Minutes - draft

Please note these minutes are currently draft and are subject to committee approval.

Minutes of the meeting of the Finance Committee held on 15 September 2005 at 10 Dean Farrar Street, London, SW1H 0NY.

Present

Members

• Graham Tope (Chair)
• Richard Sumray (Deputy Chair)
• Reshard Auladin
• Richard Barnes
• Elizabeth Howlett
• Bob Neill
• Rachel Whittaker

Len Duvall, the Chair of the Authority, also attended

MPA officers

• Catherine Crawford (Chief Executive and Clerk)
• Ken Hunt (Treasurer)
• John Crompton (Committee Services)

MPS officers

• Sir Ian Blair (Commissioner) for consideration of agenda items 1 to 8
• Keith Luck (Director of Resources)
• Sharon Burd (Director of Finance Services)
• Terry Price (Director of Strategic Finance)
• Craig Watkins (Director of Business Development)
• Simon Hart (Director of Business Support)
• Alan Croney (Director of Property Services)
• Chief Superintendent Simon Humphrey attended for consideration of agenda items 15 and 18
• Emma Devenish (Environment Manager) attended for consideration of agenda item 9

15. Apologies for absence

(Agenda item 1)

An apology for absence was received from Murad Qureshi.

16. Declarations of interests

(Agenda item 2)

There were none.

17. Minutes of the meeting held on 21 July 2005

(Agenda item 3)

Resolved: That the minutes of the meeting held on 21 July 2005 be agreed and signed as a correct record.

18. Chair and Members’ update – oral report

(Agenda item 4)

No reports were given.

19. Lead members role

(Agenda item 5)

A report was submitted which requested the Committee to make appointments to the budget and police overtime review group.

Rachel Whittaker reported that she had held an initial conversation with Murad Qureshi about them exchanging their existing lead member responsibility for estates and public order policing. She undertook to speak to him again in time for the further consideration of this matter by the full Authority at its meeting on 27 October.

Resolved –That Reshard Auladin continue to be the lead member on IS/IT matters and a decision with regard to estate issues be deferred for decision at the meeting of the Authority on 27 October.

20. Revenue and capital budget monitoring 2005/06- period 4

(Agenda item 6)

The report provides an update on the revenue and capital monitoring position for 2005/2006 at period 4 (to the end of July). The revenue budget is forecast to overspend by £83.1m (3.0% of budget), which includes £88.1m of costs, related to operations following the recent terrorist attacks in London. The underlying forecast overspend excluding Operation Theseus costs is £21.8m, which is offset by a forecast underspend on Police Officer Pensions of £26.8m.

The expenditure to date for the Capital Programme as at period 4 (July) is £37.7m, which is 13.3% of the approved original budget of £215.8m. The forecast outturn is £258.5m, which is £25.6m below the revised budget.

In his opening remarks the Commissioner said it was clear from agenda items 6, 7 and 8 that when the effects of Service Review and the terrorist activities in July were considered in the context of budget setting there were clearly significant challenges for the MPA and MPS. The Commissioner said he wished to pay tribute to the Director of Resources and all members of the Management Board for their work so far on what was generally acknowledged to be a particularly difficult budget round. Undoubtedly hard decisions remained to be made to a very tight timescale.

In reply to a point from Len Duvall the Commissioner agreed that it would be desirable in future years if much of the ‘scene setting’ work on the budget was undertaken before rather than after the summer recess. This had not been possible on this occasion because of the work on finalising the corporate strategy.

Replying to comments made about the areas of overspend the Director of Resources advised that although much of the authority to incur expenditure was devolved, action had been taken from the centre to point out to each business group the necessity of managing expenditure to the bottom line of the budget. Particular attention had been drawn to areas of discretionary expenditure such as the use of hire cars and consultants. Operation Theseus was the first time that the MPS had needed to call in mutual aid for several years and amongst the lessons learnt was the fact that it had proven to be notably more expensive option than using secondments. Operation Theseus was largely the reason for the overspend in Territorial Policing (TP) but it was the case that TP had effective financial disciplines in place and last year had not overspent.

Members commented that even without the effects of Operation Theseus overspending on police overtime remained a concern. They would also welcome being given more information on the work which was now being carried out under this Operation.

