Revenue and capital monitoring report 2005/06 – Period 11

Report: 4
Date: 20 April 2006
By: Commissioner

Summary

The report provides an update on the revenue and capital budget monitoring position for 2005/06 at period 11 (to the end of February). The revenue budget is forecast to underspend by £12.7m (0.5% of budget). The expenditure to-date for the capital programme as at period 11 (February) is £181.9m, which is 63.2% of the revised budget of £287.7m. Some adjustments to certain projects within the Capital Programme are submitted for approval.

A. Recommendations

Members are invited to:

1. Note the year to date and forecast position for revenue budgets and the capital programme.
2. Approve amendments to the Capital Programme as set out in this report

B. Supporting information

Background

1. This report provides an update on the forecast against revenue and capital budgets for the MPA/MPS in 2005/06 based on the position at the end of February.

2. Table 1 provides a summary of the revenue forecast and additional cost forecast for the cost of the police operations in respect of the bombings/attempted bombings Operations Theseus and the south-east Asia tsunami operation Bracknell by business group. Table 2 compares the forecast outturn variances from Period 10 and Period 11 by Business Group excluding expenditure relating to Operation Theseus and Operation Bracknell. Table 3 provides a summary of the forecast outturn comparison between Period 10 and Period 11.

Table 1 – Summary of revenue forecast against budget at period 11

Table 2 – Comparison of period 10 forecast outturn variation with period 11 forecast outturn variation (excluding Operations Theseus & Bracknell)

Table 3 - Summary of Period 10 Forecast Outturn with period 11 forecast Outturn

3. In overall terms the forecast position has improved by £1.1m from period 10 mainly due to a reduction in Operation Theseus forecast costs. Core expenditure and net pensions forecasts have remained constant overall.

4. The forecast outturn position for the MPS is an underspend of £12.7m (0.5% of budget). This continues to reflect the action taken by the MPS to reduce expenditure in 2005/06 to produce a balanced budget in line with the wishes of the MPA Finance Committee.

5. Members are asked to note that a provision for a tax liability in relation to ATOC of £14.7m will now not be required. This will be reflected in the reported outturn position.

Operational performance

6. A short summary of key operational performance targets is reproduced below to provide a holistic view for Members. Comparing operational performance in April to February 2006 with the same period last year:

• Total notifiable offences are falling: down 2.8%.
• Homicide is falling: down 14.0% (excluding those killed on the bus in the terrorist attacks on July 7th).
• Gun enabled crime is rising: up 6.3%.
• Knife enabled crime is rising: up 3.6%.
• Residential burglary is rising: up 2.3%.
• Robbery is increasing: up overall by 14.7%.
• Rape is rising: up 8.4%.
• Motor vehicle crime is rising: up 1.7%.

7. Members will be aware that more detailed information regarding operational performance is available from the Strategy Unit within the Deputy Commissioner’s Command.

Operation Theseus

8. The current forecast for this operation is £53.1m of additional costs as compared to a forecast of £54.2m at Period 10. The figures in Table 4 include £30m in grant received from the Home Office and £0.6m from other sources.

Table 4 – Estimated costs of Operations Theseus

Revenue forecast by business group

9. The forecast outturn position for the MPS is an underspend of £12.7m (0.5% of budget). The subjective position by business group is at Appendix 1. The overall position for the MPS is at Appendix 2.

Territorial Policing – An overspend of £27.3m – 2.5% of budget

10. Forecast additional expenditure on Theseus and Bracknell has reduced by £0.4m to £15.4m. Excluding such expenditure, there is a forecast overspend of £11.9m. The principle reasons for this overspend are Police Overtime (£5.6m) on street crime and other operational commitments and Police Pay where there is a forecast of 335 officers above the budgeted workforce total of 19,698 (BWT) at the year end (£3.3m). Also, as previously noted, there are overspends within Supplies and Services costs such as Forensics, IT consumables and desk top support, Scenes of Crime Equipment, Public Order Clothing and Interpreter fees. These overspends are partially offset by an underspend on the PCSO budget. The forecast overspend has increased by £0.9m from period 10 principally within forensics where the monthly charges were higher than anticipated, higher fuel costs and police overtime following a review of the contingency fund forecast.

