Revenue budget 2007/08 – 2009/10 – update

Report: 6
Date: 23 November 2006
By: Treasurer and Acting Director of Resources (on behalf of the Commissioner)

Summary

This report shows that the current level of the budget shortfall for 2007/08 has been reduced to £16.1m, £26.8m for 2008/09 and £53.6m for 2009/10.

MPS reduction proposals totalling £65.1m have been included in the draft budget for 2007/08, with a further £17.0m in 2008/09 and £10.6m in 2009/10.

The overall budget gap has therefore been reduced from £81.2m in 2007/08, £27.6m in 2008/09 and £37.5m in 2009/10, representing a considerable achievement against a background of tightening national finances, significant financial pressures, and improving performance.

A. Recommendations

Members are recommended to:

1. Note the latest revenue budget projections as set out in Appendix 1;
2. Note the additional financial pressures identified which may increase the budget gap further;
3. Recommend that the full Authority further considers the approach to the use of reserves; and
4. Consider whether the Committee wishes to make any amendments or observations before forwarding the draft budget to the full Authority.

B. Supporting information

1. Sustaining and improving high standards of local service delivery to London’s diverse communities as well as maintaining the MPS involvement in national and international policing activities, within a tightening financial climate, inevitably requires the MPS to focus on its priorities and to use its available resources as efficiently and effectively as possible. The budget challenges experienced during the business planning process for 2007/08 have meant that difficult choices have had to be made regarding resources for next year. Investment decisions regarding the movement of resources and additional funding received have been informed by the need to deliver on the strategic priorities and outcomes, and specifically to ensure:

• the focus remains on delivery of front-line policing;
• that services are citizen focused - ensuring that the MPS/MPA responds to the needs of London's communities;
• the Safer Neighbourhoods programme is financially sustainable throughout the year;
• continued support for Counter Terrorism.

2. As part of this commitment and despite budgetary constraints the numbers of MPS police officers will increase next year and the commitment to PCSOs continues. The MPS expects to increase police officer numbers by 270 - despite making in the region of £65m efficiency savings.

3. The new normality of the enduring threat of terrorism is a major challenge exacerbated by the unique demands placed on MPS in terms of its capital city, national and international functions. The Authority will need to engage further with Central Government, the Mayor and others to work out the best way forward in managing these growing pressures, and its claim on resources – for the foreseeable future.

4. The MPS is determined to maintain momentum on improved performance despite these considerable pressures, based on a track record of delivering £269m efficiency savings in the last 3 years (2004/05 to 2006/07), with crime going down and detections up over the same period.

5. The MPS is also progressing a number of areas that should assist in delivering more sustained efficiency and effectiveness in the longer term, as well as improving the alignment of resources to deliver on the MPS strategic priorities. During 2006/07, the MPS has further developed its formal Approval process, improved the integration of business and financial planning and established a Value for Money Steering Group.

Budget process

6. Guidance was issued to Business Groups in June on preparing business plans for the period 2007/08 to 2009/10 with a deadline for returns of the end of July. These have been received and the process of summarising the plans, querying entries and omissions and identifying the business and financial implications of the plans has been completed.

7. Further consideration of the budget shortfall for 2007/08 and detailed savings proposals and growth items took place at Commissioners SMT and Investment Board from August onwards. Extensive engagement by Management Board to manage the difficult decisions that needed to be made regarding the acceptance of cost reduction proposals and the relocation of resources whilst ensuring delivery of strategic priorities and maintaining police officer numbers. The resulting budget proposal received full signup from MPS Management Board.

8. In September the informal MPA Chair’s Scrutiny Group held a first round of scrutiny meetings with the Business Groups to review their submissions, including growth and savings proposals. A further round of scrutiny meetings took place in October. The dialogue undertaken at these meetings will be reflected in the Corporate Business Plan submitted to the full MPA in November for approval and for onward transmission to the Mayor.

Mayor’s Budget Consultation 7 November 2006

9. The Mayor issued further budget guidance on 7 November in a letter to the Chair of the Authority. The full letter is attached at Appendix 2. A draft component budget figure £2,524.5m, has now been issued, rather than the previous limit of a 3% increase on the 2006/07 net revenue expenditure, plus or minus 1%. The Mayor noted that this provides a 4.1% increase on the comparable figure for the previous year and should cover the full year cost of the expansion in Safer Neighbourhood Teams. It should be noted however that the existing MPA 2006-07 Budget Requirement figure of £2,425.7m was net of £23.9m use of balances – a like for like comparison of the Mayor’s target BR with a figure excluding the use of reserves would be 3.05%.

