MPA/MPS business plan and budget 2009-12

Report: 6
Date: 18 September 2008
By: the MPS Director of Resources and MPA Treasurer

Summary

This report updates Finance Committee and PPRC members on the progress of the development of the draft Policing London Business Plan for 2009-12 and seeks approval to the Interim Budget Response for submission to the Mayor.

A. Recommendations

That

1. Members note the activities being undertaken in the integrated strategic financial/planning framework including the development of the draft Policing London business plan

2. Members approve the interim budget submission to the Mayor and note any final amendments to the submission will be subject to the agreement of the MPA Treasurer.

3. Members approve the process for submitting the detailed business plan and budget to the GLA outlined in paragraph 23.

B. Supporting information

1. This document updates members on the progress of the development of the MPA/MPS Policing London Business Plan 2009-12 and seeks approval of the Interim Budget submission to the Mayor. The report also provides members with an update on progress regarding the Mayor’s budget guidance target, and related financial information.

Development of the Policing London Business Plan

2. The full MPA/MPS Policing London Business Plan outlines our strategic objectives and delivery plans, including: business group responsibilities; performance measures and targets; the anticipated funding to support the planned activities as well as proposed efficiency savings.
The Policing London business plan has three main purposes:

• To set out the strategic objectives to be delivered over the next three years, and the way in which business groups will contribute to their achievement
• To present to stakeholders and the public how the Policing London Business Plan will improve service delivery to Londoners, meet their needs and demonstrate that taxpayers’ money is being appropriately spent.
• To ensure the content of the plan meets the requirements of the budget and business plan submission to the Mayor as outlined in the Mayoral Budget Guidance.

3. The draft Interim Budget submission at Appendix 1 fulfils the requirement of the GLA group budget guidance, provides an interim view of our Policing London Business Plan and gives an overview of the MPS’ strategic objectives for 2009-12 including financial assumptions and issues.

4. The full 2009-12 Policing London business plan will form the budget submission to the Mayor in November. The document will then be further revised to include updated performance information and the 2008/09 final budget position as determined by the Mayor. The final plan will be published on the internet by 31 March 2009. A summary document will also be produced in hard copy once the final performance figures for 2008/09 are known (end April 2009).

Integrated Business/Financial Planning Framework

5. Members will be aware of the continuing work to integrate the business and financial planning frameworks, reflecting a developing approach to strategic planning in the MPS. The aim is to ensure that financial planning and budgeting are driven by business need and that resources are allocated in line with the MPS’ strategic objectives.

6. The 2009-12 business and finance planning process aims to embed an improved planning and performance framework within a robust corporate governance structure. The enhanced functionality of the Strategy and Improvement department within Resources Directorate aims to deliver improved processes and outputs, including:

• A clear timeline and project plan including dependencies for the planning cycle
• Updated business group business planning guidelines
• An enhanced business group delivery plan template aligned to the MPS’ key deliverables
• Enhanced flow and quality of financial information to business managers, ensuring a clearer grasp of the financial landscape
• Continuing alignment of business finance, planning and performance processes
• Focus on business group deliverables and accountability for business performance, evidenced through measures and targets
• Better co-ordinated use of current consultation and development of the consultation process to inform the policing plan process
• Planned and regular meetings with MPA and MPS staff and members to inform the process
• Alignment of resource deployment to business group budgets, providing the Service with a robust basis to manage resources.

7. The timetable allows MPA members at least two formal opportunities to scrutinise the final Policing London Business Plan, at joint Finance/PPR Committees and Full Authority meetings (see paragraph 23).

Revised MPS strategic objectives and outcomes

8. On 5th February 2008, Management Board agreed that the 2008-11 strategic priorities would be retained for 2009-12 – an assessment based on the results of the Corporate Strategic Assessment (CSA), an environmental scanning process identifying areas for consideration to the Service both internally and externally. At this time, they also agreed that a new strategic objective regarding leadership and service management would be added to ensure that the work relating to corporate governance, service improvement, productivity, leadership and ICT improvements is effectively prioritised within the organisation.

