Efficiency plan monitoring – as at third quarter 2005/06

Report: 08
Date: 16 February 2006
By: Treasurer and Commissioner

Summary

This report sets out the forecast position against the Metropolitan Police Authority (MPA)/Metropolitan Police Service (MPS) Efficiency Plan at the end of the third quarter for 2005/2006. Overall we are forecasting to exceed the Home Office’s efficiency target by £25.5m.

A. Recommendations

That Members note the position against the efficiency plan as at the end of December.

B. Supporting information

Introduction

1. The purpose of this report is to provide an update on the monitoring of the MPA/MPS 2005/06 Efficiency Plan.

Background

2. As part of the annual Policing Plan for 2005/06, all Police Forces and Authorities were required to demonstrate efficiency savings equivalent to 3% of their annual budget whilst maintaining or improving performance. Her Majesty’s Inspectorate of Constabulary (HMIC) monitor police authorities achievements through quarterly inspections.

Overall Position

3. The statement attached at Appendix 1 reflects the forecast against the plan as at Quarter 3.

4. As at the end of December (Quarter 3) we are forecasting to deliver £100.9m of efficiency savings in 2005/06. The position against the original plan shows that there is a forecast under achievement of £5.1m for cash releasing savings and a forecast over achievement of £19.4m on non-cashable savings. This results in a £14.3m over achievement against the MPA/MPS plan target. However, as the plan includes a margin for slippage we are forecasting to deliver £25.5m over the Home Office’s 3% savings target.

Cash Releasing Savings

5. The overall target for cash releasing savings for 2005/06 was £61.75m; this figure excludes increased income, which does not qualify for efficiency savings plans under current Home Office rules. The Table below shows the areas where there are major variances from the plan:

Budget	Plan £m	Forecast £m	Variance £m	Comment
Medical retirements	2.05	6.62	4.57	Fewer medical retirements (50) than included in the original plan (reduction from 150 to 119).
Officer enquiry posts - staffing efficiencies	2.50	0.00	-2.50	The savings associated with staffing efficiencies relating to Officer Enquiry posts will not be achieved. Territorial Policing are currently forecasting an overstrength position for Police Officers.
Review of Specialist Crime Directorate (SCD) services	3.00	0.70	-2.30	The planned contract efficiencies that were anticipated by SCD in the forensics budget and supplies and services (£3m) have not been achieved due to the additional work undertaken by Forensics during Operations Bracknell (tsunami) and Theseus (terrorist activity in July).
Reduction in police overtime	1.90	0.00	-1.90	A major cause of the forecast underachievement in police overtime is due to the dedicated security patrols within Special operations and operational commitments within Territorial Policing.
C3i centralisation - reduction in staff posts	1.28	0.00	-1.28	The planned project rephasing in relation to the C3i project will result in a delay in the achievement of efficiency savings until 2006/07.
Other	51.02	49.33	-1.69
TOTAL	61.75	56.65	-5.10

Non Cash Releasing Savings

6. The original target for 2005/06 non-cash releasing savings was £24.8m. The forecast at the end of the first quarter indicates that £44.3m will be achieved, £19.5m over the original plan. The over achievement is due to the identification of an additional saving by the Police Bureaucracy Unit (a national initiative led by the Metropolitan Police) in the issuing of Penalty Notices (£4.9m); the identification of a reduction in Police Officers and Police Staff sickness rates (£12.6m) including backdated reductions that were not claimed in prior years and, as reported previously, a higher than anticipated forecast recruitment of special constables (£3.1m) compared to the original savings plan.

C. Race and equality impact

There are no equality and diversity implications arising from this report.

D. Financial implications

The financial implications are those set out in this report.

E. Background papers

MPA Efficiency Plan 2005/2006

F. Contact details

Report author: Sharon Burd, Director of Finance Services, MPS.

For more information contact:

MPA general: 020 7202 0202
Media enquiries: 020 7202 0217/18

List of abbreviations

MPS: Metropolitan Police Service
MPA: Metropolitan Police Authority
HMIC: Her Majesty’s Inspectorate of Constabulary