Police Property Act Fund

A report on the 2003-4 annual accounts, the allocation of grants in 2004-5 to date and proposals for the disbursement in 2005-6

Report: 09
Date: 7 April 2005
By: Commissioner

Summary

In accordance with the Finance Committee’s request at its meeting on 19 February 2004, this paper reports on the Police Property Act Fund 2003-4 annual accounts, grants made to date in 2004-5 and requests consideration of the arrangements for the disbursement of funds in 2005-6.

A. Recommendation

That the Committee:

1. Receive a report on the 2003-4 annual accounts for the Police Property Act Fund in accordance with its request at its meeting on 19 February 2004
2. Note the grants made to date in 2004-5 from the funds available for distribution from the Police Property Act Fund; and
3. Consider proposals for the disbursement in 2005-6.

B. Supporting information

1. On 19 February 2004, the Finance Committee considered a report concerning the arrangements for the disbursement of grants and administration of the Police Property Act Fund (PPAF) and asked to receive an annual report summarising the annual accounts and a list of grants awarded. This report

• Reports on the 2003-4 financial year
• Provides information to the Committee on the change in accounting procedures from 2004-5
• Reports on grants awarded to date in 2004-5
• Proposes arrangements for the disbursement of funds in 2005-6.

Annual Accounts And Grants Awarded In 2003-4

2. A copy of the annual accounts for the 2003-4 financial year has been sent to the Treasurer in accordance with the requirements in the financial safeguards proposed by the Finance Committee.

3. A summary of the income and expenditure accounts for 2003-4 and 2004-5 (to 8 March 2005) is set out at Appendix 1 together with a balance sheet as at 31 March 2004. For reasons explained under the sub title: ‘Change in Procedures 2004-5’ (paragraphs 5-7), the income and expenditure account for 2003-4 and the balance sheet as at 31 March 2004 report on funds held on behalf of third parties from whom money had been detained and to whom money was returned as well as the income and expenditure of the PPAF proper.

4. A summary of the grants for charitable purposes (both by boroughs and pan-London awards) made during 2003-4 is attached at Appendix 2.

Change in Procedures from 2004-5

5. The PPAF, according to the legislation, is derived from the proceeds of all sales of property that has come into the possession of police in connection with crime or suspected crime, where the owner has not been ascertained and no court order has been made in respect of it. The money may then be used to meet the expenses incurred in the conveyance, storage, safe custody and sale of the property and to make payments for charitable purposes.

6. Until 31 March 2004 the PPAF had also been used as the temporary holding account for money detained from persons suspected of crime. The annual accounts (and therefore the summary at Appendix 1) accordingly include both types of income (i.e. the proceeds of sale of property and the detention of money) and both types of expenditure (administrative expenses, charitable awards and restorations or forfeiture of detained money). From that date steps have been taken to separate detained money from PPAF funds and to manage each separately.

7. With effect from 1 April 2004, PPAF money and detained money have been placed in separate bank accounts since the MPS is entitled only to utilise those funds to which the PPAF proper applies. Detained money is retained until directions are received from a Court or, if a case does not reach a hearing, from the officer in the case. An exercise is presently being undertaken to identify how much of the money in the PPAF at 31 March 2004 represented PPAF money and how much was detained money. A transfer between the accounts will be necessary when that exercise has been completed. Individual audits and sets of accounts will accordingly be required for the current financial year and in future.

Report on Grants Awarded to Date in 2004-5

8. The same meeting of the Finance Committee agreed the allocation of funding for the 2004-5 financial year of £400,000 to boroughs and £100,000 for pan-London expenditure. Of the pan-London funding, £104,000 has been spent, including the £71,500 committed to the Safer London Foundation for this financial year. In contrast, of the £400,000 available for grants by boroughs, only £283,781 has currently been spent. A list of grants awarded in both categories is at Appendix 3.

