Draft MPA budget 2004-05

Report: 4
Date: 03 October 2003
By: Clerk and Treasurer

Summary

This report sets out the proposed MPA budget for 2004-05. The forecast out-turn for the financial year 2003-04 is also reported.

A. Recommendation

That the Committee

1. endorses or amends the draft MPA budget 2004-05 before referring it to the Finance Committee;
2. considers the Authority’s membership of the ALG, LGA and APA in the light of the budget provision; and
3. notes the forecast outturn for 2003-04.

B. Supporting information

1. This report sets out budget monitoring information for 2003-04 and detailed budget proposals for 2004-05 in respect of the MPA, encompassing the support organisation, audit, consultative groups, efficiency and effectiveness programme and consultancy.

2003-04

Developments during 2003-04

2. The approved 2003-04 budget has increased from £9.353 million to the revised figure of £9.418 million as shown below:

Forecast Outturn

3. The forecast end of year position is a projected underspending of £0.248 million, based on actual expenditure to the end of August (see Appendix 1). The forecast position for the MPA is mainly the result of staffing vacancies held during the year. The underspending against staffing for Internal Audit also reflects vacancies – this underspend is used to fund the use of external consultants to assist in fulfilling the 2003-04 internal audit programme.

4. There is an overspend of approximately £18,000 against the membership subscriptions budget. This budget head covers the Authority’s membership of the APA, ALG, LGA and the ICVA:

The overspend is mainly due to a higher than expected increase in the subscription for the APA in 2003-04 – an increase of 33.9% for six voting places. This was primarily due to the effect of the Authority being a net loser in a damping mechanism introduced by the APA when it was set up in 1997. The damping mechanism itself added 13.9% (£11,957). The APA has indicated that for 2004-05 damping will be set at 10%, which should start to relatively restore the subscription to the correct basis. In the current financial year the overspend is offset by underspending elsewhere, but in future years this may not be the case. Members might want to reconsider the Authority’s membership of the associations and consider the possibility of the APA reducing the number of voting places in order to reduce expenditure to within current budget provision. If the current six voting places on the APA were reduced to five, it is estimated that the subscription would reduce by about £17,100 to £93,400.

5. The legal expenses budget is projected to overspend by £38,000. In 2003-04 this is offset by underspends elsewhere, however for 2004-05 action is being taken to ensure the budget is balanced.

2004-05

6. The build up of the proposed budget for 2004-05 is set out in Appendix 2.

7. One item of committed growth of £100,000 has been identified (column 4 Appendix 2) relating to the Authority’s new statutory responsibility in respect of police ill health retirements. A full report on this requirement and how the authority will discharge its duty was considered at COP on 21 July 2003.

8. There is £100,000 in the base budget for the recruitment of independent members in 2003-04, as the work will be completed within the current financial year this amount is offered as a saving (column 5 Appendix 2).

9. The Efficiency & Effectiveness programme of reviews was intended as a three-year programme, ending in 2003-04. Full funding for 2003-04 is £1 million – in 2003-04 and for one year only £400,000 has been transferred to the Deputy Commissioner’s Command to support the step change programme and £100,000 transferred to Procurement Services. To formally accord with the time limited nature of the funding the full amount will be offered as a saving in 2004-05 and future years - the one-off transfer of £500,000 will be returned to the MPA and the full £1 million offered, as shown in columns 2 and 5 of Appendix 2. Possible future funding streams will be considered with stakeholders at the Efficiency & Effectiveness Project Board meeting on 15 October.

Budget analysis by work area

10. Appendix 3 shows an analysis of the draft 2004-05 budget which gives an indication of the MPA resources applied to work / committee areas. In particular this indicates the budgeted expenditure and the percentage of the total secretariat budget that can be attributed to activity connected to the Consultation Committee, Equal Opportunities and Diversity Board and the Human Resources Committee. The budget for each work / committee area is based on salary costs, any other direct service budgets (e.g. budgets for consultation activities) and an allocation of overheads (e.g. office supplies, accommodation costs).

C. Equality and diversity implications

1. None specific to this report.

D. Financial implications

1. The financial implications are highlighted in the body of the report.

E. Background papers

Existing Committee reports referred to above.

F. Contact details

Report author: Ken Hunt, Deputy Treasurer, MPA.

For more information contact:

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

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