Contents
Report 7 of the 17 February 2005 meeting of the Finance Committee and sets out the forecast position against the MPS’s Efficiency Plan as at the end of the third quarter.
Warning: This is archived material and may be out of date. The Metropolitan Police Authority has been replaced by the Mayor's Office for Policing and Crime (MOPC).
See the MOPC website for further information.
Efficiency plan monitoring – as at third quarter 2004/05
Report: 07
Date: 17 February 2005
By: Treasurer and Commissioner
Summary
This report sets out the forecast position against the MPS’s Efficiency Plan as at the end of the third quarter.
A. Recommendation
That members note the position against the efficiency plan as at the end of December (period 9).
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. Her Majesty’s Inspectorate of Constabularies (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 third quarter projected efficiency savings outturn position based on the currently available information regarding the remainder of the year.
5. The efficiency savings achieved at quarter three stands at £49.23m, which already exceeds the HMIC target of £47.30m. The overall efficiency target for the year is £53.44m, in order to provide a safety margin. The forecast for the year is showing an under achievement of £11.87m for cash releasing savings and an over achievement of £15.44m on non-cashable savings. On the latest forecast the MPS is projecting an over achievement of £3.57m against the MPS plan target and £9.71m against the HMIC target.
Cash releasing savings
6. The overall target for cash releasing savings is £37.64m. This was taken from the savings of £61.3m necessary to balance the 2004/05 budgets. It excludes increased income, which does not qualify for efficiency savings plans under current Home Office rules. The latest information indicates that the following areas are unlikely to fully achieve the savings targets:
Budget Plan
| Budget | Plan (£m) | Forecast (£m) | Variance (£m) |
|---|---|---|---|
| Supplies and Services | 6.07 | 3.95 | (2.12) |
| Compensation | 6.00 | 5.00 | (1.00) |
| Personnel | 3.26 | 2.36 | (0.90) |
| Police Overtime Reduction | 5.00 | 0.00 | (5.00) |
| Recruitment and Advertising | 2.48 | 2.28 | (0.20) |
| Consultancy | 2.40 | 1.46 | (0.94) |
| Transport | 2.31 | 0.60 | (1.71) |
| TOTAL | 27.52 | 15.65 | (11.87) |
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 the MPS has increased the non cashable element by incorporating the efficiency saving from the reduction in Police Sickness over the past three years (reduced from an average 12.2 days to 8.2 days per annum) of £16.65m. Whilst its inclusion may result in an over achievement of the target the MPS will be able to carry forward any excess saving into future years.
HMIC review and future developments
8. As mentioned in previous reports to Committee the MPS were waiting the outcome of discussions between the Association of Chief Police Officers, (ACPO), Association of Police Authorities (APA) and the Home Office regarding efficiency targets from 2005/06. This has now been agreed and issued and it has been confirmed that the efficiency savings target has been increased to 3% of annual budget each year from 2005/06. The Efficiency Plan 2005-06 paper also presented at this meeting outlines the detail and impact of this on the MPS.
9. A meeting with HMIC to review Second Quarter performance took place on 11 November 2004, at which time feedback was provided for the Quarter Two report. The meeting was regarded as successful and the Inspector provided verbal assurance that he was content with the methodology used and the figures presented. The next meeting with HMIC is due to take place on the 4 February 2005.
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. Legal implications
There are not considered to be any new legal implications associated with this report.
F. Background papers
- MPA Efficiency Plan 2004/05
G. 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
Supporting material
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