10. The Mayor has also issued further guidance on climate change and any consequential amendments will be included in the paper to the full Authority.

Latest Budget Submission projections

11. An initial budget shortfall of £116m for 2007/08 was identified in June 2006, which the MPS has worked to reduce. An overview of the latest budget projections is set out in Appendix 1. Taking into consideration the likely Business Group and Corporate reductions the net position is a budget gap measured against the Mayor’s ‘target’ where projected expenditure exceeds expected funding in 2007/08 of £16.1m, £26.8m for 2008/09, and £53.6m for 2009/10. This reduction in the budget gap represents a significant collective achievement over the past months.

Reserves

12. The MPA maintains a general reserve to meet unforeseen or emergency expenditure which cannot be contained within the approved budget. This general reserve is deemed to include the Emergencies Contingency Fund (£20.134m) agreed by this committee on 15 June 2006. It has been agreed that these uncommitted reserves should be within a range of 1.5 – 2.0% of net revenue expenditure, as and when conditions permit. This is in addition to the now well established ‘rules’ that there are adequate accounting provisions and earmarked reserves, reasonable insurance arrangements, a well funded budget and effective budgetary control. At 31 March 2006 the general reserve and the Emergencies Contingency Fund stood at £48.974 million, at 1.7% in line with the policy level.

13. The Authority’s balance sheet also contains specific earmarked reserves established to meet specific expected revenue costs. The remaining specific earmarked reserves at 31 March 2006 total £84.976m million. At this stage no sums have been identified as not being required for the original purpose.

14. Considerable attention has been focussed during the year on the need to maintain maximum flexibility in the availability of the Authority’s reserves to support Operation Overt (the operation relating to the arrests and on-going investigations into the alleged plot to manufacture and smuggle explosive devices onto aircraft) and Overamp (relating to the anti-terror raids at an Islamic School in Sussex and a Chinese Restaurant in South London). It would be prudent to prepare for the additional costs, now thought to be in the region of £24m, to be met in part or full from reserves.

15. The Finance Committee agreed that the approach to dealing with the additional costs of Operation Overt and Overamp was, in preferred priority order: to minimise the additional spending in the first instance, seek additional funding from government, deliver additional underspend or use existing reserves. The dialogue with central government is continuing and the Authority is not yet in a position to take a decision on the issue. However, with the spend on Operation Overt/Overamp forecast at £24m any inability to contain the expenditure within revenue budgets would add, pound for pound, to the budget gap of £16m if reserves were initially used and then ‘topped-up’. The Authority has a number of alternatives and it is recommended that the matter be further considered at the full Authority.

16. A full review of all the Authority’s reserves was undertaken in June 2006. The Treasurer has again reviewed the situation and at the present moment is content with the existing position, particularly the risks which require the maintenance of reserves, and the opportunities for any sums which might be released. It is felt the size of the general reserve, balanced against the potential calls on the reserve, maintains a prudent approach to the reducing flexibility in budgets (arising from the tightening financial position driving out budget inefficiencies) and provides protection against the predicted worsening financial position in future. There will need to be a further review following consideration of the outcome of negotiations with government on support for Operation Overt. There are also a number of earmarked reserves held for appropriate purposes over previous years. Appendix 3 sets out the full analysis of reserves including a projection over a 3 year period.

17. There is one further issue which needs addressing. The June report brought into focus the fact that last year’s budget planning had identified that £17m was planned to be appropriated to reserves from the revenue account in 2007-08 (following previous transfers which had transferred funds the opposite way and reduced budgeted expenditure.) At the present moment that transfer has not been included in the financial envelope (it would add to the budget gap). If the general reserve and the Emergencies Contingency Fund are maintained at present levels then the planned £17 million transfer will not be required.

Government grants

18. A strong indication of the 2007-08 government grant settlement was made last year as part of advance notification of formula grant. The figure for 2007-08 is likely to be £1,883.7m - an increase on the previous year of 3.6%. Formal consultation by government on the 2007-08 grant figure is now thought likely to be in the last week of November. Indication of the 2008-09 grant has been received showing that the overall Home Office increase will be 2.7%. It is anticipated that the allocation nationally to the police service will be less than that figure, perhaps in the range of 2 -2.5%, but details are not yet known.

