Efficiency plan monitoring – as at 2nd quarter 2003/4

Report: 06
Date: 18 December 2003
By: Commissioner

Summary

This report sets out the forecast position against the MPS’s Efficiency Plan as at the 2 nd quarter and provides an update on the meeting with HMIC to discuss the Plan.

A. Recommendation

Members are asked to note the contents of this report.

B. Supporting information

Introduction

1. The purpose of this report is to provide a monitoring update on the MPS’s Efficiency Plan and to provide feed back from the 2nd quarter HMIC review.

Background

2. As part of their annual Policing Plan, all Police Forces and Authorities are required to demonstrate efficiency savings equivalent to 2% of their annual budget with performance also being maintained or improved. HMIC monitor police authorities achievement through quarterly inspections.

3. These inspections cover both financial and operational performance. Failure to meet the annual efficiency target may result in a reduction to funding - in particular, the Crime Fighting Fund. The HMIC’s 2nd quarter inspection took place on 4 November.

Overall position

4. The statement attached at Appendix 1 reflects the 2nd quarter position for efficiency savings, and provides a projected savings outturn position based on these actual results and currently available information regarding the remainder of the year.

5. The position as shown at Appendix 1 shows an overall target of £42.8m, this exceeds the HMIC target of £40.7m to provide a safety margin. The projected savings for the year are showing an over achievement of £3.2m for cash releasing savings and an under achievement of £2.16m on the non cashable target of £22m for the year. Overall the Service is projecting an over achievement of £3.14m over the HMIC target of £40.7m.

Cash releasing savings

6. The overall target for cash releasing savings is £20.8m. This has been taken from the savings of £25.8m necessary to balance the 2003/04 budget build and excludes increased income of £5m which does not qualify for efficiency savings plans under Home Office rules. From this £20.8m three areas which are not likely to achieve their savings target are Police Overtime (£2.5m), Overseas Travel (£0.5m) and External Consultancy ( £0.60).

7. At the review meeting the HMIC recommended that the diversion of non pay inflation of £6.8m to fund the increased payment to ATOC rather than increase non pay budgets should be shown as cash releasing saving. The MPS had presented this as non-cash releasing since the overall budget does not decrease however as the impact on the bottom line is neutral the MPS have taken HMIC’s advice and shown this as cash releasing.

Non cash releasing savings

8. The non cash releasing savings are made up of two main areas, civilianisation of Police posts under C3i and other initiatives including Best Value Reviews.

Civilianisation of posts under C3i

The efficiency saving relates to the civilianisation of police posts. The target in the Plan was originally £14m, the forecast has now fallen to £12m due to re-phasing of the project.

Best Value Reviews and other initiatives

Bringing Offenders to Justice – Best Value review in identifying improving the level of service provided to victims and witnesses. The net savings target of £3.62m is based on implementing the recommendations from this review.

Records Management – Best Value review in improving records and information management which put forward recommendations May 2002. Net savings of £1m were taken from the report at the Planning, Performance and Review Committee on the 9 October and are based on implementing these recommendations.

Spend to Save Fast Track Surgery – Initiative to pay for officers surgery to cut their waiting times on the NHS. This is saving around £2m as reducing time lost caused by sickness, Police officers were returned to full fitness and back to work more quickly.

Mobile Identification Parades – New video Identification system database which holds more than 8000 images is saving an estimated £100,000 per month, as fees to pay volunteers are avoided.

Automatic Prisoner Release Notification – New system is providing timely intelligence automatically on prisoner releases thus freeing up officers to be deployed to other duties. Saving estimated at £20,000.

9. At the review meeting the HMIC expressed some concern over the MPS’s ability to achieve and evidence these non cash releasing savings and our ability to show a ‘demonstrable link between non-cashable gains and performance improvements’ which is a new requirement for 2003/04. Work is on-going to provide HMIC with assurance in this area.

10. Members will be aware that we need to deliver a managed underspend in 2003/04 to meet in-year and next year budget pressures. At the review meeting the opportunity to use this towards our efficiency target was discussed. The HMIC were not sympathetic to this approach on the basis that the savings are not of a permanent nature. Having reviewed the guidance in this area it is clear that non-cashable savings do not need to be permanent and the MPS is confident that some or all of the managed underspend can be used towards the 2003/04 efficiency target. The MPS will include this saving from the third quarter on and this should provide sufficient margin to achieve our target.

Parcels of current and previous best value performance indicators

11. Six ‘parcels’ of performance data are scored by HMIC, with the requirement to demonstrate that performance has improved. The scores are not in the public domain, but the overall assessment is of an improved performance as shown in the table below.

Efficiency planning processes within the MPS

12. At the review meeting HMIC expressed strong concern about how they perceive the efficiency planning process is managed within the MPS and the apparent lack of involvement of senior managers of the MPS and MPA. This was discussed at the 1st quarter meeting, and in response, the two aspects of financial and performance management are now brought together and reported quarterly to both the MPS Resource Allocation Committee and the MPA Finance Committee. Despite this, HMIC are eager that the Efficiency Planning process has a higher profile within the Service and are to arrange a high level meeting at which this is to be discussed. The Committee will be updated on developments in this area.

C. Equality and diversity implications

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

D. Financial implications

The financial implications are those set out in this report.

E. Background papers

None

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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