Budget devolution

Report: 07
Date: 23 October 2003
By: Commissioner

Summary

This report gives members an overview of the current financial devolution position within the MPS and informs the Committee of the recent decision not to extend devolution of police pay in-year, but to go forward with a substantial increase in pathfinder sites from April 2004.

A. Recommendation

That members note the contents of this report.

B. Supporting information

Background

1. Police Pay was originally devolved to seven pathfinder Operational Command Units (OCUs) during the 2002/03 financial year. The police pay allocation last financial year proved to be generous at the borough level due to a number of factors including:

• Hendon not being funded sufficiently for the increased number of recruits; growth in police numbers was slower than originally profiled;
• Allocations which were based on average pay rates proved to be high because of the damping effect of increasing numbers of probationers, and;
• The amount allocated for pay inflation was greater than the eventual increase.

Most pathfinder OCUs were therefore in a position at year-end to carry forward the maximum £200,000 allowed under the Scheme of Devolved Financial Management; a number also utilised under-spends on police pay for overtime and equipment.

2. From April 2003 the devolution of police pay was extended to eight additional pathfinders, making a total of 15. A list of current pathfinders and budgets devolved Service-wide during 2003/04 is shown at Appendix 1. In contrast to the previous year, Hendon has been fully funded, the police pay budget was allocated based on estimated strength at April 2003 and planned deployment of officers throughout the year, and detailed work was undertaken to validate an average pay rate, including the impact of increasing probationer numbers, for each business group to ensure that allocations are as accurate as possible. Inevitably there will be less flexibility this year at the OCU level.

3. The devolution project has made significant progress over the last two years, increasing from 16% of the MPS budget devolved pre-April 2002 to 40% in the current year.

Current position

4. Aligning the pay budget against the deployment plan has proved very challenging as the organisation is growing by 1000 officers with 3200 (approximate) probationers joining and being posted almost exclusively to boroughs. Managing the movement of experienced officers from borough to specialist units as probationers are posted, whilst ensuring that an appropriate balance of skills and experience is maintained to ensure the Service is not left exposed to unacceptable risk, adds another layer of complexity to be managed (both at local and Service level).

5. As part of the ongoing review process allocations to pathfinder boroughs are currently being reviewed by the Finance Department. Initial findings are that some units started the year with more officers than the estimated strength the budget was based on and that the attrition rate (based on last year’s experience) is less than anticipated, and the Service needs to examine and, if necessary, refine its allocation mechanisms.

6. It is still relatively early in what is the first full year of police pay budget devolution and the MPS needs to ensure that it learns as much as possible from the pathfinding exercise in order to inform further devolution, rather than forge ahead possibly exacerbating current challenges and risking both operational and financial credibility.

Decision not to extend devolution of police pay in-year

7. In the light of the above, the joint MPS/MPA/GLA Budget Devolution Steering Group agreed on the 22 August that a recommendation should go forward to Management Board that devolution of police pay is not extended in-year, but that existing pathfinders are given an opportunity to bed in and an action plan be put in place to enable further devolution to commence from 1 April 2004. This proposal was agreed by Management Board in September.

8. The following work, most of which is already underway, will be completed by April 2004 to ensure that the organisation is ready to extend the rollout:

• Reviewing the allocation methodology applied to police pay, and improving its accuracy.
• Reviewing postings policy in the light of devolution, and making any necessary changes.
• Providing support for pathfinders, including mandatory training for finance and personnel managers in managing, planning and forecasting police pay budgets and workforce profiles.
• Reviewing local support structures to ensure that they are adequate and effective.
• Preparing new sites for devolution.

Options for rollout from April 2004

9. A further report will be presented to Management Board in December 2003 considering the options for extending devolution of police pay. The options will range from Service-wide devolution to increasing from 15 to 30 pathfinder sites (minimum option).

Budget devolution evaluation

10. An evaluation of budget devolution is currently being completed. Following sign off by the Devolution Steering Group, a report will be presented to this Committee.

C. Equality and diversity implications

There are no additional equality/diversity issues arising from this report.

D. Financial implications

Financial implications are covered in the main part of this report.

E. Background papers

None

F. Contact details

Report author: Commander Fitzpatrick, Reform and Growth and Sharon Burd, Director of Finance Services, MPS.

For more information contact:

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

Appendix 1

From April 2003 police pay was devolved to the following 15 ‘pathfinder’ locations:

Police pay was originally devolved to the seven units highlighted above during the previous financial year (2002/03). The forensic services budget was devolved to the original seven pathfinders from April 2003.

The following budgets were devolved Service-wide from April 2003:

• Energy (gas and electricity)
• Building maintenance (emergency and reactive repairs)
• Cleaning
• Forensic medical examinations and statements
• Interpreters and translators

These newly devolved budgets, are in addition to a range of budgets previously devolved including civil staff pay, overtime, expenses, technology equipment, phones and pagers.

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