2004/05 revenue budget - guidance

Report: 07
Date: 9 June 2003
By: Treasurer and Commissioner

Summary

The Mayor published his guidance for the preparation of the 2004/05 budget and medium term financial plan on 30 May 2003. The guidance is attached and key elements highlighted in the report. A proposed timetable for producing the budget submission is set out.

A. Recommendations

1. To note at this stage the budget guidance for 2004/05 issued by the Mayor and that the implications will be further considered in July 2003.
2. To note the proposed budget timetable and the need for coordination in relation to planning, equalities and consultation.

B. Supporting information

Introduction

1. The Mayor has published his budget guidance for 2004/05 budget submissions as attached at Appendix 1 for members . The document is also available on the MPA website and on application to the Secretariat (020 7202 0181).

2. Much of the guidance follows the pattern which has been developed over the previous three years. This report highlights the key elements and significant changes, and outlines the process which will be followed to produce the MPA budget submission.

Content of submission

3. As in previous years the submission should comprise a three year budget plan with a corresponding business plan, a budget and equalities submission and a five year capital spending plan.

Policy objectives

4. The policy objectives set by the Mayor are both general and specific. All functional bodies are expected to support, as appropriate, the implementation of the Mayor’s statutory and other strategies and policies. A further objective for all bodies is implementation of Equalities for All service improvement plan. The latter would naturally form part of the budget and equalities submission. For the MPA three specific objectives are set as follows:

• Development of options and supporting implementation plans and costings for increasing police numbers to 35,000 over the next 3 to 5 year period.
• Implementation of recruitment and retention practices that deliver substantial progress to a representational workforce and minimise black and minority ethnic and female leavers.
• Development of options and implementation of plans to increase the safety and security of women.

Precept options and savings

5. In the last two years the Mayor’s guidance has set out what he intends to include in the council tax precept increase. The savings requirement has then been whatever was necessary to balance the total budget after taking account of government grant and the predetermined precept.

6. However for 2004/05 the Mayor is asking for various options to be exemplified, which will show both the precept effect and the impact of the consequential savings requirement. For the MPA there are three specific options as follows:

• Option 1 A precept increase limited to 2.5% (£454.8m)
• Option 2 2003/04 precept (£443.7m) plus the full year cost of 2003/04 officer and PCSO growth
• Option 3 A budget requirement of £2,351.6m per the 2004/05 forward plan in the published final GLA budget

In addition the guidance notes that ‘discussions are continuing with the MPA about the strategy and options for increasing police numbers to 35,000 over the next 3 to 5 years. The Mayor will be seeking further support from government for funding these proposals and may issue further budget guidance to the MPA following these discussions.’

Capital

7. The guidance acknowledges the likely requirement to comply with the Prudential Code on Capital Finance and therefore to produce and consider the prescribed indicators when determining borrowing to fund capital expenditure. These will need to be included in the submission.

Budget and equalities

8. There is separate detailed guidance for the budget and equalities submission which will be considered by the Equal Opportunities and Diversity Board.

Process

9. As in previous years the budget development process will be steered and monitored through a series of meetings with the Mayor supplemented by officer meetings. The deadline for submitting the draft budget to the Mayor is 10 November 2003.

MPA timetable

10. Since the guidance was only formally received on 30 May there has been no time to consider its implications in detail. However planning for the 2004/05 budget process had already started and the MPS has established its internal timetable for developing medium term financial information. Work has commenced in a number of areas, for example:

• The review of 2002/03 outturn will identify potential variations on the 2003/04 budget and therefore the base position for the 2004/05 budget and medium term plan.
• Specific ongoing budget pressures are being identified and clarified, e.g. the future cost of free rail travel.
• The commitments contained in the current medium term plan are under review.
• The Step Change project is under way and has already generated initial costings.

11. The following is an outline timetable for MPA consideration of the 2004/05 budget and medium term plan as they are developed.

12. The Budget Group will also maintain a monitoring role on progress in budget preparation. It will also be necessary to include informal member briefings probably linked to CoP meetings.

13. Further consideration needs to be given to the linkage between the planning process and the budget timetable set out above, and what will be available as a draft ‘business plan’ to accompany the budget submission.

14. Consultation with stakeholders will also need to be set up within the budget timetable.

C. Equality and diversity implications

The budget and equalities submission will be an integral part of the overall package of information submitted to the Mayor.

D. Financial implications

The budget and medium term plan set the resource parameters for the MPA and MPS over the plan period.

E. Background papers

None.

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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