Minutes

Minutes of the meeting of the Finance Committee held on 20 July 2006 at 10 Dean Farrar Street, London, SW1H 0NY.

Present

Members

• Graham Tope, (Chair)
• Richard Sumray (Deputy Chair)
• Reshard Auladin
• Richard Barnes (up to agenda item 6)
• Elizabeth Howlett
• Aneeta Prem

Also attended – Karim Murji

MPA officers

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

MPS officers

• Sharon Burd (Director of Finance)
• Karim Mahamdallie (Director of Business Support)
• Chris Strange (Lead Management Accountant)
• Chris Gibson (Deputy Director, Procurement)
• Rachel Musson (Lead Accountant) attended for consideration of agenda item 6.

1. Apologies for absence

(Agenda item 1)

Apologies for absence were received from Bob Neill and Rachel Whittaker.

2. Declarations of interests

(Agenda item 2)

There were none.

3. Minutes of the meeting held on 15 June 2006

(Agenda item 3)

Resolved - That the minutes of the meeting held on 15 June 2006 be agreed and signed as a correct record.

4. Finance Committee annual report 2005/06

(Agenda item 4)

A report was submitted which summarised the work of the Finance Committee for the year 2005/06.

Resolved – That the report be agreed as representing the Committee’s work over the past year for submission to the Authority.

5. Finance Committee work programme 2006/07

(Agenda item 5)

A draft work was submitted which set out the draft work plan for the Committee for 2006-07.

The Chief Executive and Clerk requested that a new piece of work - GLA convergence be added to the list of miscellaneous reports included at paragraph 16.

Resolved – That subject to the inclusion of GLA convergence to the list of miscellaneous reports the work plan for 2006-07 be endorsed on the understanding that reports on further topics may need to be submitted as circumstances arise.

6. Revenue and capital budget monitoring 2006/07- period 2

(Agenda item 6)

A report was submitted which provided the revenue and capital budget forecast provision for 2006/07 to the end of May. The revenue budget is forecast to overspend by £22.3 M (0.8%) of budget. The capital programme forecast indicates that there are no significant variances from budget.

Referring to the anticipated overspend in overtime for Territorial Policing the Director of Business Support said that the position had now been reviewed by the Assistant Commissioner, Territorial Policing who had written to the heads of the Operational Command Units and had given an assurance that the spending on overtime would be within budget. In response to a question the Director of Finance undertook to write to Elizabeth Howlett with details of the arrangements for which budget was used to meet overtime when officers were abstracted from their borough.

Referring to the anticipated overspend in Human Resources discussed in paragraph 16 the Director of Business Support said that following a review an overspend would not be shown in future reports.

Members referred to the £60.7 M capital programme which they were being asked to agree be carried forward from 2005/06 and pointed out that this represented a very large proportion of the original capital budget for that year. Members said that this position was not satisfactory especially when it was generally accepted that much needed to be done to improve the quality of the estate. Members added that it was notable that effective management of the capital programme remained an area where there had not been any sustained improvement in performance since the establishment of the MPA. Full spending of the capital programme must be an absolute priority and the Committee had yet to receive and consider options of how any anticipated underspendings might be met during the year such as over programming and the introduction during the year of smaller schemes to substitute for major schemes when it became apparent they would not proceed.

The Director of Business Support said that whilst no absolute guarantee could be given, business groups were being required to provide the assurances on the full spending of the capital budget that members sought. The report on the capital programme which was due to be submitted to the September meeting would provide an opportunity to address the concerns, which had been raised by members on slippage.

Resolved – That

1. the year to date and forecast position for revenue and capital budgets be noted.
2. a revenue budget virement of £1.25m relating to the Leadership Academy be approved; and
3. approval be given to the capital programme carry forward requests totalling £60.7m from 2005/06 to provide for re-phasing of certain projects into the 2006/07.

7. Draft Capital Programme 2007/08 to 2008/10

(Agenda item 7)

A report was submitted which provided details of emerging pressures and priorities that have arisen since the Committee approved the borrowing and capital spending plan at its meeting on 16 February.

In reply to a point from Reshard Auladin, the Treasurer said that the arrangements for him to see the papers that were submitted to the MPS Investment Board had not been finalised.

Resolved – that the report be noted and a detailed medium term capital financial plan be submitted to the September meeting of the Committee.

8. Budget submission 2007/08

(Agenda item 8)

A report was submitted which summarised the Mayor’s budget guidance issued for the 2007/08 – 2009/10 budget and business plans and outlines the steps being taken to draw up the interim information and final budget submission for consideration and approval.

Referring to paragraph 17 the Treasurer advised that the figure shown at the end of the first sentence should read £2523.2M which represented a variance of £1.3M from .the earlier anticipated figure.

Resolved - That the Mayor’s budget guidance for the period 2007/08 - 2009/10 and the implications for the MPA budget be noted.

9. Review of financial management

(Agenda item 9)

A report was submitted which provided an update of progress on the implementation of the review of financial management undertaken by a joint team of MPS staff and Capgemini management consultants following the report which had been submitted to the June meeting.

Resolved – That the progress being made in the implementation of the recommendations arising from the review of the wider finance function within the MPS be noted.

10. MPS development of Activity Based Costing

(Agenda item 10)

A report was submitted which provided members with an overview of the 2004/05 audit results and progress including development of use of data.

Karim Murji attended for this item and said he would be happy to continue acting as lead member on ABC.

Resolved –That

1. the Strategic ABC Plan be endorsed;
2. the MPS provides appropriate training for members on ABC; and
3. a further report be brought to the Finance Committee in October to report on 2005/6 ABC and Activity Analysis results to BOCU level, update on progress in implementing the Audit Commission’s recommendations from the audit of the 2004/5 ABC model and update on other progress in delivering and using ABC.

11. Treasury Management Financial Review 2005/06

(Agenda item 11)

A report was submitted which presented the annual review of treasury management for the 12 months ended 31 March 2006.

Resolved – That the annual report of the Treasury Management function be noted.

12. HR modernisation consultancy

(Agenda item 12)

This item was withdrawn.

13. Sustainable Procurement Policy

(Agenda item 13)

A report was submitted which set out details of the new GLA group statement on sustainable procurement and sought approval for MPA commitment to this statement and the principles enshrined in it subject to approval of individual initiatives and policy changes at a later date.

Resolved – That the GLA Group Sustainable Procurement Statement as shown at Appendix 1 be adopted and steps be taken towards its implementation. Implementation of the policy will be in such a way as to achieve value for money, and subject in all cases to compliance with all relevant law. Individual policies and decisions regarding the implementation of individual goals and initiatives within the Statement requiring approval will be sought through appropriate committees on a case-by-case basis.

14. Exclusion of press and public

(Agenda item 14)

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 15 agenda item 15 – supply and delivery of dry provisions and frozen foods
A new contract for the supply and delivery of dry provisions and frozen goods was awarded to ‘3663’ – First for Foodservice

Minute 16 agenda item 16 - exempt minutes of the meeting held on 15 June 2006
Agreed and signed as a correct record.

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