Specialist Operations – An overspend of £22.9m – 12.7% of budget

11. Forecast additional expenditure on Theseus and Bracknell has reduced from £15.0m to £14.7m. Excluding such expenditure, there is a forecast overspend of £8.2m. The principle reasons for this overspending remain as overseas travel and subsistence costs (£5.2m) with other overspends falling against desktop support, telephony, local procurement, clothing and police overtime. The forecast overspend has increased by £0.2m from period 10 mainly in the area of overseas travel costs.

Specialist Crime – An overspend of £8.5m – 2.9% of budget

12. Forecast additional expenditure on Theseus and Bracknell has reduced from £6.3m to £5.9m. Excluding such expenditure, the forecast overspend is £2.6m. The principle reasons for this overspend are within Supplies and Services and relate to forensics expenditure and budgets held on behalf of services such as DNA Expansion, Telecommunications Intelligence Unit and Police National Computer (PNC) charges. The forecast overspend has increased by £0.5m from period 10, mostly within overseas travel and vehicle fuel costs.

Central Operations – An underspend of £3.3m – 1.7% of budget

13. Forecast additional expenditure on Theseus and Bracknell has remained constant at £1.9m. Excluding such expenditure, the forecast underspend in Central Operations is £5.2m. The principle reason for the underspend continues to be the under-achievement of the deployment plan in the Firearms section, vacancies within various sections and additional income from various sources. The underspend has increased by £0.2m from period 10, mainly within police pay following greater certainty around expected officer numbers.

Deputy Commissioner’s Command – An underspend of £0.6m – 0.7% of budget

14. Forecast additional expenditure on Theseus and Bracknell has remained constant at £0.8m. Excluding such expenditure, the forecast underspend is £1.4m. The reason for the underspend primarily relates to Police Pay where there is a forecast of 70 officers below BWT following delays in recruiting officers with the appropriate experience. Also within Police Staff Pay a review of Impact Consultant posts has determined a lower level of requirement than originally budgeted and these have been offered as savings for 2006-07. This underspend is partially offset by higher insurance premiums and compensation payments. The forecast underspend has seen little change to that reported at period 10.

Directorate of Information – An underspend of £1.7m – 0.7% of budget

15. Forecast additional expenditure on Theseus and Bracknell has reduced by £0.4m to £1.9m. Excluding such expenditure, there is a forecast underspend of £3.6m. The principle reason for the underspend is reduced running expenses associated with various projects that have been re-phased. The forecast underspend has reduced by £0.4m since period 10 following increased expenditure on the call handling system (£1.5m) and Radio Unit Rental (£0.7m) which has been offset to some extent by reductions in the Police staff pay forecast (£1.5m) following a thorough review of forecast expectations in this area.

Human Resources (excluding Police Pensions) – An overspend of £1.8m – 2.1% of budget

16. Forecast additional expenditure on Theseus and Bracknell has remained constant at £0.4m. Excluding such expenditure there is an overspend of £1.4m. As previously reported, budget pressures in respect of police staff premature retirements and secondment income are offset to some extent by underspends in Police Pay and Police Staff Pay due to vacancies. The forecast overspend has reduced by £0.2m since period 10 mainly as a result of additional income relating to the ACPO Secretariat.

Resources – An underspend of £3.4m – 1.4% of budget

17. Forecast additional expenditure on Theseus and Bracknell has remained constant at £4.0m. Excluding such expenditure, the forecast underspend in Resources is £7.4m. As previously reported, this is principally due to the reduction in the expected tax liability on free rail travel following discussions with the Inland Revenue, additional income for service charges at Lambeth from the Forensic Science Service and increased investment income. The forecast underspend has increased by £0.2m since period 10.

