Forecast outturn 2007-08 and MPA Budget 2008-09

Report: 9
Date: 06 March 2008
By: the Chief Executive and Treasure

Summary

The 2008-09 budget for the MPA is set out, including details of the agreed growth, together with the forecast outturn position against budget for 2007-08.

A. Recommendations

That members note the report and agree to transfer the 2007-08 underspend to MPA reserves and provisions.

B. Supporting information

1. This report sets out the provisional position against budget for 2007-08 and details of the proposed budget for 2008-09 for the MPA.

Forecast Outturn 2007-08

2. As part of the Improvement Programme, work was undertaken to realign the 2007-08 budget with the corporate priorities and the new organisational structure. Each team now holds its own budget.

3. The approved 2007-08 budget is £11.465m, as shown in the budget book. There have been no in-year adjustments to the budget, however an allocation from the centrally held pay inflation pot will be made now that the pay award for 2007-08 has been agreed. Against the budget as it currently stands an underspend of £356k is forecast, as at the end of January.

4. The main variances from budget are described below and a detailed analysis is attached at Appendix 1.

5. SMT & Treasury: overall forecast underspend of £142,000. The main variances from budget are for:

• Staffing, reflecting one vacant post in the Treasury team, plus no decision has been made about performance related pay for SMT members, an allowance for which is included in the budget;
• Consultants, reflecting expenditure to date and the likely level of use of consultants and
• External audit fee, based on the planned fee indicated in the 2007-08 audit plan.

6. Communications: a projected underspend of £26,000, much of which is on staffing, reflecting the recharging of the team’s administrative post to HR. In addition there are small underspends on sponsorship and publicity.

7. Corporate Secretariat: a projected overspend of £219,000 there are a number of overspends forecast within the Corporate Secretariat budget:

• Staffing, reflecting the use of temporary staff, the re-grading of two posts to levels higher than budgeted and the part-year ‘over-staffing’ of the HR team;
• Employee related expenditure, reflecting the cost of redundancies across the Authority following the Improvement Programme.

8. In addition, there is an outstanding rent review for Dean Farrar Street that is likely to result in an increase in the rent, backdated to April 2007. This is not yet reflected in the forecasts as the impact is, as yet, unknown so it will be necessary to create a provision to cover this cost.

9. There are a number of smaller offsetting underspends, the main one being an underspend of £50,000 relating to independent member recruitment. As this recruitment will now take place within 2008-09 it will be necessary to carry forward this budget.

10. Corporate Development and Strategic Oversight: a forecast £313,000 underspend, reflecting a high number of vacancies within this team plus no alternative initiative has yet replaced the Safer London Panel.

11. Professional Standards: an overspend of £113,000 is forecast, due to an overspend on the legal expenses budget. It is difficult to anticipate total expenditure associated with legal expenses because of their unpredictable nature. This budget absorbs all legal fees for work undertaken for or on behalf of the MPA.

12. Engagement & Partnership: an underspend of £41,000 is projected, due in the main to underspending on the budget for community consultation groups that are to be developed and the ‘special projects’ fund against which existing groups were asked to bid.

13. ICV team: the main underspends making up the forecast underspend of £109k are:

• an underspend in staff pay reflecting two vacancies that the team had for the majority of the year. Both these posts are now filled.
• underspends on panel, volunteer and ICV training expenses based on actual expenditure to date. When the budgets were first put together there was no previous information on which to base the budgets and they were therefore based on best estimates. Volunteers are being encouraged to claim for expenses but it is unlikely that expenditure on this budget head will increase dramatically.
• Unbudgeted income received, reflecting the repayment of unused funds from previous years from a number of panels and a contribution from the British Transport Police (BTP) reflecting the work that the ICV team are doing for them. It is likely that the BTP income will continue in future years.

14. Internal Audit: a forecast underspend of £56,000 due to vacant posts within Internal Audit.

15. The requested transfer of the overall underspend to reserves and provisions would provide for the impact of the rent review, independent member recruitment, and a number of small initiatives, including a new visits database for the ICV team, that have been identified.

16. The Authority also holds a capital budget of £425,000 for the Connect Programme – to deliver a flexible, resilient and secure IT infrastructure. The programme has slipped and it is unlikely that any expenditure against this budget will occur in the current financial year. The 2008-09 capital budget will be revised at an appropriate point in the new year to reflect slippage identified during the closing of the 2007-08 accounts; this will ensure the programme is funded in 2008-09.

Budget 2008-09

17. The 2008-09 budget currently stands at £12.7m, incorporating:

• growth of £500,000 as agreed at Co-ordination and Policing committee on 7 February, covering three new posts, accommodation works and specialist consultancy support
• full year effect of growth agreed for 2007-08 of £600,000 to cover improvements to community engagement, the revenue implications of the ISIT Connect Programme and independent member recruitment and induction costs agreed as part of the medium term financial plan
• allocations from the inflation pot to cover uplifts in member allowances and the salary element of funding to Community Engagement Groups.

18. There are two outstanding adjustments to the 2008-09 budget that will be made prior to the start of the financial year:

• Additional budget to cover the 2007-08 pay award now that the award has been agreed
• A reduction in budget arising from changes in National Insurance thresholds. This will form a small contribution to the financing of additional services for youth and violent crime.

19. Attached at Appendix 2 is the 2008-09 budget shown against the budget for 2007-08.

C. Race and equality impact

1. Funding within the base budget supports the work of the Equalities & Diversity Unit (E&DU) sitting within Corporate Development and Strategic Oversight. The unit aims to ensure the MPA meets its duties and aims relating to equal opportunities; enabling 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.

2. An equality impact assessment will be undertaken for the recently agreed growth items.

D. Financial implications

Any approved transfer of underspends to provisions and earmarked reserves will be actioned as part of the closing of the 2007-08 accounts.

E. Background papers

None

F. Contact details

Report author(s): Annabel Adams, MPS

For more information contact:

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

Send an e-mail linking to this page

Feedback