MOPAC Provisional Outturn 2015/16

This paper summarises the 2015/16 provisional outturn position and requests the DMPC approve budget movements and transfers to and from reserves. The final year end position is a net revenue overspend of £10.1m, 0.3% of gross expenditure. Capital expenditure was £224m against a revised budget of £266m.

The DMPC is asked to

1. Note the provisional outturn 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

1.1 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, there is a net overspend of £10.1m (0.3% of gross revenue budget) for 2015/16, a reduction of £14.4m from the last reported position. In addition, to the planned use of reserves this £10.1m will need to be funded from reserves. This will impact on the planned use of reserves in future years.

2.2 The net 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.

2.3 A number of the pressures experienced in 2015/16 have been actively addressed during the 2016/17 budget setting process and should not recur in 2016/17, for example, third party claims and income. Police officer overtime is expected to continue to be a pressure which will need to be managed. Oversight of financial reporting has been reviewed and is being strengthened.

2.4 There are four budget movements proposed, detailed in Appendix 1, which reflect reductions in income, allocation from the centrally held provision for non-pay inflation, and CT related funding changes.

2.5 There is 1 proposed transfer to reserves and 3 from reserves. The item proposed to be transferred to reserves is £1.2m – in relation to obsolete uniform stock.

The three transfers from reserves are

• £5.9m – from the Budget Pressures Reserve to fund liability to pay back-dated pay allowances
• £8.3m from the Budget Pressures Reserve to fund write off of obsolete equipment following termination of the C&C Futures contract
• £10.1m to fund the net overall overspend - £5.1m from Budget Pressures reserve and £5m for the Major Change Programme Fund

2.6 Appendix 1 sets out further detail of the provisional outturn financial monitoring position, achievement of planned savings, the budget movements, and the transfer to and from reserves.

2.7 The outturn for capital expenditure is £224m, a reduction of £19m from the last forecast, and £42m 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