Police overtime

Report: 07
Date: 16 January 2003
By: Commissioner

Summary

This report gives background details of the information currently available in respect of overtime working. The recent PNB requirements to reduce overtime working are also described together with the difficulties that will need to be addressed to set an agreed ‘baseline’ and enable future monitoring of levels of overtime working. The report also sets out details of the budget build for overtime from 2001/02 to 2003/04 and current trends in overall expenditure.

A. Recommendations

1. The Committee is recommended to note the current position in respect of ongoing work within the MPS, and the involvement of MPA officers and HMIC, to respond to the requirements of the recent PNB Circular on reducing police overtime.
2. This report will also be taken to the Human Resources Committee on 6 February 2003, with any updated information that is available.
3. A further report will be brought to this Committee as part of the process of setting the ‘baseline’ for police overtime for 2003/04 to meet the timescale of the PNB Circular.

B. Supporting information

Introduction

1. This report sets out the latest position in respect of work to respond to the recent Police Negotiating Board Circular on reducing police overtime. The report updates Members on:

• Requirements of the PNB Circular
• Background information on current Police Regulations
• Police overtime management and administration
• Management information limitations and developments
• Police overtime trends
• Conclusion and way forward

Police Negotiating Board Circular

2. As part of the ongoing police reform proposals a Circular (no. 02/18) has recently been received from the Police Negotiating Board (PNB) setting out agreement to reduce the level of police overtime over the next three financial years. Appendix 1 sets out the key points covered in the PNB Circular, whose stated aim to improve police officers’ work/life balance.

3. The methodology envisaged to plan, implement and monitor this reduction in overtime working is also set out at Appendix 1. One of the key features is a target reduction in police overtime budgets over a three year period of 15% although various factors imply a different target maybe set by police authorities.

4. Whilst the setting of the baseline is expressed in financial terms the over-riding objective of the Circular, and the key management issue to be addressed by the MPS, is the management of police officers’ working time.

5. The MPA is required to set local targets in conjunction with the MPS, and with the HMIC. It is planned to involve MPA officers in the detail of setting targets, and discussions with the HMIC are also being planned.

Police regulations

6. To appreciate the rationale of the PNB Circular in determining the police overtime expenditure baseline requires an understanding of the workings of Police Regulations in compensating officers for overtime working.

7. A police officer’s entitlement to overtime compensation is agreed nationally, and is set out in Police Regulations. Overtime is only payable to police constables and sergeants. Higher ranks are not eligible. Appendix 2 sets out a brief description of the entitlements to overtime payment and compensation under current police regulations.

8. Appendix 2 highlights that recent changes to Police Regulations have endeavoured to modernise the entitlement to overtime compensation. However, this modernisation has only been achieved by a series of relatively complex rules around notice periods that make practical management and administration of overtime more problematic.

9. It should be noted that rostered working on a public holiday, with or without sufficient notice, gives rise to an entitlement to overtime compensation. Therefore, to simply ensure police cover 24hrs a day, seven days a week gives rise to a requirement to pay ‘overtime’. It is this public holiday overtime that is outside the baseline target referred to in the PNB agreement.

10. Members should also note that under current Police Regulations, once an officer qualifies for overtime compensation, there is an automatic entitlement to take an equivalent amount of time off in lieu (TOIL). This right can be exercised at any time in the following three months, but if TOIL in not taken at the end of this period, the entitlement is automatically paid to the officer to ensure excessive amounts of TOIL are not amassed.

Police overtime management and administration

11. A police officer’s overtime working is managed by the relevant line manager of the unit to which that officer is attached. Police overtime is a delegated budget under the MPS’s Scheme of Devolution, so effective management of the total of police overtime is determined by Operational Command Unit (OCU) heads. Reducing the total MPS overtime budget will not necessarily reduce overtime working therefore as local OCUs have the authority to increase spending by transferring funds from other devolved budgets.

12. Police overtime has recently been the subject of an Efficiency and Effectiveness study as part of the rolling programme of reviews undertaken by Accenture. The review findings were reported to the Finance, Planning and Best Value Committee in January 2002. The report concluded that any sustained reduction in overtime working can only be achieved by:

• A policy of ‘acceptable use’ of overtime working
• Intrusive management and questioning of essentiality of overtime working, encouraging ‘smarter’ working
• Closer supervision to ensure planned and casual overtime is authorised and recorded correctly
• Timely and accurate management information, with accountability structures and regular review.