Metropolitan Police Authority – An underspend of £0.1m – 1.4% of budget

18. The underspend position principally results from unanticipated income relating to internal audit work on fraudulent claims by interpreters (£0.3m). The forecast has remained constant compared to that reported at period 10.

Pensions – A favourable variance of £29.6m – 10.2% of budget

19. The favourable variance has reduced by £0.1m since the period 10 forecast.

Centrally held budgets – A favourable variance of £34.2m

20. The forecast additional expenditure on Theseus has reduced from £9.6m to £9.4m. The forecast also includes £30m of Home Office grant contribution to the cost of Operation Theseus.

Funded units – A favourable variance of £0.2m

21. The budget for funded units assumes income will exceed expenditure by £3.9m. The forecast now suggests that £4.1m will be achieved, a favourable variance of £0.2m.

Provisional revenue outturn by expenditure/income type

22. The main forecast variances from budget are set out below.

Police officer pay - Underspend of £0.1m – 0.01% of budget

23. The forecast includes £14.1m additional costs relating to Mutual Aid provided to the MPS and NI payable on overtime payments resulting from operations following the terrorist attacks in London and Operation Bracknell. Excluding such expenditure, there is a forecast underspend of £14.2m. This underspend is due to workforce numbers being less than budgeted through the year despite the forecast over strength position in Territorial Policing. However, the forecast underspend has increased by £3.7m from Period 10 following reduced forecasts within Territorial Policing, Specialist Operations and Central Operations.

Police staff pay - Underspend of £2.2m – 0.4% of budget

24. Forecast expenditure on Theseus and Bracknell has remained constant at £0.1m. Excluding such expenditure, there is a forecast underspend of £2.3m. The forecast underspend has increased by £1.1m from Period 10, mainly within the Directorate of Information as noted above.

PCSO pay - Underspend of £6.8m – 11.3% of budget

25. The forecast underspend is principally due to vacancies and variations in pay averages compared to those budgeted. The forecast underspend has increased marginally by £0.2m from that reported in Period 10, relating principally to the Transport OCU where there are lower numbers than previously expected.

Traffic Warden pay - Underspend of £1.8m – 13.8% of budget

26. As previously reported, this forecast reflects delays in recruiting staff for the new car pound at Perivale. The forecast underspend has increased marginally from Period 10.

Police officer overtime - Overspend of £32.8m – 27.6% of budget

27. Forecast expenditure on Theseus and Bracknell has decreased marginally by £0.2m to £24.1m. Excluding such expenditure, there is a forecast overspend of £8.7m. The major cause of the remaining overspend continues to be operational commitments within Territorial Policing relating to street crime. The forecast overspend has remained constant compared to that reported at Period 10.

Police staff overtime - Overspend of £6.6m – 25.3% of budget

28. Forecast expenditure on Theseus and Bracknell has remained constant at £1.0m. Excluding such expenditure, there is a forecast overspend of £5.6m. As previously advised, a significant element of the overspend relates to costs within the Directorate of Information associated with Communication Officers. There has also been an impact within Specialist Operations where the increase in officer numbers has required additional support by Police staff. There has been an increase of £0.4m in the forecast overspend since Period 10 following a re-assessment of the forecast within Resources Directorate based on the year to date expenditure.

PCSO overtime - Overspend of £0.3m – 43.6% of budget

29. As previously stated this overspend relates almost entirely to the cost of operations following the recent terrorist attacks in London, estimated at £0.2m. There has been minimal change in the variance from Period 10.

Employee related expenditure - Underspend of £3.0m – 8.9% of budget

30. Forecast expenditure on Theseus and Bracknell has reduced from £0.5m to £0.1m following re-categorisation of some Bracknell costs now recorded within the Transport category. Excluding such expenditure, there is a forecast underspend of £3.1m. This is principally due to the reduction in the expected tax liability on free rail travel following discussions with the Inland Revenue. The forecast underspend has reduced by £0.3m from Period 10, partly through the acceleration of training courses within Specialist Crime Directorate.

