MOPAC Budget Monitoring 2015 – Period 9

This paper summarises the period 9 financial monitoring and requests the DMPC approve budget movements and transfers to and from reserves.

The DMPC is asked to
1. Note the period 9 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

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 £27.1m is forecast for 2015/16, a reduction of £3.1m 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 little time available to further correct this financial position.

2.2 In addition, future MOPAC decisions in relation to reserves and decisions by for instance the Home Office at the year end could reduce this forecast to £15m.

2.3 The net forecast overspend is mainly due to a £12.4m pressure within Supplies and Services, and a forecast shortfall in income of £12.6m. Savings of £206.7m were planned for in 2015/16. The table in Appendix 1 sets out the forecast achievement of these this year. In summary, of the planned savings of £206.7m, £201.2m has been achieved, a net shortfall of £5.5m.

2.4 There is one budget movement proposed, detailed in Appendix 1, which aligns counter-terror (CT) officers pay budget for the pay award. This is funded from CT grant.

2.5 There are 4 proposed transfers to reserves and 1 from reserves. Items proposed to be transferred to reserves are

• £7.3m from DP to the Budget pressures reserves to align TTPi project costs for 2016/17
• £23k – BAA Airwave Replacement
• £172k from SO to the National Domestic Extremism and Disorder Intelligence Unit (NDEDIU) reserve, and the roll up of this NDEDIU reserve of £759k to the wider CT reserve
• £154k to support the National Special Branch Intelligence System (NSBIS) until its replacement expected in 2016/17

and the transfer from reserves of £67.8k relates to a drawdown from the Proceeds of Crime Act (POCA) reserve to incentive operational command units.

2.6 Appendix 1 sets out further detail of the period 9 financial monitoring position, the budget movements and the transfer to and from reserves.

2.7 The forecast outturn for capital expenditure has been revised from £264.3m to £246.1m, a reduction of £18m from last months forecast, and £20m less than the budget of £264.6m. 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.