Capital expenditure programme 2000/1 summary outturn review

Report: 9
Date: 19 June 2001
By: Commissioner & Treasurer

Summary

This paper provides a review of the outturn against budget for 2000-01 capital expenditure. All figures are shown on an accruals basis.

A. Recommendations

The Committee is invited to note the following:

• Capital expenditure in 2000-01 totalled £76.9m, this exceeded the budget of £72.3m by £4.6m. This represents an overspend of 6.3 per cent.

And approve the following:

• The overspend will be funded from the unapplied capital receipts. It is acknowledged that this overspend will detrimentally impact the funding available for the capital programme in future years.

B. Supporting information

1. Details of outturn expenditure against budget are detailed below for each Business group. The analysis is presented in a similar format see Appendix 1.

Budgets held by Property Services Department (PSD)

2. Across all its capital budgets PSD recorded an underspend of £1.7m against a budget of £22.4m. This represents a 7.7 per cent underspend. Individual rationales for each category of cost are shown in the paragraphs below:

3. Construction projects in 2000/01 consisted mainly of alterations and improvement schemes with budgeted costs for the year totalling £18.8m. The outturn shows actual expenditure of £18.0m. This represents an underspend of £0.8m (4.1 per cent). This figure includes an underspend of £0.5m on minor building works. This was primarily due to the continuing work around restructuring the MPS to a Borough based policing format where uncertainty over exact operational structure delayed decisions around accommodation changes.

4. Site Purchases for 2000/01 consisted of acquisition of the Commissioner's accommodation in London together with smaller purchases for covert purposes, of the allocation of £0.7m the provisional out-turn shows actual expenditure of £0.6m.

5. The consultants fees allocation was £2.8m for 2000/01. The outturn recorded was 2.0m representing an underspend of 27 per cent. The reasons for the underspend included slippage to major projects, delays in the payments of some final accounts and delays in minor building works (see paragraph 4 above).

6. Other PSD held expenditure on tools, plant and equipment was underspent by £104k because of delays in the specification of forensic drying cabinets required by the Forensic Support Units.

Budgets held by the Directorate of Information

8. Expenditure on outsourced contracts totalled £16.4 against a budget of £18.5m. This represents an underspend of £2.6m (13 per cent). Although there is some variation across the different outsourcing contracts the underspend generally reflects a combination of revised requirements and elements of slippage in refreshment/replacement programmes.

9. Expenditure on Information Technology was £17.6m against a budget of £12.4m. The overspend of £5.2m was primarily due to the following two factors:

• Information Technology in direct support of operational borough based policing (£2m). Historically this has been funded from contributions from devolved revenue budgets. As set out in the Revenue Outturn report elsewhere on this agenda, revenue funds will not be used for 2000/01 because of the overall income and expenditure position;
• Project slippage from 1999/2000. This included an additional £1.4m for the Met's Murder Enquiry system (MetHolmes), £0.7m for Prism (Human Resources) and £1.5 for Intelligence systems.

10. Expenditure on communications equipment totalled £5.9m against a budget of £6.8. The 12.4 per cent underspend was predominately due to the deferral of the National Police Radio Replacement Project (Airwaves) expenditure to 2001/2, and limited spending on communications to support Territorial Policing.

11. In-year slippage is incorporated in the outturn figures across all DoI expenditure.

Budgets held by Transport Services

12. Transport Services spent £14.1m against a budget of £11.7m. This represents an overspend of £2.4m (20.6 per cent)

13. This overspend can be accounted for by the following four factors:

• Re-specification of Dog Vans
  The specification for Dog Vans assumed in the budget was lower than that actually required.
• Equip for Service Costs
  The costs of equipping MPS vehicles for operational service was budgeted for under revenue and not capital. Subsequently the decision was taken to fully capitalise equip for service costs.
• VAT
  VAT commitments on unmarked vehicles were higher than expected.
• Replacement Parameters for Motor-Cycles
  The replacement parameters were changed in year giving rise to higher than expected replacement costs.

Other budgets

14. Other capital budgets, held by a variety of business groups, recorded an underspend of £0.4m against a budget of £2.6m. This expenditure includes payment of £1.6m to Essex, Hertfordshire and Surrey Constabularies for buildings and equipment as a result of the changes to the boundaries of the MPS.

C. Financial implications

Unapplied capital receipts can be used to fund the overspend of £4.6m. The capital budget for 2001/02 is unaffected by the outturn for 2000/01 and could remain at £85m as previously approved by the Committee. However, the funding available for future years will have to be reviewed as a result of the 2000/01 overspend.

A full expenditure and funding statement for 2001/2 will be presented to the July Committee meeting following the finalisation of the revenue position.

D. Background papers

• Corporate Finance – 2000/01 Capital Budget Outturn Files

E. Contact details

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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