2008/09 business and financial planning process update

Report: 3
Date: 17 May 2007
By: Director Strategy, Modernisation and Performance and A/Director of Resources on behalf of the Commissioner

Summary

This report outlines key issues regarding the 2008/09 business and financial planning process and how they will be managed. This includes alignment of the local and central planning processes and an update on the current position regarding the MPS/MPA strategic priorities.

A. Recommendations

That

1. members note the key issues identified for the 2008/09 business and financial planning process and support the activities proposed to manage these;
2. note the position and agree the activities in relation to the strategic priorities; and
3. agree the key dates for the 2008/09 business planning process

B. Supporting information

Background

1. A report was sent to the 15 March Planning, Performance and Review Committee (PPRC) which outlined:

• the challenging position with regard to the budget in the foreseeable future;
• the need for the MPS/MPA to use resources more efficiently;
• the benefits of an integrated business and financial planning process; and
• the key changes that will be made to the business and financial planning process for the 2008/09 planning process.

2. Following receipt of this report, the MPA have requested further detail regarding the key issues for the 2008/09 business and financial planning process, including alignment of the local and central planning processes and an update on the current position regarding the MPS/MPA strategic priorities.

Key issues for the 2008/09 business and financial planning process

3. The key issues for the 2008/09 business and financial planning process have been identified as follows:

• the financial position of the MPS/MPA will be very challenging (detailed in the 15 March PPRC paper);
• the need to more closely align resources to strategic priorities;
• a clearer overview of the efficiency planning process from start to finish;
• the objectives, measures and target setting process, including the critical performance areas, needs to be undertaken earlier in the planning process;
• the need to more closely align local and central planning processes; and
• closer engagement with the MPA.

The 2008/09 strategic priorities

4. Management Board discussed the strategic priorities for 2008/09 on 18 April 2007. They recognised that, whilst the MPS’s performance in most crime areas has been good, there is no room for complacency. An eighth strategic priority of ‘Violent Crime’ was therefore proposed (a) to ensure a focus on the performance challenge which this particular area presents (b) in recognition of the increasing emphasis on ‘seriousness’ from the Home Office and (c) to respond to genuine public concerns on violence.

5. In the light of this, Management Board felt there was a need to revisit all the strategic priorities to ensure that they were all still relevant. A report will be put to Management Board in June to this effect.

6. This means that the current proposal for the strategic priorities are:

• Citizen Focus
• Counter Terrorism
• Making Neighbourhoods Safer (to reflect the broader outcomes both of Safer Neighbourhoods and the wider remit of TP)
• Criminal Networks
• Capital City Policing
• Violent Crime
• Information Quality
• Together.

7. The Corporate Strategic Assessment (CSA) is intended to provide evidence that will inform the development of the strategy for the MPS/MPA. The business group business planning process commences at the beginning of May, while the CSA is due to report in September 2007, making it too late to inform the strategic priorities in time for the business group business planning process for 2008/09. However, the Business and Financial Planning Team will work closely with Strategy Unit to ensure that the business plan is consistent with emerging findings from the CSA. The CSA will be reviewed every 6 months to ensure the strategy is informed by it.

8. In the current financial climate it is crucial that the whole MPS/MPA is tightly focused on what is most important to deliver. The MPS therefore needs to be specific about what we require Business Groups to deliver within each of the strategic priorities in support of our strategic outcomes. This will require us to identify MPS-wide objectives for each of these. These objectives will assist Business Groups in prioritising activities and resources in line with our MPS-wide priorities. The Business and Financial Planning Team is currently assisting those with a corporate lead for each of the strategic priorities to identify objectives for each of the strategic priorities.

9. This information will be used to estimate the resource planned in delivering the objectives for each of the strategic priorities.

10. It is also intended to review the process for selecting the critical performance areas (Super 12) to ensure that they are fulfilling the business need and that there are rigorous criteria for their selection. The results will be reported to the MPA in July.

Closer alignment of central and local planning processes

11. In order to ensure that the central and local planning processes are more closely aligned, it is necessary to provide business groups with a clear corporate direction, whilst allowing some flexibility for local decision making. The intention is to more tightly focus business group objectives to strategic objectives. These strategic objectives will be those identified for each of the strategic priorities and will assist delivery of the MPS/MPA’s strategic outcomes (see Appendix A for diagram).

