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                                                                                 24 June 2008

                        FINANCE COMMITTEE

Bridgebury House, Woburn Road, Kempston, Bedford MK43 9AX

  For further information, or to see the papers, please contact the Police Authority:

                  CALL Janet Wardell on (01234) 842066

                  IN PERSON, (by appointment) 9am to 5pm, Monday to Friday

                  Bridgebury House has facilities for disabled people.



To:      Members of the Bedfordshire Police Authority
         Finance Committee

(Mr P Conniff, Mr M Farooq, Mrs E Horrocks, Mrs L Hockey, Mr M Pantling, Mr R Saleem
Mr B Spurr, Mr J Wells and Mr R Younger)

A meeting of the FINANCE COMMITTEE of the Bedfordshire Police Authority will be
held at Bridgebury House, Woburn Road, Kempston, at 10.00 am on Tuesday 24 June

                                                                            JANET WARDELL
                                                                 Member Services Support Manager

Agendas f24608

                 (*indicates that a supporting document accompanies this Agenda)

1.       To confirm the minutes of the meeting of the Finance Committee held on 30
         January 2008

         By Chairman - minutes*

2.       Matters Arising

3.       Declarations of Interest

         To receive any personal or prejudicial interests from Members

4.       Review of Mobile Custody Unit

         Report* of the Chief Constable

5.       Police Estate Annual report

         Report* of the Chief Constable & Chief Executive/Treasurer

6.       Capital Programme - 2007/08 - Outturn and Financing

         Joint report* of the Chief Constable & Chief Executive/Treasurer

7.       Revenue Budget - 2007/08 - Final Outturn

         Joint report* of the Chief Constable & Chief Executive/Treasurer

8.       Efficiency Plan Outturn

         Report* of the Chief Constable

9.       Statement of Accounts 2007/08

         Report of the Chief Executive/Treasurer ( To Follow)

10.      Revenue Budget and Capital Programme 2008/2009- Performance

         (a) Revenue Budget – Report* of the Chief Constable & Chief Executive/Treasurer

         (b) Capital Programme - Report* of the Chief Constable & Chief Executive/Treasurer

11.      Medium Term Plan – 2009/10-2011/12

         Report* of the Chief Executive/Treasurer & Chief Constable

Agendas f24608
12.      Treasury Management - Annual Report 2007/08

         Report* of the Chief Constable & Chief Executive/Treasurer

13.      Treasury Management - Operations Report

         Report* of the Chief Constable

14.      Review of Financial Regulations

         Report of the Chief Executive/Treasurer ( To Follow)

Agendas f24608
         To consider the exclusion of the press and public from the meeting on the
         grounds that the items to be discussed and confidential and involve the
         disclosure of exempt information as defined in paragraphs 1 of part 1 of
         Schedule 12A to the Local Government Act 1972. Papers are not being sent to
         the press or made available to the public.

Agendas f24608
                                                                 Finance Committee
                                                                    30 January 2008

                            FINANCE COMMITTEE

                               30 January 2008


          Mr J Wells (In the Chair).

          Mr M Farooq, Mrs L Hockey, Mr M Pantling, Mr R Saleem and Mr R

          Mr Conniff also attended the meeting.

          Apologies were received from Mrs E Horrocks and Mrs P Fletcher

08/QF/1   DRAFT CAPITAL PROGRAMME 2008/09 – 20010/11

          The Committee considered a joint report of the Chief Executive
          /Treasurer and the Chief Constable which appended a revised Draft
          Capital Programme for the period 2008/09 – 20010/11

          The report highlighted that the Home Office had now confirmed the
          Capital resources for 2008/09 to 2010/11 and therefore provide the
          Authority with a relatively firm commitment to the level of capital grant it
          could expect for the period covered by this programme.

          In the light of this the Capital Programme had remained broadly
          unchanged from that reported to the last meeting of the Committee.

          As previously mentioned to Members, the capital expenditure reserve
          would be fully utilised during this period and therefore any future years
          capital expenditure would be limited to the level of capital grant and
          external borrowing unless the reserve was replenished during this three-
          year period.

          A Programme that was based on the 2007/08 to 2009/10 programme,
          rolled forward one year to 2010/11 was then considered by the

          Continuing to be the main area of expenditure within the programme
          was the relocation of Greyfriars Police Station arising from Bedford
          Town Centre Redevelopment. Prior to the meeting the Head of Estates
          had circulated a briefing paper to all Members on the current position of
          the project and he attended the meeting to respond to any concerns
          that the Committee might have.
Finance Committee
30 January 2008

           Of particular concern to the Committee was the potential funding gap.
           The gap had arisen from the reduction of the number of sites now
           expected to be disposed of and the increase in custody accommodation
           requirement due to the extent of housing development expected within
           and around Bedfordshire. Despite the funding gap Members gave a
           clear steer that the borrowing limit should remain at £5M. The Head of
           Estates advised that he intended to explore further an opportunity to
           dispose of part of Police Headquarters ground for residential
           accommodation which would address the shortfall and Members agreed
           that this needed to be done as an essential part of the funding


           1. That the Committee recommend to the Police Authority that the
              Capital Programme for 2008/09 to 20010/11 be approved.

           2. That the sale of land at the rear of Police Headquarters be
              explored as part of the Greyfriars replacement project.

           It was also


           That the Head of Estates present a further report to the next meeting on
           the progress of the relocation of the Greyfriars Police Station.


           The Committee considered a draft Treasury Statement incorporating the
           strategy for 2008/2009.

           In discussing the Strategy the Chair of the Committee asked that further
           advice be obtained from the Force Treasury Advisers on one of the
           financial institutions included in the lending list. The Head of Finance
           agreed to do this and amend the list if appropriate.


           That subject to any necessary amendments to the approved
           lending list the Treasury Strategy Statement for 2008/2009 be

                                                                Finance Committee
                                                                   30 January 2008

08/qf/3   MINUTES

          The minutes of the meeting of the Committee held on 4 December 2007
          were confirmed.


          There were no declarations of personal or prejudicial interests from

          07/qf/38 Mobile Custody Unit

          The Head of Finance reported that the mobile Custody Unit was now on
          loan to Guernsey Police and would be presenting a report later in the
          year on the options for its future usage.

          07/qf/40 – Revenue Budget, Capital Programme and Efficiency Plan
          Performance 2007/2008 Revenue Budget

          The Head of Finance confirmed that the review of the Doctors Fees and
          Interpreters would be considered by the Audit & Business Assurance
          Committee as part of the Value For Money Review. The Head of
          Finance also confirmed that the mobile data project, although a finalist,
          had not won e- government National Awards title for 2007.

          PLAN PERFORMANCE 2007/2008

          The Committee considered reports by the Chief Constable on the
          implementation and management of the 2007/2008 Revenue Budget
          and Capital Programme and Efficiency Plan.

          Revenue Budget

          Members were advised that at this stage there was a forecast overall
          underspending of £1.230M.       This comprised of underspends of
          £0.645M in the devolved budgets and £0.585 in the corporate budgets.
          The Police Authority budget remained on target.

          The reasons for the variances were detailed in the report which
          highlighted that the majority of the forecasted underspending continued
          to be within the areas of Police Staff and Police Officer costs mainly due
          to vacancies being experienced in these areas. This level of
          underspending had increased from that last reported due to the Home
          Secretary delaying the police pay award from the budgeted position of 1
          September to 1 December, this amounting to an underspend of some
Finance Committee
30 January 2008

           £0.290M. Members were also advised that due to the slippage on the
           Greyfriars replacement project underspends were expected due to a
           greater level of income received from investments and lower interest
           payments on borrowing. A large underspend was also reported in
           relation to the Training Budget relating to specialist courses, particularly
           on major crime which had been later starting than expected. This was
           being addressed by the Head of the new combined major crime unit.
           These underspends were somewhat offset by the overspending
           expected for Doctors fees.

           Appended to the report was a brief analysis of the current forecasted
           outturn for each Division together with the forecasted spend as a
           percentage of the Division and the Force’s overall budget.

           The report also provided a breakdown of the £1.090M costs incurred for
           the 12 major incidents that occurred between April and December. It
           was noted that the format for the future presentation of the costs
           associated with major incidents would be revised following the
           establishment of the Beds and Herts Major Crime Unit.

