Statement by Toby Harris, MPA Chair in response to the Mayor of London's comments today on the management of the police budget

43/01
4 July 2001

The Mayor's statement is typical grandstanding, with him seeking headlines and soundbites, rather than following the progress the Metropolitan Police Authority is making to effect greater financial management of the police budget.

His statement gives the appearance of taking action, but instead his comments are ill-judged and ill-informed. Characteristically, he has spoken publicly without first discussing with the MPA the latest position.

Over the past year we have worked tirelessly with the Commissioner and his staff to turn around the antiquated financial management systems we inherited from the Home Office. And we have liaised with the Mayor over cashable efficiency savings which rose from £9m to £18m.

Up to the establishment of the MPA, the Met was effectively run as a government department, with the Home Secretary in the role of police authority.

The move to financial systems and procedures that are in line with local authority accounting and auditing practices has exposed a number of significant shortcomings in the existing financial management systems.

These included a lack of internal budgetary controls showing how the budget is allocated to objectives and cost centres, for example. As a result, the MPA had to consider the budget for 2001/02 on the basis of a subjective analysis only.

In its recent comprehensive inspection of the Metropolitan Police, Her Majesty's Inspectorate of Constabulary recognised the enormous task faced by the Authority, which it said had unfortunately 'inherited the inadequate historical basis upon which the budget has traditionally been set'. In financial and auditing terms, HMIC reported that the creation of the MPA and the application of local authority accounting rules would have a profound impact.

As the Mayor knows perfectly well, we now have in place robust measures, discussed with him, to dramatically improve financial management systems and identify savings.

The Authority is implementing wide-ranging efficiency and effectiveness reviews of core activities across a wide-range of budget headings, and we have introduced tight budget controls, greater transparency and clearer accounting.

During the budget round, in liaison with the Mayor and the London Assembly, we gave assurances that financial control of the budget would be rigorously managed and continuously scrutinised.

Indeed, our finance committee of well-informed and inquisitive members meets regularly to look in detail at the way the budget is managed and accounted for. We have introduced a regime of continuous improvement, best value and value for money. We are also backing the Met in the recruitment of more accountants to run the finances and update systems and procedures.

The MPA has moved quickly to change the way the Met handles its financial management of the budget. For the Mayor to threaten to impose totally impractical and unworkable budget arrangements for next year is an insult to the resolve and determination of MPA members, the Commissioner and his staff to overhaul a ramshackle budget regime and provide Londoners with a cost effective and efficient police service. To achieve this, it makes sense for the Mayor to work with us, not against us.

The MPA is the only police authority with such a complex budget-setting regime. Perhaps it would be easier to manage if the MPA had total control over budget-setting and less outside interference.

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