Police overtime expenditure in 2003/04

Report: 11
Date: 20 November 2003
By: Commissioner

Summary

This report discusses a number of issues which have arisen in relation to police overtime expenditure in 2003/04. These include:

• the extent and operational reasons for the forecast year end overspend
• the implications for achieving the PNB agreement to reduce police overtime expenditure
• the relationship with the work life balance debate
• a review of management controls in this area
• and the actions in place to manage this area of expenditure.

A. Recommendation

Members are asked

1. to note the contents of this report and
2. confirm that Finance Committee will be the lead committee for police overtime.

B. Supporting information

Introduction

1. The purpose of this report is to bring together various issues which have arisen with regard to police overtime expenditure in 2003/04. At Finance Committee on 23 October members were advised that a review was underway to determine why the police overtime budget was overspending and why some business groups reduced their budget as allocated during the budget profiling stage. This review has now been concluded and the outcome is set out in this report.

Reinstatement of budget

2. The August budget monitoring report showed a forecast year end overspend position of £12.9m against a full year budget of £96.4m. Further investigation in September revealed that the police overtime budget had been variously used by business groups under devolved financial management to enhance other budgets under pressure elsewhere (mainly police pay in Special Operations and police staff pay and income in Territorial Policing). Some £8.6m had been vired into other budgets. Almost half of this was to fund expected increases in SO officers (Counter Terrorism and Dedicated Security Posts), over a quarter to enhance Police Staff pay, with the remainder being various adjustments in other devolved supplies and services budgets.

3. MPS Management Board agreed that the original GLA (Mayor) approved budget should be restored. These adjustments have taken some time to unwind but this exercise has now been completed.

4. With the addition of specific Street Crime funding (£7.7m) and some money from the TOCU (£0.7m) the GLA recognised budget of £104.3m has now grown to a total overtime budget of £112.7m. The following table shows in more detail how the revised overtime budget is constructed.

Construction of revised 2003/04 police overtime budget

5. The reinstatement of the overtime budget inevitably changed the previously reported variance position on other expenditure heads. The September monitoring report also on the agenda of this meeting covers this.

Annual forecast against budget – marked improvement

6. The latest forecast shows a marked improvement on that previously reported. As at September, the mid-year point, this budget is set to overspend by £5.0m (4.4%). The projected year end variance at a business group level is as follows:

2003/04 Projected Year-end budget variance by business group

Operational reasons for overspending

7. The review into why business groups were overspending police overtime identified a number of operational reasons. These reasons are as follows:

Territorial Policing

• additional High Visibility Patrolling as part of Counter Terrorism activity
• increased public order commitment (Stop the War, Arms Fair, VIP visits)
• shortage of police sergeants
• Police Search Adviser (PolSA) abstractions
• training of probationers at BOCUs
• impact of additional officer growth

Specialist Crime Directorate

• delays in deployments of police officers
• increased demands in murder, kidnap, child protection and shootings inc Trident
  Specialist Operations
• counter terrorism demands and continuing threats (domestic and international – Arms Fair, US President visit, US Embassy, and others related to security)
• increased security patrols
• delays in deployment of police officers
• increased demands for Dedicated Security Posts (DSPs)
• increased hospital guarding
• shortfalls in Authorised Firearms Officers (AFOs) and Armed Response Vehicles (ARVs)
• Other VIP visits (eg President Putin, Prime Minister Sharon)

PNB agreement

8. Last year’s PNB agreement requires a 15% reduction in overtime against a calculated “base-line” over 3 years. The HMIC have accepted the following MPS/MPA agreed reduction profile:

• 2003/04 - £2.5m 3.6%
• 2004/05 - £3.5m 5.0%
• 2005/06 - £4.5m 6.4%

9. The second quarter’s PNB return for 2003/04 has been sent to the HMIC and showed the improvement on the second quarter result, but recorded the projected 4.4% overspend. The HMIC have been told that the MPS now does not anticipate achieving the reduction in 2003/04 required under the PNB agreement.

