Revenue and capital monitoring report 2007/08 - period 7

Report: 5
Date: 11 December 2007
By: the Director of Strategic Finance on behalf of the Commissioner

Summary

This report provides an update on the revenue and capital budget monitoring position for 2007/08 at Period 7 (to the end of October). The revenue budget is forecast to underspend by £15.6m (0.5% of budget), which includes £5.7m of estimated additional costs related to Operation Seagram. The Capital Programme as at Period 7 (to the end of October) shows year to date total expenditure of £65.9m. This total represents 36.6% of the revised annual budget. The forecast for the year of £177.4m is £2.4m below the revised budget of £179.8m.

A. Recommendations

That Members

1. note the year to date and forecast position for revenue and capital budgets; and

2. approve the transfer to reserves of £2.9m relating to an increase to the Kickz reserve (£1.5m), CAD room refurbishment (£1.2m) and MSC Minibuses (£0.2m); (paragraph 5).

B. Supporting information

Background

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

Revenue Forecast by Business Group

2. Table 1 provides a summary of the revenue forecast and additional cost forecast for Operation Seagram. Table 2 compares the forecast outturn variances for Period 7 and Period 6 by Business Group.

Table 1 – Summary of revenue forecast against budget at period 7 (see Appendix 4)

3. The outturn variance for period 7 is forecast as an underspend of £15.6m. This includes a forecast outturn of £5.7m for the additional costs attributed to Operation Seagram. The period 7 forecast outturn variance excluding Operation Seagram costs is an underspend of £21.3m.

Table 2 - Comparison of Period 7 forecast outturn variance with Period 6 forecast outturn variance. (see Appendix 4)

4. The subjective position by Business Group is at Appendix 1. The overall position for the MPS is at Appendix 2. The figures in the Appendices include expenditure on Operation Seagram.

3. Territorial Policing – An underspend of £8.3m – 0.6% of budget.
There has been an adverse movement of £3.7m in the forecast position from that reported at period 6. This principally results from the request to transfer part of the Territorial Policing underspend into Reserves which Members are asked to note and/or approve. The reserves are required for the following reasons:

1. Implementation of Integrated Prosecution Teams (£5.1m)
   Approval to the full roll-out of integrated prosecution teams is being sought at CoP on 6 December 2007. This programme will deliver significant savings in future years which have been built into the draft 2008-11 budget submission. In part due to delays in implementing this programme, approval is being sought from CoP to carry forward some resources from this year’s budget to cover:
   • Additional one-off staffing costs for a 12 month period related to the implementation of Integrated Prosecution Teams (£1.3m)
   • Additional technology and accommodation start-up costs relating to the implementation of Integrated Prosecution Teams (£3.8m)
2. CAD Room Refurbishment
   Related to the Integrated Prosecution Teams Programme it is proposed to carry forward funding to re-furbish old CAD room accommodation for re-use following rollout of the Integrated Borough Operations function (£1.2m).
3. Minibuses
   Purchase and running costs for four Minibuses for the Metropolitan Special Constabulary (£0.2m). The officers are grouped into area clusters and due to the increased numbers, additional vehicles are required to transport them to their area of patrol.
4. Kickz
   In line with previous Authority approval, deferred income of £1.5m relating to Safer Neighbourhoods needs to be transferred to the Kickz reserve fund. This will increase the available resources for Kickz to £3m.

6. Approval is sought to the carry forward of £2.9m in respect of (b), (c) and (d) above.

7. Specialist Crime – An underspend of £4.1m – 1.1% of budget.
There has been a favourable movement of £0.7m in the forecast position from that reported at period 6. This principally results from movements in Police Officer Pay and Police Staff Pay forecasts following reviews of the anticipated recruitment profiles.

8. Specialist Operations – An underspend of £0.9m– 0.5% of budget.
There has been a favourable movement of £2.5m in the forecast position from that reported at period 6. This principally results from a reduction in the Police Officer Pay forecast within SO15, Counter Terrorism Command following reviews of the anticipated recruitment profiles.

