MPA budget monitoring to December 2000

Report: 4
Date: 22 January 2001
By: Treasurer & Commissioner

Summary

This report sets out the current position against budget, the forecast outturn for the year and highlights key issues.

A. Supporting information

1. The appendices (see Supporting material) set out the financial position in respect of the MPA Budget for 2000/01:

• Appendix A: Budget and forecast full year outturn
• Appendix B1: Budget and actual expenditure (subjective basis) year to date
• Appendix B2: Budget and actual expenditure (functional basis) year to date

Revenue

2. The revenue outturn forecast for the year 2000/01 is an overspend of just over £1.0m. This projection represents an improvement of £320,000 over the forecast position reported to the December Committee

3. There is no reason to alter projections of income with respect to specific Home Office funding. No formal response has yet been received to the request for additional funding in respect of the policing of the May Day events.

4. Key points to bring to the Committee's attention in respect of the revenue forecast (Appendix 1) are that:

• The forecast for police pay continues to exclude any adjustment for London allowance anomalies which affects just over 3000 officers, which, if agreed, would cost an additional £2.5m in 2000/01. It does however include an additional £1.1m in respect of the projected tax liability accruing should free rail travel for police officers be agreed.
• The forecast overspend on Transport follows a reassessment of fuel costs and an increase in the use of hire vehicles at the local level. The decision to maintain MPS bulk fuel sites at full capacity in the event of fuel protest disruption has increased spend which should be impact the forecast favourably when the new stock levels are updated in the accounts.
• The forecast overspend for Compensation has been reduced to reflect more accurately the year to date position.
• Pensions expenditure has been reduced to take account of the lower than expected number of medical retirements and a more informed view of the numbers officers expected to retire after 30 years service.
• The revenue to capital transfer forecast has been cut to reflect the limited availability of budget savings to allow for this equipment funding option.
• The significant forecast swing on the costs of depreciation and capital charges is caused by the continuing validation and verification of the equipment and technology element of the corporate asset register. Overall this does not adversely effect the total net current expenditure quantum because of the accounting rules with the Local Authority financial regime.

5. Whilst the forecast overspend has reduced overall, there continue to be projected movements of some magnitude on certain expenditure headings as more scrutiny is given to the financial position on the "run-in" to the year end. The contingency plan to slow down non-pay expenditure in the last months remains in place should the need arise.

B. Recommendation

The Committee is recommended to note the information presented in the attached appendices (see Supporting material) and the explanations for some of the key variances presented.

C. Financial implications

The forecast outturn position has improved since being reported to the December committee and net current expenditure is now forecast to be £1.01m or 0.1 per cent over budget.

D. Review arrangements

Further monitoring reports will be submitted to future meetings of the 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

This report has been jointly agreed by the Treasurer of the MPA and the MPS Director of Resources. The author of this report is Bob Alexander, Head of Finance.

For information contact:

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

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