13. Effective management of police overtime working is, therefore, very much a local issue that concentrates on overtime causes, but is backed up with a corporate policy and direction, including central monitoring and oversight. Central monitoring must concentrate on the underlying causes rather than simple financial totals which would conflict with, and undermine, devolved budget principles.

14. Administration of police overtime working and payment is a relatively intensive process that cuts across various Departments of the MPS. An Internal Audit report in 2000/01 on police overtime identified a complex system of processes, authorisations and controls that needed to be properly undertaken and supervised. The report identified several weaknesses that needed action to ensure this complex system produced accurate and authorised overtime payments and records. These control weaknesses are being addressed, but only by increased levels of management and administrative time spent on process and procedures.

15. A simplified overview of the police overtime administration process is diagrammatically set out at Appendix 3. In summary, an individual officer completes a personal Duty Sheet (or ‘State’) with their actual hours worked. This information is then entered in the Computer Aided Resource Management (CARM) system, and any entitlement to overtime compensation and time off in lieu calculated. Manual processes have to support CARM in certain circumstances described later in this report.

16. Information from CARM and/or manual processing is passed electronically or on paper forms direct to CAPITA (ie the current outsourced payroll provider) from each OCU for payment on the next month’s payroll. A strict monthly timetable is enforced to ensure accuracy of pay calculations. The CAPITA payroll (Cyborg) produces, in addition to the payments and slips etc., various extract files for both MPS Pay and Pensions Branch, and for MPS Corporate Accounting Branch to update the accounting ledgers within the MetFIN accounting system.

Management systems and information

17. The lack of relevant management information on police overtime was a major issue identified in the Accenture review. There are on-going developments in the MPS to address this situation, and the current and proposed position in respect of available management information is described in more detail in Appendix 6.

18. An important point to be recognised is that recent changes in Police Regulations (e.g. various notice periods that trip different compensation entitlements), and changes in working methods (variable shift patterns, part time officers etc.) have resulted in ‘fixes’ to current systems. These fixes, often brought in at short notice to meet legislative timescales, have undermined the already limited ability to extract management information because this was not the priority of implementing the necessary change.

19. The Accenture review identified that improvements were needed to information systems to effectively manage police overtime working the majority of which were in respect of the CARM system. This conclusion was based on CARM being the point of capture of officer working time which was the essential focus of understanding and aiding better management of overtime working. This can only be achieved by further improvements and enhancements to Met Duties systems. Funding and plans to do this are currently in place in the medium term.

Overtime budget and expenditure trends

Budgeted expenditure

20. The amount included in budgets in recent years for police overtime is set out in Appendix 4. This shows the budget movement from the provision in 2000/01 of £69,975m to the amount contained within the proposed budget for 2003/04 of £101.127 million.

21. The adjustment includes the addition of £10 million in the current year’s approved budget for police overtime. This was agreed to correct a clear underprovision in the overtime budget in previous years.

22. In addition there are a number of items related to specific grants received that have been intended to be spent partly or primarily on overtime. The funding for Safer Streets and the Jubilee Celebrations in 2002/03 were for one year only and are shown as being removed from the budget in 2003/04.

23. The current proposed budget for 2003/04 is £2.8 million less than the current working budget for 2002/03 including the additional costs added in for inflation and additional police officer numbers. This reflects the saving of £2.5 million built in to the budget and the removal of non-recurring items. An indication has been given however by Government, of a further in-year specific grant of £8 million for Safer Streets funding. It is not clear at this stage to what extent that funding may be applied to overtime working but it is highly likely that much of the focus will be on proactive operations undertaken on overtime.

24. There is now a sense that the police overtime budget is under greater control. The MPS are confident of actual expenditure in 2002/03 being in line with the budget, and of delivering the saving of £2.5m on total overtime in 2003/04, although the search for further savings is continuing. Management of police overtime has been made more complicated by the “holdback” of £10m by MPA. This is because of the “mixed message” it has sent to OCU Commanders in terms of the total overtime resources they are accountable and responsible for.

Actual expenditure

25. Actual expenditure in recent years has been:

2000/01

£91.6m

2001/02

£97.0m

2002/03 (full year forecast)

103.4 (£65.4m to end of November 2002)

26. Appendix 5 sets out a comparison of the monthly amounts paid in overtime in 2001/02 and 2002/03 extracted from the payroll system extract files used to update the MetFin accounting system. The cumulative overtime paid to the end of November was £68.606 million in 2001/02 compared to £65.439 million for the same period in 2002/03.