9. Central Operations – An underspend of £2.0m – 0.8% of budget.
There has been a favourable movement of £0.7m in the forecast position from that reported at period 6. This is mainly within Police Officer Pay following reviews of the anticipated recruitment profiles.

10. Operational Services – An overspend of £0.9m – 0.6% of budget.
There has been a favourable movement of £1.6m in the forecast position from that reported at period 6. This results principally from a review of the average costs used when forecasting Police Staff Pay and within Supplies and Services following detailed reviews of costs relating to contracted out solicitors and legal representation for misconduct cases.

11. Strategy, Modernisation & Performance – An underspend of £0.6m – 3.9% of budget.
There has been a small favourable movement of £0.1m in the forecast position from that reported at period 6. The forecast underspend relates to Police Officer pay and Police Staff pay and reflects the current level of vacancies with the Directorate.

12. Directorate of Public Affairs – An underspend of £0.2m – 2.9% of budget.
A minor change from the forecast variance reported at period 6.

13. Directorate of Information – An overspend of £2.1m – 0.9% of budget.
There has been an adverse movement of £0.6m from that reported at period 6. This is principally due to increased activity around recruitment of specialist technical staff to cover for staff vacancies.

14. Resources – An underspend of £2.3m – 0.9% of budget.
There has been a favourable movement of £1.0m in the forecast position from that reported at period 6. This relates to savings across a range of running costs.

15. Human Resources – An underspend of £0.3m – 0.2% of budget.
There has been an adverse movement of £0.3m from that reported at period 6. This is principally due to a review of the forecast income relating to sickness benefits.

16. Metropolitan Police Authority – An underspend of £0.4m – 3.5% of budget.
There has been a favourable movement of £0.2m in the forecast position from that reported at period 6. This relates principally to a review of the Police Staff Pay forecast and small reductions in premises and supplies & services forecasts.

17. Centrally Held Budgets – An overspend of £0.6m.
There has been an adverse movement of £0.6m in the forecast position from that reported at period 6. This relates to the forecast of costs arising from the Stockwell Health and Safety prosecution.

18. Discretionary Pension Costs – A minor overspend.
There has been an adverse movement of £0.4m in the forecast position from that reported at period 6 relating to a forecast increase in ill-health retirements.

Revenue Forecast by expenditure/income type

19. Table 3 compares the forecast variance for Periods 7 and 6 by income / expense type.

Table 3 – Forecast outturn by Income/expense type (see Appendix 4)

The main forecast variances from budget are set out below.

20. Police Officer Pay – Underspend of £30.0m – 1.8% of budget.
This underspend is due to workforce levels being below those budgeted within all Business Groups. The forecast underspend has reduced by £2.3m since period 6 following the request within Territorial Policing proposals to carry forward some resources into 2008/09 (see paragraph 5). Table 4 shows the police officer strength by Business Group at 31 October against the original Budgeted Workforce Total for 31 March 2008 and the forecast strength for 31 March 2008.

Table 4 – Police Officer Strength v BWT (see Appendix 4)

21. Police Staff Pay - Underspend of £14.6m – 2.2% of budget
The forecast underspend has increased by £2.3m since period 6 due to the re-assessment of anticipated recruitment profiles within Territorial Policing, Specialist Crime, Specialist Operations, Operational Services and Human Resources.

22. PCSO Pay - Underspend of £4.1m – 3.0% of budget.
There has been an increase in the underspend forecast of £0.7m since period 6. The underspend is within Territorial Policing and relates to delays to the planned implementation of changes to the Station Reception Officer role which are to be undertaken by PCSOs. This underspend is offset slightly within Central Operations as the Transport OCU are forecasting to be over strength as they have been recruiting PCSOs instead of Traffic Wardens.

23. Traffic Warden Pay - Underspend of £0.6m – 5.2% of budget.
This underspend is principally due to Transport OCU forecasting to be under budgeted strength as they have been recruiting PCSOs instead of Traffic Wardens. There has been a minor adverse movement since period 6.

