2002/03 revenue budget update

Report: 11
Date: 29 May 2002
By: Treasurer and Commissioner

Summary

The report updates members on developments impacting on the 2002/03 revenue budget.

A. Recommendations

1. The Committee is asked to note the report.

B. Supporting information

Budget book

1. The approved budget for 2002/03 is set out in the Budget Book a copy of which will be circulated to all Authority members. Copies should be available by the time of the Committee meeting.

Transport OCU

2. The special services agreement (SSA) with TfL for the provision of the Transport OCU (TOCU) was approved following a report to the Authority at its meeting on 25 April 2002. The forecast costs of the TOCU to the MPS in 2002/03 continue to reflect the provisional estimate of £24.1m referred to in that report. The costs incurred in delivering the TOCU will be reimbursed by TfL. The new TOCU is expected to comprise in the region of 530 staff of whom some 200 are police officers.

Counter-terrorism

3. A briefing note on the Home Office announcement of additional resources following the Chancellor of the Exchequer's Budget was circulated to members of the Authority earlier this month. The total additional funding for the MPA for the current year is £62 million for counter-terrorism and street crime.

4. A sum of £49 million has been allocated to the MPA to fund enhanced counter-terrorism activity. However this provision also has to cover the costs of policing the Golden Jubilee and £15 million is 'earmarked' for recruitment of 460 community support officers.

5. It is clear that, given a realistic programme for recruiting community support officers the earmarked sum of £15 million significantly exceeds what could be spent during 2002/03. It is therefore suggested, as a first step, that the costs of the Golden Jubilee are set against that provision. The initial assessment is that the remaining balance of £34 million could fund approximately 680 police officers on a full year basis.

6. The MPS SMT, in consultation with the MPA Treasurer, have consequently proposed an initial allocation of the counter-terrorism money as follows:

* Includes, for example, Heathrow. Precise split between commands to be finalised.

7. The MPS are reviewing the practical issues in relation to achieving this expenditure in the current year and also assessing whether the funding will cover all associated increases in overhead costs. The position will be updated as part of future monitoring reports.

Street crime

8. The Home Office allocation of £13 million for street crime initiatives is one-off and will be spent on equipment and overtime in support of Safer Streets. The funding is partly dependent on meeting performance targets to be agreed with the Home Office Police Standards Unit.

Allocation of additional officer numbers

9. The 2002/03 budget approved by the Mayor and Assembly includes funding for 1,000 additional police officers. The final allocation within the MPS will now be determined having regard to the decisions on further external funding set out in the previous paragraphs. The outcome will be reported to members as soon as possible.

Delivery of budget savings

10. The approved budget includes a requirement to achieve savings of £60 million. A list of savings proposals totalling £63.8 million had been identified but it was recognised that these might not all be deliverable in full in 2002/03.

11. The latest position is reasonably encouraging. Members will be aware that the overall savings package has been split into 46 themes, each of which has a named responsible officer. Monitoring the delivery of these themes is conducted within the MPS using the "traffic light" system. The current position with the themes is:

12. The appropriate budget reductions have been made in all themes. The monitoring system indicates that the MPS is confident of the delivery of 19 themes totalling over 50% of the savings target (Green themes). Themes denoted Amber appear on track to deliver their tranche of the savings total but there remains some concern as to full achievement in 2002/03. There is great concern over those themes classified as Black and Red. Members will notice that the approved budget savings target of £60m would be met by the full delivery of Amber and Green classified themes.

13. The MPS remains committed to achieving savings totalling £63.8m. The Budget Savings Team are working proactively with the organisation to identify alternative savings that can be delivered in year to bridge identified shortfalls within the initially identified package.

Monitoring

14. MPS officers have already agreed a budget-monitoring regime for the first quarter of 2002/03 with the MPA Budget Group. May actuals will be reported in June along with projected and significant outturn variations together with emerging budget pressures. Full revenue monitoring including substantive year-end projections will commence in July based on June (Month 3) actuals. Revenue monitoring dates after quarter 1 have yet to be finally determined but work is ongoing to deliver a shortened reporting timescale whilst improving the corporate quality assurance process to increase robustness in the projections.

C. Financial implications

As set out in the report.

D. Background papers

None.

E. Contact details

Report author: Peter Martin, MPA.

For information contact:

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

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