The revised objectives and their relationship to the strategic outcomes are shown in Table 1. An additional strategic outcome of ‘Continuous improvement is fundamental to Service Delivery’ was approved, with the four existing strategic outcomes remaining the same.

MPA/MPS strategic outcomes and objectives for 2009/10

Strategic Outcomes: Crime, disorder, vulnerability and harm are prevented and reduced and Offenders are brought to justice

• Strategic objective 1 : Make our neighbourhoods safer through local and city-wide problem solving and partnership working to reduce crime, anti-social behaviour and road casualties
• Strategic objective 2 : Reduce serious violence and protect young people
• Strategic objective 3 : Disrupt more criminal networks and reduce the harm caused by drugs

Strategic Outcome: Security is improved and the public feel reassured

• Strategic objective 1 : Enhance our counter-terrorism capability and capacity
• Strategic objective 2 : Plan for, and effectively police, major events in London and prepare for the 2012 Olympics

Strategic Outcome: Communities are engaged with, confident and satisfied with our police service

• Strategic objective : Make our services more accessible and improve people’s experience of their contact with us.

Strategic Outcome: Continuous improvement is fundamental to service delivery

• Strategic objective relating to above strategic outcome: Lead and manage our Service to ensure the most efficient, effective and economic use of all the resources entrusted to us

9. The strategic objectives are reviewed on an annual basis to ensure that the strategy remains meaningful and reflects the future needs of London. This process will be informed by the CSA process and by the emerging priorities of the new administration at the MPA.

10. The GLA’s budget guidance is a reflection of the Mayor’s priority aims and objectives intended to achieve the Mayor’s new policy agenda. The guidance was issued on 22 July 2008 and Appendix 1 provides information on the Mayor’s priorities for the MPA/MPS and his requirements in respect of:

• the interim budget submission
• the budget and business plan submission

A detailed overview of Mayoral priorities, including the priorities for the MPA/MPS, within the PSAs framework set by the Government for the Police and for Crime and Disorder Reduction Partnerships, will form part of the draft corporate business plan (see Annex C of the Interim Budget Submission Appendix 1 for MPS Strategic objectives as aligned to the Mayor’s priorities 2009/10).
Key external stakeholders

11. As part of the Comprehensive Spending Review (CSR), the Government outlined Public Service Agreements (PSAs) which set out the Government’s priorities, as well as the budget that police services and partners are required to deliver from April 2008 to March 2011. These were considered as part of the review of the strategic objectives in February 2008.

12. The Government also implemented Local Areas Agreements (LAAs) across all boroughs/councils. LAAs are intended to allow flexibility in deciding priorities aligned with local needs, including consultation with local people, and to encourage collaborative action between local agencies. LAAs cover social, educational, health and community issues as well as policing needs. This process places great emphasis on partners to set out, in detail, their service delivery plans over a three-year period with an enhanced role being given to local authorities. In addition, the MPA itself has a statutory responsibility to set performance targets in respect of policing priorities. It then monitors performance regularly against these targets.

13. In some boroughs, the Local Strategic Partnership (LSP) may have decided that policing needs and police related indicators (Assessments of Policing and Community Safety - APACS) are less of a priority than other areas requiring improvement. However, the BOCU is still required to deliver against those areas identified as priorities for the MPA/MPS and in the Government’s PSA/APACS indicators, regardless of whether the LSP has selected them as part of their LAA.

14. The National Indicators (NI) are the measures that the Government will use to assess how successfully boroughs are delivering on their LAAs. These will form part of the Comprehensive Area Assessments (CAAs) that are due to be implemented in April 2009. CAAs are the inspection mechanism that the Government will use to monitor the quality of life in an area, how well agencies are working together to improve local services, including delivery of the commitments made in their LAA, as well conducting an area risk assessment. Exact details regarding CAA inspections are still subject to consultation.

