Capital programme monitoring 2003/04 – first quarter

Report: 6
Date: 15 September 2003
By: Commissioner and Treasurer

Summary

This report provides forecasts of capital expenditure for 2003/04 as at the end of the first quarter. Also provided are (a) actual expenditure on capital projects from 1 April to 30 June 2003 and (b) adjustments to the capital programme since initial approval by the Finance Committee on 10 April 2003.

A. Recommendations

That the Committee

1. approves the revised budget sum for 2003/04 of £197.487m (see paragraph 4).
2. notes that recorded expenditure at the end of the first quarter 2003/04 was £20.199m. (see paragraph 6 and Appendix 1)
3. approves a reduction of £40.879m in the capital budget in respect of the C3i Programme in recognition of timing difficulties associated with key deliverables (see paragraph 8).

B. Supporting information

There is one appendix to this report: Appendix 1: Actual and Forecast Capital expenditure 2002/03

2003/04 budgets

1. The capital budget for 2003/04 was approved by the Finance Committee at its meeting on 10 April 2003. The approved level of expenditure was £163.250m.

Revised Capital Budget 2003/04

2. Details of the capital programme outturn for 2002/03 were reported to Finance Committee members on 10 July 2003. Approval was given for the carry forward of £32.987m to 2003/04 in respect of named projects where timing problems in expenditure profiles had occurred.

3. On 10 July 2003 the Finance Committee also approved that £1.250m from the revenue underspend for 2002/03 be made available to meet immediate capital expenditure needs. This sum was required for one-off costs to fund the upgrade to MetFIN (corporate finance system) and the second phase of MetHR (corporate personnel system) as part of the resources workstream of the Information Strategy Implementation.

4. After allowing for (a) the approved carry forward sum from 2002/03 of £32.987m; and (b) £1.250m from the revenue underspend for 2002/03 for the resources workstream of the Information Strategy Implementation: a revised budget for the capital expenditure programme for 2003/04 of £197.487m is achieved.

5. A summary of the capital programme, as at 30 June 2003 is provided at Appendix 1.

Forecast and expenditure

Summary Position as at 30 June 2003

6. At the end of June 2003 capital expenditure of £20.199m was recorded. This represents 10.23% of the revised budget figure of £197.487m.

7. Business groups have advised that forecast capital expenditure at the end of the first quarter stands at £156.608m. The predicted underspend of £40.879m all relates to the C3i Programme and is determined as follows:

• £28.155m for the Airwave Project resulting from the decision to delay the purchase of new radios and related equipment; and
• £12.724m for the MetCall Project largely arising from the rephasing of equipment purchase to meet project milestones.

8. In view of the inability to utilise funds provided for the MetCall and Airwave projects for other purposes it is proposed that the capital programme for 2003/04 be amended to reflect the present forecast level of expenditure for this key programme of works. This early adjustment will ensure that unrealistic comparisons of actual/forecast expenditure with initial/revised budgets for the C3i Programme, and for the overall capital programme, are not perpetuated throughout the financial year.

Use of earmarked reserves created from revenue underspends

9. At its meeting in July 2003, the Committee approved the creation of a capital reserve of £4m to address the need to enhance and expand the MPA estate. This reflects:

• the changing nature of policing;
• the need to respond to the increase in police officers, PCSOs, and support staff; and
• resilience issues as highlighted during recent power failures at New Scotland Yard and other sites.

A sum of £1.490m is also available to be added to this sum. This represents the unapplied underspend from the capital programme for 2002/03 i.e. the amount not carried forward to 2003/04 in respect of timing difficulties for named schemes. Various projects are presently being costed and they will be prioritised for consideration by this Committee on best use of the available £5.490m.

C. Equality and diversity implications

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

D. Financial implications

Financial implications are discussed in the main body of the report.

E. Background papers

• Corporate Finance – 2003/04 Capital Budget Files

F. Contact details

Report author: Sharon Burd Director of Finance Services, MPS.

For more information contact:

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

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