Business and financial planning update

Report: 6
Date: 10 April 2008
By: the Director of Strategic Finance on behalf of the Commissioner

Summary

This report is submitted to update Members on the publication of the MPA Policing London Business Plan 2008-11 as well as the progress and timetable of the integrated business and financial planning cycle for 2009-12.

A. Recommendation

That

1. members note the details of the publication of the MPA Policing London Business Plan;

2. note the 2008-11 lessons learned and improvement recommendations to 2009-12 Business & Financial Planning process; and

3. note the key dates for the 2009-12 Business & Financial Planning cycle.

B. Supporting information

1. Members will be aware of the work in progress to continue the integration of the business and financial planning frameworks with the aim of ensuring financial planning is driven by corporate objectives and business needs and that these are reflected in resource allocation.

2. This report seeks to update members on the improvements to the business planning process during the 2008-11 cycle, the lessons learned and subsequent planned improvements to the 2009-12 planning process including efficiency planning and the Service Improvement Plan Key dates for the 2009-12 planning cycle are also included.

3. The 2009-12 process is already underway and Management Board is engaged in considering the overall strategic direction of the Service and the likely financial framework within which it will be required to operate.

4. An exercise is currently underway to validate the initial assessment considered by Management Board in February 2008. Based on the strategic assessments carried out to date, Management Board considers that the current six strategic objectives remain valid for the next planning period, i.e. 2009-12. However, Management Board is developing an additional strategic objective to embed continuous improvement and value for money in the work of the Service.

5. The 2008-11 Corporate Plan and Budget identifies the need to identify at least £40m and £64m more savings in 2009/10 and 2010/11 respectively if the Mayor’s budget guidance is to be met. An exercise is currently underway to provide an early indication of potential changes to the MTFP.

6. Members should note however, that the 2009-12 business planning process is currently under development. For this reason it is only possible to give indications of the key improvements expected during the 2009-12 cycle as well as indicative dates.

2008-11 Planning Process

7. The business planning work undertaken during 2007/08 has provided the base from which the MPS can progress incrementally during the next planning cycle.

8. Over the last twelve months there were some notable achievements in the 2008-11 planning process compared to previous cycles, particularly around improved focus and accountability. These include:

• Changes made to the MPS corporate objectives to make them more specific about what the MPS intends to deliver - to the public, external stakeholders and MPS/MPA staff
• The introduction of delivery plans for each of the corporate objectives, including key activities for the forthcoming year, measures and delivery responsibilities
• The Critical Performance Areas (CPAs) are now aligned to monitoring successful delivery of the corporate objectives
• All Business Groups have outlined key activities and measures in support of the corporate objectives and overall business need, which includes APACS measures where appropriate
• An earlier start and increased MPS Management Board involvement in budget planning
• Improved rigour regarding the MTFP.

Lessons Learned

9. Following the business group business planning process, the MPS conducted a review to identify lessons learned, the key findings of which are listed below.

• Communication with the Business Groups can be further improved if a there is a cohesive and co-ordinated front-end, Director led, planning process
• Business groups felt they had a lack of visibility and clarity on how emerging issues and cross-service dependencies identified would be managed
• The performance development process was further complicated by changes to the Government’s performance framework late into the planning process which at the time of writing is still subject to change
• The ongoing revision to the Government’s performance framework made it difficult to develop appropriate standards, guidance and support for the business groups.
• Whilst key risks for each business group were a requirement of the planning process, it was not integrated into the MPS business risk management framework.

Improvements for the 2009-12 process

11. Enhancements were made to the Business and Financial Planning processes during the production of the 2008-11 Business Plan. As a result, the 2009-12 process will embed an appropriate planning and performance framework within a robust corporate governance framework, allowing:

• The ongoing revision to the Government’s performance framework made it difficult to develop appropriate standards, guidance and support for the business groups.
• The centre to develop appropriate standards, in consultation with business groups, provide appropriate guidance and support and hold business groups to account for delivery
• Information to be compiled through the business planning process in a way that allows emerging issues and cross-service dependencies to be identified and managed.

12. The improvements to the 2009/12 process will, in addition to the above, cover two core areas of the financial landscape and the MPS corporate objectives. In order to ensure the MPS corporate objectives and supporting strategies are delivered, the MPS Management Board will determine what the MPS will deliver within its stated objectives and what the financial envelope will look like. Business groups will then be informed of what is required of them and the level of resource available.

13. The MPS horizon scanning process, Corporate Strategic Assessment (CSA) will form the basis of the corporate business plan by determining what the service delivery and organisational risks are, and how the organisation should best position itself to deal with these. From this, the corporate objectives will be reviewed and any strategies or programmes of work required to deliver the objectives or tackle longer-term strategic issues will be commissioned. These strategies/programmes should form the basis of one-year delivery plans that give business groups more detailed information about what they should expect to focus on in the forthcoming year within the context of the objectives and indicative targets for the planning period.

14. These one year delivery plans are key to the 2009-12 planning process as they ensure that business groups have a clear understanding of what the MPS Management Board require them to deliver and what they will be held accountable for. These delivery plans will be used as the basis for the planning process and the work Business groups need to carry out in developing their business group business plans.

15. The improved process will also place greater emphasis on Risk Management within guidance and associated templates for all strategic and business planning.

16. Equality, Sustainability and Environmental themes will be further integrated into the 2009-12 business plan by involving the respective organisational leads in the design of the guidance and templates.

17. Regular reviews will be an iterative process, which will include examining operational performance against financial investment where appropriate. It is therefore proposed that the MTFP review process be aligned with the performance cycle and that the relevant boards are re-designed to ensure the holistic approach is maintained.

Efficiency Planning

18. In order to demonstrate transparently how the MPS manages it business, money and resources an Efficiency Plan for the period 2008/09 – 2010/11 has been developed. As well as being a Home Office requirement, the Plan also forms part of the MPS Productivity Framework. The Efficiency Plan seeks to capture improvements in MPS productivity and efficiency, and to present this information in a quantified financial format. In previous years, it was a requirement that a copy of the Efficiency Plan should be sent to the Home Office by the end of March, however the new draft guidance indicates that this will no longer be the case, and instead greater emphasis will be laid on the integration of an effective Efficiency Plan within the MPS/MPA Business Plan.

Service Improvement Plan

19. Building on work programmes already in place, the Service is now looking to:

• develop the integration of business planning and budget, business monitoring and the annual report processes
• embed value for money (in terms of efficient, effective and economic services) into business as usual
• identify and share good practice across the Service
• rationalise and integrate Met Modernisation service efficiency and productivity review and improvement programmes

The developing Service Improvement Plan will be an integral element of the Service’s business and budgeting process and a means of meeting the needs of the Service rather than being an exercise in its own right.

MPA Overview

20. An integral element of the MPS business and budgeting process is the oversight by the MPA both informally, through the oversight group, and formally, through the Finance and Planning, Performance and Review Committees and Full Authority. As the MPS business plan and budget becomes more integrated, work needs to continue to ensure the MPA approval processes through the Finance and Planning, Performance and Review Committees reflect that integration.

Next Steps

21. The following are the key products expected from the 2009-12 process:

 Table 1: Key products expected from the 2009-12 process

C. Race and equality impact

There are no specific equality and diversity issues.

D. Financial implications

There are significant financial implications from this report that will affect budgetary decisions for 2007/8 and subsequent years.

E. Legal Implications

There are no specific legal implications.

F. Background papers

None

F. Contact details

Report author(s): Adrian Lovegrove, Financial Planning, Strategic Finance, MPS

For more information contact:

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

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