Update on ABC implementation in the MPS

Report: 08
Date: 23 September 2004
By: Commissioner

Summary

The Home Office requires that all police forces provide Activity Based Costing (ABC) information to agreed definitions and standards as part of the annual data requirement for 2003-04. This paper updates MPA members on progress in implementing ABC in the MPS. The MPS is represented on the Home Office’s ABC Project Board together with the MPA Treasurer. This note also updates members on future plans for further implementation and use of the data.

A. Recommendation

Members are asked to note the contents of this update report.

B. Supporting information

What is required to support delivery of ABC as part of PPAF?

1. The Home Office requires that all police forces provide Activity Based Costing (ABC) information to agreed definitions and standards as part of the annual data requirement. Activity data collected as part of the ABC model is also required to inform the Frontline Policing Measure developed to monitor achievement of Public Service Agreement (PSA) 2. All this information will also be used as part of the Policing Performance Assessment Framework (PPAF), which in turn is likely to be used to inform a review of the funding formula in future years. The MPS also recognises the value of ABC data for local use to inform resourcing decisions.

2. The Police National ABC model was developed by ACPO, the APA and the Home Office. It sets out:

• A common set of policing activities that should be costed (e.g. dealing with burglary, visible patrol)
• Guidance on how costs should be apportioned (for example, how accommodation costs and pensions should be dealt with)
• Guidance on how data should be collected - a key issue for all police forces is how to capture information about how staff spend their time on different policing activities.

3. As almost all forces do not have IT systems which capture this information routinely, the model recommends that activity analysis (AA) studies are used to capture time spent against policing activities by police officers and operational police staff in multi-functional roles.

4. The police national ABC model requires that activity data are collected for the whole of the force, including:

• A minimum two-week activity analysis (AA) study of all operational staff performing multi-functional roles each year to inform apportionment of basic command units (BOCUs in the MPS) costs against policing activities. AA studies involve completion of an activity card by all staff in the unit being studied, for each tour of duty during the period of the study. Data from the cards is then read into a database for collation. If there are problems with data quality, then this process of cleaning and collating the activity data can take several weeks. However, the resulting activity data is detailed and can provide valuable information to local managers on how staff spend their time.
• Information to apportion the costs of other Operational Command Units according to policing activity and the individual borough these activities supported (eg in the MPS Specialist Operations, Specialist Crime and Territorial Policing Pan-London units).
• Information to apportion the costs of support units to policing activities and to individual boroughs or force-level overheads (eg in the MPS Deputy Commissioner’s Command, HR Directorate, Resources Directorate).

5. The activity data is then combined with cost driver information in the ABC model. This model has been built by the MPS Resources Directorate using costing software and conforms to Home Office guidance.

MPS delivery of the National ABC Model for 2003-04

6. Submission of the activity analysis and costed data was required by the Home Office by the end of July 2004.

7. The MPS has 32 BOCUs and a further 22 other operational command units, covering a total of around 32,000 staff in these areas. Last year, due to the unique size and complexity of the MPS and with the support of the MPA, the Home Office agreed to a more limited programme of studies on 8 BOCUs, plus studies of other operational OCUs. In total the programme covered around 12,000 people.

8. The AA study programme was far larger than any undertaken by the MPS in any previous years and larger than that carried out by any other force. Some problems were encountered in cleaning the data for such a large set of studies and data collation was finally completed in May 04. Lessons have been learned for this year: in particular, there is a need to reduce the turn-around times for completing, cleaning and returning the activity data to those units participating in the AA study programmes.

9. The collated activity data has now been sent to the Home Office and is being used to inform the baseline assessment for the Home Office’s Front Line Policing measure. (A separate paper on that measure has been submitted to the MPA Planning, Performance and Review Committee.)

10. The costed data for the ABC submission for the MPS has not yet been submitted to the Home Office, however. Significant operational problems have been encountered by police forces generally in developing the costing model as specified by the Home Office. The MPS is more complex than other forces and this has added to the difficulties experienced. The position is further complicated by the scale of data to be processed for the MPS which has resulted in excessive run times to update the model. This has raised concerns about how well the B-Plan ABC model software will cope with increased amounts of OCU data to process when more extensive activity data is available to process.

11. A review of initial costing outputs has also identified the need to revise some aspects of the set-up of the parameters specified in the software model. Work is progressing to make the necessary changes although this is proving to be time-consuming and complex.

12. The Home Office is aware of the situation and is content that the MPS takes the necessary steps to provide a full and accurate return: they accept that in the first year of implementation of this complicated model using complex software there were likely to be some problems. The reworking commenced on 2nd September and our current estimate is that this work is likely to take about a month.

Exploiting the ABC and AA data

13. The model provides costings at force level and at BOCU level against a range of operational policing activities. In particular, the model is designed to show the contribution of HQ units (e.g. SO, SCD, TP-Pan London) to the policing of individual BOCUs. The chief strength of the costed data is that it should allow comparisons to be made across different forces and their basic command units against a range of policing activities. When the costed data are available there is a need to review this for its usefulness in informing planning and resource management internally.

