which this OPM code was applied. This resulted in a significant number of staff being moved to other OPM codes.

33. However, it is important to note that we are in the process of reviewing OPM codes and data to better align the corporate-wide understanding and mapping. Until this is complete, by the end of August 2010, the data is subject to change, but gives a good picture of the current activities carried out.

Financial Forecast Year-end Outturn

Revenue (Appendix 3.1)

34. Appendix 3.1 states that, as at the end of Quarter One, the MPS has a forecast outturn overspend of £18.1m (0.6% of net expenditure budget). Whilst Management Board has approved a range of options to drive down expenditure in order to manage the £28m reduction in revenue grant and the £5m reduction in Counter Terrorism funding, overspends are evident in the following areas.

• Police Staff Pay; several Business Groups have not been able to reduce staff numbers as originally anticipated.
• Transport Costs; mainly in Central Operations due to ASU aviation costs, increased contract inflation for maintenance costs and increased fuel prices.
• Supplies and Services; principally within the Directorate of Information relating to unbudgeted contract inflation for ICT and unachievable savings within Service Delivery Group.
• Other Income; principally within Territorial Policing partnership funding as partners react to increased fiscal constraints and reduced income from Operation Reclaim.

35. Management Board will need to agree revised target strengths for the BGs following the agreed officer recruitment freeze. Once this has been finalised budgets will be adjusted accordingly. This will need to be finalised in time for the Quarter Two report.

Management of Medium-Term Outlook

Medium Term Outlook

36. On 22 June the Chancellor announced his intention on public finances for 2011-15. Details of Government spending over this period will not become available until the autumn or beyond. However it is clear that the financial environment within which the Service will need to operate will be significantly worse than outlined in the Mayor’s original guidance. On the basis of the information currently available, the Service has been planning on the basis of a 25% reduction in Net Revenue Expenditure over the next four years.

37. At the Management Board away-day on 29th June, consideration was given to the medium-term financial position of the Revenue Budget within the MPS for 2011-14. A number of detailed proposals were considered on the day and agreement was reached on what work needed to be progressed to develop the 2011-14 Policing London Business Plan.

38. It has now become apparent that the Chancellor's budget statement in June did not fully reverse the impact of the increase in Employer's National Insurance contributions (ERNIC) agreed by the previous Government. Due to the fact that the MPS has a high proportion of relatively high earners, the Chancellor's decision to increase the ERNIC thresholds will only provide a marginal benefit to the organisation. This results in the need to increase the expenditure commitments in the 2011-14 budget by £18.6m each year. It can be seen that the revised budget gap figures:

• 2011/12 - £178.8m
• 2012/13 - £306.0m
• 2013/14 - £462.8m
  

39. The budget gaps described above do not include a full analysis of the risks associated with the level of specific grants and other external income over the medium-term. The total budget for these items is approximately £940m; therefore any reduction in funding would have a significant impact on service delivery as we would look to reduce expenditure in line with redundancy income. To the extent this is not possible the budget gap would increase. The withdrawal of these income streams could result in significant reductions in officers and staff numbers.

40. The 2011-14 Policing London Business Plan is being developed in the context of the Service being committed to:

• Doing all we can to maintain operational capacity
• Delivering efficient and effective support services at lowest unit cost
• Makes the most productive use of our operational asset

41. Work continues to identify savings in order that a balanced budget position can be delivered. The deadline for submission to the Mayor is 19 November and the proposals will be considered by a joint meeting of F&R/SOP on 11 November 2010.

42. It is probable that a further detailed submission to the Mayor will be required in late October/early November based on a level of grant reduction linked to the results of the CSR announcement in October. The Mayor has yet to confirm the details of this process.

43. Budget Scrutiny sessions for each Business Group will take place in late September/early October led by the Chair of the MPA.

Service Improvement Plan (Appendix 4.1)

44. As part of the regular quarterly reporting on the SIP, business groups have provided updates in July on the progress of all the projects/programmes. Appendix 4.2 provides an analysis of these savings that also identifies key SIP projects that have either significant savings built into the budget or are likely to deliver significant savings.

TP Development Programme

45. The next steps are summarised by project below:

• Response Model - A full PID for the LX pilot and the as yet unconfirmed additional boroughs is to agreed at the Strategic Programme Board (5/8/10)

46. For the following projects, to produce detailed design and implementation plans. Updates on progress are to be provided to the Strategic Programme Board (5/8/10).