19. Although it is always possible that there may be some minor changes to the 2007-08 grant (perhaps data changes) major changes are not expected this year. It is also anticipated that those authorities like the MPA at the ‘grant floor’ will continue to receive existing levels of grant protection.

Neighbourhood Policing Fund/PCSOs

20. The priority given to the continued early rollout of Safer Neighbourhoods has resulted in meeting the target that all wards will have a full complement of 1 sergeant, 2 officers, 3 PCSOs by December 2006. This means that it is now likely that the additional 1,000 PCSOs to be recruited in 2006/07 will be sufficient to satisfy the Home Office that the Safer Neighbourhoods programme has been fully implemented and therefore that the recruitment of a further 1,844 PCSOs will not now be required before the additional £44m funding is made available in 2007/08. Confirmation in writing from the Home Office regarding the position on this is still awaited, but the indications from officials remain positive.

Transport for London funding for PCSOs

21. Further to the report to the Co-ordination and Policing Committee meeting on 5th October on Transport Safer Neighbourhoods Teams, income of £7.5m has been added to the financial envelope to recognise the funding to be provided by TfL towards a joint initiative between TfL and the MPS to provide 375 PCSOs to work on transport safer neighbourhood teams. The income generated through this initiative is intended to partially fund the cost of putting police staff into the integrated borough operations (IBOs) functions at boroughs, so that police officers can be released back to front line policing duty. Expenditure of £7.5m has therefore also been added for the IBO function to fund the additional police staff required. There is therefore no overall net financial impact.

Additional financial pressures not included in the Financial Envelope

Management of Police Information (MoPI)

22. Previously the requirement was for this to be implemented by 31 March 2008, but following pressure from all police forces, including the MPS. This deadline has now been extended to 31 March 2010. The attached budget projections do not contain an entry for MoPI, as the scope of the work to implement this Code of Practice is still being assessed.

Sustainable procurement/London living wage

23. There is also no entry at this stage for sustainable procurement and the London Living Wage. The Mayor has given a strong commitment to enforcing the new London Living Wage of £7.05 an hour through public contracts awarded by the GLA. The MPA has supported the GLA Group’s aims to address equal opportunities and inclusion issues within its supplier base, but there are a number of issues which need to be addressed before the cost of moving to the Living Wage is added to the financial envelope and the MPS are not in a position at the present time to quantify these.

Police pay average

24. Following some years of significant growth in police numbers police pay averages reduced in real terms as relatively large numbers of new officers came in at the bottom of the pay scale. This was recognised by reducing the police pay budget. The position for 2007/08 is likely to show a change as police officer numbers have stopped growing at the rate they were previously. As the newer officers rise through their incremental scale it is becoming apparent that the average is again increasing in real terms. Further work is now being done to investigate the impact in more detail and enable projections to be made for future budgets. No entry has therefore been made in the financial envelope at this stage.

Firearms training

25. Full evaluation of the delivery of firearms training has not been included in the financial envelope. The increased numbers being put through firearms training over the past few years need to be evaluated so that training can be delivered in the most effective way, bearing in mind the capacity for handling the calibre of firearms required and the most appropriate locations for refresher training. The potential implication may be a requirement for a new firearms training range.

New normality

26. The current debate on the financial provision needed to meet the cost of the ‘new normality’ in Counter Terrorism is the most significant of these ‘unknown’ pressures. It is therefore possible that even when the current budget gap is closed further measures may need to be taken at a later date to address these issues.

Neighbourhood Policing and PCSOs

27. The MPS is working with the Home Office to look at PCSO numbers for the future as well as seeking further flexibilities in the funding. In particular the MPS is developing a cost sharing initiative with Local Authorities.

Savings and growth

28. All individual Business Groups have been asked to include 2% savings within their business plans for each of the three years of the plan and also to exemplify a further 3% savings in 2007/08 for consideration. The savings put forward by Business Groups have been reviewed by Management Board and the informal MPA Chairs Scrutiny Group, who held a first round of scrutiny meetings in September, and a second round in October. Decisions regarding acceptance of cost reduction proposals and the relocation of resources were made using the following four key principles:

• Cost reductions have minimal impact on strategic priorities and objectives;
• Cost reductions identified do not impact elsewhere within the organisation;
• Minimise staff reductions;
• Achievability.