15. Where possible the corporate planning process has aligned performance measures to the APACS/NI set to streamline the number of different areas for which BOCUs will be held accountable. However, it is not expected that there will be complete alignment, as BOCUs have to balance MPA, MPS, national and local performance requirements - and LAAs are intended to be bespoke according to local needs.

16. However, the two strategic objectives that would principally be delivered at a local level are ‘Making neighbourhoods safer’ and ‘Reduce serious violence and protect young people’. These both have NI measures that have been chosen by a significant number of BOCUs (e.g. 26 boroughs have ‘serious acquisitive crime rate’ within their LAA, and 21 have ‘serious violent crime rate’) both of which are also Government PSAs. However, as partnerships develop, there will be a need to capture more effectively the work delivered by partners, especially where it contributes to, or could affect, delivery of the MPA/MPS strategic objectives.

17. "Protective services" (which include Counter Terrorism, Civil Contingencies, Firearms, Major Crime - Homicide, Public Order, Roads Policing, Serious Organised Crime, Domestic Extremism, Critical Incidents and Public Protection) also contribute to delivery of local targets. Aspects of this protective services police work are co-ordinated by business groups throughout the MPS. For example, work on Counter Terrorism is co-ordinated by the Specialist Operations business group.

18. One aspect of the changing nature of partnership working is the growing need for a more robust negotiating position in respect of partnership budget share, particularly where activities are more clearly to the benefit of partners. A current example might be the possible move towards charging for the services of a crime prevention design advisor within the planning process. Work is continuing on the implementation of a partnership strategy to ensure that governance arrangements and processes support partnerships and ensure compliance with MPA and MPS decision-making frameworks.

19. A further specific issue exists in respect of partnership funding - in this case the LAA funding: It is not clear that all boroughs have entered into clear undertakings with regard to the distribution of any reward grant associated with the achievement of targets. Such monies are paid directly to the local authority without being ring-fenced in any way. While it is encouraging in one sense that many boroughs seem to be operating on the basis of trust, there may be implications where partnership personnel change. Also, there continues to be uncertainty over the future of the BCU Fund. At one stage it was due to come to an end in 2008. An allocation of 80% was made for 2008/09 and there are now suggestions that this fund may continue (even returning to 100% allocation). However, should this not be the case, the loss of this very valuable source of partnership funding would further increase pressure on other sources of funding for additionality which so often enriches the work of a partnership.

Consultation

20. The MPA/MPS consult the public regarding policing priorities, in addition to other forms of consultation, such as the requirement to consult on the introduction of a new strategy as part of an Equality Impact Assessment (i.e. Violent Crime Strategy), and surveys such as the MPS Youth Survey. This year’s public consultation process took the form of an on-line survey that asked respondents to list their top three policing priorities and how they would like the police to address them. Responses from this consultation and others suggest that the MPA/MPS strategic objectives are broadly aligned to the public’s priorities.

21. Going forward, the Strategy and Improvement Department have reviewed the current means of public engagement and consultation within the MPS, and consultation has also taken place with the MPA. All forms of engagement and consultation have now been mapped to identify overlaps and gaps in the consultation currently undertaken.

22. A key issue is the need to strengthen the role of engagement and consultation within the annual planning process. This will now be achieved in the following ways. The Public Attitude Survey (PAS) will include questions around policing priorities, and, specifically, open questions to elicit people's views on top priorities for policing in London and how they would like the police to address them. This will be in place for quarter three in the 2008/9 planning cycle (October 2008) and thereafter. The information gleaned will then be considered alongside other sources – principally the online policing priority consultation survey hosted on the MPA website, Safer Neighbourhoods and Safer Schools data - to inform the development of content for the Policing London Business Plan.

23. A major advantage of using the PAS in this way is to exploit existing methods of consulting with the public. The PAS sample is large (5,000 responses a quarter), providing robust data for analysis. Use of the PAS to inform selection of policing priorities is in addition to existing forms of consultation such as the on-line survey referred to above. The consultation processes undertaken are complex are extensive to reflect the need to consult effectively with a wide range of MPS customers.