Proposals for the Disbursement of Funds in 2005-6

9. It was reported to the meeting of the Finance Committee held on 19 February 2004, that the PPAF had approximately £1 million available for distribution for charitable purposes. It was decided at the meeting that half of this sum should be made available for disbursement in 2004-5 with the other half retained for future years (subject to review in spring 2005). Of the £500,000 available for 2004-5, £400,000 was allocated for borough use and £100,000 for pan-London projects. The funding for boroughs was allocated according to local need, based on crime and deprivation factors.

10. The borough allocations for 2004-5 and grants made during the period 1 April 2004 to 8 March 2005 are shown in Appendix 3. A list of the individual grants is at Appendix 4. It will be seen that while the pan-London allocation has been slightly overspent at £104,000, the boroughs, despite being reminded about unspent allocations, have so far only made grants totalling £283,782. There is, therefore, £116,218 of the original total allocation of £500,000 unspent to date.

11. Since the last report to the Finance Committee, the MPS has experienced a decrease in the income due to the MPS, largely because of a considerable fall in the amount and value of the property that has been available for disposal under the legislation. It is uncertain whether this trend will continue. However, the MPS is of the view that in the foreseeable future the income from sales is unlikely to match previous levels and that some caution should, therefore, be exercised in the disposal of the £116,218 left from 2004-5 and the unallocated residue of £500,000 from the original £1m.

12. The MPS proposes, therefore, the following arrangements for 2005-6:

• That boroughs retain the residues totalling £116,218 from their 2004-5 allocations
• Of the funds remaining for future allocation, boroughs receive a total of £200,000 allocated in the same proportion as 2004-5
• That boroughs are advised that these funds will be available for the 2005-6 financial year only and that any unutilised funds from either 2004-5 or 2005-6 will be withdrawn at the end of 2005-6 for re-allocation in future years
• £100,000 be allocated in the new financial year for pan-London projects from which the £53,500 already approved for the Safer London Foundation will be met.

Of the available funding, this would leave £200,000 for future years plus any residual funds from boroughs at the end of 2005-6.

13. It is also proposed that the same grant criteria and administrative arrangements for the operation of the PPAF as used for 2004-5 is adopted for 2005-6.

C. Equality and diversity implications

Grants are awarded to organisations whose work encourages a positive relationship between police and a wide spectrum of local communities covering the full range of diversity within the Metropolitan Police area.

D. Financial implications

There are no financial implications in relation to the Metropolitan Police Authority Fund. The financial implications for the Police Property Act Fund are addressed above.

E. Background papers

• None

F. Contact details

Report author: Carol Hume, Charities and Special Payments, Strategic Finance

For more information contact:

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

Appendix 1: Police Property Act Fund - Summary of Income and Expenditure Accounts 2003-4 and 2004-5 to date

Note 1. This summary represents a transitional period: in 2003-4 both detained monies and PPAF money were held in the same account. The account was split at the end of 2003-4 with the bulk of the funds properly belonging to the detained monies account. The reduced amount of interest received in 2004-5 on the PPAF therefore reflects this transfer of the detained monies to their own account. The true opening balance will be calculated in due course and the figure for the interest will be adjusted accordingly.

Note 2. Details of the grants awarded are contained in Annexes 2 and 3.

Note 3. The administration charge does not represent the full cost of the Fund’s administration. The amount charged will vary according to the funding available to the PPAF each year.

Note 4. The figure for miscellaneous expenditure in 2004-5 includes a back payment of nearly £35,000 VAT owed to the Inland Revenue.

Note: The balance sheet reflects the end of year position for the amalgamation of PPAF and funds held on behalf of third parties from whom money had been detained. An exercise is presently being undertaken to identify how much of the balance at 31 March 2004 represents PPAF money and how much is detained money.

Appendix 2: PPAF grants awarded in 2003-4

Appendix 3: PPAF allocations 2004-5 and grants to date (as at 30/3/2005)

Appendix 4: PPAF disbursement by boroughs 2004-5 to date

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