2000/2001 budget monitoring

Report: 11
Date: 20 July 2000
By: Treasurer

Summary

This report seeks to inform members of the nature of the budget monitoring reports that will be provided, the development process for enhancing these reports, to inform members of identified pressures on the 2000/2001 budget and present the budget monitoring report for the first quarter of the financial year.

A. Supporting information

Monthly budget monitoring reports

1. The budget for the financial year 2000/01 inherited by the Authority was reported to the Authority on 10 July 2000. Monitoring of this inherited budget was referred to the Finance, Planning and Best Value Committee.

2. As an initial step in meeting the anticipated reporting requirements of this Committee, a reporting format has been developed jointly with the MPS that provides:

• a high level functional analysis of spend against budget;
• a high level subjective analysis of spend against budget;
• an accompanying commentary.

3. These will also form the basis of budget monitoring reports made to the Management Board of the MPS and to the Mayor.

4. The MPS is currently working on reducing the duration of the monthly close procedure. This will allow earlier reporting following the month end. However, these improvements have not yet been realised and as a consequence the budget monitoring report covering the period 1 April 2000 - 30 June 2000 will be tabled at the Committee meeting on 20 July 2000.

5. Henceforward, budget monitoring reports will be submitted to this Committee on a monthly basis.

Further development of reporting capability

6. The objective will be to provide this Committee with timely and accurate budget monitoring information to enable its members to undertake the proper scrutiny of the budget and to inform the decision-making process.

7. In this context, we will be seeking to develop the format and content of the budget monitoring reports provided to this Committee each month in order to address, in particular:

• member’s requirements;
• and the Code of Practice on Accounting for Best Value.

8. The format and content of reports will be developed and agreed in partnership with the MPS, as a basis of reporting to both this Committee and the MPS Management Board.

Pressures on the 2000/2001 budget

9. The following pressures affecting the 2000/01 budget have been identified by the MPS and were reported to the Authority on 10 July 2000:

• The London pay lead - the Home Office has indicated that they would expect up to £3.5 m of the 2000/01 cost to be met from the existing budget;
• New Year 2000/01 - the budget assumes a ‘normal’ New Year. If major events were to be staged significant additional expenditure (depending on the scale, location and duration of events) might be required;
• Character enquiries - the Police Act 1997 envisages a significant extension of criminal record and criminal intelligence checks for prospective employees. It is not clear whether fee income will cover the additional costs;
• Overtime - whilst budgetary provision for overtime reflects the proposals put forward by Territorial Policing and Specialist Crime, expenditure to date is running higher than forecast, reflecting uncertainty about eventual budgets by Units affected by the abolition of areas;
• Insurance - there is an earmarked reserve for compensation of £10m but no provision has been made for the costs of stop-loss or catastrophe insurance that it might be prudent to take out.

10. In relation to the London pay lead the Chair of the Authority has written to the Home Secretary requesting that he reconsider his decision not to provide additional funding to cover the full cost in 2000/01.

11. At the meeting of the Authority on 10 July 2000, members registered their concern at the potential policing costs of up to £3m for the proposed 2001 New Year celebrations. It is anticipated that details of the proposed events will become clearer in September at which point the Commissioner will report on the policing implications.

12. At this stage, it is difficult to specify the extent to which these pressures will result in costs being incurred over and above existing budget provisions. This Committee will be kept informed of the potential effect of these pressures and proposals to offset additional costs arising from these pressures through identified savings.

B. Recommendations

1. That the budget monitoring report for April 2000 to June 2000 tabled at this meeting be considered.
2. That the objective of improving reporting capability in response to a number of factors, including members’ requirements be noted.
3. That the pressures on the 2000/2001 budget identified by the MPS that may result in unbudgeted costs and the requirement to identify offsetting savings be noted.

C. Financial implications

There are potential but unspecified additional costs in 2000/2001 for which there is no specific budgetary provision and for which offsetting savings have not yet been identified.

D. Review arrangements

None

E. Background papers

The following is a statutory list of background papers (under the Local Government Act 1972 S.100 D) which disclose facts or matters on which the report is based and which have been relied on to a material extent in preparing this report. They are available on request to either the contact officer listed below or to the Clerk to the Police Authority at the address indicated on the agenda.

None.

F. Contact details

The author of this report is Colin Balkman, Deputy Treasurer.

For information contact:

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

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