Premises costs - Overspend of £3.6m – 1.9% of budget

31. Forecast expenditure on Theseus and Bracknell has remained constant at £1.4m. Excluding such expenditure, there is a forecast overspend of £2.2m. There has been an increase of £1.6m in the forecast overspend from the Period 10 position following increases to legal & consultants charges in light of year-to-date expenditure; increase to major works fees following a review of various contracts and potential liabilities arising from negotiations; and increases to electricity costs as a result of price changes.

Transport costs - Overspend of £17.6m – 34.9% of budget

32. Forecast expenditure on Theseus and Bracknell has increased by £0.3m to £5.4m from that reported at period 10, following the re-categorisation of costs previously reported as Employee Related Expenditure. Excluding such expenditure, there is a forecast overspend of £12.2m. As previously reported, the majority of the forecast overspend relates to overseas travel and subsistence costs which result from increased security and protection duties within Specialist Operations. There are also budget pressures relating to increased fuel costs, vehicle hire and maintenance and increases to the forecasts in these areas have seen the forecast overspend increase by £1.8m from the Period 10 position.

Supplies and services - Overspend of £18.7m – 4.7% of budget

33. Forecast expenditure on Theseus and Bracknell is £10.3m. Excluding such expenditure, there is a forecast overspend of £8.4m. As previously advised, the main causes are DNA testing, external and legal consultancy, scenes of crime equipment and telephone rental. The forecast overspend has increased by £3.2m since Period 10 principally due to an increase in the forecast within Directorate of Information following increased expenditure on the call handling system.

Capital financing costs - Underspend of £2.5m – 14.3% of budget

34. As previously advised, it is estimated that there will be reduced capital financing costs due to the Minimum Revenue Provision being lower than budgeted, as capital expenditure in 2004/05 was lower than originally anticipated. There has been no change to the forecast underspend from that reported at Period 10.

Income - Forecast over-achievement of £45.8m – 15.4% of budget

35. As previously reported, the income forecast includes a contribution of £30m from Home Office in respect of Operation Theseus, receipt of the MPS contribution to Operation Bracknell of £6.3m, income of £4.7m for policing the G8 meeting and an additional £1.8m from Transport for London following a transfer of police officers from Territorial Policing to the Transport Operational Command Unit (OCU). These are all one-off income streams and do not therefore affect the budget build for 2006/07. The forecast also reflects income of £3.1m for service charges at Lambeth. The forecast over-achievement has increased by £2.2m since Period 10, mostly within Resources Directorate for increased rents receivable (£0.6m), miscellaneous receipts (£0.4m) and interest on investments (£0.3m). There has also been an increase in forecast income for funded units principally in relation to the Disclosure Service.

Funding - Forecast increase in funding of £0.3m – 0.01% of budget

36. As previously reported, the forecast for Home Office funding for London Allowance has been revised and it is now expected that an additional £0.3m will be received as a result of there being more officers who qualify for the payments. There has been no change to the forecast reported in period 10.

Budget movements

37. Details of the budget movements made by Business Group from the beginning of the year are at Appendix 3a and details of movements for the month of February are at Appendix 3b. The major budget movements in period 11 relate to the allocation of centrally held budgets to Business Groups for additional Special Priority Payments and the associated ERNIC costs.

Movements in Reserves

38. The following reserve movements have been carried out in period 11:

Capital monitoring

39. The Finance Committee approved a 2005/06 capital programme of £322.4m on 16 February 2006.

40. Members are asked to approve the following amendments to the 2005/06 Capital Programme:

• Carry forward of £10.7m relating to the Property Programme due to the planned re-profiling of various projects.
• Carry forward of £27.0m relating to the Step-Change Programme primarily due to delays in finding and fitting out bases for the Safer Neighbourhoods element of the programme (see para. 49).
• Additional funding of £3.0m from a specific grant for the National Automatic Number Plate Recognition (ANPR) Data Centre.

