Archived decisions

AT A MEETING of the FINANCIAL AFFAIRS PANEL of HAMPSHIRE POLICE AUTHORITY held at The Portal Room, Castle Avenue, Winchester on Friday 30 May, 2003

PRESENT:

Councillor A. Collett (Vice-Chairman in the Chair); Mrs. R. Atkinson; Mrs. L. Cawsey JP; Councillor P. Heath.

Also present: Mr. J. Pittam (Treasurer); Mr. M. Coombes (Director of Finance); Mr. I. Readhead (Deputy Chief Constable); Chief Supt. J. James (Project Oberon); Supt. M. Bradford; Chief Inspector R. Bayntun (Traffic Division) - Item 14; Mr. T. Collier (Assistant Director of Finance) - Item 9; Mrs. Kate Huck (PA to Director of Finance); Mr David Steele (Head of Business and Property Services) - Item 17; Mr P Arkell and Mr M Catlow (Audit Commission); Ms. C. Vagg and Mrs. M. Boyes (Clerk's Office).

262 DECLARATION OF INTEREST

Members were mindful that, where they believed they had a personal or personal prejudicial interest in any matter to be considered at the meeting, they should normally at the time of the debate, declare their interest and, having regard to the circumstances described in paragraphs 9, 10, 11 and 12 of the Police Authority's Code of Conduct, consider whether to leave the meeting whilst the matter was discussed.

263 APOLOGIES

Apologies were received from Councillor S.A. Hayes.

264 MINUTES

The Minutes of the meeting of the Panel held on 11 February, 2003 were confirmed as a correct record and signed by the Chairman.

265 AUDIT COMMISSION AUDIT PLAN 2002/03 - 2003/04

The Panel considered a report of the Treasurer (Item 4 in the Minute Book) on the Audit Commission Audit Plan for the 2002/03-2003/04 and the plans for external work for the audit year 2003/04.

The Treasurer introduced to the Panel, Peter Arkell the new District Auditor and Mark Catlow the Audit Manager, who presented the Audit Plan. The District Auditor provided the Panel with a presentation of the summary report, and highlighted the particular business areas that would be audited as part of the plan. Audit reports would be provided to the Authority for each of the areas identified within the summary report, with the key milestones being set out in Appendix 1. In compliance with SAS610, which requires District Audit to report relevant matters relating to the audit to those charged with governance being the Police Authority and the Financial Affairs Panel, Mark Catlow advised the Panel that the Treasurer had responded to the Annual Audit Letter. The issues will be raised with the National Technical Forum with regard to the pension liability situation. The Audit Commission would be developing a national position. An update was provided to the District Auditor that morning advising that the matter would be considered in the week commencing 2 June 2003.

The District Auditor further confirmed that an agreed position had been reached in relation to compensatory housing grant liabilities.

The Treasurer and the Panel reiterated to the District Auditor the unnecessary cost to the council tax payer of £1.7m that had been necessary to accrue for compensatory housing grant required by District Audit, but which had led to no improvement in service to the public of Hampshire and the Isle of Wight.

Mark Catlow advised the Panel that they had been commissioned by the Police Standards Unit (PSU) to undertake national work this year in relation to activity based costing (ABC). The work for this is likely to be completed by the end of June and was being funded by the PSU. In relation to the statement of internal financial control no major issues had been highlighted. The data quality work that had been commissioned by the PSU would be presented to the Best Value and Performance Management Panel at its meeting in June, 2003.

The Treasurer highlighted the outstanding issue which was the pension situation and asked the District Auditor to take back the views of the Police Authority on the pension liabilities issue. The Treasurer also commented on the fee for the 2002/03 audit as the increase was more than inflation. He confirmed that he had written to Mark Catlow the Audit Manager in relation to this matter. The District Auditor responded that the fee was due to the fact that Hampshire Police Authority was a large Authority and due to the planned work it took the fees above the standard scale.

The Treasurer reiterated to the Members that careful consideration of the fees applied by the Audit Commission should be undertaken next year especially as the reverse situation could apply - economies of scale of a large force should lead to a fee below standard.

RESOLVED:

(a) That the Panel agree to the Audit Plan for the years 2002/03 and 2003/04.