27. It must be stressed however that the monthly totals are volatile and the comparison at the end of October was much closer. The forecast returns from OCUs also show an increase in the rate of spend in the remainder of 2002/03.

28. The Appendix also shows a comparison of the amount paid per officer eligible to receive overtime payments. This takes account of the increasing number of officers employed over the periods concerned, and so is a more accurate reflection of officer working than the overall total amount.

29. The average monthly payment, calculated on a cumulative basis, was £353 as at November for the year 2001/02. In the 2002/03 this has reduced to £325 per officer as at November. Again it must be stated that the relative position may change over the remainder of the year but it would appear likely that a reduction in the average payment will be identified. It should also be recognised that the reduction is greater in hourly terms because the recent police pay award has increased officers’ rate of pay by 3%.

30. The figures quoted above include all overtime and premium rate payments. The monitoring required by the PNB settlement excludes premium rate payment in respect of public holidays. These are paid at double time. There are other circumstances that give rise to double time payments and it is not possible to accurately identify the amount paid for public holidays. Nevertheless, the largest element of double time does relate to public holidays and an analysis of payments over the various rates of enhancement for the period April to November are.

This shows approximately 30% of overtime is paid at double time.

Conclusion

31. There are a number of complexities in obtaining data from the various systems that deal with overtime. The information that can be obtained to monitor overtime on an overall basis is at present only financial data. Details of hours worked are not accessible without system developments to provide relevant extracts. To obtain the information necessary to monitor the PNB requirements is also likely to require system developments to fully provide for the financial data relating to public holidays.

32. Nevertheless, there is a requirement for the MPA to agree a baseline and target reduction in overtime working over the next three years. This report outlines some of the issues that are being considered in order to make a recommendation to the MPA. Some progress is already being made and a reduction in the earnings per officer is apparent in 2002/03.

Further reports will be submitted to the MPA to enable a decision to be made on the target reduction for 2003/04 in accordance with the PNB timetable requirements.

C. Equality and diversity implications

There are no equality and diversity implications arising from this report.

D. Financial implications

The financial implications are those set out in this paper.

E. Background papers

None

F. Contact details

Report author: Mike Jennings, Director of Finance

For more information contact:

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

Appendix 1: PNB Circular 02/18 - Main points

Introduction

The circular sets out guidance on the application of the agreement made within the PNB in May 2002 for the management of working time to reduce the overtime bill and provide a better work/life balance.

Work/life balance

The scheme is about reducing the requirement of officers on operational duties, beyond their rostered hours, it is not about cutting costs. Research has shown that a good work/life balance brings benefits to both employee and employer. Police officers terms and conditions are subject to the provisions of the Working Time Regulations 1998, and the PNB believes forces must make every effort to ensure police officers are not routinely working excessive hours.

Operational effectiveness, etc

Forces will need to take account of the impact on operational effectiveness, and produce evidence for the Inspectorate that due consideration has been made when setting local targets.

It is recognised that local staff associations have a key role in working with managers to identify and implement new systems and ways of working.

Setting targets

The PNB Agreement provides for a national target of a 15% reduction in overall expenditure on overtime over the three years from 2003/04. The target is based on overtime expenditure in 2001/02.

The baseline will exclude all payments for rostered shift working on a public holiday. Overtime payments to officers on secondment to other police organisations (e.g. NCS, NCIS etc.) will also be excluded from the baseline figure

Local targets will be set locally by the police authority and the chief constable, with the approval of HMIC. If it can be shown to the satisfaction of the inspectorate that they have taken effective action between 2000/01 and 2002/03 to reduce their overtime bill, a target of 10% may be agreed.

An indicative timetable is set out that envisages targets to be agreed for all three years, together with a description of how it is proposed to meet achieve the changes necessary to meet the targets, and consultation to have taken place with local staff associations, in time for publication in the local policing plan by 31 March 2003.

Role of police authorities

In addition to setting targets, police authorities are expected to support the force in their work to achieve targets, and for monitoring and scrutinising force performance against the targets. Regular progress reports from the Chief Constable are expected, at least quarterly.

Appendix 2: Police regulations

Regulation 29 – Public holidays and rest days for ranks below inspector

Police officers below the rank of Inspector are entitled to 2 rest days per week and are allowed a day’s leave on each public holiday.

A working week for Police Officers is 40 hours per week divided into 5 eight hour shifts.

