Finance Committee Annual Report

Report: 06
Date: 10 July 2003
By: Treasurer

Summary

The report summarises the work of the Finance Committee for the year 2002/03.

A. Recommendations

Members are asked to agree the report as representing the Committee’s work over the last year for submission to the Authority.

B. Supporting information

Introduction

1. The Authority has decided that each committee should produce an annual report on its activities. The reports are intended to give a general indication of member performance. They will also provide material for incorporation into the Authority’s published annual report.

Meetings and membership

2. The Committee has met ten times during the year. There are ten members of the Committee. Graham Tope has been Chair for the year and Nicholas Long Deputy Chair. Other members have been Reshard Auladin, Richard Barnes, John Biggs (to February 2003), Elizabeth Howlett, Diana Johnson (from April 2003), Eric Ollerenshaw, Sir John Quinton, Richard Sumray and Rachel Whittaker.

Responsibilities

3. The Finance Committee oversees the preparation and management of the revenue and capital forward plans and annual budget, making recommendations to the Authority as appropriate. The Committee also discharges the Authority’s responsibilities in relation to treasury management, insurances, the efficiency and effectiveness review programme and any other significant non-audit financial matters. In addition the Committee considers strategic issues in respect of the estate and other resource functions, financial and strategic issues relating to the provision of information systems and technology, and major contract matters as required by the Authority’s contract regulations.

Budgets

4. The Committee has considered financial plans, budgets, expenditure and outturn as appropriate in the annual cycle as follows:

• 2001/02. The final revenue and capital outturns were reviewed and final adjustments agreed.
• 2002/03. The Committee has received regular monitoring reports on both revenue and capital budgets and has considered provisional outturns. It is likely that further steps can be taken, building on the improvement already effected in 2001/02, to strengthen the Authority’s balance sheet so that the external auditor’s qualification of the accounts can be removed.
• 2003/04. The Committee has considered the draft budget, including at a special meeting in October, and made recommendations to the Authority with regard to the submission to the Mayor. Members have made decisions in relation to budget adjustments after approval by the Mayor and Assembly. Medium term financial projections to 2005/06 and a five year capital programme have been approved. The 2004/05 revenue budget was approved as submitted and allows for recruitment of a further 1,000 officers which will take total officer numbers close to 30,000. The budget also provides for recruitment of 1,000 police community support officers.
• 2004/05. Consideration of the 2004/05 budget has commenced with a report on the Mayor’s budget guidance.

Other financial matters

5. The Committee has dealt with a number of significant financial matters in addition to budgets, including:

• Efficiency and effectiveness review programme. Regular progress reports have been received.
• Treasury management. The Committee has received monitoring reports and a strategy report for 2003/04.
• Insurances. Insurance renewals have been agreed and also the appointment of insurance and risk advisers.
• Budget devolution. Progress reports on the continuing development of budget devolution have been received.
• Activity based costing. The Committee has considered and endorsed the approach being adopted to the requirement to implement activity based costing in 2003/04.
• Prudential code for capital finance. The Committee has considered the potential implications of the Prudential Code which is likely to be introduced from April 2004.
• Police pensions. The Committee has considered the results of an actuarial review of future police pensions costs and agreed a strategic response.
• Contract regulations. The Committee has approved a comprehensive revision of the Authority’s contracts regulations.
• Financial Management Strategic Programme. Two progress reports have been made against this programme demonstrating significant improvement in financial management in the MPA’s finances and MPS financial management.

Estate

6. The Committee has received regular update reports from the MPS Director of Property Services on a range of current estate issues. It has also considered reports relating to specific property transactions and proposals, approving action as appropriate. These have included the development of a centralised Traffic and Transport criminal justice unit at Sidcup and the implementation of a vehicle recovery and storage service at Charlton. The Committee has endorsed an estate strategy, Building Towards the Safest City 2003/08 and has agreed a central London property plan. The Committee has also endorsed an annual environmental report. The Committee has monitored the progress of Operation Cleansweep (driving forward improvement in working conditions of front-line officers in police stations), a response the Committee-sponsored ‘Changing Habits’ report.

IT/IS

7. The Committee has monitored the implementation of the MPS information strategy and has taken decisions to facilitate achievement of the ICT infrastructure strategy. Contract action in relation to the C3i project has also been approved.

Procurement

8. The Committee has considered and approved contract action in respect of major procurements. It has also received information on the routine forward contracts programme.

Next year

9. In the forthcoming year the Finance Committee will review the final outturn for 2002/03, monitor expenditure against budget in 2003/04 and develop the budget submission for 2004/05 together with the medium term financial plan. Revenue and capital plans will both need to take account of the implications of the Step Change programme looking at further expansion of the MPS.

10. The Committee will continue to monitor improvements in financial management through the financial management strategic programme. Specific areas of development in which the Committee will take an active interest include budget devolution and activity based costing.

11. Proposals relating to property will now be assessed in the context of the new estate strategy. The Committee will continue to monitor and facilitate the MPS information strategy. Major procurements will be considered in the framework set by the revised contract regulations. Decisions will have to be taken during the next year in relation to the renewal or replacement of current outsourced service contracts.

C. Equality and diversity implications

The Committee addresses equalities aspects if and when they arise in relation to its business.

D. Financial implications

The cost of the Committee’s activities is met within the MPA’s directly managed budget.

E. Background papers

Finance Committee agendas:

• 11 July 2002
• 27 September 2002
• 14 October 2002
• 24 October 2002
• 14 November 2002
• 12 December 2002
• 16 January 2003
• 13 February 2003
• 10 April 2003
• 09 June 2003

F. Contact details

Report author: Peter Martin, Treasurer, MPA.

For more information contact:

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

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