           Also reported upon were the known levels and scope of grants and
           reimbursements to be received from the Home Office in 2007/08. The
           Head of Finance orally reported an additional grant of £80K which had
           been approved in relation to the Smart Water initiative in Luton.

           Capital Programme

           With regard to the Capital Programme the latest estimate of Total Costs
           indicated a reduction in total costs of £0.220M from £26.566M to
           £26.346M. This variance mainly related to variations in the IS/IT

           With regard to the latest forecast of payments in 2007/08 showed a
           reduction of £5.164M. The majority of this underspend continued to be
           related to the Greyfriars Police Station Replacement Programme but
           there were other variances in the Estates and IS-IT Strategies and
           these were detailed in the report.

           Appended to the report were progress reports on the IMPACT
           programme, Case and Custody System and the implementation of
           Mobile Data. The Chair of the Committee asked that the ability to use
           electronic files within the new Case and Custody system should
           continue to be explored.

           Efficiency Plan

           Progress on the implementation of the Efficiency Plan was also
                                                      Finance Committee
                                                         30 January 2008

Details of the individual efficiency plan items, together with the current
estimate of outturn based on the latest available management
information for the third quarter were appended to the report.

The current estimated total level of savings of £8.860M was an increase
on the original plan of £6.734M which was well above the 3% Home
Office target of £2.737M at 9.71%.

This was due to the introduction of the new NSPIS Case and Custody
System which had been added to the efficiency savings this quarter,
and a saving of £0.514M for the last three quarters of this year was

It was noted that the official notification from HMIC that they have
approved the outturn for 2006/07 was still awaited.

The Committee also noted that from 2008/09 onwards there would no
longer be an Efficiency Plan and that Efficiency and Productivity gains
would be included as part of the Annual Policing Plan. The cumulative
value of net cashable efficiency or productivity gains to be achieved by
2010/11 is 9.3% of the Gross Revenue Expenditure (GRE). There was
no requirement for gains to be spread evenly over the three years.

Based on the forecasted position of 2007/08 there was already £1.95M
(approximately 1.9% of GRE) to carry forward as efficiency and
productivity gains for 2008/09 and the Head of Finance provided
Members with the details of those areas where efficiencies were due to
be made during 2008/09. The budget position would assist in
determining what could be included as further savings for 2008/09. As
the national guidance was still draft further work was required and the
full details would be included in the Policing Plan.


That the current position be noted

Finance Committee
30 January 2008

08/qf/7    REVENUE BUDGET 2008/09

           The Chief Executive/Treasurer and Chief Constable presented a joint
           report which provided all the relevant information to assist the
           Committee in considering the Revenue Budget for 2008/2009 and
           making recommendation to the Police Authority at its meeting on 15
           February 2008.

           The Final Finance Settlement had been received. With the exception of
           Luton Airport Funding and the DSP grant confirmation of all other
           specific grants had now been received.

           The Head of Finance explained that any capping criteria would not be
           announced until after the budget had been set, but confirmed that in
           announcing the Finance Settlement the Minister had declared that he
           would exercise his rights to invoke capping to ensure that average
           council tax increases remained significantly below 5%.

           The implications of capping (i.e. a lower level of Council Tax increase
           being enforced, the costs of re-billing and impact on reputation) were
           also explained.

           The Head of Finance explained that both the Chief Constable and Chair
           of Authority had received verbal assurance that due to Bedfordshire’s
           circumstances and the fact that its Council Tax was far below the
           national average that this risk of capping was low. However, the risk of
           capping would be exacberated if the Police increase in Council Tax
           meant that the overall Council Tax bill for taxpayers in Bedfordshire and
           Luton exceeded 5%, and that based on provisional information from
           partnering Authorities, this would mean a maximum Council Tax
           increase of approximately 10%.

           Based upon the current priorities for the Authority the report set out the
           implications of Council Tax increases of 5%, 10% and 12%. Included
           within all three options were number of savings that would have no, or
           limited, impact on force performance, as well as items that were
           deemed essential growth from the force perspective. The savings and
           essential growth items were detailed as Appendices to the report.

           A list of the current level of reserves was also appended to the report.
           The Head of Finance advised for financial prudence and sustainability,
           the Authority needed to consider replenishment of the reserves and
           pointed out that this was unlikely to be achieved through option of a 5%
           increase in Council Tax but could be achieved at the 10% and 12%
           options. He particularly highlighted, that the Capital Programme for
           2008/09 to 2010/11, mainly due to the Greyfriars replacement, would
           fully utilise the capital expenditure reserve by 2011. Therefore unless
                                                              Finance Committee
                                                                 30 January 2008

          the reserve was replenished any further capital investment would have
          to be limited to the capital grant or would have to result in additional
          long-term borrowing which itself would have an impact on the revenue

          Prior to the Committee the Chairman of the Authority held informal
          discussions with all Members on the Draft Budget and the results of a
          telephone budget survey were presented. The results had indicated
          that 66% of respondents in Luton and 65% of respondents in
          Bedfordshire were willing to increase the council Tax by 11%. At that
          meeting the majority of Members supported the options for either a 10%
          or 12% rise in Council Tax. Those Members representing the Luton
          Borough Council expressed a strong view that the Council Tax increase
          should be limited to 5%.

          With this guidance in mind the committee considered the options set out
          in the report. In its recommendation to the Authority the Committee
          considered that the ability to replenish the level of reserves was
          significant as the ability to sustain performance. These were important
          factors in determining the level of Council Tax increase and Members
          accepted that these could only be achieved through a Council Tax
          increase of approximately 10% or more. This would also provide for a
          growth in Police Officer numbers required to minimise abstractions, and
          Members were assured that the Force would strive to recruit to any
          increase in police officer establishment.


          That the Chief Executive/Treasurer prepare budget options for
          consideration by the Authority at its meeting on 15 February that would
          ensure that Bedfordshire and Luton’s average Council tax increase
          remained below 5%.


          The Chief Constable submitted a report which summarised the Treasury
          Management Operations that had taken place since the last report to
          the Committee in December 2007.


          That the current position be noted

Finance Committee
30 January 2008

08/qf/9    PRECEPT DATES

           The Chief Executive/Treasurer submitted a report which outlined the
           dates on which precept payments would be received by the Police
           Authority in 2008/2009.


           That the report be noted.


           The report of the Chief Executive/Treasurer was submitted. For
           2007/08 onwards CIPFA had introduced a new requirement known as
           the Annual Governance Statement which had replaced the Audit
           Commission’s Statement of Internal Control but still required the Force
           and the Authority to undertake an annual review of its overall control
           internal framework and governance arrangements.

           In addition to this Committee was required to review the major risks
           attributed to it and these were appended to the report. Amendments to
           the likelihood risk rating in relation to setting the precept, defending a
           litigation and funding and policing of Luton airport were agreed.

           As part of the annual review it was also appropriate for the Committee
           itself to consider how it feels it was performing. Some areas for
           consideration were highlighted in the report and the Committee was
           satisfied with its performance in each area.


           1. That the Committee is assured that there are all the major risks
              attributed to it are appropriate and that changes be approved to the
              ‘likelihood’ risk as follows

           •   Failure to set a precept that meets with Government requirements –
               Rating to be increased from 2 to 3

           •   Failure to successfully defend a major litigation to be decreased
               from 2 to 1

           •   Failure to adequately fund and police Luton airport be increased
               form 2 to 4

                                                   Finance Committee
                                                      30 January 2008

2. That the Committee confirms it has undertaken a self-assessment of
   its own performance and that there are no areas that require


Committee:                                Finance Committee
Date:                                     24 June 2008
Agenda Item:                              4

Report Author:                            Chief Constable

Lead Officer:                             Assistant Chief Constable – Protective

Subject:                                  Mobile Custody Vehicle

Purpose:                                  To consider the future use of the Mobile
                                          Custody Unit

Background Papers:                        None

1.    Introduction

1.1   Members may recall that at the October 2007 meeting of the Finance Committee it
      was resolved that a formal assessment be undertaken around the future use of the
      Mobile Custody Unit (MCU) and determine whether the MCU should be retained.

