Efficiency plan monitoring – as at 1st quarter 2005/06

Report: 11
Date: 15 September 2005
By: the Treasurer and Commissioner

Summary

This report sets out the forecasted position against the Metropolitan Police Authority (MPA)/Metropolitan Police Service (MPS) Efficiency Plan as at the end of the first quarter for 2005/2006.

A. Recommendation

That

1. Members are asked to note the position against the efficiency plan as at the end of June.

B. Supporting information

Introduction

1. The purpose of this report is to provide an update on the monitoring of the MPA/MPS 2005/06 Efficiency Plan.

Background

2. As part of the annual Policing Plan for 2005/06, all Police Forces and Authorities were required to demonstrate efficiency savings equivalent to 3% of their annual budget whilst maintaining or improving performance. Her Majesty’s Inspectorate of Constabulary (HMIC) monitor police authorities achievements 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 forecast against the plan as at Quarter 1.

5. The efficiency saving forecast to be achieved as at the end of Quarter 1 is £80.21m. The position at the end of Quarter 1 against the original plan shows that there is a forecast under achievement of £7.37m for cash releasing savings and a forecast over achievement of £0.99m on non-cashable savings. This results in a £6.38m under achievement against the MPA/MPS plan target. However, due to the fact that the MPS has overprogrammed in terms of its Efficiency Plan, there is forecast to be a £4.78m over achievement against the Government’s 3% savings target.

6. Guidance has been very recently received from the Home Office regarding the features of high quality efficiency plans with particular emphasis on procurement, corporate services (e.g. Finance and Human Resources) and resource management. This information is contained in Appendix 2. The MPS is broadly in line with this guidance however, we are reviewing areas in which the plan could be improved in the future. The Home Office have also provided feedback on the MPS efficiency plan in 2005/06 and this is contained in Appendix 3. The Home Office have noted that the MPS’ efficiency planning results in a savings target in excess of the 3% overall target, but acknowledge that the recent terrorist attacks in London may affect the MPS’ ability to achieve that target. HMIC have not carried out a Quarter 1 review of the MPS efficiency plan but are expected to carry out a Quarter 2 review in the near future.

Cash releasing savings

7. The overall target for cash releasing savings for 2005/06 was £61.75m; this figure 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):

The ‘Reduction in Police Overtime’ (£1.9m) has not been achieved principally as a result of the budget pressures faced by the MPS due to the recent terrorist attacks in London. The civilianisation of Officer Enquiry posts (£2.5m) is currently forecast to underachieve due to the forecast overstrength position in Territorial Policing. Also, planned project rephrasing in relation to the C3i project will result in a delay in the achievement of efficiency savings, of £1.28m, until 2006/07.

Non cash releasing savings

8. The original target for 2005/06 non-cash releasing savings was £24.85m. The forecast at the end of the first quarter indicates that £25.83m will be achieved, £0.99m over the original plan.

List of abbreviations

MPS – Metropolitan Police Service
MPA – Metropolitan Police Authority
HMIC – Her Majesty’s Inspectorate of Constabulary

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 2005/2006

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

Appendix 2

Checklist – features of high quality efficiency plans

Efficiency planning

1. Wide involvement in the budget setting process BCU commanders engaged in and conversant with the EP process.
2. Plan is a ‘living document’ which is constantly evolving.
3. Carry forwards clearly identified and value calculated in accordance with guidance on use of deflators.
4. Re-cycled gains tracked though to re-investment in more efficient practices thereby making further gains.

Procurement

1. Clear understanding of procurement spend. Specific targets for gains from better practice and in relation to particular categories of spend.
2. Understanding of supplier base. Targets for reducing number of suppliers and spend outside main contracts.
3. Standard specifications for products in use force wide (or standardised with other forces).
4. Collaborative procurement with other forces and/or other public sector purchasers.
5. Use of national or regional framework contracts where these exist.

Corporate services

1. Understanding of Finance/HR and other corporate service costs compared to other forces or other public sector bodies.
2. Active consideration of scope to better manage fleet. Use of national vehicle procurement framework contract.
3. Pension arrangements - plans in place to manage down the cost of medical retirement. Collaboration in planning for administration of the new pension scheme.
4. Use, or planned introduction, of Integrated Business Systems. Collaboration on procurement of software with other forces.

Resource management

1. Collaboration or outsourcing in training provision.
2. Clear plans for increasing FLP, recognising the impact of ICT (e.g. Airwave, NSPIS Custody and Case, VIPER, Livescan, ANPR).
3. Civilianisation gains including use of the wider police family - contribution of CSOs, specials, wardens.
4. Scope for more effective deployment and rostering of officers considered.
5. Good progress on reducing sickness absence.
6. Measures to increase the effectiveness of officers undertaking duties that score for FLP ie there is an increase both in the amount of time devoted to FLP and in the effectiveness of time spent on FLP.
7. Full account taken of gains attributable to Airwave, Livescan, NCPIS Custody and Case, Police Portal, ANPR.
8. Full account taken of gains from implementing the recommendations of Sir David O’Dowd’s Bureaucracy Taskforce.

Appendix 3

Individual force comments

MPS

The MPS has an overall savings target of 3.44% with 2.46% relating to cashable gains.

The cashable gains target in particular is ambitious. We noted particularly the gains attributed to use of designated detention officers and those associated with C3i.as well as the impact of other planned civilianisation, reduced IT contract costs.

We would welcome further details of the measures to reduce the vehicle fleet and to outsource transport, as such measures do not feature in many other plans and there may be transferable good practice.

We recognise that for the future the Service Review is probably the key to identifying and realising further substantial gains and that events on and since 7 July are bound to have a significant impact on the realisation of planned efficiency gains.

Bureaucracy reduction

The contribution to the gains from Bureaucracy Task Force bureaucracy reduction is likely to be underestimated and could be around £9.09m, based on items included in the plan but not linked to BTF. Items that should be scored as BTF include the reduction of overtime, civilianisation, designated detention officers, special constables and introduction of Telephone Investigation Bureau.

Bureaucracy Reduction measures that may not yet have been taken or scored include: improved prisoner handling and processes including statutory charging schemes, Street Bail and PNDs. Also Local Bureaucracy Gateways and IT solutions such as Livescan, Video ID parades, ANPR, Custody & Case and Airwave.

These points have been discussed in detail with the Chief Inspector in the Unit, so we are confident that they will be picked up.

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