24. The MPA plans to further develop the online consultation process and other consultation methods to inform future MPA/MPS strategic objectives. The online consultation survey will be advertised in London press and each borough’s Local Policing Summary (which will be published in local press). A wide variety of individuals and organisations will also be directly invited to take part in the consultation process, including a large number of youth contacts established throughout the MPA youth scrutiny. Plans for future consultation processes also include focus groups and consultation ‘road shows’.

Future Key Dates

25. The key forthcoming meetings and dates in relation to the development of the Policing London business plan are as follows:

• 18th September – PPR and Finance Committee – approval of interim budget submission
• 26th September – Interim budget submission to the Mayor
• 17th November - PPR & Finance Committee - approval of draft Business Plan and budget submission and response to Mayor's consultation on his draft budget proposals
• 27th November - Full Authority - approval of draft Business Plan and budget submission and response to Mayor's consultation on his draft budget proposals
• 29th January – Full Authority consider initial draft of Policing London Plan
• 26th February - Full Authority approve final draft of Policing London Plan
• 23rd March –Policing London Plan published.

Note: In the above, the Business Plan is the document produced for the Mayor which, for time related reasons, cannot include all performance targets. The Policing London Plan uses the same budgets and objectives information as in the Business Plan but includes additional performance targets and legislative information (such as results of HMIC inspections) required by the Home Office.

26. The interim submission would normally be considered by the Full Authority and was scheduled for the meeting on 25 September which has been moved to 6 October, which is after the Mayor’s deadline of 26 September. The PPR and Finance Committee is, therefore, asked to approve the interim submission. Any changes required to the submission following the PPR and Finance Committee will be subject to the approval of the MPA Treasurer.

List of abbreviations

APACS

Assessments of Policing and Community Safety

ASB

Anti-Social Behaviour

BCU

Basic Command Unit (for crime and disorder interventions)

BME

Black and Minority Ethnic

BOCU

Borough Operational Command Unit

CAA

Comprehensive Area Assessment

CDRP

Crime and Disorder Reduction Partnership

CO

Central Operations

CSA

Corporate Strategic Assessment

CSR

Comprehensive Spending Review

EIA

Equalities Impact Assessment

GBH

Grievous Bodily Harm

GLA

Greater London Authority

HMIC

Her Majesty’s Inspectorate of Constabulary

ICT

Information and Communication Technologies

LAA

Local Area Agreements

LCJB

London Criminal Justice Board

LSP

Local Strategic Partnership

MPA

Metropolitan Police Authority

MPS

Metropolitan Police Service

NI

National Indicator

PAS

Public Attitude Survey

PPR

Planning Performance and Review

PSA

Public Service Agreements

SO

Specialist Operations

C. Race and equality impact

A summary of the MPS position on Corporate Social Responsibility issues (including Environmental Sustainability, Diversity and Partnerships) is provided within the Interim Budget Submission. Equalities Impact Assessments (EIAs) are being completed for each of the strategic objectives by the strategic lead for these.

D. Financial implications

1. The Mayor’s guidance for his 2009-12 budget was issued on 22 July 2008 and the MPA/MPS has been asked to prepare its budget within the following guidelines and assumptions:

• For 2009/10 increases in net revenue expenditure of 1.75% over the 2008/09 amount of £2,595.0m presented in the Mayor’s published budget and annual increase of 1.25% in 2010/11 and 2011/12
• There is no addition to the GLA council tax precept for Olympic security costs
• Alternative options to be prepared on the assumption to increase net revenue expenditure in 2009/10 over 2008/09 of 0.25% or less than the above guidelines including the impact on service levels over the three year period

2. The Mayor’s budget guidance is open to some interpretation regarding the planning range but, subject to further clarification, the proposed financial envelope for this MPA/MPS can be summarised as follows:

Table 1 - Summary of the MPA/MPS financial envelope

3. Work is well advanced on the preparation of the 2009-12 budget and business plan. Based on the GLA financial model current planning assumptions, the potential budget gap at this stage of the process is summarised below:

 

Table 2 - Potential budget gap in the 2009-12 budget, based on the current planning assumptions in the GLA financial model

4. Work is continuing to determine the impact of narrowing the gap between the current budget requirement and the lower limit of the Mayor’s guidance. However, given the financial uncertainties and pressures facing the Service, the impact of moving to this lower level of funding is likely to have a significant adverse impact on the delivery of the front-facing services.

