Contents
Report 6 of the 16 February 2006 meeting of the Finance Committee and updates members on the latest position on the 2006/07 revenue budget.
Warning: This is archived material and may be out of date. The Metropolitan Police Authority has been replaced by the Mayor's Office for Policing and Crime (MOPC).
See the MOPC website for further information.
2006/07 grant settlement and budget implications
Report: 06
Date: 16 February 2006
By: Treasurer
Summary
The report updates members on the latest position on the 2006/07 revenue budget.
A. Recommendations
That members note the latest position on the 2006/07 budget.
B. Supporting information
Update on the 2006/07 Budget
1. This paper updates members of the latest revenue budget position. Since my last update in mid January there have been government announcements on counter-terrorism grant funding on 25 January and 2 February. The government also announced the final revenue grant settlement figures on 31 January.
Counter terrorism funding
2. The recent counter-terrorism grant announcement included the following revenue items:
| 2006/07 £m |
2007/08 £m |
|
|---|---|---|
| Existing MPS Specific CT Grant | 61 | 61 |
| New MPS Specific CT Grant | 30 | 45 |
| Specific CT Grant (top sliced from Capital City Payment) | 50 | 50 |
There was a £2m shortfall against budget expectations for the first item, the existing specific CT grant. The second item is a new CT specific grant and will be matched by new expenditure not already included in the budget and the third item, financed from the top slice of the special capital city payment exactly matched the budget provision. At the full Authority meeting on 26 January it was agreed by the Commissioner that the £2 million shortfall would be found. The Chair’s understanding from the Authority is that this will be found from Special Operations budgets.
A fourth element of counter-terrorism grant in respect of dedicated security posts had previously been announced on 23 December at £115.8 million, £0.8 higher than anticipated in the budget. This effectively reduces the £2m. saving requirement to £1.2m.
Final Revenue Support Grant Settlement
3. The final grant settlement announcement on 31 January gave a slightly lower grant figure than the provisional settlement, in the sum of £1.764 million. This is the result of Ministers agreeing to correct other police authorities' data in relation to pensions. This benefits nine police authorities to a total of £14 million. While some new money has been found the government needed to redistribute £7 million from within the existing settlement. As a result all authorities (apart from the nine) will receive slightly less grant. This means that the government is not able to afford a floor of 3.2% in 2006/07 and it has been reduced to 3.1%. At this stage it is understood that the Mayor is not seeking corresponding reductions in the Authority’s budget to offset this grant loss.
Budget Requirement
4. The changes to the budget and the precept requirement have now become complex. To keep the audit trail, I have kept the table from my last update and added in these latest changes in italics. The full roll out costs of safer neighbourhoods is also included in the table below.
| 2006/07 | £M | £M |
|---|---|---|
| Budget Requirement (per initial submission in November) | 2,590.734 | |
| Less pensions financing changes - net reduction | -19.425 | |
| Less Amending Grant | -5.249 | |
| Add Safer Neighbourhoods | 48.100 | |
| Net Variation in specific grants | 46.506 | |
| Counter Terrorism grants originally anticipated | -228.000 | |
| Use of Reserves - agreed 19 January 06 | -7.000 | |
| Lower than expected specific CT grant (£2m) less additional DSP grant (£0.8m) | 1.2 | |
| Net additional savings required for the above | -1.2 | |
| -165.068 | ||
| Revised Budget Requirement | 2,425.666 | |
| Les Government Grant | -1,818.281 | |
| Net Requirement to be met from precept | 607.385 |
The precept requirement represents an increase of 8.4% over 2005/06 on the MPA’s element of the total precept..
A full report on the allocation of the budget to business groups will be brought to the 30 March full Authority for members’ consideration.
Capital Settlement 2006/07 and 2007/08
5. The capital settlement details for England and Wales were announced on 18 January 2006. The capital grant figures were disappointing as they represented reductions of £3.944 million in 2006/07 and £10.518 million for 2007/08 on an assumed grant figure of £35.856 million for each year. Full details of the settlement are contained in the paper on Borrowing and Capital spending Plan 2006/07 to 2008/09 elsewhere on this agenda. (agenda item 5)
6. In addition to the general capital settlement above, the Home Office announced on 25 January 2006 a new national counter – terrorism capital grant of £30 million in 2006/07 and £35 million in 2007/08. As yet there are no precise details on how this funding will be distributed to police authorities in England and Wales.
C. Race and equality impact
There are no direct equality and diversity implications arising from this report.
D. Financial implications
These are shown above.
E. Background papers
None
F. Contact details
Report author: Ken Hunt. Treasurer
For more information contact:
MPA general: 020 7202 0202
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