Revenue and capital budget monitoring 2007/08 - period 2

Report: 8
Date: 19 July 2007
By: Director of Finance Services on behalf of the Commissioner

Summary

This report provides an update on the revenue and capital budget monitoring position for 2007/08 at Period 2 (to the end of May). The revenue budget is forecast to underspend marginally by £0.2m (0.01% of budget).

The Capital Programme for 2007/08 is still being finalised and will be reported as part of period 3 monitoring.

A. Recommendations

That Members note the year to date and forecast position for revenue budgets.

B. Supporting information

Background

1. This paper provides information on the forecast against revenue and capital budgets for the MPA/MPS in 2007/08 based on the position at the end of May.

Revenue forecast by business group

2. Table 1 provides a summary of the revenue forecast which reports a forecast underspend position of £0.2m.

Table 1 - Summary of revenue forecast against budget at period 2

3. The subjective position by Business Group is at Appendix 1. The overall position for the MPS is at Appendix 2.

4. Territorial Policing – An underspend of £1.7m – 0.1% of budget.
The principal reason for the forecast underspend relates to Police Officer Pay as workforce levels are currently lower than those budgeted for. This is partly offset by a forecast overspend on Interpreter’s fees and Forensic Medical Examiner fees. Additional income is forecast for Operation Safeguard (the accommodation of Home Office prisoners within police cells). Operation Safeguard is likely to continue to the end of the calendar year.

5. Specialist Crime – An underspend of £0.5m – 0.1% of budget. 
The principal reason for the forecast underspend relates to Police Officer Pay and Police Staff Pay as workforce levels are currently lower than those budgeted for. This is partly offset by forecast overspends on DNA testing (£0.9m) and specialist communications (£0.6m).

6. Specialist Operations – An underspend of £0.4m – 0.2% of budget. 
The principal reason for the forecast underspend is within Police Officer Pay where workforce levels are below those budgeted.

7. Central Operations – An overspend of £3.7m – 1.3% of budget.
The forecast overspend relates to Police overtime where additional aid is anticipated to be required for events at Wembley Stadium. There is also an overspend within Transport costs due to corporate vehicle hire and fuel costs related to the anticipated increased level of additional aid as well as higher than budget levels of maintenance within the Air Support Unit.

8. Operational Services – An overspend of £2.1m – 1.3% of budget.
The forecast overspend relates to Police Staff pay and Police Staff overtime as a result of additional staffing requirements within the Central Communications Command to meet required standards for call handling performance.

9. Strategy, Modernisation & Performance – An underspend of £0.4m – 2.7% of budget. 
The forecast underspend relates to Police Officer pay and Police Staff pay and reflects the current level of vacancies with the Directorate.

10. Directorate of Public Affairs – An underspend of £0.2m – 2.6% of budget.
Minor variation.

11. Directorate of Information – An underspend of £0.9m – 0.4% of budget. 
The principal reasons for the underspend relate to Police Officer pay and the current level of vacancies.

12. Resources – An underspend of £1.1m – 0.5% of budget. 
The forecast underspend relates mainly to Police Staff pay which reflects the current level of vacancies within the Directorate.

13. Human Resources – An overspend of £0.5m – 0.4% of budget. 
The principal reason for the overspend relates to the unbudgeted cost of premature retirements and the increase in provision of uniforms for Special Constables following higher recruitment targets. These have been partly offset by underspends within Police Officer pay and Police Staff pay resulting from vacancies within the Directorate.

14. Metropolitan Police Authority – An underspend of £0.1m – 0.5% of budget.
Minor variation.

15. Centrally Held Budgets – An underspend of £0.4m 
Minor variation.

16. Funded Units - An underspend of £0.8m.
The variance is principally due to additional income at Heathrow Airport as part of the recent contract negotiations.

17. Discretionary Pension Costs – Minor overspend.

Revenue forecast by expenditure/income type

18. Table 2 provides the forecast outturn for Period 2 by income/expense type.

Table 2 – Forecast outturn by Income/expense type

19. The main forecast variances from budget are set out below.

Police Officer Pay - Underspend of £14.8m – 0.9% of budget

20. This underspend is due to workforce levels being below those budgeted, mainly within Territorial Policing and Specialist Operations. Police Officer strength as at 31 May 2007 is 31,050. BWT at 31 March 2008 is 32,086. A breakdown by Business Group will be provided in future reports.

Police Staff Pay - Underspend of £5.9m – 1.1% of budget

21. This underspend is mainly due to vacancies within Specialist Crime, Specialist Operations and Human Resources. There is a forecast overspend within Operational Services as a result of additional staffing requirements within the Central Communications Command to meet required standards for call handling performance.

PCSO Pay - Overspend of £0.4m – 0.3% of budget

22. This overspend is principally due to Transport OCU forecasting to be over strength as they have been recruiting PCSOs instead of Traffic Wardens.

Traffic Warden Pay - Underspend of £0.4m – 3.0% of budget

23. This underspend is principally due to Transport OCU forecasting to be under budgeted strength as they have been recruiting PCSOs instead of Traffic Wardens.

Police Officer Overtime - Overspend of £5.5m – 4.6% of budget

24. This overspend relates mainly to additional aid within Central Operations which is anticipated to be required for events at Wembley Stadium.

Police Staff Overtime - Overspend of £2.5m – 8.3% of budget

25. This forecast overspend is principally due to overtime within the Central Communications Command to meet required standards for call handling performance.

PCSO Overtime - Underspend of £0.1m – 10.9% of budget

26. Minor underspend.

Employee Related Expenditure - Overspend of £0.9m – 2.2% of budget.

27. This overspend principally relates to the costs of Police Staff premature retirements within the Human Resources directorate.

Premises Costs – Overspend of £1.1m – 0.5% of budget

28. This overspend relates mainly to a budget categorisation change required within Territorial Policing which will be rectified for the next report.

Transport Costs - Overspend of £2.6m – 4.4% of budget

29. The overspend relates mainly to Central Operations due to corporate vehicle hire and fuel costs related to the anticipated increased level of additional aid as well as higher than budgeted levels of maintenance within the Air Support Unit. There is also an overspend within Specialist Operations related to overseas travel and subsistence costs and vehicle hire.

Supplies and Services - Overspend of £10.3m – 2.4% of budget

30. This overspend primarily relates to expenditure on Interpreters, Medical Examiner fees and DNA testing. There are also overspends related to expenditure on dangerous dogs, office equipment, consultants covering vacancies within emerging technologies and additional uniform costs for increasing numbers of Metropolitan Special Constables.

Capital Financing Costs – Underspend of £0.4m – 1.7% of budget

31. Minor underspend.

Income - Forecast over-achievement of £2.7m – 0.9% of budget

32. This over-achievement of income primarily relates to Operation Safeguard (the accommodation of Home Office prisoners within police cells).

Budget movements

33. The major budget movements undertaken in periods 1 and 2 are shown below in Table 3:

Table 3 – Major budget movements actioned in periods 1 and 2

Movements in reserves

34. There have been no reserve drawdowns carried out in periods 1 and 2.

Capital monitoring

35. The Capital Programme for 2007/08 is still being finalised and will be reported as part of period 3 monitoring.

C. Race and equality impact

There are none specific to this report.

D. Financial implications

The financial implications are those set out in this report.

E. Background papers

• 2007/08 Budget Book

F. Contact details

Report author: Sharon Burd, Director of Finance Services, MPS.

For more information contact:

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

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