Development of a corporate business plan

Report: 06
Date: 18 January 2007
By: Acting Director of Resources on behalf of the Commissioner

Summary

This paper summarises the financial and business planning process undertaken for 2007/08 and describes the lessons learnt from this exercise. It also sets out the longer term vision for business and financial planning and indicates the next steps for the 2008/09 process in building towards this vision.

A. Recommendations

That members

1. Note the lessons learnt from this year’s business and financial planning process
2. Agree the longer term vision
3. Note the next steps for the 2008/09 planning process
4. Express their views on the future of the development of the business and financial planning process

B. Supporting information

Background

1. A review was undertaken in spring 2006 of the financial planning framework to determine how financial planning could better support the MPA/MPS. This review resulted in a new business planning process for the MPA/MPS, intended to more closely align its resources to deliver on its strategic priorities. In particular the aim is to provide the MPA, MPS and business groups with information that will assist:

• strategic decision making
• making best use of resources
• continuous improvement in productivity and performance
• accountability for performance against plans.

Development of the business and financial planning process

2. For the first time this year, each business group produced a 3-year business plan that detailed how they aim to deliver against their strategic priorities for their part of the business. These plans included aligning their entire budget, human resources and performance information to their objectives, as well as incorporating efficiency planning.

3. One of the outputs of this planning process is the three-year corporate business plan, which outlines what the MPA/MPS plans to deliver in support of the priorities, together with the resources required. The process is still underway, and is due for completion in March 2007 with the GLA approval of the budget and precept and the publication of the corporate business plan.

4. The implementation plan outlined in the financial planning framework review suggested that the business and planning processes would be run in parallel this year and become more integrated over a three-year period. Good progress has been made towards integrating the two processes this year, though it is recognised that there is still a some way to go.

Key learning points

5. The key learning points from the 2007/08 process are that there is a need:

• to refine long term aim for business and financial planning to ensure that the process assists strategic decision making;
• to review the timetable to allow full consultation and delivery of products in particular starting the process earlier;
• for greater alignment of planning, finance, human resource and performance plans and activities to strategic priorities;
• for proactive, sustainable efficiency planning, in order to respond to the productivity agenda;
• improve the linkage between revenue and capital planning;
• to improve communication between all parties involved in the process;
• to remove some of the bureaucracy.

The MPS Management Board will be considering the development of the Corporate Plan at a future meeting and members' views will be fed back.

Next steps in the 2008/09 business and financial planning process

6. The MPS has already started the business and financial planning process for 2008/09. At the Management Board Strategic Day (9 January 07) the Financial Landscape over the medium term was reviewed. The main focus of the work was to review the 2008/09 budget gap and discuss the potential strategic direction for the 2008/09 budget.

7. The business and financial planning process will be improved through more closely aligning the timetabling of both business and financial planning. However, the suggested changes to the process will need to be iterative and will require more than one financial year to be implemented. Suggested improvements will be taken forward in collaboration with business groups to improve both the process and timetabling in subsequent years. Specifically:

• An outline vision is proposed that will assist in addressing many of the learning points outlined previously. This vision is based on the premise that business and financial planning can be viewed in terms of a learning cycle, with regard to the need to plan, deliver and review performance then draw conclusions in order to inform the next planning process. Appendix 1 outlines how the business and financial framework can be aligned to this learning cycle. This demonstrates how strategy, corporate planning, business planning, finance, human resources and performance are integrated and assist the MPS in continuous improvement. This diagram also shows the importance of ensuring that the components are undertaken in a defined order and thus, how critical the timetable is to an effective process;
• Regular meetings organised with business groups to ensure that the process is pragmatic (e.g. designing templates and considering the use of information);
• Assist business groups in moving towards being able to cost strategic priorities by allocating resources and funding, with the support of Activity Based Costing (ABC) and other data;
• Work with Performance Directorate and business groups to develop a performance framework that will assist the review of both the business group objectives, resource use and project funding within business plans;
• Efficiency planning to become embedded as a continuous process with assistance provided from the VfM Steering Group. The intention is to move towards more sustainable efficiency savings which will include the use of strategic decision making tools such as ABC and productivity analysis.

8. It is intended that a full report will go to Finance Committee (February meeting) which will include how the learning points will be implemented and a timetable for the 2008/09 business and financial planning process.

Abbreviations

ABC

Activity Based Costing

MPA

Metropolitan Police Authority

MPS

Metropolitan Police Service

VfM

Value for Money

C. Race and equality impact

There are no specific equality and diversity issues.

D. Financial implications

There are no specific financial implications arising from this report, although the way in which MPS finances are aligned to delivering the strategic priorities forms the basis for the integrated strategic/financial-planning framework.

E. Background papers

None

F. Contact details

Report author: Paul Stock – Director of Strategic Finance, MPS.

For more information contact:

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

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