Archived decisions

    AT A MEETING of the FINANCIAL AFFAIRS PANEL of the HAMPSHIRE POLICE AUTHORITY held at Westgate Chambers, Winchester on Monday 16 September, 2002

PRESENT:

    Mr. M.J. Attenborough-Cox (Chairman); Mrs. L. Cawsey JP; Councillor A. Collett; Councillor J. Fazackarley; Councillor S. Hayes; Councillor P. Heath.

    Also present: Mr. J. Pittam (Treasurer); Mr. P. Robertson (Clerk); Mr. M. Coombes (Director of Finance, Police HQ); Mr. T. Collier (Assistant Director of Finance, Police HQ); Ms. C. Vagg and Mrs. M. Boyes (Clerk's Office) and Ms. Kate Huck (Finance Department, Police HQ).

207 APOLOGIES

Apologies were received from Mrs. R. Atkinson.

208 MINUTES

The Minutes of the meeting of the Panel held on 16 July, 2002 were confirmed as a correct record and signed by the Chairman.

209 PROGRESS REPORT ON DEVOLUTION OF PAY BUDGETS TO SOUTHAMPTON AND PORTSMOUTH DIVISIONS

The Panel considered a report of the Chief Constable (Item 3 in the Minute Book) providing an update on progress since the last report was considered in May, 2002. The report notes that work is still ongoing, the assessment of other budgets which can be devolved to Southampton and Portsmouth is also progressing, the guiding principle being which budgets could be controlled more effectively locally.

The report further notes that North East Hampshire Division has been selected for the extension of the pilot with effect from 1 October, 2002. Professional support from the Personnel and Finance Departments will be delivered centrally.

The Director of Finance confirmed that a divisional commander would attend the next meeting to provide members with a personal update on how well the devolution of budgets was working within their division.

RESOLVED:

That the report be noted.

210 EFFICIENCY PLAN 2001/02 - FINAL POSITION AND MONITORING STATEMENT 2002/03

The Panel considered a report of the Chief Constable (Item 4 in the Minute Book) on the final outturn position as certified by (HMIC).

RESOLVED:

That the report be noted.

211 INTERNAL AUDIT PROGRESS REPORT

The Panel considered a report of the Treasurer (Item 5 in the Minute Book) on the progress of work by Internal Audit included in the 2002/03 Audit Plan. Based on the reviews completed during the period, the overall opinion remains that the control environment is sound.

RESOLVED:

That the progress on the 2002/02 Internal Audit Plan be noted.

212 STATUTORY STATEMENT OF ACCOUNTS - YEAR ENDED 31 MARCH, 2002

The Panel considered a report of the Chief Constable and Treasurer (Item 6 in the Minute Book).

The Treasurer introduced the report and advised the Panel that the overall position was sound and although reserves had fallen the remaining £1.6m in the pensions reserve needed to be reviewed against future liabilities and the volatility of expenditure on pensions between financial years.

The Director of Finance advised the Panel that the level of service income was continuing to increase in line with specific grants that had been received from Central Government.

The Members sought clarification on the level of debtors and payments in advance. The Assistant Director of Finance to provide more information to Members in due course.

The Treasurer advised the Panel of the additional grant received from Central Government that were of most relevance to the Authority, the Crime Fighting Fund (CFF) and the DNA expansion grant. These were most significant as they would be reoccurring and long-term spending would need to be sustained in these areas.

The Director of Finance advised Members that he would ensure that explanatory notes were included on income (page 11) and corporate and democratic core (page 12), and that some detail would also be included with regard to pensions costs for civilian posts, which would be inserted under the Police Pensions heading (page 14).

RESOLVED:

      (i) That the changes made to the final accounts be approved.

      (ii) That the transfers to and from reserves as set out in Paragraph 2.6 be approved.

      (iii) That it be a RECOMMENDATION to the full Authority that the draft statement of accounts be approved.

213 SPENDING REVIEW 2002

The Panel considered a report of the Treasurer (Item 7 in the Minute Book) covering the Government's spending plans for the period 2003/04 to 2005/06. Insufficient information has been released to be sure about the figures at a local police level, however the outcome would be distorted by the proposals to introduce formula revenue grant from April, 2003.

The Treasurer drew the Members attention to Paragraph 2.7 and the percentage increases in Spending Review 2002 (SR2002) for each year compared with previous spending plans. The difference between the cash and real terms figures being the Government's assumption of 2.5% for inflation, which is likely to underestimate the true cost of police services.

The conclusions reached by the Association of Police Authorities (APA) are consistent with the initial briefing made to the Authority in July. Unavoidable cost increases (pay and price increases, pensions costs) could be more than the percentage increases feeding through into the settlement and at a local policing level. Considerable council tax increases would ensue just to stand still would result. This was before the impact of formula grant changes affecting the distribution of the national pot available. There would be little or no scope for additional investment and local priorities.

In general the Treasurer highlighted that there would be a fairly tight financial position with league tables emerging in 2004/05. The Home Office would be publishing where they expected the money to be spent.

The Panel discussed the matter and the difficulties to be encountered in explaining the likely increases to the general public.

RESOLVED:

That the uncertainties and time constraints surrounding SR2002 for Police Authorities be noted.

214 FORMULA GRANT DISTRIBUTION

The Panel considered a report of the Treasurer (Item 8 in the Minute Book) on the recent Government consultation paper on new proposals for formula grant as part of the Government's reform of Revenue Grant Distribution (RGD). The Government has now published this work together and put forward options with responses being required by 30 September, 2002.

