Financial Reporting 2019/20 - Quarter 1

The DMPC is asked to note the 2019/20 forecast position, and to approve a number of budget and reserves movements. In summary, there is a full year forecast revenue overspend of £53.6m. The forecast overspend consists of a £46.6m overspend related to Total Pay and Overtime, £17.7m Running Expenses overspend, and £10.7 over achievement of Total Income and Grants.

Police Officer pay has been reported with a forecast underspend of £1.4m at quarter 1, and with a £31.9m forecast overspend against officer pay overtime. This leaves a forecast net overspend of £30.5m against officer related pay.

We recommend that DMPC approves at quarter 1, the reserve transfers, application of grants and income and housekeeping budgetary changes as listed in paragraph 2.4 and detailed in Appendix 1

Capital expenditure is forecast at £355.0m, against the budget of £388.0m.

The paper also seeks approval for the publication of the 2019/20 Quarterly Performance Update Report- attached as Appendix 2.

The DMPC is asked to

1. Note the 2019/20 forecast revenue and capital financial position.

2. Approve the budget movements and transfer to reserves set out in paragraph 2.4.

3. Approve the publication of the 2019/20 Quarterly Performance Update Report (Quarter 1).

1. Introduction and background

1.1. As part of MOPAC’s and MPS corporate governance arrangements regular monthly and in-depth quarterly monitoring processes are in place to track spend against budget, forecast outturn and monitor the achievement of planned savings and income targets.

1.2. In line with the Scheme of Delegation and Consent the DMPC is responsible for the approval of all MPS proposed budget movements and virements in excess of £500,000 which are highlighted on a monthly basis as part of the monthly budget monitoring report, and approval of all transfers to and from reserves.

2. Issues for consideration

Revenue

2.1. The forecast year end net revenue position is an overspend of £53.6m.

2.2. Further detail of forecast under and overspends is set out in Appendix 2 from pages 46-49.

Capital

2.3. Capital investment is forecast to be £355.0m in 2019/20 against an approved budget of £388.0m. Further detail of variances is set out in Appendix 2.

Reserves Movements

2.4. The reserves movements are set out in Appendix 1

The DMPC is requested to approve;

Reserve movements as follows-

• Transfers into reserves;

o £17.7m - Change in assumptions regarding the Central Estates programme (including dilapidations reserve)

o £10.5m - Expenditure incurred in 2018/19 (police officer recognition awards) ahead of previous plans

o £10.0m - Reassessment of transformation reserves

o £9.6m - Public Inquires reserve partially used in 2018/19 (£3.6m), remaining £6.0m being re-profiled to 2020/21.

o £6.1m - Transfer of ‘Connect’ underspend to reserves

o £5.6 - Investigative coaches drawdown profiled to 2020/21

o £5.5m - Adjustments in relation to the 2018/19 outturn (overstated transport accruals £6.4m, understated NI contributions £0.9m)

o £2.5m - Reprofiling of Covert Police Management Platform (CPMP) reserve

o £1.9m - Reprofiling of Leading for London as drawdown taken place in 2018/19 outturn

o £1.1m – Vetting reserve drawdown delayed until 2020/21

o £1.1m - FLP reserve drawdown delayed to 2020/21

Transfers out of reserves

o £0.2m Q1 POCA Awards

o £0.7m Application for Taser uplift reserve

o £0.8m Use of the Violent Crime Taskforce reserve created in 2018/19

o £1.1m Custody TOM reserve adjustment

o £1.9m Drawdown of Mental health training reserve

o £6.6m Use of reserves to support Mercury project (RCCO)

• Approve the application of grants and income, the corresponding increase in the expenditure budget, and housekeeping budgetary changes to re-align budgets to forecast spend with a net nil increase in the budget.

3. Financial Comments

3.1. As this is a financial report the financial implications are contained within the body of the report.

4. Legal Comments

4.1. Under section 3 (6) of the Police Reform and Social Responsibility Act, MOPAC is under a duty to secure the maintenance of an efficient and effective police force. Under paragraph 7 of schedule 3 of the 2011 Act MOPAC may do anything which is calculated to facilitate, or is conductive or incidental to, the exercise of its functions. Under section 79 of the Act, MOPAC must have regard to the Policing Protocol when exercising its functions. The Policing Protocol provides that PCCs (including MOPAC) as recipient of all funding, must determine how this money is spent.

4.2. MOPAC/MPS as statutory bodies must only budget for activities that fall within its statutory powers. Under the Scheme of Delegation and Consent the DMPC must approve any budget movement for £500,000 or above. Under Financial Regulations all decisions in relation to the transfer in and out of reserves will be made by the DMPC.

5. GDPR and Data Privacy

5.1. The project does not use personally identifiable data of members of the public therefore there are no GDPR issues to be considered.

6. Equality Comments

6.1. There are no equality or diversity implications arising from this report.

7. Background/supporting papers

Appendix 1 – Budget Transfers

Appendix 2 – Quarterly Performance Update Report – Quarter 1 2019/20