Minutes

Minutes of the meeting of the Finance Committee held on 23 November 2006 at 10 Dean Farrar Street, London, SW1H 0NY.

Present

Members

• Graham Tope, (Chair)
• Reshard Auladin
• Richard Barnes
• Elizabeth Howlett
• Aneeta Prem
• Rachel Whittaker.
• Karim Murji also attended.

MPA officers

• Catherine Crawford (Chief Executive and Clerk)
• Ken Hunt (Treasurer)
• John Crompton (Committee Services)
• David Riddle (Deputy Chief Executive and Clerk) attended for consideration of agenda item 14.

MPS officers

• Sharon Burd, (Acting Director of Resources)
• Simon Hart (Acting Director of Finance Services)
• Karim Mahamdallie (Director of Business Support)
• Ailsa Beaton (Director of Information)
• Alan Croney (Director of Property Services)
• Stuart Middleton (Director of Transport Services)
• Rachel Musson (Lead Accountant)

51. Apologies for absence

(Agenda item 1)

Apologies for absence were received from Bob Neill and Richard Sumray

52. Declarations of interests

(Agenda item 2)

There were none.

53. Minutes of the meeting held on 19 October and the joint meeting with the Planning Performance and Review Committee held on 9 November 2006

(Agenda item 3)

Resolved - That the minutes of the meeting held on 19 October 2006 be agreed and signed as a correct record, and the minutes of the joint meeting held on 9 November be noted.

54. Revenue and capital budget monitoring 2006/07 – period 6

(Agenda item 4)

The report provides the revenue and capital expenditure forecast position for 2006/07 at Period 6 (to the end of September). The revenue budget is forecast to overspend by £35.4m (1.2% of budget), which includes £23.7m of estimated additional costs related to Operations Overt/Overamp. The underlying forecast overspend excluding Operations Overt/Overamp is £11.7m. The capital programme shows year to date total expenditure of £63.3m, which represents 25.5% of the revised budget. The forecast for the year of £208.9m is £39m below the revised budget of £247.9m principally due to the rephasing of project expenditure into future years.

In reply to questions the Director of Business Support said that there was reasonable confidence that the action being taken to control and reduce the overspend position would result in a balanced budget.

Referring to the list of budget changes to the capital programme that the Committee was being asked to approve, Elizabeth Howlett asked whether the revenue contribution to capital (RCCO) of £2.3m to fund additional Partnership vehicles could not be capitalised.

The Treasurer commented that there appeared to be an opportunity for capitalisation and this point would be examined further by the MPS.

Members referred to the information on the MPS staff pay settlement in paragraph 4, and in particular to the lack of information on the way in which this had been approved and was being funded. The Treasurer confirmed that the sums involved would appear to be at a level where the Authority would be required to authorise a virement particularly the full year costs. It was noted that a report on the matter was due to be submitted to the Co-ordination and Policing Committee on 7 December. (Note: this was subsequently withdrawn from the agenda.)

Resolved – That

1. the year to date and forecast position for revenue and capital budgets be noted; and
2. the budget changes to the capital programme as set out at paragraph 36 be approved.

55. Draft capital programme 2007/08 to 2009/10 –progress report

(Agenda item 5)

This report provided details of progress on the development of the capital programme for 2007/08 to 2009/10.

The Acting Director of Finance Services apologised for the fact that the complete version of the Appendix to the report had not been attached to the report and said that that it would be circulated to members subsequently.

(These are enclosed for members)

Resolved – That

1. the draft capital programme 2007/08 to 2009/10 be noted;
2. the proposed funding of the programme be noted; and
3. it be noted that the final capital programme for 2007/08 to 2009/10 will be submitted for approval by the Finance Committee in the new year

56. Revenue budget 2007/08 -2009/10 -update

(Agenda item 6)

A report was submitted which 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.

Members were advised that negotiations concerning the possibility of additional grant in respect of Operations Overt and Overamp were continuing with the Home Office, but the expectation was that this would result in only a partial refund. The Committee reiterated its view that the level of the General Reserve and Emergency/Contingency Fund (standing at 1.7% of net revenue expenditure) was one which they supported maintaining.