Elizabeth Howlett asked whether consideration had been given to introducing a blanket percentage spending reduction across all business groups. The Director of Resources said that this option had not yet been considered.

Resolved - That

1. the year to date and forecast position for revenue budgets and the capital programme be noted; and
2. approval be given to capital funding and budget increases of £1.1m as detailed at paragraph 13.

21. Financing Operation Theseus

(Agenda item 7)

A report was submitted which updated the Committee on the current position of financing the costs of Operation Theseus, which was instigated in response to the terrorist attacks in London which occurred on 7 July.

Members noted it was clear that there was an expectation that some of the expenditure would be met from the reserves and enquired whether there were any other pressures on the reserves, for example the recent heavy increase in fuel prices. The Treasurer advised that he was not aware of any other requests to use the reserves.

The Treasurer advised that it remained the case that no response has been received to the claim for Special Grant. Len Duvall said that being realistic he would expect the Home Office to have submitted its detailed response to the request by the middle of October.

Resolved - That

1. the action already taken be noted;
2. agree to temporarily freeze spending against earmarked reserves where a financial commitment has not yet been entered into, pending resolution of Home Office Special Grant arrangements;
3. the option of preparing for a possible contribution to the overall additional Theseus costs a managed revenue underspend in 2005/06 of up to £27 million, excluding pensions be endorsed; and
4. a further update report be submitted to the October meeting.

22. Draft Budget Submission 2006/07 update

(Agenda item 8)

This report provided an update on progress to date in the preparation of the draft Budget Submission for 2006/07 to 2008/09 and Medium Term Financial Plan (MTFP), and the processes being undertaken to establish a balanced budget for consideration by the joint Finance/PPRC Committee on 10 October.

The Director of Strategic Finance advised that the information in the Appendix was the most up to date and accurate representation of the financial position. It was acknowledged that there were some inconsistencies with figures in the narrative. The report to be submitted to the budget meeting of the Committee on 10 October would provide full consistency in this respect.

Members raised several points about the further roll out of the safer neighbourhood programme. The comment was made that although wards continued to be used for planning the further roll out it remained the case that there was some criticism of this approach in view of the lack of consistency of the size of ward populations between boroughs. On the other hand, the phrase 'neighbourhoods' was used with no clear agreed definition of what this meant. Perhaps there needed to be a resolution of this point once and for all. Arising from a discussion on other practical aspects of the further roll-out the Commissioner confirmed that the issue of sufficient Sergeants being in place to head each team would need to be addressed.

The Committee felt that given all the uncertainties, this was not the appropriate time to make a decision with regard to the size of the budget submission and effects on the precept as requested in recommendation 6. It was agreed that the matter be considered again as part of the consideration of the draft budget submission at the joint Finance and Planning Performance and Review Committees on 10 October. Recommendation 6 was accordingly deferred.

Members noted that formal consultations with the staff associations had yet to commence and considered that recommendation 7 as drafted was too specific and did not provide enough flexibility in what could be a fast moving scenario. It would be better for the wording to simply say “appropriate Committee” so that reports could be submitted to the most opportune meeting.

In his concluding remarks the Commissioner said he felt that the useful discussion the Committee had held on agenda items 6, 7 and 8 had made a significant contribution to identifying an agreed basis for the direction of travel for the next few years.

Resolved - That

1. the current financial overview position and the steps being taken within the MPS to achieve a balanced budget for consideration by the joint meeting of Finance/Planning Performance and Review Committees on 10 October be noted;
2. the prospects for Government grant in 2006/07 and the assumptions currently made be noted;
3. the potential implications of the budget savings requirements and possible implications for police officer and police staff numbers be noted;
4. Confirm in principle, support for the roll out of all the remaining 368 Safer Neighbourhood teams during 2006/07 subject to funding from the Home Office, redirection of permanent beat officers and the GLA precept as outlined in this report;
5. a revised business plan for the accelerated roll out of the Safer Neighbourhood teams be submitted to the joint meeting of Finance/PPRC Committee on 10 October;
6. recommendation 6 be deferred for consideration at the joint meeting of Finance/PPRC Committee on 10 October; and
7. reports on the staffing implications of the budget proposals and the diversity and equality implications be submitted to the appropriate Committees when the budget proposals have been clarified.

