MPA budget 2004-05 and projected outturn 2003-04

Report: 4
Date: 15 March 2004
By: Clerk and Treasurer

Summary

The 2004-05 budget for the MPA is set out, together with the projected outturn position against budget for 2003-04.

A. Recommendations

That Members

1. Note the report;
2. agree the carry forward of £10,000 from the underspent recruitment budget for independent members (paragraph 5), up to £135,000 from the underspent consultation initiatives budget (paragraph 6), up to £40,000 from the underspent accommodation budget (paragraph 7), and any unspent budget from the Efficiency and Effectiveness funding (paragraph 9);
3. request that Finance Committee consider the scope for establishing appropriate reserves for the third floor accommodation (paragraph 18).

B. Supporting information

1. This report sets out the forecast position against budget for 2003-04 and details of the agreed budget for 2004-05 for the MPA, encompassing the support organisation, audit, consultative groups, efficiency and effectiveness, and the MPA contingency.

Developments during 2003-04

2. The approved 2003-04 budget has increased from £9.353 million to the revised figure of £9.483 million, as shown below:

Forecast outturn 2003-04

3. The forecast end of year position is a projected underspending of £639k based on actual expenditure to the end of January (see Appendix 1). The forecast does not include any expenditure on the Morris Inquiry.

4. The underspend on the secretariat staffing budget is due to posts being vacant during the year. In internal audit part of the underspend on the staffing budget is used to fund the use of contract auditors to support the internal audit work programme. Recruitment activities are planned to bring the MPA toward a ‘fully staffed’ level in 2004-05.

5. There is a projected underspend of £60,000 on the one-off budget for independent member recruitment – committee agreement is sought to carry forward £10,000 of this underspend to fund induction and training for new and existing members in 2004-05.

6. There are a number of areas of work for which the Community Engagement team are seeking to carry forward funding from the 2003-04 underspend:

• £80,000 to establish and maintain a Citizen’s Panel,
• £5,000 to undertake research around disability,
• £50,000 for targeted engagement work in a number of boroughs.

7. The anticipated underspend on the accommodation budget (up to £40,000) has been earmarked for the purchase of a back-up generator for Dean Farrar Street, subject to committee agreement.

8. The overspend on the legal expenses budget is being addressed in 2004-05 through the creation of a professional standards officer post who will undertake duties presently undertaken by contractors (see paragraph 16).

9. It is anticipated that the Efficiency and Effectiveness (E&E) budget will be underspent by approximately £450,000. It is proposed that the anticipated underspending is carried forward for use in 2004-05. This is the last year of the three-year programme; the annual funding of £1 million therefore drops out of the 2004-05 budget.

10. In summary the requested carry forwards are:

11. As highlighted in appendix 1, £94k of the MPA reserve has been used in 2003-04 to finance expenditure on:

• the Authority’s responsibilities around ill health retirements of £75k (as agreed at CoP 21 July 2003), and
• training of £19k (as agreed at CoP 4 April 2003).

Pressures in 2003-04

12. The Morris Inquiry - the independent inquiry into professional standards and employment matters in the MPS commissioned by the Authority - could cost up to £1.1 million (spanning two financial years – anticipated expenditure is £590k in 2003-04 and £550k in 2004-05). There is some funding available within the MPA reserve – c. £300,000 – and a small underspend on the secretariat budget – c. £80,000. Proposals on funding will be brought to Finance Committee as part of the review of reserves when closing the 2003-04 accounts.

13. Possible outstanding litigation will be taken into account in making the final decisions about reserves and provisions in the final outturn.

Budget 2004-05

14. The detail of the agreed £9.091 million budget for 2004-05 is summarised below:

* funding in respect of the 2004-05 pay award to be allocated during 2004-05

Agreed Growth 2004-05

15. The 2004-05 budget incorporates the areas of growth agreed during the budget process:

MPA involvement in police ill health retirement procedures – funding relating to the Authority’s statutory responsibility. A full report on this requirement and how the Authority will discharge its duty was considered at COP on 21 July 2003.

Members’ Allowances – an early allocation from the inflation pot to cover the annual uplift in members’ allowances, in line with the Police Support Staff Council pay award.

Community & Police Consultative Groups – an early allocation from the inflation pot to cover pay awards in order to finalise the distribution to individual groups before the start of the financial year.

Re-organisation of budget for 2004-05

16. When the draft secretariat budget for 2004-05 was considered by COP (03-10-03) concern was raised over the lack of growth in the equalities budget and the impact that this could have on equalities work. The Race & Diversity work programme agreed by EODB (16-10-03) required £50,000 additional budget. The Deputy Clerk indicated that consideration of the Race & Diversity and Community Engagement budgets together should enable the priorities of each to be achieved (this is reflected in the analysis of the budget at Appendix 3).

17. A re-organisation within the secretariat has seen the Consultation and Diversity Unit split into two teams – Race & Diversity and Community Engagement. In order to ensure that both teams are appropriately resourced two community consultation co-ordinator posts from the Community Engagement team have been redesignated as policy development officers for Race and Diversity.

18. A new post – professional standards officer – has been created reporting to the Deputy Clerk. The officer will deal with ACPO conduct matters, pensions appeals and other individual cases/complaints dealt with by the Authority. It is envisaged that appointment to this post will significantly reduce the use of external solicitors, and the post can therefore be funded from within the existing legal expenses budget.

19. There has been some additional minor rebalancing of budgets – shifting budget allocations from areas of underspend in 2003-04 to areas where there are identified expenditure pressures in 2004-05, such as telephony and subscriptions.

Pressures in 2004-05

20. The growth in the number of posts and recruitment to those posts has necessitated the secretariat reclaiming from the MPS the third floor at Dean Farrar Street to accommodate staff. Whilst this does not represent a growth in the overall MPA/MPS accommodation budget, it is an unfunded budget item in the secretariat budget. It is recommended that members ask Finance Committee to set aside £175,000 from the 2003-04 MPA/MPS underspend for rent, rates and fitting out costs and that £125,000 be included in the 2005-06 Medium Term Financial Projections.

Budget analysis

21. Attached at Appendix 3 is a reworked analysis of the MPA budget, focussing on policy areas. The analysis shows the budget for each work / committee area, 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). This is also shown as the percentage of the total secretariat budget that each allocation represents.

C. Equality and diversity implications

1. The Race & Diversity work programme was agreed by EODB (16-10-03) and is supported by funding within the base budget. The work programme aims to ensure the MPA meets its duties and aims relating to equal opportunities. The programme enables the Authority to better engage with the MPA’s equality target groups, improve its own and the MPS’ diversity performance, address key issues of community concern and develop the appropriate structures and processes to fulfil its equal opportunities policy.

D. Financial implications

As set out in the paragraphs above.

E. Background papers

None.

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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