29. The total savings that have been included following the scrutiny stand at £65.1m in 2007/08 (£60.1m from Business Group business plans and £5m found corporately), with a further £17.0m in 2008/09 and £10.6m in 2009/10. However, there are still a few areas where explanations are still awaited by the informal budget scrutiny group. As reported above this means that the overall budget gap is currently £16.1m in 2007/08, £26.7m in 2008/09 and £53.6m in 2009/10.

30. This work has identified five main areas where efficiencies and savings can be delivered:

• More effective deployment of operational resources to the front line;
• Increased efficiency in support services;
• Savings in running expenses through improved procurement and efficiency;
• Income Generation;
• Corporate Efficiency Savings.

31. More effective deployment of operational resources to the front line has delivered a saving of £19.9m in 2007/08, £6.1m in 2008/09 and £3.5m in 2009/10. This has been achieved by ensuring budgets have been focused on the MPS key priorities.

32. Increased efficiency in support services has delivered a saving of £13.6m in 2007/08, £4.2m in 2008/09 and £3.4m in 2009/10. These have resulted from the need to ensure front line policing is maintained, therefore requiring support functions to be provided more efficiently.

33. Savings in running expenses through improved procurement and efficiency has delivered a saving of £18.8m in 2007/08, £6.5m in 2008/09 and £6.0m in 2009/10. The MPS has forged ahead with the efficiency agenda and delivery of savings through better procurement allowing resources to be maximised for policing. Examples are a saving of costs of the external ICT supplier, reduced costs of support to IT development and a reduction in utilities costs.

34. Income Generation is expected to deliver funding of £7.9m in 2007/08, £0.1m in 2008/09 and £2.3m in 2009/10. This is a key area to gain funding for services that support policing and other organisations such as stolen vehicle unit and leasing custody cells to the Immigration Service.

35. Corporate Efficiency Savings has identified the potential for a saving of £5.0m in 2007/08. This supports the work of the MPS via its Value for Money work. This has identified areas where the MPS can be more efficient across the MPS. This covers areas such as internal inspectorate, hire cars, consultancy and travel.
36. Items of growth are included in Appendix 1. The Chair of the Authority also considers that there is a need for a modest increase in the Authority’s budget of £0.9m principally to increase support to community engagement groups and to provide capacity to maintain the Authority’s Improvement Programme.

Potential future changes to projections

37. Finance Committee should be aware that there could still be changes arising to the current position. These could arise from individual growth or savings items needing to be revised due to more up-to-date information becoming available or from the additional financial pressures identified above (or others not currently known about) when the details become clearer.

Capital budget

38. A report dealing with the draft capital budget is on today’s agenda. The revenue effects arising from the proposed growth in the capital programme are consistent with the revenue budget submission figures presented here.

Report on the robustness of the estimates

39. The Treasurer’s report is attached at Appendix 4.

Abbreviations

GLA

Greater London Authority

IBOs

Integrated Borough Operations

MOPI

Management of Police Information system

MPA

Metropolitan Police Authority

MPS

Metropolitan Police Service

MTFP

Medium Term Financial Projection

PCSO

Police Community Support Officers

SMT

Senior Management Team

Operations

Operations Overt

relating to the arrests and on-going investigations into the plot to manufacture and smuggle explosive devices onto aircraft

Overamp

relating to anti-terror raids at an Islamic School in Sussex and a
Chinese Restaurant in South London

C. Race and equality impact

There are no specific equalities or diversity issues arising specifically from this report. Consideration of the implications of the MTFP for equalities and diversity will be included in the Budget Submission in accordance with the Mayor’s guidance.

D. Financial implications

The financial implications are as set out in the report.

E. Background papers

• Home Office 2006/07 grant settlement notification letters
• 2006/07 MTFP Budget Submission papers
• MTFP 2007/08 -2008/09 Financial envelope reports to MPA Finance Committee on 15 June 2006, 21 September 2006 and 19 October 2006

F. Contact details

Report author: Simon Hart, A/Director of Finance Services, MPS; Ken Hunt, MPA Treasurer, MPA.

For more information contact:

MPA general: 020 7202 0202
Media enquiries: 020 7202 0217/18

Appendix 3

Analysis of proposed Revenue Reserves 2006-2009

Explanation of existing reserves at March 2006

Budget Pressures Reserve - This reserve was to meet specific unbudgeted pressures in 2005/06 and should normally expected to be fully utilised by year-end.