The Committee made the following observations for consideration by the full Authority. Without at this stage identifying any detailed financial figures and pending the resolution of the discussions on the possibility of financial assistance from the Home Office, that the authority’s reserves only be used as a last resort, that every effort be made by the MPS to undertake a managed underspend to offset the additional costs of Operation Overt and, in particular, Specialist Operations manage its budget in view of the new normality now being faced. If necessary, the managed underspend to be implemented across the current and next financial year, with temporary use of reserves to assist this process.

Resolved - That

1. the latest revenue budget projections as set out in Appendix 1 be noted;
2. the additional financial pressures identified which may increase the budget gap further be noted;
3. that the full Authority further considers the approach to the use of reserves; and
4. the foregoing comments concerning the use of reserves be included in the report to be considered by the full Authority.

57. Activity based costing

(Agenda item 7)

This report provides the Committee with an update on progress on 2004/5 audit results, 2005/6 submission and progress including the high level costing results and development of use of data.

Following the discussion of detailed points on issue such as the use made of the data by BOCUs and the relation with the funding formula; Richard Barnes said that he supported the concept of ABC. However, for it to achieve its full potential it was important that it be seen to be more readily understandable to everyone in the organisation than appeared to be the case now.

It was noted that there would be a briefing for MPA members on ABC and AA on 19 December.

Resolved – That the report be noted

58. Estates update

(Agenda item 8)

This report updated members on the latest information on estate and Property Services matters.

Aneeta Prem, portfolio member for estates, requested that the MPA estates group receive details of the new asset plans referred to in paragraph 17. The Director of Property Services indicated that consideration would be given to this request. Members also said that it was important that MPA link members and CPCGs be kept advised on the development of the borough asset plans. The Director of Property Services confirmed that link members would be kept advised.

The Director of Property Services advised that the discussions with the Authority on the estate strategy had raised a number of issues, which needed to be considered further before the Authority could consider the strategy formally. The Deputy Commissioner would be taking personal charge of these further discussions with the Authority. It might not be possible to have fully worked up options in response to points made regarding the future of New Scotland Yard and Hendon in time for the December full Authority meeting at which it had been anticipated the strategy would be considered.

The Chair commented that it would be unfortunate if consideration of the overall strategy had to be delayed pending clarification on particular aspects which could be dealt with separately.

Resolved – That the information on current estate issues be noted.

59. Approval to award the facilities management services contracts

(Agenda item 9)

A report was submitted which described the formal tendering exercise undertaken to select contractors to deliver the contract and sought approval to award contracts to the two leading tenderers.

The Treasurer said he wished to amend the third recommendation so that authority was delegated to the MPA Chief Executive and Clerk acting with the agreement of the Chair of the Committee.

Resolved – That

1. the outcomes and recommendations of the FMS evaluation be noted;
2. the recommendation for the award of the FMS contracts (one North and one South) to the leading tenderers for a period of seven years from April 2007 with possible extension on a yearly basis up to a maximum of ten years in total dependent upon performance be approved; and
3. that delegated authority be given to the MPA Chief Executive and Clerk (acting with the agreement of the Chair of the Finance Committee) in respect of the proposed minor additions to the contract outlined in paragraph 23 of the linked exempt report.

60. Exclusion of press and public

(Agenda item 10)

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 61 agenda item 11 – Exempt Appendix to estates update
Information noted.

Minute 62 agenda item 12 –FMS contract award
Recommendations adopted.

Minute 63 agenda item 13 coach hire service contract
Approval given to the issue of an OJEU notice asking for expressions of interest for the provision of coach hire services.

Minute 64 agenda item 14 – Mettime 2 status update
A status update was received and it was noted that work continues towards the production of a full business case in the first calendar quarter in 2007. It was also agreed that the MPA be represented by the Deputy Treasurer in the governance structure of the project.

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