An example of a working pattern when a bank holiday occurs would be thus:

• Monday – day off for bank holiday
• Tuesday – 8 hours worked
• Wednesday – 8 hours worked
• Thursday – 8 hours worked
• Friday – 8 hours worked
• Saturday – rest day
• Sunday - rest day

Although the officer physically works only 32 hours in that week they are paid for 40.

However, due to the requirement for police cover on a bank holiday some officers will be “rostered” to work on a bank holiday. Rosters should be prepared a year in advance. The roster will normally show the bank holiday dates on which the officer will be required to be on duty. (Regulation 27-rostering of duties)

Because an officer is entitled to leave on a public holiday, compensation is payable in addition to the normal days pay they would have received had they not worked the bank holiday. It is a matter of interpretation as to whether the additional entitlement should be classed as “overtime” as it is hours worked in addition to the requirement for that week, or if it merely compensation for being required to work on a public holiday. Regulation 28 (Overtime) refers to overtime as a compensation payment for hours worked in addition to a normal shift.

“Compensation” is awarded in 2 ways. Either time off in lieu or payment for hours worked at appropriate. The compensation also varies dependent upon the notice given of the requirement to work on a bank holiday.

If more than 8 days notice of the requirement to work a bank holiday is given a double time “overtime” payment can be made. If the officer elects not to be paid overtime, time off can be granted which is equal to double time. That is, 2 days off.

If less than eight days notice of a requirement to work a bank holiday is given, a double time compensation payment can be made and another day off in lieu can be given. If the officer elects to have the time off rather than be paid they will still only receive 2 days off, regardless of the notice given.

If an officer volunteers to work a bank holiday they are not treated as being required to work on that day and a compensation payment is not given. Another day off in lieu is awarded and is treated as a public holiday leave day. Public holiday compensation rules apply if the officer is required to work on the re-scheduled public holiday day off.

If an officer receives more than fifteen days notice of cancellation of a rostered rest day the only compensation is another rest day off in lieu.

If an officer receives between 15 and 8 days notice of cancellation of a rostered rest day they will be entitled to paid compensation of time and one half for every completed fifteen minutes worked. If they elect for time off they will be awarded time equivalent to one and a half times each completed 15 minutes worked.

If an officer receives less than 8 days cancellation of a rostered rest day they will be entitled to paid compensation at a rate of double time for each completed 15 minutes worked. If they elect for time off in lieu they will be awarded time off equivalent to double time for each completed 15 minutes worked.

For all other overtime worked under regulation 28 (overtime) compensation is paid at time and one third for every completed 45 minutes worked.

Appendix 3: Simplified police overtime process diagram

Appendix 4: Overtime costs - Police overtime budget changes 2000/01 to 2003/04 (provisional)

Appendix 5: Summary of police overtime paid in 2001/02 and 2002/03 - part year to November

Actual expenditure on overtime

All figures in this table are £000

Monthly average overtime paid

Cumulative average overtime paid

Appendix 6: Current management information systems

CARM system

1. The CARM system is used to plan and record individual officer’s duties or roster for the whole of an Operational Command Unit (OCU). The CARM system is supported by individual officers’ weekly duty sheets which require a physical signature to verify its correctness, and substantiate the officer’s overtime and expenses claims.

2. CARM was first piloted in the MPS in 1996, and in order to facilitate activity analysis, is being rolled out across all parts of the MPS for both officers and civilian staff. CARM is intended to provide base data for the Operational Policing Measure. The system has been upgraded during this time to reflect the change in police regulations and working patterns of officers.

3. A significant number of OCUs, principally Specialist Operations (including Specialist Crime), were added to the system during 2002 with a resultant position that all bar a small handful of officers will have their hours of working recorded on CARM by the end of December 2002, with 100% coverage within a month or two of this date.

