Finance Committee Annual Report

Report: 05
Date: 23 June 2005
By: Treasurer

Summary

The report summarises the work of the Finance Committee for the year 2004/05.

A. Recommendation

That

1. Members agree the report as representing the Committee’s work over the last year for submission to the Authority.

B. Supporting information

Introduction

1. The Authority requires each committee to produce an annual report on its activities. The reports are intended to give a general indication of member performance. They will also provide material for incorporation into the Authority’s published annual report.

Meetings and membership

2. The Committee has met nine times during the year. There are nine members of the Committee. Graham Tope has been Chair for the year and Richard Sumray Deputy Chair. Other members have been Reshard Auladin, Richard Barnes, Elizabeth Howlett, Bob Neill, Murad Qureshi and Rachel Whittaker.

Responsibilities

3. The Finance Committee oversees the preparation and management of the revenue and capital forward plans and annual budget, making recommendations to the Authority as appropriate. The Committee also discharges the Authority’s responsibilities in relation to treasury management, insurances, the efficiency and effectiveness review programme and any other significant non-audit financial matters. In addition, the Committee considers strategic issues in respect of the estate and other resource functions, financial and strategic issues relating to the provision of information systems and technology, and major contract matters as required by the Authority’s contract regulations.

Budgets

4. The Committee has considered financial plans, budgets, expenditure and outturn as appropriate in the annual cycle as follows:

• 2003/04. The final revenue and capital outturns were reviewed and final adjustments agreed. The resulting final accounts again received an unqualified opinion from the external auditor for the second time since the Authority’s inception.
• 2004/05. The Committee has received regular monitoring reports on both revenue and capital budgets and has considered provisional outturns.
• 2005/06. The Committee has considered the draft budget, including at a special meeting in October, and made recommendations to the Authority with regard to the submission to the Mayor. The 2005/06 revenue budget was approved as submitted and allows for implementation of the second phase of the Step Change programme with the further introduction of 160 neighbourhood-based policing teams. Medium term financial projections to 2007/08 and a five year capital programme have also been approved.

Other financial matters

5. The Committee has dealt with a number of significant financial matters in addition to budgets, including:

• Efficiency plan. The Committee has monitored the successful delivery of the efficiency plan for 2004/05 and approved the 2005/06 plan.
• Police overtime. The Committee has raised issues around the management of police overtime as part of the monitoring of expenditure against budget. A member-led review (under the auspice of the Budget and Overtime Group) into the subject has been made with an agreed MPS Action Plan. This is being carefully monitored.
• Treasury management. The Committee has received monitoring reports and a strategy report for 2005/06.
• Prudential Code for capital finance. The Authority has approved prudential indicators for 2005/06 in accordance with the requirements of the Code. The Committee has agreed arrangements for monitoring the indicators during the year.
• Insurances. Revised insurance arrangements were agreed during the year, which provide substantially improved catastrophe cover.
• Annual Review of Fees and Charges. The Committee has kept under review the arrangements for special service agreements including agreeing updated rates.
• Activity based costing. The Committee has received an update on progress in implementing activity based costing in the MPS.
• Funding of the Resource Allocation Formula. The Committee received a report setting out the financial aspects of the Resource Allocation Formula for 2005/06 and agreed changes to the 2005/06 budget to fund its implementation.
• Cost Implications of Public Order Events. The Committee has kept under review the policing costs associated with major public order events that occurred during 2004.
• Police Property Act Fund. The Committee considered the PPAF 2003-04 annual accounts, grants made in 2004-05 (to March 2005) and considered arrangements for the disbursements from the fund in accordance with agreed criteria in 2005-06.
• Financial Management Strategic Programme (FMSP). The Committee endorsed the new FMSP which was designed to secure continual improvement in the financial management in the MPS.
• Personal Insurance Indemnity Policy. The Committee agreed MPS personnel being indemnified by the Authority in certain tightly defined situations where their own personal life and accident insurances do not provide an indemnity. This included situations where life and accident insurances are invalidated through non disclosure of material information relating to high risk duties that cannot be disclosed to their insurers for operational security reasons.
• Capital Strategy. The Committee approved the first capital strategy which will become an integral part of the strategic financial and service planning that will in turn become part of the annual budget setting process and support decisions on the Authority’s capital investment under the prudential system.

Estate

6. The Committee has received regular update reports from the MPS Director of Property Services on a range of current estate issues. It has also considered reports relating to specific property transactions and proposals, approving action as appropriate. The Committee has approved proposals for siting mobile telecoms aerials on police property, all subject to local planning approval. Accessibility to police station front offices by disabled members of the community has also been considered. The Committee has agreed revised rents and charges for residential accommodation. During the year the Committee received regular updates on the progress of the Central London Estate, in particular the acquisition of Empress state Building and the associated office moves.

IT/IS

7. The Committee has approved various contracts in pursuance of the MPS information strategy.

Procurement

8. The Committee has approved a procurement transformation programme update. It has monitored progress on the outsourced contracts retendering programme and has approved contract action in support of that programme. It has approved action in relation to the C3i programme. It has also received information on the routine forward contracts programme.

Transport

9. The Committee has approved a Transport Services’ Strategy. This strategy set out the key principles against which the various services are provided and highlighted specific changes designed to improve service delivery.

10. Environmental Strategy

The Committee has approved an Environmental Strategy. Achievement of the strategic objectives will be achieved through the development of an Environmental Management Programme to include targets, responsibilities and performance indicators.

Next year

11. In the forthcoming year the Finance Committee will review the final outturn for 2004/05, monitor expenditure against budget in 2005/06 and develop the budget submission for 2006/07 together with the medium term financial plan. Consultation with stakeholders on the 2006/07 budget will be undertaken. Revenue and capital plans will both need to take account of the continuing implications of public expenditure plans under SR2004 and Mayoral priorities. The government’s review of the formula grant arrangements are expected in the late summer 2005. Work will be needed to implement the likely proposed changes following the Police Pensions Finance Reform from April 2006. Work will be progressed on reviewing the capital strategy and asset management planning in order to provide a strategic framework for decisions about capital investment, in accordance with good practice endorsed by the Prudential Code. The Efficiency Plan will continue to be monitored carefully.

12. The output from the current service review will need to be carefully considered. Key decisions will need to be taken to enable a balanced budget to be presented to the Mayor in the extremely tight timescale required.

13. The Committee will be asked to consider progress on the new financial improvement programme. Specific areas of development in which the Committee will continue to take an active interest include budget devolution and activity based costing.

14. Proposals relating to property will be assessed in the context of the estate strategy and the residential estate strategy. The Committee will continue to monitor and facilitate the MPS information strategy. The implementation of the procurement strategy should see continuing improvement in the quality of the procurement process and improved value for money in contracts the Committee is asked to approve. Major decisions will be required in the next year on the retendering of outsourced contracts.

C. Race and equality impact

The Committee addresses equalities aspects if and when they arise in relation to its business.

D. Financial implications

The cost of the Committee’s activities is met within the MPA’s directly managed budget.

E. Background papers

Finance Committee agendas:

• 22 July 2004
• 23 September 2004
• 11 October 2004
• 21 October 2004
• 7 December 2004
• 20 January 2005
• 17 February 2005
• 7 April 2005
• 23 May 2005

F. Contact details

Report author: Ken Hunt

For more information contact:

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

Send an e-mail linking to this page

Feedback