2007/08 grant settlement

Report: 5
Date: 15 February 2007
By: Treasurer

Summary

The report updates members on the latest position on the 2007/08 government grant settlement.

A. Recommendations

That members note the position on the 2007/08 government grant settlement.

B. Supporting information

Update on the 2007/08 Government Grant Settlement

1. This paper updates members of the latest government grant position. The 2007/08 Final Settlement was announced on 18 January 2007. Since the announcement of the provisional settlement on 28 November 2006, there have been no changes to the Authority’s formula grant figures for 2007/08.

2. Formula grant has been agreed at £1,883.739M, comprising police grant £1,026.712M (which incorporates the Metropolitan Police Special Payment of £192.00M), Revenue Support Grant (RSG) £123.158M and National Non Domestic Rate (NNDR) £733.869M.

3. The Authority received a 3.6% flat rate increase in grant over 2006/07 as expected, and continues to sit on the ‘grant floor’.

Crime Fighting Fund

4. In the provisional grant announcement on 27 November the Secretary of State committed to consider greater flexibility in the use of the Crime Fighting Fund (CFF). The present annual specific grant allocation to the Authority is £73M. In a letter to the Authority dated 21 December, the Home Office has now confirmed the criteria for continuation of the funding. The overall effect of the decision is to suspend the system of CFF penalties until further notice. CFF payments will not be conditional on maintaining particular numbers of police officers. The suspension will be reviewed annually, in consultation with the APA and ACPO, with the intention of maintaining the suspension in future years. The Home Office will monitor officer numbers through existing reporting systems and reserves the right to intervene in situations where performance drops, there is a clear link with the reduction of officer numbers, and the force in question is unable to provide assurances that the performance issue can be addressed. The letter sets out the process whereby this would be considered, and the action that might be taken, in more detail. A copy of the letter is attached at Appendix 1.

Counter-terrorism funding

5. Further clarification was still awaited on the allocation of the counter terrorism specific grant funding. The Authority received confirmation of one element of the overall grant – the Dedicated Security Post (DSP) element on 30 January. The cash allocation is £116.516M, with confirmation of the number of posts at 1,995.34. The cash allocation is some £0.7M (+0.6%) higher than last year however, the number of posts mandated by the Home Office has risen by 99. The MPS will look to fulfil its security and protection duties within the constraints of the Dedicated Security Post budget afforded by the grant allocation. Given the level of grant provided, there remains a significant shortfall between the affordable and the mandated number of DSPs. The MPS will seek to mitigate the resultant operational risk, however, this cannot be fully addressed without increased grant provision. The MPS therefore continues to press the Home Office for an increase in the DSP element of the Counter-Terrorism Grant that is commensurate with the operational risk.

Until clarification is received on the allocation of all the elements of the counter-terrorism specific grant, it is not known whether there will be an overall funding shortfall. If there were to be a shortfall, this will further increase the financial and operational risk for the MPS.

6. The present position on counter-terrorism grant announcements are as follows:

7. Additionally, the MPS have included a budget reduction item of £4.5M in the 2007/08 budget which anticipated additional ‘inflation proofing’ of specific grants for CT activity. An announcement on this is still awaited.

Capital Settlement 2007/08

8. The final capital settlement details for England and Wales is still awaited. It is understood that the announcement is likely to be within the next week and if details are available they will be reported orally to the committee. The announcement will include decisions on arrangements for the allocation of the former £75M ‘top slice’ of the capital pot for the police restructuring exercise undertaken earlier in the year. The Authority has already responded to the initial consultation exercise requesting that it be a full participant if it is decided to return this sum to the capital pot.

C. Race and equality impact

There are no direct equality and diversity implications arising from this report.

D. Financial implications

These are shown above.

E. Background papers

• Final Government Grant announcements.

F. Contact details

Report author: Ken Hunt. Treasurer

For more information contact:

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

Appendix 1

Letter to Commissioners of Police, Chief Constables and Clerks to Police Authorities from Jeremy Crump, Police Human Resources Unit

Police Human Resources Unit
Head of Unit
Jeremy Crump
6th Floor NE, Fry Building
2 Marsham Street
London SW1P 4DF
www.homeoffice.gov.uk

Commissioners of Police
Chief Constables
Clerks to Police Authorities

21 December 2006

Dear Colleague

Crime Fighting Fund criteria 2006/7

Introduction

1. This letter sets out criteria for continuation funding for 2006/7 under the Crime Fighting Fund. The effect of these is to suspend the existing system of penalties until further notice, subject to the arrangements set out in the annex relating to monitoring and performance.

2. The regime described here has been discussed with ACPO and the APA and follows Tony McNulty’s commitment in his statement of 27 November to consider allowing forces greater flexibility in their use of the crime fighting fund.

Criteria for 2006/7

3. Continued payments from the Crime Fighting Fund will be made irrespective of force strength on 31 March 2007.

4. The Home Office will continue to monitor force strength on a quarterly basis through the ADR process and will review the arrangements for continuation funding annually in consultation with the APA and ACPO. There will be a presumption that continued payments should not be conditional on officer numbers, but the Home Office retains the ability to make future continuation funding dependent on force strength targets if there is evidence in a force that:

• performance has fallen
• there is a clear link between this fall in performance and the reduction of officer numbers and
• the force is unable to give assurance that they can take action to mitigate the fall

5. Were it to become necessary to set a revised target to restore performance to an acceptable level, it would not necessarily be the case that the target would restore levels to the 2004 baseline which was been used for continuation funding in previous years.

Audit

6. The arrangements for triggering consideration of establishing a target for force strength will be the same as those used by the Police Performance Steering Group (PPSG) which alert Police and Crime Standards Directorate (PCSD) and HMIC to potential or emerging issues around performance.

7. If there is evidence of a fall in performance, and subsequent examination of the evidence by PCSD indicates that falling police numbers have played a part in the performance drop, the Home Office will discuss with the force its plans for improving performance. Should it be appropriate, the Home Office may at this stage set a new target number for police officer numbers which would form a baseline against which to assess entitlement to CFF continuation funding.

8. If you have any queries please contact Rebecca Pentelow.

Yours faithfully

Jeremy Crump

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