Police overtime

Report: 11
Date: 6 February 2003
By: Commissioner

Summary

This report gives background details of the PNB requirements to reduce overtime working to improve police officers’ work/life balance, and the issues to be addressed to set an agreed ‘baseline’ for the overtime budget. The role of the MPA in monitoring overtime working is also described, together with the process and timetable for agreeing and setting future target reductions. The report also sets out details of the budget build for overtime from 2001/02 to 2003/04 and current trends in overall expenditure.

A. Recommendation

1. That the Committee notes the current position in respect of ongoing work within the MPS, and the involvement of MPA officers and HMIC, to respond to the requirements of the recent PNB Circular on reducing police overtime; and
2. That a further report be taken to Finance Committee on 13 February 2003 to agree the 2001/02 ‘baseline’, and provisional budget target reductions for police overtime for the next three years (an earlier version of this report has already been taken to the Finance Committee on 16 January 2003)

B. Supporting information

Introduction

1. This report sets out the latest position in respect of work to respond to the recent Police Negotiating Board Circular on reducing police overtime. The report updates Members on:

• Requirements of the PNB Circular
• Background information on current Police Regulations
• Recent Guidance from the PNB and HMIC
• Issues to be addressed
• Police overtime trends
• Way forward

Police Negotiating Board Circular

2. As part of the ongoing police reform proposals a Circular (no. 02/18) has been received from the Police Negotiating Board (PNB) setting out agreement to reduce the level of police overtime over the next three financial years. Appendix 1 sets out the key points covered in the PNB Circular, whose stated aim to improve police officers’ work/life balance.

3. The methodology envisaged to plan, implement and monitor this reduction in overtime working is also set out at Appendix 1. One of the key features is a target reduction in police overtime budgets over a three-year period of 15% although various factors imply a different target maybe set by police authorities.

4. Whilst the setting of the baseline is expressed in financial terms the objective of the Circular, and the key management issue to be addressed by the MPS, is the management of police officers’ working time.

5. The MPA is required to set local targets in conjunction with the MPS, and with the HMIC. It is planned to involve MPA officers in the detail of setting targets, and discussions with the HMIC are also being planned.

Police regulations

6. To appreciate the rationale of the PNB Circular in determining the police overtime expenditure baseline requires an understanding of the workings of Police Regulations in compensating officers for overtime working.

7. A police officer’s entitlement to overtime compensation is agreed nationally, and is set out in Police Regulations. Overtime is only payable to police constables and sergeants. Higher ranks are not eligible. Appendix 2 sets out a brief description of the entitlements to overtime payment and compensation under current police regulations.

8. Appendix 2 highlights that recent changes to Police Regulations have endeavoured to modernise the entitlement to overtime compensation. However, this modernisation has only been achieved by a series of relatively complex rules around notice periods that make practical management and administration of overtime more problematic.

9. It should be noted that rostered working on a public holiday, with or without sufficient notice, gives rise to an entitlement to overtime compensation. Therefore, to simply ensure police cover 24hrs a day, seven days a week gives rise to a requirement to pay ‘overtime’. It is this public holiday overtime that is outside the baseline target referred to in the PNB agreement.

10. Members should also note that under current Police Regulations, once an officer qualifies for overtime compensation, there is an automatic entitlement to take an equivalent amount of time off in lieu (TOIL). This right can be exercised at any time in the following three months, but if TOIL is not taken at the end of this period, the entitlement is automatically paid to the officer to ensure excessive amounts of TOIL are not amassed.

Recent guidance from the PNB and Her Majesty’s Inspectorate of Constabulary (HMIC)

11. In recent weeks, further guidance has been received from both the PNB and HMIC to provide police authorities and forces with advice on the interpretation of the original PNB circular.

PNB guidance

12. The further guidance elaborates on:

• Background to, and principles underlying the agreement
• The police authority role in agreeing targets with the chief constable
• How police authorities might scrutinise and oversee ongoing force progress against the agreed target
• The guidance also refers to the HMIC guidance (see below).

13. The PNB guidance provides some additional information on how police authorities should agree and monitor overtime targets. However, there are still a number of significant issues affecting the MPS, which are not addressed by the guidance, and these are considered later in this report in the section ‘Issues to be addressed’.

HMIC guidance

14. The HMIC guidance includes a recommended ‘template’ of both financial and human resource information that should be provided to the HMIC to enable the baseline position, and future targets to be agreed.

15. The guidance does not provide any further advice on the factors to be taken into account in setting the baseline and future targets which are considered later in this report in the section entitled ‘Issues to be addressed’. However, informal initial discussions with members of HMIC have been helpful in raising the concerns of the MPS and how these will be viewed in future information exchanges.

