Capital Programme Monitoring 2003/04 - Provisional Outturn

Report: 07
Date: 24 May 2004
By: Commissioner and Treasurer

Summary

This report provides details of the provisional outturn position for capital expenditure during 2003/04 as recorded at 11 May 2004. An early indication is also given of sums arising through project re-phasing that are required to be carried forward through reserves to be re-allocated during 2004/05. Approval for the eventual level of carry forward will be sought as part of the report on the final outturn to be submitted to this Committee in July.

A. Recommendation

1. The Committee is invited to note the report, in particular the recorded provisional outturn figure of £164.813m, and approve the adjusted budget figure of £179.286m (paragraphs 1 and 2 refer)

B. Supporting information

2003-04 Budget, Expenditure and Forecast

1. A provisional outturn of £164.813m is recorded against an adjusted 2003/04 capital budget of £179.286m. This represents an underspend of £14.473m or 8.07%. The underspend relates directly to the need to re-phase major projects.

2. An adjusted budget figure of £179.286m has been used for comparison purposes. This is because a number of areas of expenditure fall within the strict technical definition of capital outlay and have contributed towards the recorded spend figure of £164.813m. Finance Committee members approved a revised capital budget of £158.108m at the meeting held on 19 February 2004. This latter figure needs to be adjusted by:

• £8m in payments to Equion Ltd in respect of the PFI contract for the provision of the Firearms and Public Order training facility at Gravesend. This is funded from the sale of the Hounslow Heath Training site as previously agreed by Committee;
• A reduction of £1.1m in respect of monies allocated at the end of second quarter for the refurbishment of Edinburgh House as these monies were found from within the £5.5m earmarked at the end of financial year 2002/03 for Estate improvements and it proved possible for the cost of refurbishment work at Edinburgh House to be found from the central budget for office refits;
• £10.2m for expenditure on the Infrastructure Renewal Programme which needs to be capitalised and will be funded from revenue budgets. This increase has no impact on revenue or capital budgets as to balance the capitalisation of expenditure there will either be a revenue contribution to capital outlay (RCCO) or, where special Airwave-related grant will be received in 2004/05, temporary funding from capital reserves; and
• £4.1m in respect of vehicles purchased from dedicated grants and partnership funds to assist in counter-terrorism and front-line policing operations.

3. Appendix 1 provides a statement by business group of the provisional outturn for 2003/04 as recorded as at 11 May 2004.

4. The final accounts process for 2003/04 is still ongoing, with work continuing to be carried out to ensure that expenditure is (a) matched to the accounting period to which it relates and (b) appropriately classified according to the nature of the service/goods purchased. In view of this, outturn information must only be regarded as provisional at the present time. Whilst figures would not be expected to vary considerably from those shown in this report they should be noted as indicative rather than actual figures.

5. Confirmation of the final expenditure position, together with a detailed summary of performance in respect of named capital projects, will be provided as part of an outturn review report. This will be submitted to the Committee for its July meeting.

6. The level of underspend shows an increase of £4.689m on that notified to Finance Committee members on 19 February 2004. This rise results from revised payment dates caused by amended milestone dates associated with the C3i and IT development programmes.

7. The key elements of the £14.473m variance from budget are;

• £9.9m in respect of building schemes reprogrammed by Property Services under the Revised Estates Strategy;
• £1.6m due to delays in implementing several projects associated with the Information Strategy; and
• £3.0m resulting from the adjusted payment profile for the supply of the Integrated Communications Platform (ICP) in respect of the Airwave element of the C3i Programme.

8. Finance Services has been advised that the full underspend as recorded by Property Services, the Directorate of Information, and the C3i Programme will be required to be carried forward through reserves to be allocated to these named projects during 2004/05. As the level of underspend delivered by Property Services is less than that forecast when the 2004/05 programme was approved, it will be necessary for discussions to take place with the Director of Property Services to determine where revisions to the land and buildings programme can be made.

Capital Receipts

9. The outturn for capital receipts in respect of the sale of land and buildings is recorded as £32.137m. This is £6.137m above the forecast for financing of capital expenditure in 2003/04 and reflects the delay from 2002/03 in the sale of Rochester Row and residential accommodation to police officers under ’right to buy’ legislation.

10. Capital receipts of £0.47m are noted from the sale of surplus vehicles.

C. Race and Equality impact

These 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

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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