Minutes

Minutes of the meeting of the Finance Committee held on 13 February 2003 at 10 Dean Farrar Street, London, SW1H 0NY.

Present:

• Graham Tope (Chair)
• Nicholas Long (Deputy Chair)
• Elizabeth Howlett
• Eric Ollerenshaw
• Sir John Quinton
• Richard Sumray
• Rachel Whittaker

MPA staff:

• Catherine Crawford (Clerk)
• Peter Martin (Treasurer)
• John Crompton (Committee Services)

MPS staff:

• Keith Luck (Director of Resources)
• DAC Stephen House
• Alan Croney (Director of Property Services)
• Mike Jennings (Director of Finance)
• Alastair Thompson (Director of Commercial Services)

Assistant Commissioners Ghaffur and Godwin and Commander Gormley also attended for consideration of agenda item 8.

Part 1

144. Apologies for absence

(Agenda item 1)

Apologies for absence were submitted on behalf of Reshard Auladin and John Biggs.

145. Declarations of interests

(Agenda item 2)

Agenda item 24 – Disposal of Bow Street Police Station Nicholas Long asked that it be noted that he was the MPA representative on London Police Education Ltd., but that he was not a director.

146. Minutes of the meeting held on 16 January 2003

(Agenda item 3)

Resolved: That the minutes of the meeting held on 16 January 2003 be agreed and signed as a correct record.

147. Chair and Members’ update

(Agenda item 4)

Nicholas Long reported that he had been involved in the selection process for the Head of Exchequer Services and Head of Corporate Finance.

148. Disposal of Old Street Police Station and Magistrates Court

(Agenda item 5)

At its meeting on 16 January the Committee received several reports on the disposal of these premises. A report was submitted which updated the Committee on developments since its last meeting.

Further to paragraph 5 of the report the Treasurer reported that London Development Agency had given notification that in principle it would not agree to a acquire a building at District Valuer valuation and then pass it to another party at a lower level.

The Committee noted that it was intended that a further report concerning the disposal would be made to its next meeting on 10 April but that if it was necessary to act sooner a report could be submitted to the Co-ordination and Policing Committee.

Eric Ollerenshaw said that as the link member for Hackney he had to draw attention to the unfortunate effects of the delay in disposing of the property in terms of planning blight.

Resolved – That the report be noted.

149. Capital programme monitoring 2002/03 (3rd quarter)

(Agenda item 6)

The Committee received a report which provided forecasts of capital expenditure for 2002/03 as at the end of the third quarter. Details were also provided on actual expenditure on capital projects from 1 April to 31 December 2002.

Further to paragraph 16 of the report the Director of Finance reported that notification had been received earlier in the day of the 2003/04 capital settlement. All Police Authorities had been awarded a reduced allocation compared with the current financial year and for the Authority the reduction was in the order of 7%. There would clearly be implications for the Authority and a report would be submitted to the next meeting of the Committee.

The Chair commented that whilst the details of the settlement would need to be assessed, the figures were very disappointing. The allocation was already small given the size of the overall budget and the poor state of repair of much of the estate and any reduction was not to be welcomed especially in the context of increasing police numbers. He would ask the officers to consider whether representations should be made to the Home Office, possibly by the Chair of the Authority.

Resolved - That

1. it be noted that:
   • recorded expenditure at the end of the third quarter was £61.949m. This represents 49.53% of the revised budget sum;
   • recorded capital expenditure forecast by budget holders as at the end of December indicates an underspend of £19.07m against the revised budget of £125.084m;
   • forecast capital receipts now stand at £16.3m;
   • the revised business group allocations and financing position for the capital programme 2002/03 are as set out in paragraph 14; and
   • information in respect of the five-year capital programme for 2003/04 to 2007/08 has been delayed pending an announcement by the Home Office of the capital settlement for 2003/04m and would be submitted to the next meeting.
2. the Treasurer be authorised to consider whether representations should be made to the Home Office on the level of the capital settlement for 2003/04.