Budget Smoothing Reserve – this reserve was created to provide the initial £24 million required to balance the budget in 2006/07.

Communications project – monies set aside for the development of an integrated communications system for the MPS. The expectation is that this will now be fully used in 2006/07.

Emergencies Contingencies Fund – An uncommitted fund under the direct control of the Authority for emergencies. Considered to be effectively part of the General Reserve.

Laming Inquiry – This reserve contributes to the continuing costs of implementing the recommendations to come out of the Laming Enquiry (the Ministerial enquiry chaired by Lord Laming following the death of Victoria Climbiè).

Legal costs - This reserve is to provide for the cost of potential lawsuits.

MPA - The reserve supported accommodation costs of office moves, and Independent Custody Visitors – organisational scheme management.

Met Time Project – An agreed reserve to finance the cost of a new IT system.

Operational costs - The reserve provided for a number of operational activities planned for 2005/06. The expectation would normally have been that the majority of the reserve will be used in 2005/06, with the balance being required in the medium term.

Pandemic response – The reserve is to be used for the cost of anti-viral drugs in order to maintain essential services.

PFI Contracts – The reserve has been established to part meet the costs of a PFI development. A proportion of it would normally have been required in 2005/06, with the remainder required in the medium term.

Police Pensions - The reasons for maintaining this reserve are (i) the MPA’s responsibility for the costs of ill health retirements and the need for a reserve to smooth the costs year on year and (ii) assistance in dealing with any net deterioration in the Authority’s financial position re the new pension financing arrangements. For the former it is anticipated that a sum of £5 million will be suitable and should be held to cover possible liability over the coming years, topped up as necessary upon annual review and a substantial part transferred to the general reserve. The latter risk of further adverse movement in the MPA’s revenue budget is assess as low risk and does not need to be provided for.

POCA – Proceeds of Crime Act – This reserve is maintained to hold the anticipated POCA balances still awaiting distribution at the end of the financial year.

Property related costs – This reserve has been established to meet the cost of various building related projects. A proportion of this was required in the 2005/06 with the balance required in the medium term. The reserve has been topped up in 2005/06.

Protective Clothing – This reserve provides for the cost of protective clothing for officers including research and development and costs. The expectation would normally have been that the reserve will be fully utilised in 2005/06, but some residual spend will be undertaken in 2006/07.

Rent Smoothing – This reserve has been set up to fund future years increases on rent payable on a newly occupied building. The reserve will be required in the medium to long term.

Systems – The reserve contributes to the cost of developing financial systems. This will be required in 2005/06 and 2006/07.

Vehicle recovery services – This reserve was established to contribute towards the expansion costs of the vehicle recovery service. It is anticipated it will be fully utilised in 2006/07.

Appendix 4

Report on robustness of the estimates

This report addresses the estimates as incorporated in the draft 2007/08 budget to be considered by full Authority on 30 November, before formal submission to the Mayor. The submission will be subject to further review after the publication of the provisional grant settlement, expected late November, and this advice on the robustness of the estimates will be revised appropriately following that review.

Reliability/accuracy

1. The estimates have been put together by, or with the involvement of, qualified finance staff and reviewed by the Corporate Finance section of the MPS Finance Services Department.

Scrutiny

2. Budget proposals have been through a rigorous scrutiny within the MPS, including the Investment Board. I have asked a series of questions about the construction of the budget and the nature of individual components and have received responses from the MPS. A series of informal budget scrutiny meetings have been held by the Chair of the MPA and a small group of MPA members comprising the two Vice Chairs, and Chairs of Finance and Policy, Performance and Review Committees and members with HR and Specialist Operations interests. Individual MPS business groups and Management Board members were asked to present their detailed revenue growth and savings proposals for scrutiny by the members. The outcome of the review process for the proposed growth and savings items assessed possible impacts of any savings across business groups as well as on strategic priorities. A small number of suggested savings which would have an adverse impact across various business groups have been proposed for withdrawal or reduction during this review process. The Finance Committee, and joint Finance & Planning Performance and Review Committee has reviewed update reports on the draft budget submission. The budget submission will be formally considered by a meeting of the full Authority. In addition there has been a regular dialogue with, and challenge from, the Mayor and GLA officers. Further amendments to the budget before final submission to the Mayor in November will also be subject to scrutiny from officers and members.