5. The committee reporting cycle does not currently allow the MPS to give the very latest position for the budget. It is therefore anticipated that a verbal update will be given to the Finance/PPR committee on the latest budgetary position and any impact on the interim budget submission.

6. It should also be noted that at this stage of the planning process there is considerable uncertainty regarding some funding streams on which the Service depends. Government has already announced the provisional police grant for 2009/10 and 2010/11 which are reflected in the planning assumption.

7. The Olympics costed national plan is not expected to be agreed by the Home Office before December. However, the planning period 2009-12 ends just four months before the 2012 Olympics. Work has, therefore, had to be undertaken to prepare an assessment of the impact of planning and preparing for the Games over this planning period. This assessment will be revised as more complete information becomes available from the Home Office.

8. Counter Terrorism Government settlement for 2009/10 and 2010/11 has been announced and is reflected in our planning assumptions. But the implications of the Home Office grant allocations review in November 2008 for CT activity are unknown - this could impact on announced settlements and also clarify potential settlements for 2011/12.

9. Pay and price inflation is based on the latest information available, in addition a small provision has been included in the base budget to provide some resilience on pay and prices. The planning assumption, however, is that pay awards will be contained within 2.5% a year. If this proves not to be the case then further budget reductions will have to be found.

10. As part of the planning process, the MPS has already identified potential savings options and these have been built into the budget. The MPS has already identified savings as part of the 2008/09 process that contribute to the 2009/10 position, these equate to £13.1m in 2009/10 and £15.00m in 2010/11. The new 2009/10 process has identified additional savings of £57.6m in 2009/10 rising to £73.4m in 2011/12. Overall savings of £70.7m in 2009/10 rising to 73.4m in 2011/12 are included in the current planning assumptions.

11. A number of further corporate efficiency proposals are being considered as part of the developing Service Improvement Programme with the aim of contributing to bridging the current budget gap. The scope of savings at business group level needs to be assessed before the result of these reviews can be built into the budget forecasts. These reviews cover:

• Developing Resource Management
• Staff Establishment
• Capital Investment Impact
• Efficiency Gains to Cashable Benefits

12. It is also recognised that work needs to start now on some additional major reviews if they are to have an impact in 2010/11 and beyond. A number of reviews are being considered by the MPS Management Board as part of the developing Service Improvement Plan Programme which focuses on:

• Efficiency and Productivity
• Corporate Support Services
• Operational Capacity

Significant progress has been made over the summer on scoping these reviews and target reductions are being assessed so that the initial results can be reflected in the final Service’s 2009-12 budget and business plan submission.

13. In finalising the budget proposals the MPS/MPA will need to be satisfied about the deliverability of proposals required to support a balanced budget given the lead in time for the delivery of the changes (initiatives or savings). Any changes that involve police staff or police officers will require consultation with the unions.

14. The MPS/MPA current budget does not include any assumptions on the use of reserves.

E. Legal implications

The Authority has a responsibility to deliver a legally balanced budget having regard to the resources available to it from the Mayor’s precept and government grant.

Risk

Business risk management is a critical activity in the budget and business planning cycle, focused on controlling the key risks that will prevent the business group and the MPS from achieving its overarching aims and objectives. Our risk management process involves:

• Identifying key strategic risks
• Analysing their causes and consequences
• Prioritising controls and
• Monitoring action to be taken/performance of current processes

Subsequent risk analysis will lead to action plans which support key objectives and are regularly monitored and reviewed through the planning year.

E. Background papers

• None

F. Contact details

Report authors(s): Angela Emery and Adrian Lovegrove, Resources Directorate, MPS

For more information contact:

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

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