23. Environment (sustainable development) budget return 2006/07

(Agenda item 9)

The GLA group budget process for 2005/06 requires the inclusion of a submission on the Environment (Sustainable Development) Budget to support the budget application. A budget return, which had been approved by the MPS Management Board, was submitted for the approval.

A member suggested that opportunities be taken to look for other ways of increasing the income of the Wildlife Unit to support its important work in for example tackling the lucrative field of trafficking of rare species.

The Environment Manager said that the possibility of obtaining EU funding would be explored.

Resolved - That the environment (sustainable development) budget return be approved prior to its submission to the Greater London Authority by the end of September.

24. Financial Management Strategic Improvement Programme

(Agenda item 10)

A report was submitted which set out progress against the improvement programme.

Resolved - That the progress against the Financial Management Strategic Improvement Programme be noted.

25. EFFICIENCY PLAN MONITORING 2005-06 – 1st QUARTER

(Agenda item 11)

A report was submitted which sets out the forecasted position against the MPA/MPS efficiency plan as at the end of the first quarter.

Resolved - That -the position be noted.

26. Formula grant distribution: consultation

(Agenda item 12)

A report was submitted on the issues relevant to the MPA on the outcome of the Government review of the grant distribution formula

Resolved - That

1. the MPA response to the consultation questions as set out in Appendix 2 be agreed; and
2. specific representation be made for retention of the police staff pensions uplift (paragraphs 21-23).

27. Insurance and liability provision

(Agenda item 13)

This report describes the insurance renewal programme for 2005/06 and seeks approval for the re-letting of insurance policies. Delegation to the Treasurer was proposed to enable agreement to be made on some outstanding insurance matters.

Resolved - That

1. the insurance policies be re-let in accordance with the terms outlined in the exempt report, with effect from 1 October 2005; and
2. the Treasurer in conjunction with the Chair be given delegated authority to finalise arrangements for outstanding insurance matters as detailed in the exempt report

28. Estates update

(Agenda item 14)

A report was submitted which updated members on the latest information on Estate and Property Services matters.

In reply to a question about the item on safer neighbourhoods the Director of Property Services advised that the accommodation for the teams was being provided in a wide variety of settings – such as shopping centres and local authority buildings. The position varied widely with some accommodation being made available for a nominal charge whereas other providers expected the full market rent.

In reply to a question about the item on Notting Hill Carnival, the Director of Property Services advised that the Directorate was involved in many aspects such as negotiating short licences for the siting of temporary structures, providing 3rd party indemnities and the siting of CCTV cameras.

Resolved - That the current position on estate and Property Services matters be noted

29. Replacement of MPS helicopters

(Agenda item 15)

This report sought authority to award a single source contract for the purchase and in- service support of three helicopters, replacing machines introduced into service between 1993 and 1996. The choice of helicopter type was approved by the Committee of 23 September 2004 subject to Home Office capital funding approval of up to 40%.

Chief Superintendent Simon Humphrey said that the proposed funding arrangements were a significant departure from the previous sponsorship arrangement (In this context the Chief Executive and Clerk advised that a report on sponsorship was due to be submitted to an MPA committee shortly).

Members congratulated the officers on achieving a satisfactory outcome to this procurement exercise.

Resolved - That a single source contract be awarded for the following:

1. the purchase and role equipping of three helicopters, associated spares and tooling, of which up to 40% will be met by the HO as detailed in the exempt Appendix 1.
2. a Service By Hour (SBH) maintenance contract for both the engines and airframe for a period of five years (fixed for the first two years) and with an option for a further five years to cover the anticipated life of the helicopters and as detailed in the exempt Appendix 1.

30. Exclusion of press and public

(Agenda item 16)

Resolved - That under section 100A(4) of the Local Government Act 1972 the press and public be excluded from the meeting for the following items of business on the grounds that they involved disclosure of exempt information as detailed in paragraphs 8 and 9 of Schedule 12A to the above Act.

Summary of decisions made on exempt items

Minute 31 agenda item 17 Exempt Appendix to Insurance and liability provision
The information was noted.

Minute 32 agenda item 18 Exempt Appendix to helicopter replacement
The information was noted.

Minute 33 agenda item 19 - exempt minutes of the meeting held on 21 July 2005
The minutes were agreed and signed as a correct record.

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