266 POST BUDGET UPDATE

The Panel considered a report of the Chief Constable and Treasurer (Item 5 in the Minute Book) on the level of council tax for 2003/04 set by other police authorities, and the responses received by council tax payers to the council tax increase and district audit matters.

The Treasurer introduced the report and drew Members' attention to the Minister's letter which had been received in April, 2003 regarding the police funding settlement 2003/04. The Treasurer advised the Members that the response received did not address the real issues faced by the Authority. The Treasurer also drew attention to a complaint received regarding a statement in the council tax leaflet about Government grant reduction was misleading as the grand had increased by 3% in cash terms. Although this was put in context later in the leaflet, the complainant had asked that this be drawn to the attention of the Authority. Due care will be given to next year's statement.

RESOLVED:

That the report be noted.

267 POLICE AUTHORITY'S REVENUE BUDGET 2002/03 - FOURTH QUARTER MONITORING

The Panel considered a report of the Treasurer (Item 6 in the Minute Book) on the budget for servicing the Police Authority for the period to 31 March, 2003. The report also included the forecast for the outturn for the year. The actual outturn figures for the year would be reported to the July meeting of the Panel when the close of accounts process had been completed.

The Clerk's office clarified the situation in relation to the underspend of the Crime Prevention Panel budget for 2002/03.

RESOLVED:

That the position on the expenditure for the fourth quarter 2002/03 for servicing the Police Authority be noted.

268 REVENUE BUDGET AND CAPITAL PROGRAMME - FOURTH QUARTER MONITORING REPORT 2002/03

The Panel considered a report of the Chief Constable and Treasurer (Item 7 in the Minute Book) on the fourth quarter monitoring of the revenue budget and the capital programme for 2002/03. The figures provided in the appendices reflect the position at the end of March, 2003 before the normal end of year accounting processes had been completed. A final position would be advised to the Panel at its meeting in July.

The Director of Finance introduced the report and advised the Panel that work was still necessary in relation to accrued creditors and similar end of year items which all were larger than seen in previous years and that there had been some planned slippage on capital.

The Panel sought clarification on Appendix 2 to the report in relation to the balance of the capital programme, as there appeared to be no noting of savings or adjustments.

The Director of Finance clarified the position and was confident that the Technical Service Unit relocation would come in under budget. The capital programme will be amended accordingly at the revised budget stage.

RESOLVED:

That the fourth quarter monitoring position on both the revenue and the capital programme be noted.

269 POLICE OVERTIME

The Panel considered a report of the Chief Constable (Item 8 in the Minute Book) on practical problems that have arisen since the strategy was approved at the meeting of the Panel on 11 February, 2003. Her Majesty's Inspector of Constabulary had written to the Chief Constable indicating that he had agreed to the Constabulary setting an overtime spend reduction target of 15% by April, 2006. To allow Basic Command Unit Commanders to fulfil their obligations to partner organisations, meet the requirements of specific initiatives and adequately cover the operational needs associated with events for which services are recharged, this may mean that the first year target of a reduction of 5% may not be met, if lobbying to exclude externally funded overtime from the target was not successful.

The Director of Finance introduced the report and advised the Panel of the funding that had been received from the Government Office for the South East (GOSE), which was announced late in the budget process and had caused specific problems in relation to the 5% target.

Paragraph 3.5 of the report was drawn to the Members' attention as it highlighted the likely cash value of the overtime externally funded in 2003/04 which was over £1m, which was in excess of the 5% reduction (£350,000). If the requirement was not relaxed and HMIC was not persuaded of the unreasonableness of including this overtime, the overtime reduction in 2004/05 and 2005/06 would be in the order of £2.7m (just over 38%). This was an impossible target and indicated the perverseness of including externally funded overtime in the required reduction. Should the lobbying referred to be successful this would have no adverse effect on the target, however should it be unsuccessful it would leave the Constabulary not having achieved its target in 2003/04, and having to make a significantly higher saving in years 2 and 3. To include externally funded overtime against target would be likely to significantly reduce the Constabulary's performance - but to allow this overtime outside the target should allow performance to improve and when the final reckoning was done in April, 2006 it ought to be possible to persuade HMIC of the reasonableness of the actions.

The Chief Constable on the advice of the Constabulary's Resource Management Board (RMB) had reviewed the position and had considered that Basic Command Unit Commanders should be permitted to incur police overtime outside the 5% reduction target for the current year where the cost of that overtime is funded externally.