• Total Resource Centre, create a Detention OCU, reduce Front Counter Provision, create a Borough and Area Intelligence Model, move IBO functionality to CCC and reduce TPHQ and SNT

47. For the following projects, an update on progress will be provided to the Strategic Programme Board (5/8/10).

• IPT (full roll-out and brigading), Create a CRIB Model for TIB/CMU delivery, Enhanced Area Model and Shifts

48. TP are currently drawing up the timetable of project information going to their programme board, TP Chief Officers Group (COG) and identifying what information should go to Management Board.

Corporate Real Estate

49. For the Corporate Real Estate project, the Board agreed that decisions on proposals in relation to occupation or disposal of corporate real estate are to be made by Property Services. Dependencies and risks were raised by the Board.

50. Key next steps:

• The CRE principles around office, training and storage will now be used to drive the accelerated rationalisation of the estate subject to normal MPA/MPS approval processes
• Ongoing joint project work (as discussed at the joint DoI, DoR & HR Away Day 6 July)
• Union, Police Federation and Staff Association consultation.
• A data collection schedule is being drafted for distribution to OCU Commanders to collate information in regard to the number of lockers in each building, how these are allocated and what support facilities are available. The data will inform proposals for rationalising space as part of the roll out of CRE plans.

Delivery of Property Services

51. Staffing Review - Pilot interviews with PSD staff underway and working well. External analysis on track, interviews with stakeholders taking place during June 2010. PSD Contracts - significant savings identified but more work required to meet the targets set.

52. Key next steps:

• Internal and external analysis - August 2010
• Blue print for future structure - October 2010
• Resources Board agreement to structure - November 2010
• Implementation - From December 2010.

Improving Police Information

53. Release 1 which was recently approved by the MPA will provide officers with more detailed information about individuals using the nominal centric data search. A short branding exercise has been carried out recently and the IPI solution is now known as 'e.Met'.

54. Key next steps:

• Information sharing rollout complete July 2010
• Release 1 Go-live October 2010

Training

55. The Training Development Proposals were presented to Management Board and Governance Board in May. The Implementation Team have been asked to look at extending the original scope of the project to identify additional savings areas and review the timescales for delivery.

56. Key next steps

• to report to Management Board to consider scope of programme

SCD re-alignment

57. The next key phase of this project is to produce a detailed blueprint by September to underpin the organisational structure for SCD. The new organisational structure for SCD was endorsed by Management Board on 29th June.

58. Key next steps:

• Implementation of the first stage of the new SCD organisational structure, which brings together similar functions in order increase flexibility and make efficiencies by end of September 2010
• Delivery of recommendations for the new blueprint, opportunities to work ‘smarter’ within the new functional areas - by end of September 2010
• New Blueprint for SCD to be agreed - by end of December 2010
• Implementation of new blueprint to commence - January 2010.

DRM (Procurement workstreams)

59. The Procurement workstream under the DRM programme seeks to deliver improved controls for contract and purchase order management, increase and sustain the saving potential of Strategic Procurement Plans (SPPs) and increase Procurement capability across the MPS.

60. External support is now on site and working to a clear 20 week plan

61. Strategic Procurement Plans due for delivery August 2010

62. Contract Management, Purchase Order Management and Enhanced Procurement Technology due for delivery September 2010

Catering

63. Updates and next steps are summarised by workstream below:

64. Refurbishment of the dining room and servery at NSY

• Refurbishment completed on time and on budget with subsequent increase in sales by 35% per annum delivering a £500,000 reduction in the subsidy
• Initial design drawings for mess and restaurant presented in June

65. Modern vending machines

• PQQ published on Blue Light - 21 expressions of interest, with 10 completed submissions.
• Successful bidders presented to Director of Catering end July.
• Subject to agreement to proceed, contract installation dates for all sites will be January 2011.

66. High street coffee offer

• Objective to increase gross profits by £350,000.
• Tender issued November 2009, contract awarded February 2010.
• Installation commences June 2010

67. Provision of EPOS

• Objective to measure and manage the business through delivery of Electronic Point of Sale (EPOS) technology in a number of key canteens
• 3 EPOS providers have been identified.
• Requirement for solution to interface with SAP may impact delivery

68. Refurbishment of front of house canteen facilities

• Potentially 8 - 10 key canteens to be upgraded to provide a modern cost effective facility that will increase revenue through increased patronage and therefore reduce subsidy.
• Outline costs received.

