Efficiency plan monitoring – as at 4th Quarter 2004/05

Report: 09
Date: 23 June 2005
By: Commissioner and Treasurer

Summary

This report sets out the provisional outturn position against the MPS’s Efficiency Plan as at the end of the 4th Quarter.

A. Recommendation

That members note the position against the efficiency plan as at the end of March.

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, in 2004/05 all police forces and authorities were 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 provisional outturn.

5. The efficiency savings achieved at the end of Quarter 4 were £57.05m, which exceeded the HMIC target of £47.30m. The overall efficiency target for the year was £53.44m, in order to provide a safety margin. The position at the end of Quarter 4 shows that there has been an under achievement of £12.46m for cash releasing savings and an over achievement of £16.07m on non-cashable savings resulting in an over achievement of £3.61m against the MPS plan target and £9.75m against the HMIC target.

Cash Releasing Savings

6. The overall target for cash releasing savings for 2004/05 was £37.64m, which 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 shows that the following areas have not achieved the savings targets (Ranked in order of shortfall):

Non Cash Releasing Savings

The original target for non-cash releasing savings was £8.0m. 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 has resulted in an over achievement of the target, the MPS will carry forward the excess saving into future years.

HMIC Review and Future Developments

The efficiency targets for 2005/06 have 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. Details of the Efficiency Plan 2005/06 were presented at the last meeting.

A meeting to discuss the provisional outturn position was held with HMIC on 17 May, when a verbal update was provided. The Inspectorate was satisfied with MPS performance and it was agreed that final figures would be provided after the close of the accounts.

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 report.

E. Background papers

• MPA Efficiency Plan 2004/05

F. Contact details

Report author: Sharon Burd, Director of Finance Services

For more information contact:

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

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