Revenue budget monitoring 2003/04

Report: 05
Date: 19 February 2004
By: Commissioner

Summary

This report sets out the income and expenditure for the MPA/MPS to the end of December 2003 (Month 9) and provides an update to the projected financial outturn for the year.

A. Recommendation

1. Members are asked to note the contents of this report and to approve the two budget virements detailed in paragraph 11.

B. Supporting information

Introduction

1. The purpose of this report is to provide an understanding of the revenue budget position of the MPA/MPS for the financial year 2003/04.

2. The statement attached at Appendix 1 reflects the year to date position for income and expenditure to December 2003 (Month 9), and provides a projected outturn position based on these actual results and current information available regarding the remainder of the year. The statement at Appendix 2 provides the projected outturn position against the annual budget for each of the business groups.

Overall position

3. The summary position is shown at Appendix 1. The statement shows an underspend of £7.9m on expenditure (0.4%) and an over achievement of income by £9.2m (4.2%) for the year to date and a forecast underspend for the year of £0.8m (0.03%) after transferring £18.9m to reserves approved by the MPA and required under the budget submission to the Mayor. A summary of the overall position by Business Group is as follows:

Table 1 – Overall position by Business Group

Headline issues

Police officer pay

4. This budget line shows an underspend of £6.7m for the year to date, with a projected underspend of £6.2m for the year, an increase of £0.9m from last month.

Police (Civil) staff pay

5. Police staff pay is showing a year to date underspend of £12.2m and a forecast underspend of £13.9m (3.7%) an increase of £0.9m from last month Table 2 shows the year end forecast position against full year budget for each business group.

Table 2 – Comparison of annual budget to forecast year end position

Police overtime

6. The position on police overtime has again deteriorated since last month, the year to date position and forecast showing overspends of £10.4m and £8.8m respectively. The main business group overspends are in:

• Territorial Policing - £3.4m (5.1%)
• Specialist Operations - £4.7m (20.1%)
• Specialist Crime Directorate -£1.7m (10.3)

7. The Police Overtime Working Party met on 4th February with the continuing remit to improve management controls in this area and identify opportunities to control and reduce the forecast overspend. Average annual overtime payments per officer are set out in the following table.

Table 3 – Amount paid on average to individual officers since 2000/01

Note – all at 2000/01 cost base

Running expenses

8. Running expenses as a whole are forecast to overspend by about £6.1m (1%). This an increase of £2.3m on the position reported last month of £3.8m. The main variance has been a fall in the supplies and services underspend as a result of increases in developmental charges and an increase in prices for forensic services.

Income

9. Business Group income is showing a forecast over recovery on budget of £8.3m, a small increase from last month which is mainly due to increased recovery from third parties for the provision of additional services.

10. Service wide income is forecast to over achieve the budget by £3.7m, a £0.7m increase from last month. This is mainly due to favourable projected receipts for investment income.

Budget virements

11. Authority is sought for two budget virements:

1. a virement of £2m from police pay into police overtime for partnership working. This is not a permanent virement and reflects a realignment of partnership budgets which are set in-year on a one off basis.
2. a virement of £2m to fund capital expenditure for Integrated Borough Operations rooms in Boroughs from underspending budgets in Deputy Commissioners Command. Again this is not a permanent virement.

Budget Savings in 2003/04

12. As part of the exercise to balance the 2003/04 budget the MPA/MPS identified savings of £25.8 million. These savings were reflected in reduced budgets. The MPS is not anticipating achieving the savings in a few areas which total £6.5 million. Due to a price increase in forensic charges the £1m saving will not be achieved. The other main savings not being achieved are police overtime, air travel and income targets for the Income Generation Unit. We are, however, over achieving on additional investment income by £2.8 million giving a net under achievement of £3.7 million.

Delivering a managed underspend

13. In order to provide funding for one-off budget pressures in 2004/05 and following the Authority’s decisions on the 2004/05 budget, the MPS needs to deliver a managed underspend of £18.9m. The forecast reflects the transfer to reserves for this and the MPS remains on course to deliver the required level of underspend.

C. Equality and diversity implications

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

D. Financial implications

1. The financial implications are those set out in this paper.

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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