Transport

69. Updates and next steps are summarised by workstream below:

70. Work with Procurement to review existing transport contracts and deliver necessary amendments to terms and conditions

71. Work with Procurement to drive improvements in procurement process

• MPS given the lead for police vehicle selections and other technical areas at ACPO standardisation group.
  • Work is commencing to share expertise at a national level

72. Internal Hire Fleet

• Responses to invitation to tender (ITT) have
• Contract to be awarded to recommended supplier
• Ongoing local consultation regarding pooling of assets to inform development of the resource model

73. Reduction in Daily Hire

• Current position at 700 vehicles per day
• Summary of savings shows cumulative total of £477k
• Second generation business cases due with 403 for re-approval across Business Groups

Capital Programme (Appendix 4.2)

74. Appendix 4.2 shows the budgeted Capital Programme for the MPS for 2010/11. The revised capital programme for 2010/11 taking account of (a) ‘slippage from 2009/10; (b) revised expenditure profiles; and (c) the addition of new projects, have been approved by Management Board and MPA.

75. The information shows an overall Capital Budget for 2010/11 of £276m, predominantly relating to Property, DoI and Transport programmes. This includes a £14m which represents ‘slippage’ from 2009/10.

76. Capital forecasts for Quarter One match the revised budget information. At the present time over-programming of £33m is present within the 2010/11 programme. The Capital Programme Steering Group are reviewing the programme and given the current economic conditions, whether any further reductions would be possible to ensure that expenditure at least remains within the overall funding total of £276m.

77. The first draft of the 2011-18 capital plan is being reviewed by the provisioning departments and will be shared with Management Board in September.

Assurance

Business Risk (Appendix 5.1)

78. Appendix 5.1 is an extract from the Corporate Risk Register and identifies the risks that currently have red status. The risk status is a measure that reflects the potential impact and likelihood of the risk occurring, rather than an indication that it has materialised. All risks detailed in the appendix have had a red status throughout 2010.

79. The position on each of the risks with red status is as follows:

Risk 1 - Need to manage corporate governance

Summary of the risk position

• Improvements continue to key controls in this risk area. A small focus group will update the analysis of this risk in September to ensure that it remains fit for purpose and that all key controls have been recorded.

Risk Trend: Downwards

Ongoing work in all areas of corporate governance continues to reduce the likelihood of a significant governance failure. However, there is now a significantly increased risk for the MPS in delivering against its business plan given the Chancellor’s statement of serious budgetary cuts (25%) in policing. Management Board is working to ensure that robust plans are in place to address the budget gap. It must however be noted that the budget gap has not yet been closed in years two and three. (12/13 & 13/14)

Risk 4 - Need to manage change effectively

Summary of the risk position

• Some further work on this risk is required to ensure that the analysis and controls associated with this risk remain fit for purpose during a period of significant change for the MPS. This work is planned for the last quarter of 2010 in line with the requirement for an annual risk refresh. A partial update has been received this quarter in respect of HR owned controls.

Risk Trend: Static

Although good work is ongoing across the MPS to ensure that change is effectively managed major change programmes are now underway across many areas of the MPS against a back drop of budget cuts. The potential for a failure in change management during this period means that the risk remains static.

The announcement of a 25% budget cut in funding over the next four years means that major change programmes will need to be delivered aggressively and as with risk 3 it is critical that dependencies are fully managed to move swiftly through any blockages and ensure effective delivery.

Risk 6 - Need to Manage Information Effectively

Summary of the risk position

 The underlying analysis to this risk is held within DoI and has been undertaken and improved over a 2 year period. The key controls listed consist primarily of ongoing programmes and projects which are monitored through normal DoI management and performance processes, all have a RAG status of green. No new controls have been added this quarter.

Risk Trend: Downwards

The likelihood of a significant failure in information management continues to reduce from high to medium.

Risk 7 Need to engage effectively with the general public

Summary of the risk position

• Significant changes have been made in respect of both TP and DPA controls relating to this risk. This partly reflects that change in focus away from the Policing Pledge which has been removed from the register.

Risk Trend: Downwards

Latest British Crime Survey (BCS) confidence results show that the percentage of people who agree that the Police and local council are dealing with ASB and crime issues that matter in their area rose from 49.3% in the last FY to 54.7% at the end of the last reporting period (March 2010). This supports a downward trend in the likelihood of failure from high to medium.

Risk 10 Olympics

Summary of the risk position

• Work is ongoing with the Olympic Security Directorate to provide a refreshed analysis for this risk which summarises key risks to project and programme delivery, the potential key risks during the Olympic period of operational delivery and the maintenance of core business and potential risks arising from the Olympic legacy.

Risk Trend: Static

The likelihood of the MPS failing to meet the challenge of delivering a safe and secure Olympics whilst maintaining effective core business continues to remain medium. However, as highlighted in many of the other risk areas in this paper, the threat of funding cuts from the comprehensive spending review and in year reductions is a significant issue in this risk area. Central Operations and HR are working on this issue and recognize that it will require significant attention.