4. Whilst this position now gives the opportunity to provide MPS-wide information on duties planning and actual hours worked including overtime hours, there are a number of associated issues that remain to addressed:

• OCUs starting on CARM in recent months will not have any ‘history’ of previous hours worked as it is not viable nor cost effective to convert previous paper records onto CARM because of the scale of the task involved.
• ‘Local discretion’ was previously allowed in the use of CARM, with only minimum operating standards for the system. This is to be changed in the near future, but again this does not allow for previous information to be extracted and compared with confidence for those sites that have been on CARM for longer periods of time.
• CARM does not record all hours completely accurately. Errors found after the production of the monthly pay disk, additional hours for part time officers, significantly late claims etc, are unable to be processed in CARM, and manual paper forms to pay officers have to be used. The discipline (i.e. ensuring correct payment to the officer) to retrospectively update CARM in these circumstances is removed, resulting again in lack of completeness of the information held.
• Currently each OCU holds its own CARM database on the local file server. A central team of two staff (one temporary) provide support in terms of system expertise. Any request to produce statistical analysis of CARM data requires individual interrogation of each and every OCU database and then a summarisation of the data. This is an extremely resource intensive task. It is intended to move to a process of automatic overnight consolidation of all OCU databases on a regular basis, but there is still a significant resource implication associated with any proposal to produce regular MPS-wide management information on overtime hours worked.

5. Despite the above limitations, CARM was the only system that could be enhanced and implemented across the Met in time to meet the January 2003 timetable for the Operational Policing Measure.

Payroll system (Cyborg)

6. The current payroll arrangements are based upon an outsourcing contract with CAPITA Business Services, who provide all detailed processing and payroll production. The detail of the ‘how’ has been left to the contractor to decide, with only the ‘outputs’ specified in the contract.

7. Change requests, including changes to Police Regulations and non-contract specified management information requests, are subject to additional cost tariffs and negotiation on timescales and production. These need to be separately funded with resources being identified by the “sponsoring” department or in competition with other corporate pressures.

8. The payroll system is heavily reliant upon the ‘feeder’ information it receives from CARM, and to a lesser extent manual paper forms. CARM input is captured in terms of overtime hours worked in a specific week. The hours are then ‘enhanced’ (i.e. doubled, time and third, time and a half) and multiplied by the officer’s basic overtime rate. Additional hours worked by part-time officers and corrections to previous and current CARM data are processed through manual paper based routines.

9. Whilst there appears to be an option to interrogate the payroll to provide a history of hours worked over recent years, there are a number of significant limitations and difficulties with this approach:

• The payroll is primarily designed to pay police officers and civilian staff, it is not set up to record and report on actual hours worked. Extraction of hours worked will require a combination of accessing basic contracted hours, additional hours worked (part time staff) and overtime hours worked (full and part-time staff). Each of these data items are held and processed differently.
• A requirement of the PNB Circular is to isolate the compensation ‘overtime’ associated with rostered hours worked on public holidays. The hours worked captured by the payroll from CARM are in weekly totals only. Therefore, it is not possible to identify what overtime hours worked during a week containing a public holiday were in respect of the public holiday or any other day that week.
• The payroll captures hours paid in a specific month. As an officer has a right under Police Regulations to be paid for overtime hours worked for a period up to three months after the hours were incurred, identifying hours worked for a defined period would require interrogation, sorting and consolidation of a much wider period.
• In certain scenarios, an officer is entitled to overtime compensation and further time off in lieu (TOIL). If this TOIL is subsequently taken as pay, there is no methodology that enables these ‘hours’ to be identified and taken into account to determine the ‘real’ additional hours worked.

10. In conclusion, the payroll only holds relevant data passed to it by CARM for payment purposes. The information is not in a form that can be reliably extracted for management information purposes in terms of identifying actual overtime hours worked within OCUs and Business Groups.

Financial accounts (MetFIN)

11. The MetFIN accounting system is updated on a monthly basis with a file extract from the payroll system. The extracted data has been determined as that which is sufficient to update the accounting system in order to minimise duplicated or redundant data. Therefore, there is no data extracted currently which identifies actual hours worked. Overtime data consists of the financial totals only, with a code to indicate at which premium rate it was paid.

12. Once loaded into MetFIN, the ability to analyse and manipulate financial data at an individual officer level becomes problematic. This is because most financial accounting packages (and, as an off-the-shelf commercially available SAP package, MetFIN is no exception) are not designed to provide reports etc for other than total costs for individual employees, with no further analysis below this total to other than individual allowances and employment on-costs.

13. Disaggregation of ‘overtime’ allowances into a lower level of detail are being investigated, but the actual information being passed on at each stage from CARM to Payroll to MetFIN limits the analysis. Additionally, the functionality of MetFIN is not designed to deal with information requirements essentially surrounding individual hours worked per officer.

14. In summary, because MetFIN is at the end of a chain of systems that passes an ever smaller, more summarised, amount of data from one link to the next, the system is not only limited by its own data manipulation ability, but also by the limitations of the system supplying data to it.

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