150. Revenue budget monitoring 2002/03

(Agenda item 7)

A report was submitted which sets out the income and expenditure for the MPS to the end of January 2003 and provides an update to the projected financial outturn for the year. Expenditure budgets were forecast to underspend by £13.6m. whilst income is forecast to over achieve its budget by £6.3m. Overall there is a projected net underspend of £19.9m.

In reply to a question, the Treasurer undertook to keep Eric Ollerenshaw, MPA link member for Hackney, informed of the situation with regard to claims for compensation received following the Hackney siege.

Resolved - That the report be noted.

151. Police overtime

(Agenda item 8)

A report was submitted which describes the work undertaken, in liaison with the MPA Treasurer and Her Majesty’s Inspectorate of Constabulary (HMIC), to meet the Police Negotiating Board (PNB) requirements to reduce overtime working. The calculation of the budget ‘baseline’ and the resulting target reduction in overtime budgets over the next three years is also included in the report. The report includes an assessment of the operational impacts of such a reduction over the next three year’s, coupled with the pressures on the MPS to grow in police numbers.

Assistant Commissioners Ghaffur and Godwin and Commander Gormley addressed the Committee on this report. They spoke about the importance of the flexibility of overtime in being able to respond to the challenges of policing London. Overtime was generally considered a cost effective means of service delivery. It was accepted however that in order to address the life-work balance the amount of overtime worked per individual needed to be carefully considered. The officers, together with DAC House, urged the Committee not to make any further reduction in the overtime budget in 2003/04 beyond the £2.5M already agreed.

In reply to questions the Director of Resources confirmed that the proposal not to reduce the overtime saving further in 2003/04 would still allow for a 15% saving to be achieved by the end of the next three years as required by the PNB agreement.

Resolved -That

1. it be noted that an additional police overtime saving of £1.247m would be required in the 2003/04 budget submission to meet a 5% saving towards the PNB three year target requirement, together with further savings of £3.5m in each of the years 2004/05 and 2005/06;
2. it be noted that any further reduction in police overtime in 2003/4 will result in severe, adverse operational impacts, and dramatically limit the operational flexibility of local police commanders;
3. there should be no further reduction in the police overtime for 2003/04 budget over and above the £2.5m already agreed by the MPA in December 2002 which represented a 3.6% reduction against the baseline rather than 5%; and
4. further discussions be held with HMIC to seek agreement to the MPS’s special position with respect to a reduction in police overtime.

152. Treasury management strategy 2003/04

(Agenda item 9)

A report was submitted which sets out the Treasury Management Strategy and borrowing limits to be recommended to the Authority for formal adoption.

Resolved- That

1. the strategy set out for 2003/04 be approved; and
2. the borrowing limits set out in paragraph 22 be approved and referred to the meeting of the Metropolitan Police Authority on 27 February 2003 for formal adoption.

153. Budget devolution

(Agenda item 10)

A report was submitted which provided an update on financial devolution and the proposal for its roll-out.

Resolved – That the Committee supports the continued incremental development of devolved financial management.

154. Proposal to charge recruits at Hendon for meals and accommodation

(Agenda item 11)

The Committee was advised of a budget saving proposal to charge recruits for their accommodation and meals whilst undergoing their training at Hendon.

Members noted that there had been an adverse reaction from the Metropolitan Police Federation and the Superintendents Association to the proposal to charge for accommodation.

In reply to a question, the Director of Commercial Services advised that given the space constraints in the canteen and the logistics of serving a large number of people in a short space of time it would not be feasible to introduce a system of paying for meals on the spot.

The Committee generally agreed that the proposal to charge for meals should go ahead, but that it would not be appropriate to charge for accommodation.

Members pointed out however that if it was decided not to charge for accommodation this would leave a gap of some £2.7M in the budget for 2003/04 which would have to be met elsewhere. The Treasurer drew attention to the section of agenda item 12 on the budget for 2003/04 concerning the treatment of the price inflation provision.

Resolved - That

1. recruits be charged for their meals;
2. the concerns which had been expressed about charging for accommodation be noted;
3. the proposal to charge recruits for their accommodation be not proceeded with. The resulting shortfall to be considered in the context of the proposed arrangements under agenda item 12.

