Review of financial management in the Metropolitan Police Service

Report: 9
Date: 15 June 2006
By: Commissioner

Summary

This report is to brief members on the Review of Financial Management, which is being conducted by a joint team of Metropolitan Police Staff and Capgemini to ensure the financial management practices across the MPS are operating at the optimum level.

A. Recommendations

Members are invited to:

1. Note the content of the report and support the development of a package of measures to bring further improvements in the operation of financial management in the MPS.

B. Supporting information

Background

1. As members will be aware the finance function of the MPS has undergone many significant improvements over recent years. There has been considerable investment in the finance function and the capacity and capability of the function has grown markedly since the creation of the MPA thanks largely to the active support of the MPS’s Management Board, Treasurer and Members of the Authority.

2. In line with the modernisation agenda of the Service it was felt that the time was right to review how financial management is delivered across the MPS. The main focus of the review was to determine to what extent processes, systems and structures align with best practice and to identify any further opportunities for improvement to ensure that full benefit from previous investment is being realised. The review and any subsequent improvements in working will be key to delivering against the Financial Management Strategic Improvement Programme previously approved by members.

3. The key deliverables for the review were:

• To review and document existing financial processes and compare these with best practice
• To map out the staff numbers and the management structures in place to deliver financial management and make proposals for improvements
• To undertake interviews with key stakeholders to seek views on the current provision of financial management and potential areas for improvement
• To make proposals to improve on existing ways of working

4. The review has been managed to ensure that it complements other key areas of review currently in progress in the finance arena, namely the Review of Financial Planning work to further integrate financial and business planning and the review of transactional processing eg paying bills operates to ensure where possible these processes are centralised and operating to maximum efficiency. The review has also been closely aligned with the Met Modernisation Programme, particularly the work of the HR Transformation Project.

5. The review has been supported by Capgemini who have worked in partnership with a team of Metropolitan Police Staff. A Steering Group made up of staff from throughout the MPS including Business Managers, Finance and Resource Managers, Human Resources, Unions and the MPA has provided oversight for the review and through four Steering Group meetings has provided strategic direction to the review and sign-off of deliverables as required. The review, which was carried out over an 8-week period, concluded on the 26 May 2006.

Review findings

6. Overall the findings of the review have been very positive with the finance function of the MPS comparing favourably with best practice. The review identified some key strengths in the way financial management is delivered, these include:

• a highly professional finance centre
• the centralisation of transactional processes in the Exchequer Services part of the department
• effective reporting to MPS Management Board and the MPA
• local financial management support which is highly valued by budget holders.

7. However, the review has also identified some areas where improvements could be made, including:

• The need to further professionalise the provision of financial advice and support across the MPS by utilising dedicated finance staff rather than staff who have a dual responsibility for managing finance and other resources
• The opportunity to group and rationalise how financial support is provided locally to ensure that support is provided in the most cost effective way
• The opportunity to align finance activity to ensure it is undertaken in the most appropriate place, in particular the need to continue the move to centralising finance transactional activity.

8. The main recommendations following the review can be grouped in to three main areas:

Quick wins

A number of small scale but probably high potential quick wins have been identified. Implementing these improvements will not fundamentally affect the way financial support is delivered but will remedy concerns that people find frustrating locally and will free up time to undertake more value added tasks.

Process and systems improvements

A number of larger scale process and systems improvements have been identified for example in the way the revenue and capital forecasts are produced. These improvements have largely already been identified within the Finance Services Business Plan for 2006-07 and work will be undertaken to ensure that these improvements are prioritised and resourced.

Structural improvements

The longer-term area of change will be to ensure that that the Finance Family ie the Department and the wider finance function has the structure, skills and systems in place to provide the right level of financial support to the MPS. The key themes to this change will be:

• Ensuring finance managers have properly defined roles and responsibilities
• Ensuring local financial support is grouped effectively
• Ensuring the central Finance Services department is structured appropriately
• Reinforcing the position of Exchequer Services as the Service Centre for financial transactions

Next steps

9. Over the next few weeks the output from the review will be considered in detail and proposals drawn up to take forward the recommendations made. Proposals relating to ‘quick wins’ and process and system improvements will be brought to Finance Committee in July. Proposals for implementing structural improvements will be submitted for Member approval later in the year following further detailed work and consultation.

Abbreviations

MPS

Metropolitan Police Service

MPA

Metropolitan Police Authority

HR

Human Resources

C. Race and equality impact

There are none specific to this report.

D. Financial implications

1. There are no direct financial implications at this stage.

E. Background papers

None

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

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