Resource allocation formula - process for review

Report: 12
Date: 21 November 2000
By: Commissioner

Summary

Following acceptance of the paper 'Resource Allocation Formula - Challenges and time for review?' at the Committee’s meeting on 17th October 2000, this paper seeks approval for an outline plan to review and enhance the MPS Resource Allocation Formula (RAF) in time to inform the 2002/03 allocation process.

A. Supporting information

Outline plan

Any new method to support the 2002/03 allocation process will need to be available for testing and evaluation in comparison to RAF by September 2001. The following project stages are aimed at meeting that deadline.

Stage 1: Set up Project Board
MPS Corporate Development Group will set up a Project Board to undertake management of the project, in consultation with the Metropolitan Police Authority.

Stage 2: Review of options
External consultants will be commissioned to:

1. undertake discussions with stakeholders in the allocation process, including BOCU commanders, Territorial Policing management, Metropolitan Police Authority, Greater London Authority and Local Authorities;
2. review the ‘state of the art’ in respect of resource allocation methodologies in public service organisations whose size, structure and complexity is comparable to the MPS;
3. assess options for modifying or replacing RAF.

A first draft of the briefing for consultants who may satisfy this requirement is attached at Appendix 1.

Stage 3: Testing of options
As options emerge during Stage 2, MPS Consultancy Group will assess their implications by producing and analysing resource allocations in comparison to RAF.

Stage 4: Selection of preferred option
The Project Board and Corporate Development Group will obtain agreement from MPS Management Board and the MPA that the preferred option should replace the current version of RAF.

Stage 5: Completion of model development
Consultancy Group will undertake the work required to establish and document the preferred option to replace RAF.

Stage 6: Use of the new model for 2002/03 resource allocation

Timetable

B. Recommendations

1. Members are asked to note and agree to this plan; and specifically to Stages 1 to 3.
2. The Committee is asked to nominate one or more Member or officer to represent the MPA on the Project Board.

C. Financial implications

The consultancy study in Stage 1 will involve additional external costs for 2000/01 and 2001/02. In order to scope the requirement for external consultants MPS Corporate Development Group has made contact with the Home Office to obtain the costs of comparable studies.

Stage 1 will also require MPS resources from Corporate Development Group, Department of Procurement and Commercial Services and Consultancy Group to manage the purchasing process and the project management process.

Dependent on the outcome of Stage 2, there will be a larger requirement for MPS Consultancy Group resources in Stages 3,5 and 6. There may also be a requirement to purchase external data to support any new allocation model. Both of these elements will be quantified during Stage 2.

As noted in the previous paper, the allocation process is currently aimed at effective distribution of resources, rather than determining overall resource levels. There should, therefore, be no long-term financial implications in principle, although the review of the formula may lead to a re-definition of its scope.

D. Review arrangements

Corporate Development Group will convene a Project Board to manage Stages 1 to 5 of the review. The MPA will be represented on the Project Board. Progress reports from the Project Board will be presented to future meetings of the Finance, Planning and Best Value Committee.

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 above 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 Michael Debens, MPS Corporate Development Group.

For information contact:

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

Appendix 1: Consultancy study of MPS resource allocation

Specification of requirements

Introduction

Since 1995 the MPS has used its Resource Allocation Formula (RAF) to support the allocation of its overall resource budget to its component Areas (and more recently to Boroughs). RAF was developed within the MPS and its structure reflects the policing responsibilities of the Borough Operational Command Units (BOCUs).

Explanation of RAF mechanism.

The review

The MPS now wishes to review RAF and develop its resource allocation for future use. It is seeking consultants to undertake the following components of the review.

• Consultation with stakeholders in the allocation process, including MPS management, Borough commanders, the Metropolitan Police Authority, Greater London Authority and Local Authorities;
• An examination of the ‘state of the art’ of resource allocation in comparable organisations. This will include selecting organisations with comparable resource allocation problems, reviewing their allocation processes and consulting academic experts in resource allocation;
• Proposing options for the development of RAF;
• Assessing the implications of these options.

Timescales

The project should start during January 2001 and be completed no later than the end of June 2001. The preferred timetable is:

Preference will be given to tenderers who can meet, or improve on, this timetable.

MPS resources

The Project Sponsor is …………

The Project Liaison is ……………who will be responsible for arranging briefings with MPS contacts.

A Project Board will oversee the project.

Office space for consultants (or working offsite?)

Required skills and experience

The consultant(s) must be able to demonstrate experience of resource allocation in large organisations and an appreciation of the issues surrounding resource allocation in the public sector.

Vetting necessary?

Deliverables

The consultants will provide:

• An initial plan outlining their approach;
• Periodic progress reports to Project Board;
• Documentation on emerging findings;
• A final report detailing options for future resource allocation support in the MPS, and the implications of those options;
• Presentation of findings to (?)

Financial arrangements

Invoices will be forwarded to the Project Liaison, monthly, in arrears.

The price of the contract should be inclusive of expenses, telephone calls and other incidental costs.

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