155. Revenue budget 2003/04

(Agenda item 12)

A report was submitted updating the Committee on matters relating to the 2003/04 revenue budget.

Further to paragraph 3, the Treasurer reported that the budget had been approved by the Assembly meeting on 12 February without any amendment. The Treasurer reminded the Committee that its next meeting was due to be held on 10 April which was after the start of the new financial year. In order to facilitate any changes which might be necessary he would suggest that he in consultation with the Chair of the Finance Committee, be given delegated authority to agree any budget virements which are essential to ensure the allocation of budgets for 2003/04 before the next meeting of the Committee.

The Treasurer referred to the decisions taken not to charge recruits at Hendon for their accommodation at agenda item 11 together with other potential budget variations.

Resolved – That

1. the latest position on grant funding be noted;
2. the provision of £12M. 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; and
3. the Treasurer, in consultation with the Chair of the Finance Committee, be given delegated authority to agree any budget virements which are essential to ensure allocation of budgets for 2003/04 before the next meeting of the Committee on 10 April.

156. Efficiency and effectiveness review programme

(Agenda item 13)

A report was submitted which updated the Committee on progress in the efficiency and effectiveness programme.

Resolved - That the report be noted.

157. Estates updates

(Agenda item 14)

A report was submitted which updated the Committee on several aspects of the Property Services Department.

Resolved - That the report be noted.

158. Disposal of MPA freehold – Rochester Row Police Station

(Agenda item 15)

A report was submitted concerning the disposal of the surplus MPA property at Rochester Row.

Resolved - That arrangements be made for the disposal of the freehold interest in the surplus MPA property in Rochester Row in accordance with the recommendations in the linked exempt report.

159. Review of residential rents and service charge

(Agenda item 16)

A report was submitted which requested the Committee to determine the level of rent increases for resident officers for 2003/04.

Resolved - That option 4 – to increase rents to achieve the efficiency and effectiveness savings of an average of 4% - be adopted.

160. Front offices refurbishment project

(Agenda item 17)

This report and the linked exempt item 22 was withdrawn.

161. Strategic review of capital programme

(Agenda item 18)

A report was submitted concerning the Property Services capital programme. A review of the programme has been held to realign the projects against a revised set of criteria.

Resolved – That

1. the revised approach to the next two years of the Property Services capital programme be endorsed and appropriate approval reports be submitted as required;
2. subject to further reports, the strategic review of the programme and the identification of potential funding sources be endorsed;
3. the timescales involved be noted; and
4. consultation on these revisions be undertaken as appropriate having due regard to commercially sensitive information.

162. Airwave hardware procurement and consortium framework

(Agenda item 19)

A report was submitted which sought authority to award a number of contracts under a framework arrangement for the supply of hardware and managed services to support the Airwave radio communications system. The MPS is the lead procurement body for a consortium of 26 police forces in England, Wales and Scotland.

Resolved - That contracts for the supply of Airwave hardware and services under a framework arrangement be awarded to the companies listed in the linked exempt report for a period of 5 years renewable for further periods up to a maximum of a further 10 years.

163. Exclusion of press and public

(Agenda item 20)

Resolved: - That under section 100 A(4) of the Local Government Act 1972 the press and public be excluded from the meeting for the following items of business on the grounds that they involved disclosure of exempt information as detailed in paragraphs 7,8, 9 and 12 of Schedule 12A to the above Act.

Summary of decisions made on exempt items

Minute 164 agenda item 21- Disposal of MPA freehold – Rochester Row Police Station
Recommendations relating to the arrangements for the disposal of these premises were agreed.

Minute 165 agenda item 22 – Front offices refurbishment
No report submitted.

Minute 166 agenda item 23 – Airwave hardware procurement and consortium framework
Recommendations relating to an award of contract were agreed. See minute 19.

Minute 167 agenda item 24 – Disposal of Bow Street Police Station
Legal advice was noted.

Minute 168 agenda item 25 - exempt minutes of the meeting held on 16 January 2003

The exempt minutes were confirmed and signed.

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