12. During the 2007/08 target setting process the demands made on BOCUs by Government Office for London (GoL) and the corporate centre highlighted the following key issues for the BOCUs, MPS and MPA:

• The current PSAs are mandatory elements of Crime and Disorder Reduction Partnership (CDRP) Local Area Agreements (LAAs), and therefore GoL’s approach to setting targets to meet the 4-year 17.5% or 20% levels was extremely rigid. This was in contrast to the ‘challenging but achievable’ approach taken by the MPS;
• GoL also oversee the Local Public Service Agreements (LPSAs) agreements with, CDRPs where financial rewards are attainable if boroughs achieve a stretch performance target over a 3-year period. By their very nature, these stretch targets are locally focused and have the potential to be inconsistent with the current (or future) corporate strategic priorities;
• As there will be a new set of PSAs this time next year, it’s possible that these 3-year agreements will no longer be relevant to the BOCU or MPS/MPA.

13. Under these circumstances, it is important to ensure that the MPS/MPA’s business planning process is genuinely both top down and bottom up. It is also critical for the central team to work closely with local business units and the MPA throughout the planning process to identify and manage issues as they arise.

14. We also plan to take full account of what appears to be a genuine strategic shift in Central Government. This includes the new PSAs and target-setting process that will underpin them. In particular, there may be some flexibility around the introduction of borough-based, MPS-wide and national targets which should reduce some of Members’ concerns around the 2007/08 process. A further paper will be submitted to PPRC to propose a consistent approach, before the 2008/09 target setting round begins in the autumn.

The 2008/09 efficiency planning process

15. Following on from the need to make revenue savings in the region of £65m to £70m in each of the 2006/07 and 2007/08 financial years, it is clear that the challenge ahead is significant and requires the MPS to focus effort not just on delivering an effective service, but on doing so in the most efficient way possible. Both the MPS and MPA need to recognise that there is limited potential for the continuing gap to be met purely by focusing on ‘discretionary budgets’ and back-office/support functions.

16. The key to delivering a robust and balanced budget is to start the planning process early. Work has begun on a number of levels and by a range of individuals with different areas of expertise:

• Finance Services are working to create a robust MTFP/strategic outlook;
• The Productivity Group are further developing their role in determining efficiencies across the MPS – and ensuring the ‘efficiency’ approach is embedded within the organisation;
• The Modernisation Delivery Unit is working to ensure business benefits from the Met Modernisation Programme deliver real business efficiencies and improved service delivery;
• Consider and develop further innovative and creative opportunities to ‘mould and change’ the services we deliver.

17. The initial work on the 2008/09 budget will be led through a new Strategic Budget Group. This Group is chaired by the Deputy Commissioner and will consider, corporately, areas of the MPS budget which should be ‘protected’; areas in which efficiency savings might be made with minimal impact on public facing services; and alignment of this work with the MPS/MPA strategic priorities. The Group will provide early advice to the Management Board on the options for dealing with the budget.

Key dates during the 2008/09 planning process

18. The revised key dates for the 2008/09 planning process are as follows:

• July 2007 MPA Budget Scrutiny meeting – consideration of 2008/09 budget and savings options (date to be arranged)
• 12 July 2007 PPRC – draft of the strategic objectives and a report regarding the CPAs
• 20 September 2007 joint Finance and PPRC meeting – first consideration of the draft corporate business plan and update on emerging measures
• 27 September 2007 Full Authority - consideration of the draft corporate business plan
• 30 September 2007 – interim high-level priorities and budget information to the GLA
• 11 October 2007 PPRC meeting – consideration of next iteration of the draft corporate business plan and update on emerging measures/targets
• 25 October 2007 Full Authority – consideration of the draft corporate business plan following changes from the joint meeting in September
• early November 2007 – receipt of Mayor’s preliminary draft budget proposals
• 19 November 2007 joint Finance and PPRC meeting – update on measures and target setting
• 22 November 2007 Full Authority – ‘sign off’ of the corporate business plan for submission to the Mayor
• 30 November 2007 – return of draft corporate business plan to Mayor/GLA
• 15 January 2008 PPRC meeting – update on targets
• 30 March 2008 – publication of the Policing London Strategy and Plan.

19. As well as the formal meetings, the Business and Financial Planning team will hold regular meetings with the MPA Treasurer, MPA officers and key MPA members throughout the planning process.

C. Race and equality impact

There are no specific equality and diversity issues.

D. Financial implications

There are no significant financial implications directly from this report. The financial and business planning processes detailed in the report will affect budgetary decisions for 2008/09 and subsequent years.

E. Background papers

None

F. Contact details

Report author: Angela Emery and Adrian Lovegrove, MPS

For more information contact:

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

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