Achievability and risks

3. There are a number of areas of risk in the budget as currently proposed. In particular the budget is being submitted initially before the government grant settlement. Assumptions have therefore had to be made to estimate the MPA’s grant entitlement. The current estimates will be replaced by relatively firm grant figures following the provisional settlement. At this stage there is a small risk that the grant estimates are overstated. There are also risks around the scale of additional costs in respect of Operation Overt and any effect this may have in 2007/08. The full Authority will further consider this at its meeting and any implications this may have on its reserves. The Authority has been in dialogue with the Home Office on a bid for financial assistance for additional counter-terrorism funds which is ongoing. There is a risk that income for PCSO numbers may not be received, but a decision is expected shortly and remedial action would be necessary if income was lower than expected.

4. In 2006/07 the Government took steps to cap council tax increases considered excessive. It is likely that capping will apply again in 2007/08. In our case capping would actually apply to the overall GLA precept. However since the police component represents approximately 80% of the GLA precept, the increase in the MPA precept will be critical in relation to the criteria for excessiveness applied to the overall precept and a significant impact would inevitably fall on the MPA budget if the GLA precept had to be reduced as a result of capping. There is no firm information at the moment as to the criteria that will be applied in 2007/08. In the Mayor’s budget guidance it states that he does not wish to propose a consolidated budget that risks being capped. It is possible that the budget to be submitted at this stage, including provision for further Safer Neighbourhood growth, will exceed the capping criteria for 2007/08 and will therefore have to be reduced before final approval by the GLA.

5. The draft budget requires delivery of savings totalling £65 million, plus a further £16 million to balance the budget. There are significant items in the savings list that will require firm management and difficult decisions. Greater clarity is being sought as to how these savings will be achieved. It should be noted that the additional requirement for Safer Neighbourhood roll out in 2007/08 is excluded from these figures.

6. Monitoring of the 2006/07 budget shows overall expenditure overspending. Some elements of the current overspending, particularly police overtime, have not been carried through into next year’s budget proposals. There is therefore a risk that overspendings will persist in 2007/08, a factor recognised during 2006/07. Management action will be required to minimise this risk and to take appropriate corrective action if it does materialise during the year.

7. There are a number of features of the Authority’s financial policies, accounting policies and governance arrangements which mitigate financial risks. These include the following:

• An element of the risk of financial loss is transferred externally though insurance arrangements.
• The Authority has appropriate general and earmarked reserves.
• The Authority takes a prudent approach to achievability of income and debts due, making appropriate provisions for bad debts.
• The Authority has adopted accruals accounting, in particular making full provision for realistic estimates of future settlements of known liabilities.
• The level of external borrowing is low and therefore the Authority’s exposure to interest rate changes is low.
• The Authority has recognised the risks associated with the major programme of re-tendering outsourced contracts. There are appropriate management arrangements in place and financial provision has been made for associated one-off costs.
• Risk management has been built into the corporate governance arrangements of both the MPA and MPS so that there is proactive assessment of risks and processes to monitor and manage risks.

Future commitments

8. The financial projections for future years included in the budget show a significant level of ongoing commitment. However further work is required on the medium term figures in order to judge the implications in the context of the Authority’s overall financial position.

9. The Authority’s cash flow requirements are forecast and monitored on a monthly basis to ensure stable and predictable treasury management, avoiding unexpected financing requirements.

Capital

10. The risk inherent in large capital schemes is considered low. The major capital scheme is the C3i project. Risks around the project have been minimised by a rigorous governance arrangement incorporating external validation. The C3i project is substantially supported by government grant thereby minimising risks around available finance.

11. The Prudential Code has introduced a rigorous system of prudential indicators, which explicitly require regard to affordability, prudence, value for money, stewardship, service objectives and practicality. This is backed up by a specific requirement to monitor performance against forward-looking indicators and report and act on significant deviations.

12. The updated capital strategy has drawn together key processes and arrangements for prioritisation, appraisal, management, monitoring and review of the existing programme and new investment. Although the processes are as yet immature, improvements will be made over the short to medium term, which will inform choices on the allocation of additional capital investment and its affordability.

Conclusion

The estimates have been prepared in a properly controlled and professionally supported process. They have been subject to due consideration within the MPS and by the MPA. The risks identified in this report will be subject to further review as the budget is amended before final submission to the Mayor in November.

Ken Hunt
MPA Treasurer

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