2.    Evaluation of the MCU

2.1   The force took delivery of the Mobile Custody Unit (MCU) in July 2005. This
      purchase was based on a business case prepared in January 2004 which identified a
      need for additional cell space to deal with a projected sustained growth in arrests in
      peak periods of operational activity.

2.2   In addition to the general trend of increased arrest levels at peak times such as
      Friday and Saturday nights three other key factors were identified as factors positively
      impacting further on arrest rates. These were:

      •    The introduction and growth of ANPR technology and the anticipated increase in
           the number of short duration arrests.
      •    Population growth within the county.

2.3   Whilst these key factors provided a positive business case for the introduction of this
      type of vehicle based into the Force, there have been a number of changes both
      nationally imposed and local developments as well as operational limitations, as
      highlighted below, that now restrict the use of the MCU to very infrequent.

      Nationally Imposed Changes

      •    The publication of the ‘Guidance on The Safer Detention & Handling of Persons
           in Police Custody’ published by the Home Office late in 2006 identified
           operational issues with the use of this vehicle and its future compliance. The
           guidance reinforced existing human rights legislation suggesting that prisoners
           should be taken to the best facilities available. In some circumstances this causes
           difficulty in justifying the use of the MCU.

      •   There has been a substantial expansion in the number of offences that can be
          dealt with by Fixed Penalty Notices. This has led to an increase in non custodial

      Changes in Local Practice

      •   The MCU can only serve as a non-designated police station under PACE and as
          such can only be used to detain persons who at the time of arrest present no
          known risk and who are likely to be held in custody for under six hours. The MCU
          was therefore only really capable of dealing with the projected increase in short
          term arrests. However the projected increase in short term arrests has been
          mitigated by a number of other relevant factors such as highlighted below and
          therefore removed the need for the MCU in these circumstances.

      •   The use of digital cameras and portable fingerprint kits in conjunction with Fixed
          Penalty Notices has increased officers’ confidence in the ability to positively
          identify offenders in later proceedings and reduced the need to effect short term
          arrests to positively establish identity.

      •   The portable fingerprint kits only operate on the basis of a single fingerprint
          however. Some prisoners are taken into custody to ensure a full forensic profile is
          obtained encompassing fingerprints, DNA, a full descriptive Phoenix form and
          potentially shoe wear impressions. The MCU is not equipped to obtain full
          forensic profiles and therefore is unsuitable for these types of arrested prisoners.

      Operational Limitations

      •   Experience has shown that ANPR operations at locations such as Toddington
          Services, which, at face value, is eminently suitable for the deployment of the
          MCU tend to produce results which do not impact on Bedfordshire’s performance
          figures. This is because a high percentage of persons arrested are transiting the
          county, live elsewhere and committed the crime for which they are arrested
          elsewhere. These types of person, wanted on warrant or wanted for crimes in
          other counties are not short term prisoners but need to be transported to
          designated stations.

      •   The nature of the MCU as a HGV and its size restricts the scope of its
          deployment as a high visibility, public reassurance vehicle where the custodial
          value of its use is limited.

      •   Staffing the MCU with trained custody staff has proved problematic at times.
          Frequently the operational judgement of senior managers has been that
          brigading the available custody resources at a designated station is operationally
          more effective than splitting the available resources between the designated
          station and the MCU. The size of the MCU again limits its ability to co-locate at a
          designated station to simply provide more cell capacity.

2.4   Despite these constraints the MCU has assisted in the provision of additional capacity
      during the cell refurbishment programme for Dunstable. It has been used on a
      number of high profile occasions such as the project ‘Lantern’ launch ANPR
      operation, the Luton Carnival, two joint operations with Hertfordshire Constabulary
      and a regional Operation, codenamed Utah, however as previously stated these
      events are very infrequent.

2.5   The annual running costs for the MCU are in the region of £20K per annum including
      maintenance and satellite support costs which are payable irrelevant of whether the
      vehicle is in use or not.

2.6   At present the vehicle has been hired out to Guernsey Police as a contingency for the
      loss of the island’s main custody facilities. The satellite support contract has been
      suspended during this period and income derived from Guernsey Police that more
      than offsets, by a modest amount, the monthly CTC charge and depreciation costs.
      The arrangement with Guernsey Police is to come to an end in July 2008.

3.    Options for Future Use

3.1   The conclusion that the use of the MCU does not justify the on going cost is
      inescapable given the information outlined in paragraph 2.3 above and therefore two
      options are open to the Authority for its future use. These options need to be placed
      in the context of the Police Operations Command (POC) Vehicle coming to the end of
      its operational life. The Uniformed Protective Services Department is currently
      evaluating options around the replacement of the POC and the possibility of
      collaboration in this area with Hertfordshire. Both forces are considering whether
      there is an operational need for a bespoke hostage negotiators vehicle and a
      bespoke silver command vehicle (the development of mobile communications
      technology, particularly around Airwave and mobile data affords an opportunity for a
      smaller POC capable of more flexible deployment.)

      •   Option 1 is simply to dispose of the MCU by selling it on the open market. CTC
          advises that the residual value in the vehicle likely to be realised in such a sale is
          around £15,000. This money would then be put towards the purchase of a new
          bespoke silver command vehicle to replace the POC.
      •   Option 2 is to convert the MCU into a POC. By removing the cell area from the
          MCU a flexible operational briefing room for silver commanders would be created
          so that during a protracted a forward command point could be established within
          the vehicle where proper briefings could be conducted without the need to return
          to Police premises.

      Both options will require additional one-off capital investment in 2008/09 ranging from
      £7-10K for option 2 and £15K for option 1, however this will be met from within
      existing resources.

3.2   Whilst Under option 1 there is very little return for initial outlay on the MCU which is
      not near the end of its viable life as a vehicle, it does provide the force with maximum
      flexibility in determining its future command vehicle choices and exploiting any
      collaborative opportunity with Hertfordshire. In addition it removes the financial
      burden of £20K per annum for a vehicle that is not being utilised.

3.3   Option 2 provides for greater value to be realised from the conversion of the MCU but
      there is a danger that difficulties around its deployment, in particular its HGV status
      (with very few officers having HGV licences), will result in it only being deployed in
      rare circumstances where a major incident requiring a forward command centre is
      declared. Whilst the force must have a forward command centre capability it is highly
      desirable that it be capable of flexible deployment in a variety of circumstances if it is
      to represent best value for money, as provided for in option 1.

4.    Risk Assessment

4.1   Whilst there are limited risks associated, the financial and operational risks
      associated with the conversion of the MCU are such that this option would not
      provide for value for money.

5.     Financial Implications

5.1   Option 1 would require an additional one-off capital cost to supplement the capital
      receipt of some £15K to purchase the silver command vehicle, but these costs would
      be met from within existing resources and would be far outweighed by the operational
      benefits provided. Option 2 again would require one-off capital costs of some £7-10K
      and again would be met from within existing resources. However, the operational
      benefits derived from this option would not provide value for money from the

6.     Benefits

6.1    The sale of the MCU provides for a more flexible and value for money approach to
       both hostage negotiating and communications that will also assist future collaboration
       with other forces.

7.     Recommendation

7.1    That Members agree the disposal of the MCU and re-invest the capital receipt into a
       silver command vehicle replacing the current POC.

Gillian Parker
Chief Constable

For Publication


                                 Not Protectively Marked

Information Item

Committee                              : Finance

Date                                   : 24th June 2008

Agenda Item                            :5

Report Author                          : Chief Constable

Lead Officer                           : Director of Corporate Services (Head of
                                       Estates & Facilities Management)

Subject                                : Police estate, annual report

Purpose                                : To advise members of the current extent of
                                       the police estate and future developments.

Background Papers                      : Nil

1.        BACKGROUND

1.1       This report updates members on the development of the estate and reviews,
          in particular, the situation regarding the replacement of Greyfriars Police


2.1       Overall Estate value

          The balance sheet capital value of the estate as at the 31st March 2008 is
          £32.9M, comprising £32.3M for the operational estate and £0.5M for the
          residential estate and £0.1M investment property. Details of these properties,
          and those that are subject to lease, are indicated at Appendix 1. The
          revenue cost of running the estate amounts to some £2.593M per annum.