The Panel considered that the Association of Police Authorities (APA) should be aware of this situation and should be lobbying on behalf of the Police Authorities across the Country.

RESOLVED:

(a) That the Panel note the lobbying currently being undertaken on behalf of all forces to exclude from the 15% reduction target police overtime funded externally.


(b) That BCU Commanders be permitted to incur police overtime outside the 5% reduction targets for the current year where the cost of that overtime is funded externally.


(c) That the Chairman of the Authority be asked to write to the APA on the overtime issue.

270 ACTIVITY BASED COSTING

The Panel considered a report of the Chief Constable on the background to the ABC model and the Force's current position with regard to ABC, and setting out the requirements for ensuring compliance with the initial Home Office requirement of providing 2003/04 ABC data by July, 2004.

The Director of Finance introduced the report and introduced the Assistant Director of Finance to the Members, who had been working on ABC for the Force. He further advised the Panel that Forces are required to submit data to the Home Office once a year producing ABC in accordance with a manual of guidance produced on behalf of the Home Office by Accenture. ABC is a key component of the Policing Performance Assessment Framework (PPAF), enabling accurate inter force comparison within groups of most similar forces. The new model built upon the existing ACPO model which had been in existence since 2001 and which had not been implemented consistently across Forces.

The Assistant Director of Finance advised the Panel that the underlying drive behind the process is the Treasury's desire to see what it is getting for the funds it makes available to the police service. The Home Office believes it needs ABC data from all forces in order to strengthen its negotiating position with the Treasury. Within the Home Office it is now very much the Police Standards Unit which is driving the process. ABC will provide police authorities with clearer information about how resources are being used in practice in a way which is consistent with agreed priorities and targets set in the policing plan.

The Panel raised the issue of training implications on officers and that it appeared to be adding another layer of bureaucracy for frontline police officers.

The Assistant Director of Finance confirmed this point, however the majority of police staff had been providing activity samples already, and frontline officers and supervisors were familiar with the process. The main training issues were in relation to the extension to units and departments who were not exposed to the process so far. Some national guidance and training would be available in due course. The future aim was to minimise the impact on staff. However, not all staff would be exposed to activity sampling.

The Director of Finance advised the Panel that most of the costs incurred to date (approximately £200,000) included training and associated form filling. However he emphasised that the Force was keen to get the most out of the ABC model. The Panel discussed the single audit of ABC results, which would be completed in tandem with the audit of the statement of accounts. Forces would be expected to maintain clear audit trails including the ability for reviewers to verify individual activity records against other sources of information such as pocket books. Members considered that this would enable the Home Office to decide on local policing priorities.

RESOLVED:

(a) That the report be noted.


(b) That the summary attached to the report detailing the implementation plan be approved as the basis for the submission of the implementation plan to the Home Office.

271 SINGLE TENDER AND EXCEPTIONS REPORT - QUARTER FOUR (JANUARY, 2003 - MARCH 2003)

The Panel considered a report of the Chief Constable (Item 10 in the Minute Book) of contracts awarded compliant with Standing Orders on Contracts 2.8 single tender applications and exceptions. The report provided information on single tender contracts awarded for the period 1 January to 31 March, 2003.

RESOLVED:

That the report be noted.

272 DEVOLVED BUDGETS

The Panel considered a report of the Chief Constable (Item 11 in the Minute Book) on the devolvement of budgets to Basic Command Units (BCU's) and the further devolvement of budgets which took place on 1 April, 2003. The report also presented a proposed strategy for the extension of devolvement and the use and creation of reserves.

The Director of Finance introduced the report and advised the Panel that devolved budgets were being rolled out to the remaining BCU's across the Force. The revenue budget includes provision for an additional five professional accountants across the Force to facilitate the devolvement of budgets to BCU's. The Constabulary was currently debating the most efficient use of these resources given the constraints, as there were more BCU's than posts available, and the needs and existing skills on each division would vary. He further advised that there were a number of issues around reserves which had arisen during the course of the project from both the Southampton and Portsmouth BCU's, which had looked for certainty that reserves built up would be carried forward and from the centre which had asked how the reserves would be deployed. The Panel debated the level of reserves and the uses for which these can be put, and were reassured that the level and use of reserves was both appropriate and sustainable. To provide this assurance there needed to be in place a greater and more transparent link with the BCU Service Plan. For those BCU's which are part of the pilot the service plan now incorporates finance and personnel plans. The Director of Finance scrutinises the finance plans to ensure that any implications are taken account of.