Compliance (Appendix 5.2)

80. This represents the Director of DARA's Overall Assurance score for the MPS. These markings take into account the relevant review work by HMIC, Audit Commission, MPS Inspectorate and DoI Information Assurance. (The lower the score the better the internal control). The table demonstrates that there has been a steady improvement in internal control since 2004/05 as well as highlighting a marked improvement since 2001/02. The final score of 2.6 for 2009/10 is the lowest recorded and represents a positive direction of travel.

81. Compliance is based on all accepted recommendations for Final and Follow up Internal Audit reports from 2009/10 and 2010/11. The MPS continues to demonstrate a long-term improvement in the implementation of high risk audit recommendations.

82. Work is ongoing to ensure progress on the implementation of all outstanding recommendations. Updates on progress are sought from the respective teams on a monthly basis and discussed at the Internal Inspection and Co-ordination Meeting (IICM) on a quarterly basis. Robust monitoring of recommendations is undertaken across all Business Groups to ensure timely implementation.

83. As part of the corporate Service Improvement Programme a review of the MPS Assurance Framework is now underway. The project is initially focusing on identifying what assurance and inspection activity is currently carried out within the Service. It will ultimately consider options for future service delivery to support improved working and efficiencies.

84. Route to Purchase (RTP) Compliance i.e. Invoices paid using a Compliant Route to Purchase includes all Invoices paid referencing a SAP Purchase Order, plus all Invoices paid via the Raindrop Manhattan, ELVIS, and FoxPro (for Interpreters) systems. For Financial Year 2009/10 the weighted average of 75% was achieved. For the first quarter of 2010/11 the RTP Compliance target of 80% has been consistently exceeded with a steady increase in compliance month on month. Compliance currently stands at 89%.

85. Contract Compliance i.e. value of Purchase Orders referencing an ERP Contract. For Financial Year 2009/10 an average of 42% was achieved yet Contract Compliance fluctuated throughout the year due to varying purchasing demand, which in the main can be attributed to seasonal demand for utilities (e.g. gas, electricity, etc.). For the first quarter of 2010/11, April and May have an average of 35% contract compliance whilst June shows a significant increase to 61%. This is due to a large contract-compliant payment (£16m) for electricity during the third period of this quarter.

86. Members have previously noted the degree of contract compliance and agreed a quarterly report to afford them the opportunity to evaluate the associated risks at a much earlier stage in the process. As at 11 June 2010 progress is as follows:

87. For contracts detailed in the Contract Compliance report, it is not possible at this stage to forecast the cost, if any, of challenges made by potential suppliers, but it is expected that a combination of claims being time expired, future contracts being compliant and the steps taken to mitigate the risks in the period whilst the situation is corrected will limit this unquantifiable financial risk.

C. Other organisational & community implications

Equality and diversity impact

1. There are no equality or diversity implications arising directly from this proposal. Equality Impact Assessments are undertaken on the Corporate Planning process and on Corporate Objectives.

Consideration of MET Forward

2. In year monitoring of finance and performance will help insure the delivery against MET Forward priorities. Where performance is failing the MPS will continue to prioritise resources to drive service improvement, to ensure reductions in crime and criminality, increase public confidence and driving value for money.

Financial implications

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

Legal implications

4. This report identifies proposals that are considered necessary to meet the efficiency saving targets, whilst maintaining an efficient and effective police force in an increasingly challenging fiscal climate.

5. The wide ranging measures on operational management, the financial position, forecasted use of resources and management of risk are likely to be subject to various legal processes required by statute, regulation and internal governance requirements.

6. The MPA are under a duty to ensure that their financial management is adequate and effective, and that they have a sound system of internal control and management of financial risk. This function is delegated on a day to day basis to the MPS. The measures set out in the report also support the duty to secure continuous improvement in the way the Authorities functions are exercised, having regard to a combination of economy, efficiency and effectiveness.

7. The workforce planning proposals will in particular need to be carefully managed as there are potentially a number of employment law related issues that may arise.

8. It is strongly recommended that legal advice is obtained on individual saving option proposals, as and when they are developed, to ensure legal compliance with the relevant statutory/regulatory framework.

Environmental impact

9. The environmental implications are being managed as part of the core work on the Budget and Business Plan 2011-14, which will considered the impact on the way the MPS works to improve the quality of life for Londoners and our employees and to drive the sustainable consumption of resources.

Risk implications

10. There are significant risks inherent in delivering policing services within the financial environment outlined, but these are being managed as part of the 2011-14 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

None

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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