Draft capital programme 2003/04 to 2007/08

Report: 06
Date: 24 October 2002
By: Treasurer and the Commissioner

Summary

This report provides information on a proposed high-level five-year capital expenditure programme for 2003/04 to 2007/08. The programme is required for submission by the Metropolitan Police Authority (MPA) as part of its budget proposal to the Mayor and Greater London Authority. Summary information is provided on expected funding and on capital projects that fall to be funded from specific grants additional to the main capital programme. Business groups’ responses to the indicative programme totals are included.

The detailed review of spending proposals by business groups, and confirmation of available funding through the local government settlement, will be reported in detail to the Committee in January 2003.

A. Recommendation

The Committee is invited to:

1. Approve the indicative medium term capital programme 2003/04 to 2007/08 for submission to the Greater London Authority (Appendix 1).
2. Note that final approval of the detailed five-year capital programme 2003/04 to 2007/08 will be sought from the Committee in January 2003 following announcement of the local government finance settlement.

B. Supporting information

There is one appendix to this report:

Appendix 1: Draft capital programme 2003/04 to 2007/08 including funding information.

Background

1. A five-year summary capital expenditure programme is required as part of the formal budget submission to be made by the MPA as one of the functional bodies of the Greater London Authority (GLA). The Mayor has requested this information to validate the costs of providing the complete range of services provided by the Authority and to ensure that his policy objectives can be achieved.

Funding

2. Allocations of capital grant and supplementary credit approvals (Sacs) for 2003/04 will be announced by the Home Office at the end of November 2002 as part of the local government finance settlement. It has been anticipated that these totals will not differ significantly from the assumptions incorporated in the present funding projections. Details of funding sources being utilised to finance the five-year capital programme are shown at Appendix 1.

3. The five-year programme will be reviewed in the light of the capital settlement details. The Finance Committee in January 2003 will receive a report recommending a detailed capital programme for 2003/04 to 2007/08,

C3i/Airwave grant

4. The expenditure profile for the C3i Programme, which includes C3i, Airwave, and Mobile Data, has been extended. This follows a review of the business case and slippage in project delivery. Expenditure will now occur in 2006/07 and 2007/08. Appendix 1 sets out the spending profile over the five-year capital programme period. It is anticipated that specific Home Office grant will cover this expenditure.

Allocations to business groups

5. The proposed high-level allocations for the five-year programme for individual business groups are shown at Appendix 1.

Years 2003/04 to 2005/06

6. The medium term capital programme for 2002/03 to 2005/06 was given final approval by the MPA Finance Planning and Best Value Committee at its meeting on 18 April 2002. It provided indicative allocations for business groups for the initial three years of the required five-year capital programme 2003/04 to 2007/08 inclusive.

7. Details of the allocations and information on individual capital projects within these sums, as approved by the Finance Planning and Best Value Committee, are contained within the MPA budget book for 2002/03. The only variations from the budget book reflected in Appendix 1 relate to the C3i programme. The budget book analysis will therefore form the basis the detailed submission to the GLA. This information has not been reproduced with this report.

8. Whilst some adjustment was requested this occurred within the miscellaneous projects classification. Therefore the current business group capital programme allocations are unchanged for 2003/04 to 2005/06 at this stage.

Years 2006/07 to 2007/08

9. In preparing the five-year programme it has been recognised that a suitable level of reserves should be maintained to ensure:

• security in respect of major projects such as C3i should funding or cash flow problems arise;
• reassurance that reserves are not denuded to such a level that serious financial concerns would arise;
• safety from the effects of reduced in year capital receipts should there be a down turn in the property market; and
• reassurance that reserves provide sufficient flexibility should critical capital expenditure issues arise.

10. By the end of 2005/06 capital reserves will have been reduced to a level that directs a suitable degree of caution is exercised. This is especially so in view of the major programme of work being undertaken by the Service under the C3i umbrella. For this reason the capital expenditure envelope for both 2006/07 and 2007/08 has been set at £55.5m (excluding specific grant projects). This sum equates to the forecast level of in year funding receipts and would not be expected to require any draw down from reserves.

11. In accordance with the capital prioritisation policy previously agreed by the MPA Finance Committee, indicative allocations for business groups for financial years 2006/07 and 2007/08 allow for the cost of meeting the vehicle replacement programme, with remaining funds allocated to the other business groups on their pro-rata share of the 2002/03 to 2005/06 medium term capital programme.

12. Business Groups have been requested to indicate acceptance or otherwise of the programme totals set out in Appendix 1 for the year’s 2006/07 and 2007/08 and progress is as set out below.

13. Property Services is presently embarking on a comprehensive review of the MPA estate strategy. This is intended to reflect the changing policing priorities of the Service and will necessarily reflect the increase in police officers, community support officers, and civilian staff. It is expected that the review will highlight a need for urgent and additional capital expenditure on the MPA’s estate. This review is yet to be finalised and therefore the impact upon the indicative level of programme allocation is not known at this stage, but will be used to develop the detailed estates programme to be considered by the MPS Estates Policy Group.

14. The Directorate of Information is working up detailed proposals to be validated by the MPS’s Information Management Steering Group, following acceptance of the broad planning total.

15. The MPS’s Capital Prioritisation Group will consider the balance of all detailed schemes across the whole programme in early December 2002, before the detailed programme is reported to the Finance Committee for approval in January 2003.

Revenue consequences

16. Revenue costs associated with implementation of those projects listed within the initial three years of the five-year capital programme are known and have been incorporated within revenue budget proposals for 2003/04 and the Medium Term Financial Plan. When finalising the capital programme for approval by the Finance Committee in January 2003, any adjustments to revenue support costs for later years from new schemes will be managed as part of the updating of the medium term financial plan.

C. Equality and diversity implications

There are no specific equality and diversity implications arising from this report. Any implications will be addressed as specific programmes and schemes are put forward for authorisation.

D. Financial implications

Financial implications are discussed in the main body of the report. 

E. Background papers

Corporate Finance – Medium Term Capital Programme

F. Contact details

Report author: Martin Chatfield, Head of Corporate Finance, MPS.

For more information contact:

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

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