4. Police Officer Overtime – Overspend of 18.8m – 14.7% of budget.
There has been a favourable movement in the forecast of £0.8m from that reported at period 6 mainly following a review of the cost of additional aid within Central Operations.

25. Police Staff Overtime – Overspend of £4.0m – 13.2% of budget.
There has been a small favourable movement of £0.1m from that reported at period 6.

26. PCSO and Traffic Warden Overtime – Minor underspend.

27. Employee Related Expenditure – Overspend of £1.5m – 4.0% of budget.
There has been a favourable movement of £1.0m in the forecast from that reported at period 6, mainly due to additional budget allocated within Specialist Operations relating to ACPO TAM grant for seconded officers.

28. Premises Costs – Overspend of £7.9m – 3.7% of budget.
There has been an adverse movement of £1.6m in the forecast from that reported at period 6, mainly relating to additional repairs and maintenance costs within Territorial Policing and higher than anticipated rent and rates and contractual increases in annual service charges within Resources Directorate.

29. Transport Costs - Overspend of £5.7m – 9.7% of budget.
There has been a small favourable movement of £0.2m from that reported at period 6.

30. Supplies and Services - Overspend of £14.6m – 3.3% of budget.
There has been an adverse movement of £2.0m in the forecast from that reported at period 6. This movement is principally within Territorial Policing to reflect additional activity associated with mobile Automatic Number Plate Readers (ANPR), Optical Readers for improved Stop and Search activity and youth engagement plans with Multi-Agency initiatives. There has also been an increase within Central Operations relating to helicopter insurance and increased Counter Terrorism costs at Heathrow.

31. Capital Financing Costs – Underspend of £0.6m – 2.8% of budget.
There has been no movement in the forecast from that reported at period 6.

32. Income - Forecast over-achievement of £20.8m – 6.4% of budget.
There has been a favourable movement in the forecast of £4.7m from that reported at period 6. This movement principally relates to rental income forecast from the Forensic Science Service at Lambeth and additional miscellaneous income forecast throughout Territorial Policing boroughs.

33. Budget movements
The major budget movements undertaken in period 7 are shown below in Table 5.

Table 5 – Major budget movements actioned in periods 7 (see Appendix 4)

34. Movements in Reserves
The reserve drawdowns and transfer to reserves carried out in period 7 are shown in Table 6.

Table 6 – Reserve drawdowns and transfer to reserves carried out in Period 7 (see Appendix 4)

Capital Monitoring

35. Appendix 3 sets out the expenditure for the 2007/08 Capital Programme as at Period 7 (October) by programme, which shows a year to date total of £65.9m. This represents 36.6% of the revised budget of £179.8m. The forecast for the year of £177.4m is £2.4m below the revised budget (£106.8m below the original budget)

36. Property Programme – A forecast underspend of £0.6m (1.5% of budget)
Minor variation.

37. Information Programme – Excluding C3i – £0.4m Overspend (0.6% of budget).
Minor variation.

38. MPA Information Technology – £0.15m underspend (35.3% of budget).
This relates to re-phasing of the Connect Programme into future years.

39. Transport Projects – Nil variation.

40. Other Plant & Equipment Expenditure – £1.1m overspend (43.2% of budget). This primarily relates to additional forecast expenditure on aircraft and associated support equipment.

41. Directorate of Information – C3i Programme - £2.4m underspend (7.7% of budget). The forecast underspend relates to the Heathrow Special Scheme which will now be funded from the 2007/08 Revenue Budget.

42. Safer Neighbourhoods Programme (Phases 1 to 3) - £0.9m underspend (5.9% of budget).
The Safer Neighbourhoods forecast shows small underspend against the current year budget allocation following the request to carry forward £12.9m to future years.

Abbreviations

CAD

Computer Aided Despatch

MSC

Metropolitan Special Constabulary

PCSO

Police Community Support Officer

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

• Background Papers: 2007/08 budget book
• Previous monitoring reports.

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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