Issues to be addressed

16. The PNB Circular requires police authorities to agree a ‘baseline’ position against which future budget levels of overtime will be reduced. There are however significant methodological difficulties to be overcome, and points of principle to be agreed, to achieve this requirement:

Public holiday working

17. Compensation payments to officers for rostered public holiday working are excluded from the baseline and reduction targets. However, there is no current method of routinely isolating this compensation payment from other double time compensation payments (i.e. non-rostered and rest day working) on a historical basis other than by manual investigation.

18. A methodology is being devised to estimate the level of cost that public holiday working represents alongside what system changes are required and possible to operate from 1 April 2003 to monitor these hours in financial terms.

19. From the 1 January 2003, the MPS now has a Met-wide system (Computer Aided Resource Management or CARM) to collect and analyse information on hours worked.

Seconded staff

20. Seconded staff are excluded from the overtime baseline and reduction target. There is an issue of definition that will need to be clarified, as well as a methodology developed to ensure public holiday working by these officers is not excluded twice from the baseline.

21. Work to address this issue is in hand, as well as clarification of a working definition of secondees for overtime management purposes.

Growth in officer numbers

22. There is no clear guidance from either the PNB or HMIC on how growth in officer numbers should be treated in the calculation of the baseline and future reduction in budgets. It is accepted that increased officer numbers should lead to a reduction in overtime working at the individual officer level. However, the issue of officer growth leading to some level of additional overtime to meet practical operational demands is well understood, but the exact calculation of this additional sum is more difficult to ascertain.

23. Past patterns of overtime spending are being analysed as a proxy for determining this impact, and will be factored into discussions with the HMIC when arriving at future targets.

Specific grants

24. There are a number of additional grants the MPA receives in addition to the general Home Office formula grant and precept funding. These specific grants are only notified each year, and are subject to audited claims by police authorities.

25. By their very nature, specific grants are viewed as ‘one-off’, targeted funding to address short term Government initiatives e.g. counter terrorism, safer streets, Queen’s Jubilee celebrations, etc. For 2003/04 the Home Office has announced a Street Crime specific grant estimated at £8m, with no guarantees that this sum will continue beyond 2003/04. Therefore, specific grants are only able to be spent on increased overtime working to be effectively utilised.

26. The Home Office have offered no guidance on how this system of funding should be squared with the requirement to reduce officer’s overtime working. The MPS proposes to take account of these funding initiatives from Government in determining its future overtime targets.

Local overtime management

27. A police officer’s overtime working is managed by the relevant line manager of the unit to which that officer is attached. Police overtime is a delegated budget under the MPS’s Scheme of Devolution, so effective management of the total of police overtime is determined by Operational Command Unit (OCU) heads. Reducing the total MPS overtime budget will not necessarily reduce overtime working as local OCUs have the authority to increase spending by transferring funds from other devolved budgets.

28. It is proposed to develop guidance on reducing overtime working alongside budget allocations for 2003/04, and separate non-financial measures developed to give a more informed picture of overtime management at local level. These initiatives will also help address the work/life balance dimensions of overtime management.

29. A ‘good practice guide’ to managing overtime is being developed, and will shortly be presented to the MPS Management Board for approval and dissemination.

30. Members should be aware that a certain element of unplanned overtime is currently being generated by the need to cover work undertaken by civilian staff. The issue of civilian staff cuts and vacancy levels leading to police officers being diverted from operational roles has been the subject of previous reports and debates by MPA Committees.

31. When agreeing the target reduction for police overtime for 2003/04, the Finance Committee will be asked to consider that if any additional budget saving is required, over and above the £2.5m already provisionally set, this sum should be considered for virement into civil staff pay to reverse the trend of ‘de-civilianisation’.

Monitoring arrangements

32. The PNB circular suggests that quarterly reports to presented to police authorities to ensure the effective monitoring of overtime reduction targets. The guidance from the HMIC also states that information should be provided for Inspection teams on a similar timescale.

33. The Accenture review identified that improvements were needed to information systems to effectively manage police overtime working the majority of which were in respect of the CARM system. This conclusion was based on CARM being the point of capture of officer working time which was the essential focus of understanding and aiding better management of overtime working. This can only be achieved by further improvements and enhancements to Met Duties systems. Funding and plans to do this are currently in place in the medium term.

34. The development of CARM to provide management information to facilitate corporate and local management of overtime is essential. Appendix 3 sets out a simplified overview of how CARM ‘feeds’ data to the payroll system, and then onwards to the MetFin accounting system. At each stage of the process, progressively less detailed data is transferred from one system to the next. This standard payroll and accounting system practice means it is not possible to extract information on overtime hours worked, at an individual officer level other than from CARM.

Overtime budget and expenditure trends

Budgeted expenditure

35. The amount included in budgets in recent years for police overtime is set out in Appendix 4. This shows the budget movement from the provision in 2000/01 of £69.975m to the amount contained within the proposed budget for 2003/04 of £104.302m. Actual expenditure on overtime for each year is also shown for information.

