Financial devolution within the Metropolitan Police Service

Report: 14
Date: 21 February 2002
By: Commissioner

Summary

This report summarises the background to the work on financial devolution within the Metropolitan Police Service and provides an update on the current position. It also sets out the proposals for a proof of concept on the devolution of the police pay budget.

A. Recommendations

1. Members are asked to note the progress made on financial devolution
2. Members are asked to note the need for operational policing measure to allow devolution of the police pay budget and the intentions to secure the support of the Mayor as well as the Authority.
3. That members delegate to the Treasurer in consultation with the Budget Group of members, any approvals necessary to allow implementation of pathfinder proposals from 1st April 2002.

B. Supporting information

Impetus for financial devolution

1. The devolution of financial responsibility and control to local level is an essential part of holding managers to account for performance within the two-tier structure implemented by the Commissioner. All the major stakeholders – GLA, MPA, HMIC and managers within the MPS - support financial devolution, though there are varying views on how, to what extent and when, this can be achieved.

2. In recent years, devolution of financial responsibility has been taking place in the MPS, resulting in some 16% of the budgets already being devolved. It is, however, recognised further devolution provides an opportunity to allow local managers to manage their resources more effectively and thereby be held to account to a greater extent for their performance.

Progress to date

3. To drive the devolution process, the MPS set up a project led by Assistant Commissioner Tarique Ghaffur, Policy, Review and Standards. The scope for this project has built on the work originally produced by Accenture as part of the programme of efficiency and effectiveness reviews. All of the major stakeholders (MPA and GLA officers, MPS Business Groups and Staff Associations) are represented on the board for this project, which is chaired by AC Ghaffur, as well as the operational and support business groups of the MPS.

4. Six boroughs were identified as pathfinder sites on which devolution would initially take place. The number of sites was limited to ensure that appropriate support and monitoring could be put in place. The boroughs taking part in the proof of concept are:

• Barnet
• Bromley
• Camden
• Hackney
• Lewisham
• Sutton

5. Management Board agreed that the budget lines should be considered within three categories

• lines to be devolved - those which local managers can clearly manage and control and therefore be accountable for
• lines not to be devolved – where devolution is not practicable since local managers cannot at this time exercise full control or where economies of scale would be lost as a consequence
• lines where more work is required – for example those where contractual arrangements exist or where further work on disaggregation is required.

6. Appendix 1 shows the lines that sit within each category. There are already a number of lines devolved to local level throughout the MPS and it is intended that more will be devolved across the MPS from 1 April 2002. Building on the current Accenture review, it is also intended that lines for forensic medical examiner fees and interpreter fees will be looked at for devolution.

7. A scheme of devolved financial management has been drafted and detailed guidance on the management of devolved lines has been prepared to support this process at the pathfinder sites. It has also been identified that devolution needs the appropriate infrastructure to be in place, including skills, systems and procedures. Investment will be required in some places to put in place this infrastructure and, as a consequence of the brigading of the human resources and finance functions in headquarters business groups, a sum £750k has been made available for this project.

8. A thorough method of evaluation for the project has also been developed.

Key issue

9. The devolution of the police pay line is a key issue for this project. The borough commanders at the pathfinder sites are keen that this line is devolved along with the flexibility to use resources within this line to fund civil staff posts or other types of expenditure. Being able to use the flexibility of a devolved police pay line would allow, for example, the funding of civil staff posts which in turn would release police officers to focus on service delivery. Devolution of the police pay line would increase the level of devolution within the MPS to 56% of total budget. The MPS view is that if police pay cannot be devolved, the purpose of devolution itself is questioned.

10. The obstacle to this is the political imperative to maintain and increase police officer numbers. What is needed is a means of measuring the level of operational policing which would legitimise civilianisation options to release officers from non operational duties and unproductive time.

11. In support of a move towards devolving the police pay line, the amount of officer and civil staff time spent on front line duties and service delivery is being defined, using amongst other tools the computer aided resources management (CARM) software. This will enable the MPS to better identify the amount of time being spent on service delivery rather than focusing on a total number of officers allocated to a particular borough.

12. There is a commitment therefore to pursue devolution of the police pay line in a controlled exercise that would allow two of the pathfinder sites to have that line devolved to them with the opportunities to use the funds flexible.

13. The two sites identified for this exercise are Bromley and Lewisham. Both of these Boroughs have mature financial management systems and processes, with highly experienced and qualified senior resource managers (SRM's) in place. Resources from our Finance Department will also be available to support these sites.

14. Part of the exercise will be to link the flexible use of resources that this approach will provide with performance measurement to show the effect that such flexibility can have on performance. This proposal would have to be supplied by both the Mayor and the MPA. An initial presentation to the Mayor and Chair of the MPA is planned to test that support

Next step

15. Financial devolution is a fundamental development of financial management within the MPS. The proposed arrangements for the pathfinder boroughs will therefore require the approval of the Authority. Given that the next scheduled meeting of this Committee is not until April 2002, the Committee is asked to delegate to the Treasurer, in consultation with the Budget Group of members, any approvals necessary to allow implementation by 1st April 2002.

C. Financial implications

An initial sum of £750,000 has been allocated to provide the support required to the six pathfinder sites. Additional investment is likely to be required to support the devolution of financial management across the MPS in the future. The benefits are likely to be tighter budgetary control and more informed decision making at local level leading to improved operational performance.

D. Background papers

None.

E. Contact details

Report author: Assistant Commissioner Tarique Ghaffur, MPS.

For information contact:

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

Appendix 1: Budget lines within the three categories

Already devolved

• Police O/T & Exps
• Civil Staff Pay & Exps (Temp' Staff)
• Traffic Wardens Pay & Allowances
• Training
• General Building Maintenance
• General Vehicle Chgs'
• Travel
• Office furniture / Equipment & Maintenance
• Catering
• Clothing
• Office Supplies
• External Consultants
• Dogs & Supplies
• Miscellaneous
• Communications
• CID Incidental Expenses

To be devolved

• Police pay
• Interpreters and translators
• Forensic medical examiner fees
• Abstractions to CO11/SO
• Civil staff recruitment
• Fixed call charges
• Property tenant costs (utilities and repairs)
• Polcols repair costs
• Telephone extensions
• Forensics
• Moves/ changes to computers

Not to be devolved

• Pensions
• Police recruitment
• Insurance
• Probationers
• Mandatory training
• Compensation costs
• Communications infrastructure (IS development, network maintenance)
• MPS strategic management and policy
• Capital expenditure

Further work required

• Central finance costs (ie processing costs)
• Central HR costs (excluding training and recruitment)
• Central PSD Central DOI (excluding IS development)
• Vehicle ownership, maintenance and parts (lease charges)
• Non-mandatory central training
• Internal consultancy services

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