The Panel were given an initial briefing at the last meeting, based on a tabled letter to the Chairman of the Authority. First indications were not good with shire police authorities losing grant support, with the Metropolitan Police and metropolitan authorities generally having the gains from this potential redistribution of grant.

The worst case option would lose this authority revenue grant of upto £10.4m or 4.8% from 1 April, 2003. The very best option would result in a small gain of 0.3%. A loss of grant of £10.4m could result in a council tax rise of about 22%, although there would be transitional arrangements through the "floor" mechanism to mitigate the grant loss over a number of years.

The Panel considered the responses to the consultation document and suggested amendments where appropriate. Members agreed to develop a media campaign to highlight the potential impact caused by the options for change in grant support. The public need to be aware of the financial implications to the council tax. All members of the Police Authority need to be made aware of the implications, a press release would be issued and copied to Members. A meeting was planned with John Denham, MP in October and following that meeting a further round of meetings would be arranged with all other MPs within Hampshire and the Isle of Wight. A meeting of Members of the Authority would be arranged in due course once the full implications are known in January, 2003.

RESOLVED:

      (i) That the Authority supports the APAs framework for the development of a new revenue grant system (Appendix 1).

      (ii) That the draft response to consultation (i) to (xii) be amended further to the suggestions of the Panel, and that the Treasurer in consultation with the Chairman of the Authority, the Chairman of the Financial Affairs Panel and the Chief Constable be authorised to submit the final response to the Home Office, Office of the Deputy Prime Minister, Association of Police Authorities and Association of Chief Police Officers by the 30 September, 2002 deadline.

      (iii) That the media campaign to promote awareness of the potential significance of these changes and to oppose their introduction be developed and implemented.

      (iv) That, a copy of this response be sent to MPs in the Authority's area.

      (v) That, a further report identifying the actual impact after the formula grant proposals for 2003/04 be published in late November, 2002.

215 MEDIUM TERM PROJECTION

The Panel considered a report of the Chief Constable and Treasurer (Item 9 in the Minute Book) providing a projection of both revenue and capital expenditure for the five years to 2006/07. A firm prediction for 2003/04 was not possible, let alone for future years, the projection and affordability of budget proposals will need to be reassessed and more clearly defined after the provisional formula grant settlement is available in late November, 2002.

The Director of Finance advised that there were a number of significant national issues that affect the medium term projection, these are the impact of the Airwave Project and the Police Reform Programme. Appendix 6 to the report detailed the capital programme 2002/03 to 2006/07 which required careful monitoring.

The Panel discussed briefly the "no choice items" and suggested that these were referred to the Policy Group.

RESOLVED:

      (i) That the Panel notes the position on the net expenditure for the current year and future years as shown in Appendix 1 and changes, if any, that should be made in spending plans at this time, together with its longer term views on the reinstatement to and from balances on both the pensions and general reserves.

      (ii) That the Panel note the impact of the Police Reform on the budgets for future years.

      (iii) That the level of priorities above present priorities be referred to the Policy Group for further consideration.

      (iv) That the Panel note the likely impact of future net expenditure and the changes in general Government grants on the council tax precept for next year.

216 BUDGET CONSULTATION

The Panel considered a report of the Treasurer (Item 10 in the Minute Book) on the Panel's views on additional budget consultation that might be necessary for the 2003/04 budget process to supplement the existing structured meetings with business and council tax payers and residents groups. Apart from the uncertainties of the council tax outlook for 2003/04 there would be a need to take account of new Government guidelines on council tax consultation. Although these have been promulgated with local authorities in mind, it is suggested that the Police Authority would also wish to comply with best practice.

The Treasurer introduced the report and advised the Panel that it would not be possible logistically, within existing resources and timescales to develop more intensive means of consultations such as citizens panels or community workshops. It would not be possible to consult with any degree of certainty until after the formula grant announcement in late November had been received. To allow time for the implications to be assessed and for the Panel to have an initial review of the settlement and its potential budget options, this would not be practical until January, 2003.

The Panel considered it was important to concentrate on the media campaign to inform the public about the changes resulting from SR2002, formula grant changes and the final formula grant settlement on budget and council tax levels. Other police authorities were to be approached to ascertain what they would be doing this year in terms of budget consultation. A further paper with suggested options for consultation to be presented to the Panel at its next meeting for further consideration.

RESOLVED:

That the issues raised in the report be considered and a future paper on options for budget consultation be presented to the Panel at its next meeting.

217 EXCLUSION OF THE PRESS AND PUBLIC

RESOLVED:

That, by virtue of the Paragraphs of Part I of Schedule 12A of the Local Government Act 1972, the press and public be excluded from this part of the meeting.

218 WESTGATE CHAMBERS - FINANCIAL ADJUSTMENT

The Panel considered a confidential report of the Treasurer (Item 12 in the Minute Book) setting out the financial adjustments required to deal with the acquisition of Westgate Chambers.

RESOLVED:

That the financial adjustments required for the lease of additional space at Westgate Chambers be approved.

219 LAND AND/OR BUILDING ACQUISITION

The Panel considered a confidential report of the Chief Constable (Item 13 in the Minute Book) seeking the views of Panel Members on the concept of purchasing land/buildings in advance of building projects to enable flexibility.

The Director of Finance introduced the report and advised the Panel that whilst the principle was sound it was clear that the matter could not be progressed further at this current time.

RESOLVED:

That the Panel consider adopting a forward planning approach to land/building acquisition for schemes outlined in the estates strategy.

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