Efficiency Plan Monitoring – as at 1st Quarter 2004/05

Report: 09
Date: 23 September 2004
By: Treasurer and Commissioner

Summary

This report sets out the forecast position against the MPS’s Efficiency Plan as at the end of the1st quarter.

A. Recommendation

The Committee is invited to: Note the position against the efficiency plan as at the end of June (period 3).

B. Supporting information

Introduction

1. The purpose of this report is to provide a monitoring update on the MPS’s 2004/05 Efficiency Plan.

Background

2. As part of their annual Policing Plan, all Police Forces and Authorities are currently 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.

Overall Position

4. The statement attached at Appendix 1 reflects the 1st 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 shows an overall target of £53.44m, this exceeds the HMIC target of £47.30m to provide a safety margin. The projected savings for the year are showing an under achievement of £5.00m for cash releasing savings and a potential over achievement of £16.00m on the non-cashable target of £8.00m for the year against the MPS plan target. Overall we are projecting an over achievment of £11.00m against the MPS plan target and £17.14 against the HMIC target at this stage.

Cash Releasing Savings

6. The overall target for cash releasing savings is £37.64m. This has been taken from the savings of £61.3m necessary to balance the 2004/05 budget and excludes increased income which does not qualify for efficiency savings plans under current Home Office rules. The latest information indicates that Police Overtime (£5.00m) is the one area that is unlikely to achieve the savings target.

Non cash releasing Savings

7. The original target for non-cash releasing savings was £8.00m As a consequence of the uncertainty surrounding the achievement of the ‘cashable’ savings we have increased the ‘non-cashable’ element and incorporated the efficiency saving from the reduction in Police Sickness over the past three years from an average 12.2 days to 8.2 days per annum (£16.65m). Whilst at this stage its inclusion shows that we overshoot the target, future changes to efficiency plans will enable us to carry forward any overachievement.

HMIC Review and Future Developments

8. There is no meeting planned with HMIC to review 1st Quarter figures but a summary has been sent to HMIC. It is expected that any feedback will be provided with the 2nd Quarter report.

9. As mentioned above, there are plans to review the efficiency plan targets and rules under which they are constructed. Currently ACPO, APA and the Home Office are discussing how the rules will be amended to make gathering efficiency data and savings more transparent. It is anticipated that from the 2005/06 financial year, efficiency gains will need to be made at the increased level of 3% of annual budget, split 50/50 between cashable and non-cashable. To assist in meeting this target it will be possible to roll over any excess (or shortfall) achieved in any particular year into a three-year plan period, this will begin with the current financial year. An update on the proposals will be included in the next monitoring report.

2003/04 Efficiency Plan Final Assessment

10. The 2003/04 efficiency plan has undergone its final assessment and the MPS has received commendation and confirmation that it met its performance assessment. HMI – Sir Ronnie Flanagan’s letter of the 2nd August 2004 - confirmed that performance has improved and that the efficiency savings had over achieved HMI targets by £1.80m.

C. Race and Equality impact

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

D. Financial implications

The financial implications are those set out in this paper.

E. Background papers

• MPA Efficiency Plan 2004/05

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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