The Panel sought clarification from the Director of Finance on whether the Audit Commission had identified any issues in relation to the impact of reserves which were potentially £1m. The Director of Finance confirmed that no issues had been raised, and that in line with the precautions taken, any exceptions would be reported to the Panel. He further confirmed that grant funds sit in the devolved divisional budget and a percentage was taken back into the centre to cover costs that are incurred at the centre or across BCU boundaries. A report was being presented to the next meeting of the Police Authority on the position of grant funding to Basic Command Units. The devolvement of budgets would be in line with previous pilots.

RESOLVED:

(a) That the Panel note the content of the report and approve the strategy for the extension of devolvement of budgets.


(b) That the Panel note the additional devolvement of budgets (mainly travel and subsistence) with effect from 1 April, 2003, and the reserves be built up by each BCU on the following basis:

i) A maximum reserve of 1% of the total BCU devolved budget be allowed.

ii) This reserve to be the sum of reserves built up in respect of planned savings, unplanned savings and contingencies.

iii) Reserves be carried forward for BCU use in all but the most exceptional circumstances.


(c) That the Panel note that a further report be presented in September detailing the outcome of the evaluation of the pilot.

273 INTERNAL AUDIT PROGRESS REPORT

The Panel considered a report of the Treasurer (Item 12 in the Minute Book) on the progress of work by internal audit included in the 2002/03 audit plan, together with an overview of the key developments incorporated in the strategic internal audit plan for 2003/04.

The Treasurer presented the report and confirmed to the Members that improvements had been achieved in Portsmouth and that there was now a sound control environment in place. He further confirmed that more days may be needed in respect of BCU budgets, possibly offset by less risk with a devolved finance manager in post in each BCU.

The Panel sought clarification on whether any issues that had been identified within the Portsmouth BCU were cascaded across the Force. The Director of Finance confirmed that there was a promulgation of good practice through, for example the self inspection process and that, quarterly meetings of divisional administration managers and finance managers were held with the Director of Finance whereby information was cascaded down.

The Panel sought further clarification on whether audit would need to undertake any additional inspection in relation to the risk assessment process associated with the new best value review process that was being proposed to the Authority. The Director of Finance and Treasurer confirmed that this would automatically be picked up through normal processes.

RESOLVED:

(a) That the progress on the 2002/03 internal audit plan be noted.


(b) That the strategic internal audit plan for 2003/04 be approved.

274 INSURANCE AND RISK MANAGEMENT

The Panel considered a report of the Chief Constable and Treasurer (Item 13 in the Minute Book) on the insurance renewal exercise undertaken last year through SEERPIC (South East and Eastern Regional Police Insurance Consortium) and current risk management initiatives.

The Director of Finance introduced the report and advised the Panel that this was an annual renewal process which provided a comprehensive picture of the market within the risk management arena.

The Members asked if risk management would be undertaken in relation to policy development and whether this had been thought of. The Head of Business and Property Services confirmed a risk assessment on policies and practices was undertaken before implementation. The Director of Finance confirmed that financial risks are dealt with promptly and well documented, however he would consider the comments raised by the Members.

The Members sought further clarification on whether SEERPIC provide the Authority with the best costs possible. The Head of Business and Property Services confirmed that the market was extremely difficult since September 11, but that the Consortium provided a sound arrangement.

RESOLVED:

That the report be noted.

275 PROJECT LASER - AUTOMATIC NUMBER PLATE RECOGNITION

The Panel considered a report of the Chief Constable on the development of the Project Laser initiative which is due to be piloted within Hampshire from 1 June, 2003. The full potential of Automatic Number Plate Recognition (ANPR) in tackling criminality was yet to be achieved and, the project is aimed at encouraging forces to use the facility to the maximum. The project allows cost recovery against fixed penalty tickets issued by officers performing intercept duties on ANPR operations. Increased ANPR activity is seen as having a significant impact on tackling criminality and in narrowing the justice gap.