2.2.      Update on the Disposal of the Police Housing Stock

The total remaining freehold stock at 31st March 2008 numbers 4. No sales were
made in the last financial year. One dwelling has now been vacated and is in the
process of disposal on the open market. The lease for the police house in Luton,
rented from the Borough Council, will not be renewed upon its expiry. The occupying
officer has retired and is currently funding the rent.

For Publication

          Financial year           Number Sold            Gross Capital Receipt (£)

          2007/08                         0                       0

          2008/09 to date                 0                       0


3.1       The contract for the provision of strategic property and estate management
          services expires at the end of this financial year, and will be re-tendered.

3.2       A computer based help desk system has been installed, will be piloted at
          three main sites and go live at the end of June. This will be the primary
          communication channel the to Estates & Facilities Management Dept and
          allow all work requests to be logged and monitored


4.1       The enquiry office at Dunstable PS has been subjected to an extensive

4.2       1 & 2 Peel court, Leighton Buzzard, which form office accommodation on the
          station site, have been upgraded.

4.3       The entrance lobby to PHQ has been remodelled and the toilet areas within
          the three storey section have been upgraded, with completion of the final
          work imminent. Work has commenced on the installation of a lift to serve the
          training wing area of the building.

4.4       The cells in Luton custody have been refurbished, following on from
          alterations and refurbishment carried out in other areas of the custody in the
          previous financial year.

4.5       Further projects have also been completed, in addition to the annual minor
          works and maintenance projects,


5.1       The capital works provision for 2008/09 is reported elsewhere on the agenda.
          This year sees much of the minor works provision being spent on small
          upgrades and improvements, whilst the major expenditure includes:-

         Police HQ               Relocation of Greyfriars PS etc to PHQ site (£15M)
                                 Alterations to accommodate increased Force Executive
                                 and Corporate Services
                                 Additional temporary training facilities and

         Repairs &               Capital funding to support reduction of repair and
         Maintenance             maintenance backlog (£200,000)

          (All costs are estimated and exclude professional fees where applicable)

For Publication

6.        FUTURE WORKS

6.1       Continuing, small-scale development of the estate to meet on-going
          operational changes will continue to be met from the capital minor works

6.2       Neighbourhood Policing continues to roll out and various small scale
          accommodation provisions have been made, by local agreement at nil or low
          cost. A capital allocation, as reported elsewhere, remains to cover other
          developments, to meet the ultimate establishment of Neighbourhood Policing.

6.3       The replacement of Greyfriars Police station is being progressed, by the
          consultant design team.

6.4       The capital programme includes a provision of £400,000 for custody
          installations and CCTV evidence processing. Half of the sum is to improve
          visual and audio monitoring in custody; with consideration being given to life-
          signs monitoring in certain areas accommodating particularly vulnerable
          people. The remainder will be expended on Level 1 CCTV processing
          following the implementation of CJSSS (Simple Speedy Summary Justice).
          This area of work will be subject to development by Project Board with the
          Estates & Facilities Management Department managing the budget and
          implementing the physical works.


7.1        A ‘mini-competition’ between pre-tendered consultant firms selected from the
          Office of Government Commerce (OGC) list of Project Managers was held.
          The selection process evaluated the project management firms and the
          design professionals which they proposed to employ on the project.

7.2       Initial design studies have been progressed to define optimum site utilisation,
          access solutions and the likely cost of the proposed project. These studies
          have indicated a requirement to minimise the scale of the development to
          meet budget constraints and the brief has, therefore, been carefully reviewed
          to meet the divisional requirement only. However, the brief includes a 40 cell
          custody unit and adequate space and flexibility to meet foreseeable future
          need. A list of the functions included is attached at Appendix 2. The original
          proposal to incorporate other functions, to consolidate operations on this site,
          have been revised to allow the additional accommodation to be defined as
          later phases of the HQ development.

7.3       When the project is sufficiently developed to facilitate an application for
          planning approval, the application will include both the initial building and the
          later phases. Whilst no funding has been identified for these phases the
          planning approval (if granted) will facilitate their later construction as need
          and funding allows.

7.4       In accordance with the agreement of the Police Authority, the possible sale of
          part of the existing sports field, to support the funding of the project, has been
          investigated. However, it is deemed not to be a feasible option. The area of
          land most suitable for disposal is to the rear of the site, bounded by the
          adjacent school playing field and what will be housing development within the

For Publication

          new by-pass, currently under construction. Unfortunately access to this land
          can only be gained from the new housing development area; thus removing
          competition for the purchase, reducing the opportunity to realise best value
          and minimising the viability of any capital receipt thus gained.

7.5       The provision of accommodation for the two Inspector-Led Neighbourhood
          Areas (ILNAs) currently housed in Greyfriars PS has also to be funded from
          the project budget. In order to limit the capital cost it has been decided that
          the South ILNA will not relocate to the HQ site; but will be accommodated
          elsewhere. The opportunities for renting a suitable building to house this
          function are currently being pursued. For operational reasons it is important to
          provide this accommodation as soon as possible and, certainly, ahead of the
          re-provision of GPS. The provision of the North ILNA accommodation will be
          investigated also; but for operational reasons it could remain in Greyfriars PS
          up to the end of its operational life, if necessary.

7.6       The budget originally anticipated in 2006 was £15M, comprising:

          Estimated capital receipts (mid-range estimates):-

          Greyfriars PS         £4.5M
          Halsey Road           £3.5M
          Biggleswade           £1.4M
          Ampthill              £1.75M
          Borrowing             £5M max.

          Note: with tender and construction prices increasing in the region of 3 – 4%
          p.a. the effective value of the borrowed element is reducing in the region of
          £0.5M year on year.

          It was assumed that all replacement accommodation, including the town-
          centre policing base, would be leased and thus funded from revenue budgets.

          Given the potential loss of some of the capital receipts totalling some £6.6M,
          the residual budget stands at some £9.5M

7.7       The current estimated cost of the project, excluding the provision of ILNA and
          town-centre policing bases, relocation costs, furniture and fittings and
          specialist installations is £17.64M.

7.8       The original budget of £15M assumed capital receipts from the disposal of
          other sites which, for operational reasons can no longer be relinquished. The
          capital receipt for Greyfriars PS still remains undefined; as does the cost of
          the provision of the town-centre policing base. Clearly, in the current
          economic climate and with the continuing requirement to sign up major
          tenants for the town-centre redevelopment project, the developer has been,
          and continues to be, unwilling to commit to these costs.

7.9       The current economic climate does, of course, cast some doubt on the
          continuation of the town-centre redevelopment project. Similar developments
          in other areas have already been postponed or abandoned due to financial
          pressures. However, at this time, the Borough Council remains confident that
          the project will proceed. Indeed, if it did not, the inadequacy of the current
          custody accommodation would not allow us a ‘no action’ option.

For Publication

7.10      The programme produced by the design team illustrates a potential
          completion of the new facility towards the end of 2010. However this
          programme has been compressed by such factors as progressing detailed
          design ‘at risk’ on the assumption that planning approval will be granted. It
          therefore follows that a later completion date is more realistic and this will be
          developed as further investigation and design work progresses.

7.11      To date no contact has been initiated by the town-centre developer, St.
          Modwen. Whilst the onus to press for the early vacation of Greyfriars PS to
          facilitate commencement of that redevelopment lies with the developer,
          contact with the design team has not been forthcoming. Consequently the
          design team are endeavouring to maintain a dialogue; thus informing the HQ
          development programme. Again, it would appear that the requirement to pre-
          let a proportion of the key town-centre sites is influencing the likely
          programme of that development.

