MOPAC Budget Monitoring 2015/16 – Period 10

Reference code: 
DMPCD 2016 46
Date signed: 
17 March 2016
Authorisation name: 
Stephen Greenhalgh (past staff), Deputy Mayor for Policing and Crime

Executive summary

This paper summarises the period 10 financial monitoring and requests the DMPC approve budget movements and transfers to and from reserves. The period 10 revenue forecast is for a £24.5m overspend, 0.8% of gross expenditure.  

Recommendation

The DMPC is asked to

  1. Note the period 10 financial monitoring position,

  2. Approve the budget movements set out in paragraph 2.4

  3. Approve the transfers to and from reserves as detailed in paragraph 2.5

Non-confidential facts and advice to the Deputy Mayor for Policing and Crime (DMPC)

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 and the achievement of 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

2.1 In summary, a net overspend of £24.5m (0.8% of gross revenue budget) is forecast for 2015/16, a reduction of £2.6m from last month.  The MPS continues to implement a number of actions (posting of officers and PCSO’s to vacant funded posts and requiring all business groups within the MPS to implement management actions to bring expenditure in line with the budget) which may reduce this forecast overspend. However there is now no time available to further correct this financial position.  Decisions by the Home Office in respect of grant funding at the year end could reduce this forecast.

2.2 A number of the pressures experienced in 2015/16 have been actively addressed during the budget setting process and should not recur in 2016/17.  

2.3 In previous years the final revenue outturn has been less than that forecast at Period 10.  The major reasons for this year’s current forecast variance are in the same cost categories as the reasons for last years movement from P10 to outturn (income, overtime, supplies and services), however, these included a number of one-off items not expected to recur in 2015/16.  

2.4 Any final overspend in 2015/16 will need to be funded from reserves which will impact on planned use of reserves in future years.

2.5 The net forecast overspend is mainly due to a £7.4m pressure within Supplies and Services, a forecast overtime overspend of £2.3m and a forecast shortfall in income and specific grant of £12.7m.  

2.6 There are two budget movements proposed, detailed in Appendix 1, which correct a historical posting of agency staff to ‘Development Charges’ within Supplies and Services and the reversal of a planned drawdown from reserves to fund the purchase of high visibility jackets as this has slipped to 2016/17. 

2.7 There are 2 proposed transfers to reserves and 2 from reserves.  Items proposed to be transferred to reserves are

  • £23k – BAA Airwave Replacement, and
  • £1.6m in relation to the delayed purchase of high visibility jackets and the two transfers from reserves 
  • £655k –  from the Major Change Fund to fund Met Change Programme activities, specifically forensics equipment £502k and £126k legal costs if the Managed Service Provision, and
  • £186k -  in relation to revenue funding of capital investment specifically CrimInt server reconfiguration £32k, 999 Call Routing system £80k, EROS traffic camera enforcement software £16k, accommodation works at Cobalt Square for the Human Exploitation Team £18k, and digitisation of anti-corruption records £38k.   

2.8 Appendix 1 sets out further detail of the period 10 financial monitoring position, the budget movements and the transfer to and from reserves.

2.9 The forecast outturn for capital expenditure has been revised from £246.1m to £243.3m, a reduction of £2.8m from last months forecast, and £22.7m less than the budget of £266m. Further detail is shown in Appendix 1.
    
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 Equality Comments

5.1 Equality and diversity implications have been considered and there are no negative impacts identified from the proposals.

6 Background/supporting papers

6.1       Appendix 1 MOPAC budget monitoring