10. Members will be aware that the budget for 2004/05 recently submitted to the Mayor excludes the possible reduction of £3.5m in 2004/05.

Work life balance

11. The issues of work life balance and police overtime expenditure have become firmly linked when, in effect, police overtime expenditure is only one aspect of the work life balance debate. Members should be aware that the MPS have completed a number of other initiatives which should help in this area. These are as follows:

• publication of flexible working guidance for managers
• re-launch of flexible working policy
• publication of policy and guidance on Carers’ Policy
• publication of guidance on working time directive
• putting in place local OCU People Strategy and Gender Agenda plans

12. Members should also be aware that the average overtime payment received by individual officer has been fairly constant over recent years despite the marked increase in operational pressure on the Service and is set to reduce in 2003/04. Average overtime payments per officer are set out in the following table.

Amount paid on average to individual officer since 2000/01

Note – all at 2000/01 cost base

Review of management controls on police overtime expenditure

13. A review of management controls has highlighted that the following controls are in place:

13.1 The overtime budget is monitored and controlled at a number of levels within the organisation. Monthly monitoring reports to Management Board and the MPA show the spend to date and annual forecast against budget at corporate and Business Group level. The Commissioner’s SMT additionally receive monthly information at an OCU level and of the top 300 earners quarterly.

13.2 Following the Efficiency & Effectiveness Review of Overtime and an Internal Audit report, the various recommendations were distilled into a document “Guidelines for Managing Police Overtime Effectively”. This document is provided to assist senior staff in OCUs in managing police overtime. The document was issued at the start of this financial year. As part of the recommendations from the review, Computer Aided Resource Management (CARM) has been rolled out across the MPS to allow individual OCUs to produce management information on overtime at individual officer level.

13.3 Local management controls vary but the following practices are carried out by most OCUs:

• actual and forecast expenditure on police overtime for Business Groups as a whole is monitored by the appropriate Command Team as part of the monthly management report
• overtime budgets are closely monitored by OCU SMTs either weekly, fortnightly or monthly, dependent on the level of devolution. Overtime spend reports are issued prior to any meetings highlighting problem areas. All SMTs discuss overspends and actions that can be taken to try to bring the budgets back on line. In most OCUs there is a strong emphasis on performance in relation to budgets. The management and use of overtime forms part of performance reviews. Some OCUs devolve their budgets, where budget holders are held accountable to the OCU Commander, whilst others hold them centrally within the SMT.
• top earners are reported to SMT members each month. High earners are investigated by line managers.
• local overtime policies reviewed in relation to the ‘Management of Overtime’ paper.
• ad hoc audits of claims

Future actions

14. Following the full MPA meeting on 30 October the Deputy Commissioner tasked the Director of Resources with taking the “overall Management Board lead for the reporting and management of overtime”. This piece of work has two main strands:

• continuing the work to establish and confirm the robustness of the controls and re-emphasise the published guidelines. This work is in liaison with Commander Reform and Growth and the Step Change Programme Team.
• a review of income streams to identify additional areas of specific income funding which has not yet been added to the police overtime budget. This is being led by Corporate Finance.

15. The first Overtime Steering Group has met under the Director of Resources Chairmanship. At this meeting further work was considered as follows:

1. the extent to which the shortfall of SCD and SO officers (particularly the DSP officers) is having to be made up through the use of overtime.
2. A statement of the operational value and necessity that overtime represents to flex police resources and deal with surges.

16. Members will be kept informed of further developments in this area as part of the normal monthly revenue monitoring report.

C. Equality and diversity implications

The Steering Group has questioned whether the payment of overtime is distributed proportionately amongst all ethnic groups and between genders.

Data is not readily available, nor is it thought that it can be constructed cost effectively from existing systems. Further work is underway to assess any disproportionality.

D. Financial implications

There are no financial implications except those set out in this paper.

E. Background papers

None

F. Contact details

Report author: Terry Price, Corporate Finance, MPS.

For more information contact:

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

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