7.12      The issue of affordability and the impact of the town-centre redevelopment on
          Bedfordshire Police is to be the subject of a meeting with the Bedford
          Borough Council officers on 13th June 2008. Members will be updated at the
          Finance Committee meeting of any outcomes


8.1       The Committee is requested to note the report.

G Parker
Chief Constable

  For Publication

                                                                        APPENDIX 1


                    Property                            Location                                Tenure

Police Headquarters                      Woburn Road, Kempston                              Freehold
Bridgebury House (Police Authority)      Woburn Road, Kempston (HQ site above)              Freehold
Greyfriars Police Station                Bedford                                            Freehold
Police Station                           Luton                                              Freehold
Police Station                           Leagrave                                           Freehold
Police Station                           Dunstable                                          Freehold
Police Station                           Houghton Regis                                     Freehold
Police Station                           Leighton Buzzard                                   Freehold
Police Station                           Ampthill                                           Freehold
Police Station                           Biggleswade                                        Freehold
Police Station                           Halsey Road, Kempston                              Freehold
Police Station                           Riseley                                            Freehold
Garages                                  Halsey Road, Kempston                              Freehold
Radio Station                            Streatley                                          Freehold
Radio Station                            Twinwoods, Clapham                                 Freehold
Offices                                  Sandy                                              Freehold
Police Station                           Shefford                                          Leasehold
Radio Station                            Ampthill                                          Leasehold
Police post                              Luton Arndale Centre                              Leasehold
Police post                              M1, Toddington                                    Leasehold
Offices                                  Saxon Centre, Kempston                            Leasehold
Offices - Ports Office                   London Luton Airport                              Leasehold
Offices – Policing unit                  London Luton Airport                              Leasehold
Skid pan                                 Tempsford Airfield                                Leasehold
Offices / warehouse                      Kempston                                          Leasehold
Cop Shop                                 104B Castle Road, Bedford                         Leasehold
Cop Shop                                 Springfield Centre, Kempston                      Leasehold
Cop Shop                                 Gostwick Road, Bedford                            Leasehold
SNT base – Luton East                    Plaza 668, Stopsley                               Leasehold
Offices (Casualty Reduction Ptrshp)      Saturn Centre, Manton Lane, Bedford               Leasehold
Laboratory (Casualty Reduction Ptrshp)   Saturn Centre, Manton Lane, Bedford               Leasehold
Outdoor firing range                     Ireland, Beds.                                    Leasehold

             POLICE HOUSES

                    Location                Tenure                         Status

168 Brickhill Drive, Bedford                Freehold               In the process of disposal
26 Rosemary Drive, Bromham                  Freehold                      Occupied
30 Rosemary Drive, Bromham                  Freehold                      Occupied
142 Hockliffe Road, Leighton Buzzard        Freehold                      Occupied
211 Ashcroft Road, Luton                   Leasehold                Leased from Luton BC

For Publication

                                                          APPENDIX 2

Functional elements comprising the accommodation requirement for the
replacement of Greyfriars PS

Command suite
Serious Sexual Offences 3 staff /Domestic Violence Unit
Crime Management
Serious Crime Team and Priority Crime Team
Intelligence Unit
Enquiry office
General Admin/Finance
Duty Planning
Community Safety
DI Bedford
NIM Tasking
Events Planning
Ops Performance
DI Public Protection
Prisoner Handling
Suspect managers
Customer Services
Admin of Justice (AJU)/ Crown Prosecution Service (CPS)
Property Store
Economical Crime Unit
40 Cell Custody Suite


Committee:                                 Finance Committee
Date:                                      24th June 2008
Agenda Item:                               6

Report Author:                             Chief Constable &
                                           Chief Executive/Treasurer

Lead Officer:                              Assistant Director of Resources and
                                           Chief Executive/Treasurer

Subject:                                   2007/2008 Capital Programme – Outturn
                                           and Financing

Purpose:                                   To report the Capital Expenditure Outturn
                                           for 2007/08 and the method proposed for
                                           financing that expenditure.

Background Papers:                         None

1.     Capital Programme

1.1    This report sets out the capital expenditure outturn for 2007/08 together with its
       proposed methods of finance.

2.     Capital Expenditure

2.1.   The table overleaf shows the actual outturn in 2007/08 compared to the revised
       Capital Programme presented to the Finance Committee in January 2008, also
       shown for information is the original Capital Programme approved by the Authority on
       16 February 2007.

                                          Original       Revised          Outturn         Variance
                                          Capital         Capital
                                        Programme       Programme
                                                           £000             £000            £000
            Estates Strategy
            - Neighbourhood Policing       0,199           0,199            0,000           (199)
            - Minor Works                  0,200           0,200            0,204            004
            - Capitalised R & M            0.400           0.400            0,237           (163)
            - Greyfriars Replacement       3,761           3,761            0,000          (3,761)
            - Other                        0,078           0,078            0,120           0042
                                           4,638           4,638            0,561          (4,077)

            IS/IT Strategy
             - Airwave                     0,342           0,342            0,229           (113)
             - Mobile Computing            0,310           0,310            0,250           0(60)
             - Impact/MOPI                 0,303           0,303            0,001           (302)
             - Network Server              0,122           0,122            0,072           0(50)
               Upgrade & Storage
             - Command & Control           0,471           0,471            0,000           (471)
             - ICCS Hardware               0,100           0,100            0,033           0(67)
             - Minor Systems               0,150           0,150            0,042            (108)
             - WAN Infrastructure          0,150           0,150            0,036            (114)
             - Other                       0,423           0,423            0,132            (291)
                                           2,371           2,371            0,795          (1,576)0

            Transport Strategy             0,770           0,770            0,747            (23)

            Equipment                      0,000           0,000            0,045                45

            Totals                         7,779           7,779            2,148          (5,631)

2.2     Variances Since Last Reported

2.2.1   The variance for the year shows an underspending of £5.631M compared to £5.164M
        reported to this Committee in January 2008. The difference of £0.467M is accounted
        for by the following:

        •     Estates – The small spend expected on Greyfriars replacement did not
              materialise in the final quarter of the year as well as minor variations on
              Neighbourhood Policing Accommodation.
        •     IS/IT – minor slippage has been caused by delays in accepting software as well a
              slight slippage on Airwave.
        •     Equipment – spend to facilitate the implementation of ANPR at Luton Airport
              although committed was not spent at the end of the financial year.

2.3     Overall 2007/08 Variances

2.3.1   Although the majority of variations on the capital programme have been reported to
        this Committee throughout the financial year a detailed analysis of the major
        variances on the Estates and IS/IT programmes are shown below.

      Estates Strategy (£4.077M)

      •     An expected underspend occurred on the repairs & maintenance programme,
            partly because of managed slippage and also a result of smaller jobs being
            considered as revenue in nature.
      •     Greyfriars Replacement programme is featured in the Estates Annual report,
            elsewhere on this agenda, however as previously reported to this Committee the
            slippage of this project into 2008/09 has been expected.

      IS/IT Strategy (£1.576M)

      The majority of underspends were reported to the Finance Committee in January and
      the 2008-09 Capital Programme reflected these, however, the larger variances are
      detailed below.

      •     Command & Control – The collaboration process with Essex & Herts in this area
            means that costs are now likely to occur in 2008/09 and 2009/10.
      •     Impact/MOPI – Delays caused by regional collaboration work and difficulty in
            identifying a supplier who has all elements of a complete MOPI solution has
            delayed this project.
      •     WAN Infrastructure – Delays in the procurement process has pushed expenditure
            into 2008/09.
      •     Minor Systems – The demand for minor systems within the Force was less than
            expected in 2007/08.

3.    Capital Resources

3.1   The resources available in 2007/08 comprise as follows:

          Specific Capital Grants                             655
          Capital Grants 2007/08                            1,297
          Capital Reserve                                   3,713
          External Borrowing                                1,000
          Revenue Contributions                               215
          Total – Resources                                 6,880

3.2   The resources available, (£6.880M) exceed the requirement to finance expenditure
      (£2.148M) by £4.732M. This includes specific capital grants that have been received
      in advance of project completion.

4.    Capital Financing

4.1   The following is proposed for financing expenditure for 2007/08:-

          Specific Capital Grants                             256
          Capital Grants                                      892
          Borrowing                                         1,000
          Total – Resources                                 2,148

4.2    This leaves the following resources available in future years to finance capital

        Specific Capital Grants                                399
        2007/08 Capital Grant                                  405
        Capital Reserve                                      3,928
        Total – Resources                                    4,732

4.3    The figure shown above for specific capital grants relates to Airwave and ANPR
       (Luton Airport) and can only be used for that purpose. The remaining resources are
       earmarked to fund the Capital Programme in future years.

4.4    It should also be noted that in accordance with the Prudential Code, £0.143M has
       been set aside for Minimum Revenue Provision (MRP).

5.     Risk Assessment

5.1    Due to resources being greater than expenditure the risks to relating to the ability to
       finance the capital outturn are nil. However, monitoring of the resources in the longer
       term will be paramount in ensuring the capital programme remains affordable.