Supt. Bradford and Chief Inspector Bayntun introduced the report and advised the Panel on the background to the project and the potential benefits. Automatic number plate recognition had been trialled in a number of guises over the last four years both in Force and nationally, and it is perceived to be of significant benefit particularly with regard to denying criminals use of the roads network, and when linked with CCTV systems to both intelligence gathering and detecting criminals within urban environments. From June, 2003 procedures will be put into place extending the national pilot to permit cost recovery of fixed penalty fines. However cost recovery would only be applied to specific activities carried out by dedicated ANPR teams and would be subject to stringent controls and monitoring to ensure that it is aimed at disruption of criminality as opposed to income generation.

In order to meet the requirements of increased ANPR activity, additional expenditure would be incurred mainly supporting the intercept team of police officers. Sufficient income had been forecast to cover this based on the value of notices issued and estimated payment rates. A summary of the income and expenditure of the ANPR activity and the pilot was attached to the report as a confidential appendix. Income had been projected on a fairly cautious basis so if income from fines was insufficient to cover additional costs the Constabulary would be able to tailor its activity accordingly. Cameras would be mobile and a business case was being put to the ACPO team in relation to a future strategy to enable the project to continue in 2004/05.

RESOLVED:

(a) That the Panel note the content of the report.


(b) That the Panel note the additional costs of supporting the ANPR activity which will be recovered by receipts from fixed penalty notices.

276 EXCLUSION OF THE PRESS AND PUBLIC

RESOLVED:

That, by virtue of the paragraphs of Part 1 of Schedule 12A of the Local Government Act 1972 as set out below the press and public be excluded from this part of the meeting.

Item 16 - Paragraph 9 and 11
Item 17 - Paragraphs 7, 8 and 9

277 REPLACEMENT OF CRIME AND INTELLIGENCE SYSTEMS (PROJECT OBERON) - FINANCIAL IMPLICATIONS

The Panel considered a confidential report of the Chief Constable (Item 16 in the Minute Book) on Project Oberon which is the name given to the project to replace the Constabulary's crime recording/management and intelligence management systems by September 2004 when the support and licensing arrangements with the current suppliers expire. The report addressed the financial implications associated with system replacement.

Chief Supt. James introduced the report to the Panel and provided members with a powerpoint presentation on the purpose of Project Oberon and the comprehensive analysis which had been undertaken of the organisational benefits, market appraisal, risk issues and financial appreciation which was detailed in the business case prepared for the project executive. This information was available for Members' information if they required. The cost of replacing the existing crime and intelligence system was included in the forward plan for the IT budget as set out in the Chief Constable's report on the information systems strategy to the Panel in January, 2003 based upon best information on applications of similar functional scope. The Deputy Chief Constable advised the Panel that there was no generic replacement of Automated Crime Recording (ACR) and the technology currently available was not sufficient to meet the needs of the Force. The Home Secretary may dictate a national case project in 2005, therefore there were risks associated to this piece of work.

The Members discussed the risks and benefits associated with pursuing the acquisition of a new system. The Director of Finance was asked to look at earmarking cashable savings to assist with funding the project.

RESOLVED:

(a) That approval be granted to proceed with the feasibility study for the acquisition of a records management system as described in Section 2 of the report.


(b) That planned cashable efficiency savings be earmarked to finance the expenditure estimated at £0.81m in the current year.

278 POLICE HEADQUARTERS ACCOMMODATION PROJECT

The Panel considered a confidential report of the Chief Constable (Item 17 in the Minute Book) on the headquarters accommodation project seeking the Panel's approval of the project appraisal, cashflow projection and programme information which was appended to the main report. The Director of Finance introduced the report and highlighted that the report was comprehensive setting out all the considerations for the Members' attention.

The Panel sought an update on the planning process and were advised that the next meeting would take place on 18 June. The Members asked for a member of the Business and Property Services Department to be present in the public gallery if the debate of the planning application goes to committee.

They further debated the issue of security, however it was deemed appropriate that the Members Estate Working Group would look at the particular detail of the project in due course.

RESOLVED:

(a) That the Panel accepts the project appraisal provided as Appendix 1 to the report.


(b) That the Panel note the cashflow and programme information provided as Appendices 2, 3 and 4 to the report.


(c) That, in accordance with the resolution of the Police Authority on 24 March, 2003, the Panel passes the project for consideration of detailed matters of design and commissioning including security issues to the Members Estates Working Group.

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