36. The list of budget adjustments from 2001/02 to the current 2002/03 base budget includes the addition of £10 million. This was agreed by the MPA to correct a clear underprovision in the overtime budget in previous years.

37. There are a number of items related to specific grants received that have been intended to be spent partly or primarily on overtime. The funding for Safer Streets and the Jubilee Celebrations in 2002/03 were for one year only and are shown as being removed from the budget in 2003/04.

38. The current proposed budget for 2003/04 reflects the saving of £2.5 million built in to the budget in anticipation of the impact of the PNB requirement to reduce overtime; however this is very much a provisional figure. The 2003/04 budget also reflects the removal of non-recurring items. An indication has been given however by Government, of a further in-year specific grant of £8 million for Safer Streets funding. It is not clear at this stage to what extent that funding may be applied to overtime working but it is highly likely that much of the focus will be on proactive operations undertaken on overtime.

39. There is now a sense that the police overtime budget is under greater control. The MPS are confident of actual expenditure in 2002/03 being in line with the budget, and of delivering the saving of £2.5m on total overtime in 2003/04, although the search for further savings is continuing. Management of police overtime has been made more complicated by the “holdback” of £10m by MPA.

Actual expenditure

25. Actual expenditure in recent years has been:

2000/01

£91.6m

2001/02

£97.0m

2002/03 (full year forecast)

101.6 (£76.0m to end of Dec 2002)

41. Appendix 5 sets out a comparison of the monthly amounts paid in overtime in 2001/02 and 2002/03 extracted from the payroll system extract files used to update the MetFin accounting system. The cumulative overtime paid to the end of December was £75.380m in 2001/02 compared to £75.095m for the same period in 2002/03. The 2002/03 figures also include the 3% pay increase from September 2002.

42. It must be stressed however that the monthly totals are volatile. The forecast returns from OCUs show an increase in the rate of spend in the remainder of 2002/03.

43. The appendix also shows a comparison of the amount paid per officer eligible to receive overtime payments. This takes account of the increasing number of officers employed over the periods concerned, and so is a more accurate reflection of officer working than the overall total amount.

44. The average monthly payment, calculated on a cumulative basis, was £344 as at December for the year 2001/02. In 2002/03, this has reduced to £330 per officer for the same period. Again, it must be stated that the relative position may change over the remainder of the year but it would appear likely that a reduction in the average payment will be maintained.

45. This comparison is a broad indication only as it is subject to slight distortion by the increased proportion of officers on lower pay scales, compensated by the recent police pay award that has increased officers’ overtime rates by 3%.

46. The figures quoted above include all overtime and premium rate payments. The monitoring required by the PNB settlement excludes premium rate payment in respect of public holidays. These are paid at double time. There are other circumstances that give rise to double time payments and it is not possible to accurately identify only the amount paid for public holidays. Nevertheless, the largest element of double time does relate to public holidays and an analysis of payments over the various rates of enhancement for the period April to November are.

This shows approximately 30% of overtime is paid at double time.

Way forward

47. Regardless of the practical difficulties and uncertainty over interpretation of issues such as officer growth and funding in setting an accurate baseline, there is a requirement for the MPA to agree a target reduction in overtime working over the next three years. This report outlines some of the issues that need to be addressed in arriving at the agreed target reduction.

48. Some progress is already being made in better management of police overtime, and a reduction in the earnings per officer is apparent in 2002/03.

49. Preliminary discussions have been held with HMIC, and an MPS working group formed to address the detailed work that needs to undertaken to respond to the immediate and ongoing requirements of the PNB circular. A meeting with MPA officers is also to take place to discuss the response to the PNB requirements. A recommendation on the target reduction will be put to the MPA Finance Committee in 13 February 2003.

C. Equality and diversity implications

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

D. Financial implications

The financial implications are those set out in this paper.

E. Background papers

• Finance Committee Report 16 January 2003
• PNB Circular (02/18)
• PNB Guidance ‘Managing Overtime’ December 2002
• HMIC Guidance ‘Managing Overtime’ December 2002

F. Contact details

Report author: Martin Chatfield, Head of Corporate Finance

For more information contact:

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

Appendix 1: PNB Circular 02/18 - Main points

Introduction

The circular sets out guidance on the application of the agreement made within the PNB in May 2002 for the management of working time to reduce the overtime bill and provide a better work/life balance.

Work/life balance

The scheme is about reducing the requirement of officers on operational duties, beyond their rostered hours, it is not about cutting costs. Research has shown that a good work/life balance brings benefits to both employee and employer. Police officers terms and conditions are subject to the provisions of the Working Time Regulations 1998, and the PNB believes forces must make every effort to ensure police officers are not routinely working excessive hours.