6.     Financial Implications

6.1    The Financing of the 2007/08 capital expenditure will leave £4.732M resources
       available to finance future capital expenditure.

7.     Benefits

7.1    Successful implementation of the capital programme will contribute to the
       achievement of the organisation’s objectives.

8.     Recommendation

8.1    The Committee is requested to:

       (i)     Note the capital outturn for 2007/08 of £2.148M at paragraph 2.1.

       (ii)    Approve the method proposed for financing capital expenditure in 2007/08
               detailed at paragraph 4.1 and

       (iii)   Note the arrangements for the carry forward of resources of £4.732M from
               2007/08 to 2008/09 at paragraph 4.2.

Report prepared by:
Stuart Goodwin
Principal Accountant

On behalf of
Gillian Parker                                         Stephanie McManemy
Chief Constable                                        Chief Executive / Treasurer


Committee:                           Finance Committee
Date:                                24 June 2008
Agenda Item:                         7

Report Author:                       Chief Constable & Chief Executive/Treasurer

Lead Officer:                        Assistant Director – Resources

Subject:                             2007/2008 Revenue Budget – Final Outturn

Purpose:                             To consider the final outturn on the 2007/08
                                     revenue budget and the carry forward of
                                     resources to 2008/09

Background Papers:                   None

1.    Background

1.1   Under the Budget Management Scheme the Committee receives regular information
      comparing revenue expenditure to available resources. This report summarises the
      final outturn for 2007/08.

2.    Budget Provision

2.1   The Police Authority determined its Budget for 2007/08 on the 17 February 2007
      at £91.229M. Following its meeting on 25 June 2007, the Authority approved the
      carry forward of the 2006/07 overspending totalling £0.018M, thus reducing the
      final budget for 2007/08 to £91.211M, comprised as follows:

          Force Budget         90,346
          Authority Budget        865

3.    Final Outturn

3.1   The final outturn for 2007/08 totals £89.793M, providing a total underspending in
      the year of £1.418M.

3.2   The underspending represents a 1.5% variation on overall resources with the
      underspending being £0.188M more than that reported to Finance Committee in
      February 2008. The main reasons for this variance are as follows:

      •     Unexpected income from the NPIA in relation to Airwave;
      •     Slower progress, in terms of actual expenditure, on the PSA reward grant
            funding; and
      •     Other minor increases in expenditure offset by additional mutual aid income.

3.3     A more detailed analysis of the total variation is set out at Appendix A with a
        Divisional breakdown at Appendix A(i).

4.      Carried Forward – Proposed Utilisation

4.1     The Committee is now invited to consider the utilisation of the resources available
        from 2007/08 underspendings as set down below and summarised at Appendix B.
        The overriding consideration is that the suggested use is for one-off expenditure with
        no cost implications in future years.

4.2     Use of Underspendings - £1.418M

4.2.1   Devolved Budgets - £0.493M

        In accordance with the Financial Management Scheme, devolved budget managers
        have the ability to carry forward underspendings into subsequent years to a limit of
        1.5% of their ‘bottom line’ budget. It is proposed that these underspendings will be
        utilised to fund:

                •   Burglary Reduction and Crime Reduction initiatives;
                •   Further enhancement of Neighbourhood Policing;
                •   Pump priming of Customer Service provision in the Crime Management
                •   Specialist Crime Training;
                •   Drugs and Offender Management; and
                •   Witness Care

4.2.2   Reserves - £0.450M

        As Members will be aware, the affordability of Greyfriars police station replacement
        remains an area for concern as well as the ongoing funding of the capital programme
        itself. It is therefore proposed that £0.450M of the overall underspendings are put into
        the capital expenditure reserve.

4.2.3   Police Authority - £0.040M

        A relatively small amount to be carried forward to supplement the Authority’s budget
        in 2008/09 to cope with the additional workloads currently being placed upon it.

4.2.4   One-off Performance Initiatives - £0.435M

        As members will be aware through various reports and presentations to the
        Authority’s Committees there is a need for some one-off investments in a few areas of
        the organisation to assist in the recruitment/training of officers, force performance and
        external inspections, these are shown below:

        •   Tutor Constables - £120K – additional tutor constables required to support
            significant increase in recruiting numbers, from 80 to approximately 180.
        •   CBRN - £50K – required one-off investment to bring CBRN equipment upto
            required levels.
        •   MOPI - £50K – short term contract staff required for Force compliance around
            identity and access management and RRD volumetric work.
        •   Project Support - £80K – additional project support within corporate development,
            in particular the Criminal Justice project, performance management and the
            Greyfriars/MKSM projects (specifically around section 106 issues).
        •   Interpreters - £50K – to research and pump prime the ability to provide an in-
            house interpreter/translation service/part service.
        •   Diversity - £10K – one-off spend to further communicate and assist in the
            understanding of diversity across the Authority and Force

        •   Neighbourhood Policing Communication - £75K – to further enhance the
            embedding of Neighbourhood Policing within the Communities through pro-active
            communication and problem solving.

5.      Policy on Reserves

5.1     As Members may be aware, this Committee approved a policy on reserves in October
        2005. Since that date a number of changes have occurred, such as changes to police
        pensions legislation, further clarity around the Greyfriars replacement programme and
        changes in levels of self-insurance, as well as the Force and Authority’s drive forward
        with collaboration.

5.2     Due to these changes, whilst considering the outturn for 2007/08, it is appropriate that
        the policy on reserves be reviewed. Whilst Appendix C provides a revised policy, the
        following paragraphs provide the appropriate detail for the determination of this
        policy. It is also suggested that this policy be reviewed on an annual basis by the
        Finance Committee when considering previous years outturn positions.

5.3     General Reserves (Police Fund)

5.3.1   The current policy suggests that general reserves should be held by the Authority at a
        level of between 2% and 5% of net revenue expenditure. It is suggested that in the
        current climate this range still remains prudent.

        The minimum level of 2% basically provides the Authority with financial stability for 2
        extraordinary events (e.g. a similar major incident to Soham in Cambridgeshire or the
        prostitute murders in Suffolk). This is on the basis that the costs of these types of
        major incidents would require a special grant from the Home Office, although a
        contribution towards the first 1% of Net Revenue Expenditure would be required from
        this Authority.

        The Authority have two main vulnerabilities, these being the ongoing legal claim, in
        relation to Yarls Wood, and the current threat levels around aviation thus affecting
        airports across the country, and therefore the minimum level of general reserves
        should not be less than 2%. The 5% ceiling would provide for a contingency for any
        additional incidents but would also provide a buffer against future years funding gaps.
        The current level of this reserve stands at £2.493M or 2.6% of net revenue

5.4     Earmarked Reserves

5.4.1   The Authority currently hold, based upon the proposals at section 4 above, the
        following earmarked reserves (including the proposals above), as at 31 March 2008:

        •   Capital Expenditure Reserve - £4.378M (prior to £0.5M being added as part of the 2008/09
        •   Insurance Reserve - £ 1.293M
        •   Earmarked Revenue Reserves - £0.251M
        •   Pensions Reserve - £1.215M
        •   Devolved Budget Reserve - £0.968M

5.4.2   Capital Expenditure Reserve

        As Members are aware the impact of replacing Greyfriars, as well as the shortage of
        external resources in funding future years capital programme, means that the this
        reserve remains key to the Authority’s ability to both improve its Estate, Information
        Technology and Fleet over the short to medium term and that the Authority should,
        where possible, continue to contribute to this reserve over the medium term.

5.4.3   Insurance Reserve

        The cost of insurance premiums has dropped over the past few years, but this is
        mainly due to the fact that insurers are moving more to self insurance, whereby
        excesses and aggregate stop levels are much higher, and therefore the liability for
        insurance moves gradually towards the insured rather than the insurer. Obviously,
        insurers are happy to retain the liabilities but the cost of the premiums to do this does
        not provide value for money. It is suggested that any underspendings achieved on
        insurance budgets due to the savings on premium costs are therefore placed into the
        insurance reserve. However, to ensure that this reserve remains at an appropriate
        level, regular fund audits will be undertaken by an external adviser.