Assuming these adjustments are approved, this will revise the capital budget in 2005/06 to £287.7m

41. Appendix 4 sets out the expenditure for the 2005/06 Capital Programme as at period 11 (February) by programme/project, which shows an overall total of £181.9m. This total represents 63.2% of the revised budget. The forecast for the year of £224.8m is £62.8m below the revised budget.

Property Programme - £11.1m underspend (9.5% of budget)

42. The underspend is due to the planned re-phasing of various projects due to delays in planning and commercial issues relating to Buckingham Gate, Perivale car pound, Cam Road and Stratford.

43. It is requested that the MPA Finance Committee approve the carry forward of £10.7m for the above projects.

Information Programme – excluding C3i Programme – £10.7m underspend (20.1% of budget)

44. The underspend is due to planned re-phasing of the following projects; MetTime, Metafor, Modernising Ops, Magellan Phase 4 and the National ANPR Data Centre.

Transport Projects - £1.1m overspend (7.8% of Budget)

45. The forecast overspend is due to the purchasing of vehicles and equipment on behalf of other business groups that were not included in the capital budget. Funding for this expenditure will come from within the various business groups and such adjustments will be made as part of the Close of Accounts.

Directorate of Information – C3i Programme - £41.8m underspend (48.7% of budget)

46. The forecast underspend is due to the planned re-profiling of expenditure into later years for the subscriber terminals and Integrated Communications Control System (ICCS) contract payments.

Step-Change Programme – 1st and 2nd Tranche Costs - £0.2m underspend (3.1% of budget)

47. Following a full review of the Step-Change Programme there has been a significant re-profiling of expenditure into 2006/07. This has been caused by a slower than planned rollout at a number of sites due to security issues and delays in the implementation of Airwave.

48. The Safer Neighbourhoods element of the programme is forecast to slip by £15.8m in 2005/06 as a result of various issues. A number of existing MPA premises have been converted to Safer Neighbourhood use on a short term bases (2/3 years), to meet urgent needs of Safer Neighbourhood teams, the costs of fit-out has been considerably lower in some cases than originally budgeted for. The acquisition of sites has slowed down from 2004/05 due to the lack of suitable commercial opportunities. To counteract this, Property Services are looking at alternative size premises and in some cases have adapted Borough based asset strategies to incorporate Safer Neighbourhood units with other Borough functions. Where sites have been acquired, there have also been cases where projects have been delayed due to planning issues. Installing signage to Safer Neighbourhood units has been delayed leading to a further reduction in expenditure although it is expected that all sites will be provided with signage by the end of 2006/07.

49. Although the total expenditure to date has been lower than original budget profile, the delay in acquiring sites coupled with the provision of units on a temporary basis and the need to retrospectively fit-out other sites will require further capital funding. Property Services forecast that total capital expenditure on the Safer Neighbourhood programme will closely reflect the original budgeted estimates. As a result, it is requested that the MPA Finance Committee approve the carry forward of £27.0m in relation to the Step-Change Programme.

Appendix 4 also shows the funding received to date as £181.9m, which is 63.2% of the revised funding figure of £287.7m.

Abbreviations

ANPR

Automatic Number Plate Recognition

BWT

Budgeted Workforce Totals

ICCS

Integrated Communications Control System

OCU

Operational Command Unit

PNC

Police National Computer

Operational Bracknell

the response to the tsunami

Operation Theseus

the response to the terrorist attacks in London in July 2005

C. Race and equality impact

1. There are none specific to this report.

D. Financial implications

1. The financial implications are those set out in this report.

E. Background papers

• Previous 2005/06 monitoring reports.

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

Send an e-mail linking to this page

Feedback