2003/04 revenue budget

Report: 12
Date: 13 February 2003
By: Treasurer and the Commissioner

Summary

The report sets out the latest position on the 2003/04 revenue budget in advance of the final approval by the Mayor and Assembly on 12 February 2003. Proposals are made to manage late changes to the approved budget figures.

A. Recommendations

Members are recommended:

1. To consider any issues arising from the final approval of the 2003/04 budget expected on 12 February 2003
2. To note the latest position on grant funding
3. To agree that the provision of £12 million in respect of price inflation should be retained unallocated until there is certainty that the budget is balanced after taking account of any necessary adjustments and unavoidable pressures.

B. Supporting information

Approval process

1. The Mayor presented his draft consolidated budget to the London Assembly on 22 January 2003. This included the budget for the Metropolitan Police as approved by the MPA on 10 December 2002 and confirmed to the Finance Committee on 16 January 2003.

2. The Assembly failed to pass any amendments to the Mayor’s budget proposals, but approved (on a vote of 13 to 11) a motion calling on the Mayor to bring forward a final draft budget for 2003/04 that very substantially reduces the local tax take to an increase of 17.5% or less.

3. The Mayor will now bring forward his final budget proposals for the Assembly meeting on 12 February 2003. At the time of writing this report there is no indication that the Mayor intends to change the police component budget. An oral report of the final outcome will be provided to the Committee.

Latest grant information

4. The final grant settlement for 2003/04 was published by the Government on 3 February 2003. By comparison with the provisional figures reported previously there is a marginal reduction in police grant more than offset by an increase in RSG attributed to the MPA, resulting in a net increase in general grant of £0.492 million (0.03%). At this stage it is understood that the Mayor will include this with other grant adjustments and changes relating to council tax collection to amend the overall precept requirement.

5. Information on the various specific grants announced as part of the grant settlement is still incomplete. Grants for which we had adequate certainty when the Authority approved the draft budget in December were: pay lead grant, loan charges grant, free rail travel, street crime grant, Airwave revenue grant. The latest position on other grants is set out in the following paragraphs:

Crime fighting fund

6. As reported to the Authority in December the CFF provides funding for a further 650 police officers nationally but only at a rate of 75% of the direct costs (100% for the residential recruit training period). The MPA’s allocation of CFF funding was confirmed in December. No formal guidance has been received as to how this funding will operate. In any case the MPA budget is already based on maximum manageable recruitment in 2003/04.

Police Negotiating Board

7. It was reported to the last meeting of the Finance Committee that we had received confirmation that this grant was intended to fund the minimum requirement for special priority payments under the PNB pay and conditions package.

Counter-terrorism

8. The announcement in December included provision of £47 million to meet the full year costs of the additional counter-terrorism officers funded in 2002/03. No reference was made at that time to the bid which had been made for a further enhancement of counter-terrorism capability. A response was eventually received from the Home Office which implied that there would be no further funding for this purpose and this has been confirmed in a meeting with the Home Secretary.

Basic command units

9. Information has been circulated to all members (Members’ briefing note 09/2003) setting out the allocation of the BCU fund. A total of £9.9 million has been allocated across all borough command units in London. Details of the use and operation of this funding have not yet been received but it is expected to be spent in partnership with Crime and Disorder Reduction Partnerships. Both the funding and the associated expenditure will be additional to existing budgets.

Community support officers

10. The December announcement included provision of £15 million intended to meet the full year costs of 500 police community support officers (PCSOs) funded for a part year in 2002/03. However the MPS has estimated the full year cost at nearer £16.5 million and the potential shortfall will have to be addressed in due course.

11. It is understood that funding for the designated counter-terrorism PCSOs will continue in future years at 100% of cost. However funding for the remaining PCSOs being recruited in the current year will fall to 75% in 2004/05 and 50% in 2005/06. Grant funding for all new PCSOs from 2003/04 onwards was to be at a rate of 50% but the Home Office is apparently reviewing that.

12. The Home Office has asked for expressions of interest setting out the number of CSOs forces would wish to recruit in 2003/04. The MPS has responded in line with the budget provision for a further 500 PCSOs to be recruited in the second half of the year. There is no indication how much of the total national provision of £39 million for CSOs will be available for new recruitment in 2003/04.

DNA expansion programme grant

13. The position is still being clarified on this grant but the expenditure will be adjusted to match the ant so that there will a nil impact on the budget.

Police National Information and Coordination Centre (PNICC) and National Public Order Intelligence Unit (NPOIU)

14. Information has now been received that general police grant allocated to police authorities is deemed to have included funding for these units. Costs will be recouped from authorities via a levy. There is no provision in the budget to meet the levy which is estimated at £0.7 million for the MPA.

Conclusion

15. A number of loose ends remain around the specific grants for 2003/04. These may require further consideration as and when they are clarified. There may be further issues to be considered following the final approval of the budget on 12 February. It is also clear that there are pressures around some of the specific budget provisions which will have to be addressed.

16. In the circumstances it is proposed that, for the time being, the price inflation provision of approximately £12 million should be retained unallocated in case there is a net requirement to balance the overall budget before the beginning of the year.

C. Equality and diversity implications

There are no new equality issues other than those already reflected in the budget.

D. Financial implications

As set out in the report.

E. Background papers

Budget files.

F. Contact details

Report author: Peter Martin, MPA.

For more information contact:

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

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