5.4.4   Earmarked Revenue Reserves

        This reserve was originally created to provide for possible shortfalls in funding we
        may have had around PCSOs as well as other performance issues. It is also used
        balances held at the end of the financial year that will be carried forward into 2008/09.
        However the performance side of it has never really been defined. It is proposed that
        this reserve is re-classified as a collaboration/performance reserve and is used
        specifically for the following purposes:

                •   One-off costs associated with progressing future collaborations;
                •   One-off costs associated with performance issues; and
                •   One-off costs associated with the forthcoming Olympic Games.

        Any costs to be funded from this reserve will need to be subject to approval by the

        In addition the Authority will hold a Devolved Budget Reserve which will purely be a
        reserve against which approved carry forwards are held at the end of the financial
        year prior to them being added to the ensuing years budget.

5.4.5   Pensions Reserve

        This reserve was originally created for the large fluctuations the Authority was
        experiencing around police pensions cost, as well as providing a buffer against costs
        that were being incurred as a result of achieving appropriate efficiency and funding
        gap targets.

        The change in police pensions legislation is such that the large fluctuations in police
        pensions costs have somewhat diminished due to the introduction of a national
        employers contribution and change in government funding. However there still
        remains some volatility for the Authority around ill-health retirements.

        In addition to the ill-health volatility this reserve needs to continue to provide for a
        buffer against any associated costs relating to the impact of future years
        efficiency/productivity targets (e.g. redundancy/early retirement costs).

5.4.6   Based upon the specific use of these reserves, the actual level of the reserves should
        be reviewed, particularly the pensions and collaboration/performance reserve. It is
        proposed that the level of the reserves are restated as at 31 March 2008, as follows:

                •   General Reserves - £2.659M
                •   Capital Expenditure Reserve – £4.778M (prior to £0.5M being added as part of
                    the 2008/09 Budget)
                •   Insurance Reserve – £1.293M
                •   Collaboration/Performance Reserve – £0.400M
                •   Devolved Budget Reserve - £0.968M
                •   Pensions Reserve – £0.500M

5.4.7   The re-stated reserves provide the Authority with a more prudent set of reserves
        based upon the potential financial fluctuations faced by the Authority over the medium

6.      Specific Government Grants

6.1     As previously reported to this Committee, the Authority now receives varying levels of
        specific grants. The largest of these are shown below and are now incorporated into
        the budget setting process.

        •   Crime Fighting Fund, £2.713M – funding provided for 97 officers due to the
            national drive for increased numbers of officers.
        •   Community Support Officers, £2.399M – funding towards the cost of providing
            PCSO’s Forcewide.
        •   Counter Terrorism, £1.155M – due to the high levels of security risk nationally,
            funding has been received to provide a police unit at Luton International Airport
            as well as assisting in intelligence gathering operations, included in this figure is
            the cost of policing MANPADS.
        •   Dedicated Security Posts, £0.990M – funding for 18.5 posts the majority of which
            are special branch ports policing posts.
        •   BCU Fund, £0.522M – grant provided to the BCU’s to assist in work approved by
            the Crime and Disorder Reduction Partnerships and the Police Authority.
        •   Drug Testing Programme, £0.325M – grant received to meet the costs of
            detention officers associated with a Home Office scheme within Bedford & Luton.
        •   Rule 2 Grants, £1.699M – funding formula grant covering such activities as
            Special Priority Payments, South East Allowance, DNA and Rural policing.
        •   Various other smaller levels of grant have been received such as funding for
            CJSS, special operations and violent crime.

7.      Risk Assessment

7.1     Based upon the carry forwards suggested at section 4 the recommendations of this
        report further enhance the Authority and Force’s ability to achieve their stated

8.      Financial Implications

8.1     The outturn position of an underspending of £1.418M is incorporated in the Statement
        of Accounts featured elsewhere on this agenda.

9.      Benefits

9.1     The carry forward proposals will assist both the Force and Authority in the
        recruitment/training of officers, force/authority performance and external inspections.

10.     Recommendations

10.1    Members are asked to:

(i)     note the overall final outturn for 2007/08 at paragraph 3.1;
(ii)    approve the proposals for the dealing with the variances as highlighted at section 4.2;
(iii)   approve the policy on reserves as highlighted at Appendix B; and
(iv)    approve the restatement of reserves as shown at paragraph 5.4.6

 Gillian Parker                                         Stephanie McMenamy
 Chief Constable                                        Chief Executive

                                                                                     Appendix A

                             Revenue Budget 2007/08 – Final Outturn

                                        Notes on Variations

The main variations are as follows;

Devolved Budgets

         •       Doctors Fees – the demand levels for this service have constantly increased
                 due to changes in Home Office codes of practice and whilst negotiations are
                 taking place with the service provider to re-address the demand levels within the
                 contract costs have exceeded budget in this area to in excess of £0.250M This
                 increase in costs is not isolated to Bedfordshire with increases in costs, at a
                 similar proportionate level being experienced by the South-East Region forces.
         •       Police Staff Costs – A net underspend of £0.160M on Police Staff Costs due to
                 the impact of vacancies throughout the year.
         •       Police Officer Costs – the Force continued to remain under strength in terms of
                 officer numbers and although some resources were redirected to fund overtime
                 and frontline agency staff such as investigation officers, the final outturn
                 provided an underspend of £0.250M.
         •       The PSA reward grant to be utilised for drugs and offender management
                 initiatives and in the area of witness has been committed but not actually spent
                 in the year, totalling some £0.200M.
         •       Underspends on supplies and services, mainly in the areas of I.T. and training
                 have more than offset a forecast overspend in premises costs and combined
                 with increased income relating to legal costs recovered, data protection and
                 seized vehicles makes up the remainder of the devolved budget underspend.

Corporate Budgets

             •    Police Staff Costs – The current level of PCSO numbers are below that
                  budgeted for at the start of the financial year and the grant received per PCSO
                  is based on an average salary that exceeds the current cost to the Force.
                  These two variations have resulted in this element of the budget being
                  approximately £0.280M underspent.
             •    Capital Financing – Loans to help finance the Capital Programme were not
                  required therefore providing an underspend totalling some £0.130M in relation
                  to interest not paid.
             •    Investment Income – Higher interest rates than anticipated combined with
                  money to invest has meant investment income was £0.250M higher than the
                  budgeted figure.
             •    Underspendings were also realised through the police pay award only being
                  effective from December rather than the planned date of September. However,
                  these savings were offset by increased police pension costs and the
                  redundancy costs in relation to the implementation of Corporate Services.

                                                                                     Appendix A(i)
                           2007/08 Revenue Budget Monitoring
                                      Final Outturn

The following table provides a brief analysis of the current forecasted outturn for each

                                Summary of Forecast Reports

                   Final         Outturn       Outturn
                  Outturn       compared      compared
                                    to         to Force
                                Divisional      Budget
                   £’000            %                %
Territorial Policing
         J Div       (329))         (1.46)           (0.36)     Mainly due to police officer and support
                                                                staff vacancies
        C Div           (68))       (0.43)           (0.07)     Mainly police officer vacancies
Citizen Focus          (200)         (4.7)           (0.22)     Wholly relates to committee spend under
                                                                the PSA reward grant

Protective Services
    Protective           250          1.08               0.27   Wholly relates to overspend on medical
     Services                                                   fees

Corporate Services
      People             (75)       (2.05)           (0.08)     Mainly due to underspending on external
     Services                                                   training courses
   Resources             (16)       (0.76)           (0.02)     Minor variations
      Estates              22         1.09             0.02     Minor variations
   Corporate               12         0.81             0.02     Minor variations
         IS/IT         (272)          (6.3)          (0.30)     Mainly due to Airwave maintenance as well
                                                                as high levels of vacancies throughout the

    Corporate          (703)        (7.47)           (0.77)     Majority relates to additional PCSO grant
     Budgets                                                    than that expected, greater investment
                                                                income than budgeted for due to delays in
                                                                capital programme spend which also
                                                                provided for underspendings in interest on

       Police            (39)         (4.6)          (0.04)
        Total         (1,418)       (1.55)           (1.55)

                                                                      Appendix B

                               Revenue Budget 2007/08

                              Provisional Carry Forwards

                                               £’000       £’000

Total Variance                                              (1,418)

Proposed Utilisation

Devolved Budgets                                  (493)

Capital Expenditure Reserve                       (450)

Police Authority                                   (40)

One – Off Performance Initiatives
  Tutor Constables                                (120)
  CBRN                                             (50)
  MOPI                                             (50)
  Project Support                                  (80)
  Interpreters                                     (50)
  Diversity                                        (10)
  Neighbourhood Policing                           (75)
  Communication/Problem Solving


                                                                            Appendix C

Policy for Reserves

The Authority hold a number of earmarked reserves as well as the Police Fund. The
reserves and the rationale for holding them and their prospective use are as follows:

                          General Reserves (Police Fund)

The Authority will hold a general reserve of between 2% & 5% of the net revenue

The Police Fund will be used for extraordinary expenditure arising from exceptional
circumstances that have not and cannot be funded from within the Authority’s and
Force’s agreed revenue budgets and capital programme.

