MPS Financial Reporting 2019/20 - Quarter 3

The Deputy Mayor for Policing and Crime is asked to note the MPS 2019/20 forecast position, and to approve a number of budget and reserves movements.

After other income, specific grants and reserves transfers, the net expenditure forecast position is an overspend of £21.7m. This reflects very significant calls for police activity in the year to date and the MPS’ relentless focus to bear down on violence. To mitigate this overspend there is a review of discretionary spend taking place and some activities may be reprofiled into next year.

The forecast contains an overspend of £17.1m on Police Officer Pay and Overtime after specific grants and additional income are taken into account. This is driven by operational pressures in Frontline Policing and MPS Operations due to a step up of operations to tackle violence across London and to meet other crime demands.

The forecast for officer pay reflects very successful recruitment activity by the MPS, which will see at least 31,500 FTE police officers being in post by the end of March. This is 500 more officers than originally budgeted, due to additional Home Office funding for an in year uplift. This is on top of the 1,300 extra officers, above the workforce that would otherwise be affordable, provided for from Mayoral funding.

The forecast capital expenditure for 2019/20 is £244.4m. This represents a forecast underspend of £29.9m against the revised budget of £274.3m. Reprofiling of activity within the Property and Transformation areas are the key drivers for this.

We recommend that the Deputy Mayor for Policing and Crime approves at quarter 3, the reserve transfers, application of grants and income and housekeeping budgetary changes as listed in Appendix 1.

The paper also seeks approval for the publication of the 2019/20 Quarterly Performance Update Report for quarter 3 - attached as Appendix 2.

The Deputy Mayor for Policing and Crime is asked to:

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

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

3. Approve the publication of the ‘Mayor’s Office for Policing & Crime Quarterly Performance Update Report Quarter 3 2019/20’

1. Introduction and background

1.1. As part of MOPAC 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 £21.7m.

2.2. Further detail of forecast under and overspends is set out in Appendix 2 from pages 44 - 48.

Capital

2.3. Capital investment is forecast to be £244.4m in 2019/20 against the approved revised budget of £274.3m. At the end of Q2 the original budget of £388m was revised to £274.3m as per forecasts at the time. Further detail of variances is set out in Appendix 2 from pages 49 - 50.

Reserves Movements

2.4. The reserves movements are set out in Appendix 1

The Deputy Mayor for Policing and Crime is requested to approve;

Reserve movements as follows-

• Transfers into reserves;

o £8.0m Reduction in the planned Counter Terrorism reserve drawdown to fund future capital expenditure.

o £2.0m Territorial Policing Operational Capacity/Mental Health planned drawdown no longer required in 2019/20.

Transfers out of reserves

o £0.8m Increase in planned drawdown due to increase in Collaborative Procurement Grant

o £1.3m Reduction of planned transfers to Property reserves

o £0.4m POCA drawdown

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

• Movement to MOPAC reserves relates to VRU commissioning of £1.1m following virement from CJC Safer Schools budget to VRU. The work is being re-profiled from 2019/20 to 2020/21.

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 Deputy Mayor for Policing and Crime 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 Deputy Mayor for Policing and Crime.

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 – Revenue Budget Transfers

Appendix 2 – Quarterly Performance Update Report – Quarter 3 2019/20 /sites/default/files/mopac_q3_report_260220.pdf