14. At a local level, the underlying AA data is likely to be more useful, providing a detailed snapshot covering the resources directly under the control of each unit studied which can be broken down to team level. Data from last year’s studies is currently being made available to those units who participated in the AA programme, prior to being made available to other analytical units too. Early indications from BOCU managers are that the information is of real potential interest to them. Directorate of Strategic Development and Resources Directorate will also work with business group analytical units make best use of the ABC and AA data, in tandem with other resource and performance information.

Other requirements for costed data

15. The Police National ABC model provides costed information about policing activities. However, there are other requirements for costed information in the MPS, for example to cost major change programmes and to inform planning. The MPS Resources Directorate and Directorate of Strategic Development are exploring this, in consultation with the MPA/MPS Planning Board. The ABC data will be reviewed to see how well it can support other requirements for costed data.

Plans for further implementation of the ABC model: 2004-05 onwards

16. The Home Office is still keen for the MPS to continue to implement the ABC model more widely, but acknowledges the challenges that this presents the MPS. In the light of the lessons learned and following consultation internally, the MPS proposes the following work over the next year:

• Measures to improve the efficiency of data collection via AA studies and to reduce the amount of data cleansing required
• Further exploration of technology to increase the amount of regular activity data available from MPS units
• A programme of AA studies which is representative of MPS BOCUs and which will provide up-to-date data for non-Borough OCUs and support monitoring of the front-line policing measure. A further complication this year, though, is the roll-out of the C3i/MetCall programme. As with other MPS projects, there is a need for the AA study programme not to conflict with this
• Improvements to the build and QA of the ABC model in the costing software.

Improving efficiency of the data collection

17. Improvements this year include increasing the size of the AA Unit and boosting the support provided to BOCUs with other centrally based staff during the period of the studies. This will enable faster and more direct feedback to units on any data quality issues during the studies.

Exploiting technology

18. The ABC model requires data to be collected to 15 minute intervals. This level of detail is unlikely to be available as a by-product of standard IT systems, which means that AA studies will continue to be needed for certain roles in future. However, there are many roles where this level of data capture is unnecessary and it is possible that time-sheet approaches to activity recording would be more appropriate. Roll-out of a new duty planning/time recording system (MetTime) will begin in 2005 in the MPS and work is taking place to explore the potential to use this system to provide more of the data required, for example for some operational command units.

AA study programme for 2004-05

19. The work described above should help the MPS move to a more robust position of providing and using ABC and activity data. In developing the programme for this year we have also had to take account of the introduction of MetCall and the transition to C3i in the MPS: this major change programme requires significant planning and preparation on those BOCUs affected. In practice, this means avoiding those BOCUs affected by the first tranche of roll-out in autumn-spring 2004-05.

20. With Home Office agreement for 2004-05 the MPS will carry out studies of 10 BOCUs this year (see Table A Appendix 1). In addition, we propose to carry out studies of those operational OCUs where data pre-2003/04 is not available (see Table B Appendix 1).

21. While the drawbacks of this approach are that full compliance with the ABC model is not reached at this time, this should still ensure that a representative sample of data if provided for the MPS to inform BOCU costing and to inform monitoring of the front-line policing measure (tracked at force level). While the overall programme would be of similar size to that carried out this year, other work in this area will allow the MPS to make a more robust provision of data for us to build on for the future.

Improvements to the ABC model

22. The costing software used is complex and lessons from the model build this year will be used to make improvements to the model structure next year and feed into its QA processes.

Conclusion

23. The MPS and MPA continue to work with the Home Office on implementation of ABC. It has presented a number of challenges in the first year, but exploitation of the information gained is crucial to helping improve efficiency and resourcing decisions in the MPS.

C. Race and Equality impact

By providing an indication of cost to help set performance in context, ABC data may provide local managers with additional information on which to assess their compliance with the Race Relations Amendment Act and to assess equality of service provision.

D. Financial implications

1. There is a potential risk to MPA/MPS funding if activity based costing is not implemented in the MPS in 2003-04. This risk is not currently quantifiable.

2. Costs of conducting BOCU Activity Analysis studies were addressed in an earlier paper to MPA Co-ordination and Policing Committee (Feb 03). There have been no significant changes to these costs.

E. Background papers

• Implementation Of Activity Based Costing In The MPS - MPA Finance Committee Paper, 14 November 2002
• Operational Policing Measure - MPA Finance, Planning and Best Value Committee Paper, 29 May 2002
• Update On Implementation Of Activity Based Costing In The MPS: Data Collection From BOCUs – MPA Co-ordination and Policing Committee Paper, 17 February 2003
• Update on Implementation of Activity Based Costing (ABC) in the MPS – MPA Finance Committee 15 September 2003.

F. Contact details

Report author: Helen Dean, Directorate of Strategic Development

For more information contact:

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

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