MPA budget 2005-06 and provisional outturn 2004-05

Report: 9
Date: 28 July 2005
By: the Chief Executive & Clerk and Treasurer

Summary

The 2005-06 budget for the MPA is set out, together with the provisional outturn position against budget for 2004-05.

A. Recommendation

That Members note this report.

B. Supporting information

1. This report sets out the provisional position against budget for 2004-05 and details of the agreed budget for 2005-06 for the MPA, encompassing the support organisation, audit and consultative groups, including independent custody visitors.

Developments during 2004-05

2. The approved 2004-05 budget has increased from £9.091 million to the revised figure of £11.75 million, as shown below:

	£’000
Original 2004-05 budget as per budget book	9,091
Add:
Allocation from centrally held pot re. 2004-05 pay awards	87
Draw down from earmarked reserves to fund:
Efficiency & Effectiveness – progress review	24
Member training	10
Community engagement initiatives	55
Expansion to 6th floor Dean Farrar Street	175
Legal expenses, including Bow Street	786
Morris Inquiry	1,537
Less:
One-off virement as contribution to Trident campaign (15)	(15)
Revised budget 2004-05 11,750	11,750

Forecast outturn 2004-05

3. The provisional end of year position is breakeven, with expenditure equalling the revised MPA operational budget of £11.8m.

4. The main variances from budget relate to recruitment expenditure, legal expenses, consultative groups and income. Further details of these are provided below.

5. Consultative Groups - The allocation of funding to consultative groups left a centrally held contingency to fund one-off activities during the year. This contingency was not fully utilised leading to an underspend of £124K.

6. Income – there was unanticipated income (£240K) within Internal Audit in respect of work done on fraudulent claims from interpreters. This income, together with underspends in other areas offset the overspends detailed below.

7. Recruitment – secretariat. There was an overspend of £122K due to the high level of recruitment activity for the secretariat in 2004-05, including high profile posts such as Treasurer, Deputy Treasurer and Head of Race and Diversity Unit. It is not anticipated that this level of activity will continue in 2005-06.

8. Legal expenses - The overspend of £686K arose for a number of reasons:

Unbudgeted expenditure on the follow-up review to the Virdi Inquiry,
Unanticipated expenditure on employment tribunal cases within the secretariat,
Higher expenditure than anticipated in relation to Bow Street – the majority of which was covered by a draw down on the earmarked reserve for legal expenses (as agreed by the Finance Committee).

Budget 2005-06

9. The 2005-06 budget incorporates the areas of growth approved during the budget process:

Members’ Allowances – an early allocation from the inflation pot to cover the annual uplift in members’ allowances, in line with the Police Support Staff Council pay award. In addition, £55k growth was approved (COP 08-10-04) to fund the outcome of the recent review of allowances.

Community & Police Consultative Groups – an early allocation from the inflation pot to cover pay awards in order to finalise the distribution to individual groups before the start of the financial year.

MPA accommodation - £125k reflects the full year cost of the additional accommodation requirements (as highlighted in a report to this committee 15 March 2004).

Capacity building – a ring-fenced provision of £100k was approved to help address issues of capacity building in the MPA.

Additional support to members - two new posts were proposed to improve the support given to members. £66k was approved to meet the salary and related costs of these posts.

PR and profile raising - £60k was approved, plus a redirection of existing resources, to put in place a properly structured events framework to enable the MPA to maximise publicity and promotional activity.

MPA oversight of MPS professional standards - £40k was approved for staff and technology to strengthen the MPA capability to undertake the broader oversight role in relation to discipline and complaints.

10. The detail of the agreed £9.913 million budget for 2005-06 is summarised below:

	£’000
2004-05 Revised Budget		11,750
Less:
one-off funding drawn from reserves		(2,587)
Add:
one-off contribution to Trident campaign		15
Add committed increases:
Full year effect of 2004-05 pay award [1]	54
Increased employer’s contributions on police staff pensions	205
Early allocation of inflation for member allowances uplift	6
Early allocation of inflation for CPCGs	25
Full year cost of 6th floor at Dean Farrar Street	125
		415
Add new growth:
Member Allowances	55
Capacity building	100
Additional support to Members	66
PR and profile raising	60
MPA oversight of MPS Professional Standards	40
		321
2005-06 budget	9,913	9,913

Budget analysis

11. Attached at Appendix 2 is a reworked analysis of the MPA budget, focussing on policy areas. The analysis shows the budget for each work / committee area, based on salary costs, any other direct service budgets (e.g. budgets for consultation activities) and an allocation of overheads (e.g. office supplies, accommodation costs). This is also shown as the percentage of the total secretariat budget that each allocation represents.
12. The SMT is carrying out a review of the deployment of MPA staff and other resources in relation to corporate priorities, which will be reported later in the year.

C. Race and equality impact

Funding within the base budget supports the work of the Race & Diversity Unit. The unit aims to ensure the MPA meets its duties and aims relating to equal opportunities; enabling the Authority to better engage with the MPA’s equality target groups, improve its own and the MPS’ diversity performance, address key issues of community concern and develop the appropriate structures and processes to fulfil its equal opportunities policy.

D. Financial implications

As set out in the paragraphs above.

E. Background papers

Committee reports as referenced in the report

F. Contact details

Report author: Liz Turner, MPA.

For more information contact:

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