Operational effectiveness, etc

Forces will need to take account of the impact on operational effectiveness, and produce evidence for the Inspectorate that due consideration has been made when setting local targets.

It is recognised that local staff associations have a key role in working with managers to identify and implement new systems and ways of working.

Setting targets

The PNB Agreement provides for a national target of a 15% reduction in overall expenditure on overtime over the three years from 2003/04. The target is based on overtime expenditure in 2001/02.

The baseline will exclude all payments for rostered shift working on a public holiday. Overtime payments to officers on secondment to other police organisations (e.g. NCS, NCIS etc.) will also be excluded from the baseline figure

The police authority and the chief constable, with the approval of HMIC, will set local targets locally. If it can be shown to the satisfaction of the inspectorate that they have taken effective action between 2000/01 and 2002/03 to reduce their overtime bill, a target of 10% may be agreed.

An indicative timetable is set out that envisages targets to be agreed for all three years, together with a description of how it is proposed to meet achieve the changes necessary to meet the targets, and consultation to have taken place with local staff associations, in time for publication in the local policing plan by 31 March 2003.

Role of police authorities

In addition to setting targets, police authorities are expected to support the force in their work to achieve targets, and for monitoring and scrutinising force performance against the targets. Regular progress reports from the Chief Constable are expected, at least quarterly.

Appendix 2: Police regulations

Regulation 29 – Public holidays and rest days for ranks below inspector

Police officers below the rank of Inspector are entitled to two rest days per week and are allowed a day’s leave on each public holiday.

A working week for Police Officers is 40 hours per week divided into five 8 hour shifts.

An example of a working pattern when a bank holiday occurs would be thus:

• Monday – day off for bank holiday
• Tuesday – 8 hours worked
• Wednesday – 8 hours worked
• Thursday – 8 hours worked
• Friday – 8 hours worked
• Saturday – rest day
• Sunday - rest day

Although the officer physically works only 32 hours in that week they are paid for 40.

However, due to the requirement for police cover on a bank holiday some officers will be ‘rostered’ to work on a bank holiday. Rosters should be prepared a year in advance. The roster will normally show the bank holiday dates on which the officer will be required to be on duty. (Regulation 27-rostering of duties)

Because an officer is entitled to leave on a public holiday, compensation is payable in addition to the normal days pay they would have received had they not worked the bank holiday. It is a matter of interpretation as to whether the additional entitlement should be classed as “overtime” as it is hours worked in addition to the requirement for that week, or if it merely compensation for being required to work on a public holiday. Regulation 28 (Overtime) refers to overtime as a compensation payment for hours worked in addition to a normal shift.

“Compensation’ is awarded in two ways. Either time off in lieu or payment for hours worked at appropriate. The compensation also varies dependent upon the notice given of the requirement to work on a bank holiday.

If more than 8 days notice of the requirement to work a bank holiday is give, a double time ‘overtime’ payment can be made. If the officer elects not to be paid overtime, time off can be granted which is equal to double time. That is, 2 days off.

If less than eight days notice of a requirement to work a bank holiday is given, a double time compensation payment can be made and another day off in lieu can be given. If an officer elects to have the time off rather than be paid, they will still only receive 2 days off, regardless of the notice given.

If an officer volunteers to work a bank holiday they are not treated as being required to work on that day and a compensation payment is not given. Another day off in lieu is awarded and is treated as a public holiday leave day. Public holiday compensation rules apply if the officer is required to work on the re-scheduled public holiday day off.

If an officer receives more than fifteen days notice of cancellation of a rostered rest day the only compensation is another rest day off in lieu.

If an officer receives between 15 and 8 days notice of cancellation of a rostered rest day they will be entitled to paid compensation of time and one half for every completed fifteen minutes worked. If they elect for time off they will be awarded time equivalent to one and a half times each completed 15 minutes worked.

If an officer receives less than 8 days cancellation of a rostered rest day they will be entitled to paid compensation at a rate of double time for each completed 15 minutes worked. If they elect for time off in lieu they will be awarded time off equivalent to double time for each completed 15 minutes worked.

For all other overtime worked under regulation 28 (overtime) compensation is paid at time and one third for every completed 45 minutes worked.

Appendix 3: Simplified police overtime process diagram

Appendix 4: Overtime costs - Police overtime budget changes 2000/01 to 2003/04 (provisional)

*In 2001/02 the MPS received a grant of £22m for Counter Terrorism expenditure, and approximately £11m of this sum was used to fund overtime.
** This excludes the forecast of £4,024k for partnership expenditure, which is unbudgeted.

Appendix 5: Summary of police overtime paid in 2001/02 and 2002/03 - part year to December

Actual expenditure on overtime

All figures in this table are £000

Monthly average overtime paid

Cumulative average overtime paid

Send an e-mail linking to this page

Feedback