                                 Earmarked Reserves

The Authority will hold four earmarked reserves, as follows:

•   Capital Expenditure Reserve – this reserve will be a revenue reserve but only
    utilised for funding one-off expenditure associated with the approved capital
    programme of the Authority.

•   Insurance Reserve – an insurance reserve will be held by the Authority to fund
    self-insurance liabilities arising from increases in insurance excesses and
    aggregate stop losses. The level of this reserve will be subject to regular fund
    adequacy audits by external advisers.

•   Pensions Reserve – a reserve to cater for exceptional costs associated with both
    police officer pensions and support staff redundancy/early retirements liabilities.

•   Collaboration/Performance Reserve – a reserve to assist with pump priming
    collaborations and one-off performance pressures that cannot be met from within
    agreed revenue and capital budgets, as well as to provide for any one-off costs
    associated with the Olympic Games in 2012.

•   Devolved Budgets Reserve – a reserve against which approved carry forwards
    will be held at the end of the financial year prior to them being added to the
    ensuing years budget.


Title of Board/Group                    :          Finance Committee

Date                                    :          24th June 2008

Agenda Item                             :          8

Report Author                           :          Chief Constable

Lead Officer                            :          Assistant Director - Resources

Subject                                 :          2007/08 Efficiency Plan –

Purpose                                 :          To inform members of the outturn
                                                   position of the 2007/08 Efficiency

Background Papers                       :          None

1.     Background

1.1    The efficiency target for 2007/08 is 3% of net revenue expenditure. Based on the net
       revenue expenditure for 2007/08 of £89.793M, this amounts to £2.694M.

2.     Efficiency Plan – 2007/08

2.1    The 2007/08 Efficiency Plan approved by the Authority included cashable savings of
       £3.295M and non-cashable gains of £3.439M.

2.2    This total of £6.734M represented efficiency savings of 7.4% against the Home Office
       target of 3%, and provides scope to assist in the achievement of
       efficiency/productivity savings required for future years.

2.3    It is necessary to monitor the achievement of the efficiency plan on two fronts:

       a) to ensure that the cashable savings have been achieved and the assumptions
          made in respect of the notional non-cashable gains have been met.

       b) to assess the performance in the Force during the year compared to the previous

2.4    The assessment process each year from the second quarter onwards now requires
       the Authority and Force to complete a quarterly self-assessment, for the Home Office
       that requires the signature of both the Chief Constable and Treasurer. The
       completed return for the fourth quarter which was required by the Home Office by the
       end of May is attached at Appendix 2.

3      4th Quarter – 2007/08

3.1    Details of the individual efficiency plan items, together with the final outturn, are
       provided at Appendix 1.

3.2    The final total of £10.512M (£3.320M cashable and £7.192M non-cashable) is an
       increase on the original plan of £3.778M. The increase is mainly due to the front line
       policing measure being 70% rather than the planned 68%. The requirement by the

       NPIA to include efficiency savings around Case and Custody and a higher level of
       carry forward, from 2006/07, than anticipated when the plan was produced.

3.3    The projected overachievement on our cashable savings of £1.951M can be carried
       forward and offset against the 3% target for 2008/09.

3.4    Full details of performance in the current year are reported to each Performance
       Committee by the Chief Constable.

4.     Final Assessment – 2006/07

4.1    At this stage we are still awaiting the official notification from HMIC that they have
       approved the outturn for 2006/07.

5.     Efficiency Plans 2008/09 Onwards

5.1    As previously reported to this Committee, whilst there is no requirement to have an
       efficiency plan for 2008/09, a report will continue to be presented to this Committee to
       show progress against the planned efficiency and productivity savings incorporated
       within the annual policing plan.

6.     Risk Assessment

6.1    Whilst the 3% target has been achieved we have to wait for official notification from
       the HMIC that they have approved our outturn for 2007/08. Before they do this they
       will review our efficiency plan in relation to our baseline assessment grades for

7.     Financial Implications

7.1    The 3% Efficiency Target has been achieved and based upon this a substantial
       amount can be carried forward into 2008/09.

8.     Conclusion

8.1    The Home Office Efficiency Target of 3% has been achieved in 2007/08, with actual
       savings of £10.512 or 11.7%.

8.2    The HMIC will inspect the outturn position alongside the force performance and the
       results of this inspection will be reported at a future meeting

9.     Recommendation

9.1    It is recommended that the report be noted.

G Parker
Chief Constable

2007/08 EFFICIENCY PLAN                                                                              APPENDIX 1


                           Project                         Planned savings in   Outturn                   Comment
                                                                2007/08         2007/08
                                                                 £000            £000
 1.   Carry Forward from 2006/07 Savings                          500             525     Reflects carry forward of over achievement
                                                                                          of 2006/07 savings.
 2.   Support Staff Vacancies                                     635             635
      Reductions to budget from the Value for Money
 3.   Pay Award Contingency                                       240             240
      Reductions to budget as part of the budget setting
 4.   Merging of B & D Divisions                                  140             140
      Reductions to budget from the Value for Money
 5.   Effective use of Officers on Restricted Duties              345             345
      Reductions to budget as part of the budget setting
 6.   Non-Pay Budget Reductions                                   555             555     This reflects actual budget reductions in
      Reductions to budget as part of the budget setting                                  2007/08.
 7.   Back Office Functions                                       180             180
      Reductions to budget as part of the budget setting
 8.   Corporate Services Model                                    200             200
      Reductions to budget from the Value for Money
 9.   Casualty Reduction Partnership                              300             300
      Reductions to budget as part of the budget setting
10.   Airport Policing                                            200             200
      Reductions to budget as part of the budget setting
      Total Cashable Savings                                     3,295           3,320

2007/08 EFFICIENCY PLAN                                                                               APPENDIX 1

                  Project                                  Planned savings in   Outturn                  Comment
                                                                2007/08         2007/08
                                                                 £000            £000
 1.   Carry Forward from 2006/07 Savings                         1,700           3,225    Reflects carry forward of over
                                                                                          achievement of 2006/07 savings.
 2.   PCSO’s                                                      738             735     There was one less PCSO in the last
      Increased numbers of PCSO’s will allow Police                                       intake than planned, therefore the saving
      Officers to be utilised for other functions                                         has been reduced slightly.
 3.   Frontline Policing                                          342            1,733    The drive around FLP in terms of mobile
      Increase in FLP by 1% 2006/07 to 2007/08                                            data and other initiatives has resulted in
                                                                                          the draft FLP figure of 70% for 07/08
                                                                                          some 2% better than forecasted.
 4.   Highways Agency                                              9              14      The AA campaign for motorway officers
      Introduction of the Highways Agency should free                                     showed a reduction of time spent on the
      up Motorway officers to be utilised on other                                        jobs that are now the Highways
      activities                                                                          Agency/shared responsibility.
 5.   Mobile Data                                                 113             340     The saving has been increased to reflect
      Use of Blackberry’s by officers should increase                                     the increase in time out of station.
      the time out of station
 6.   Improved Fingerprint Technology                              7               2      Liftscan in place from 1.4.07, the saving
      Use of technology such as Liftscan and the DMA                                      from DMA has been removed as not as
      upgrade.                                                                            high as anticipated.
 7.   Volume Crime Forensics                                      200             200     New process in place from 1.4.07,
      Reduction in the level of submissions to forensics                                  planned gain has been achieved.
 8.   Centralised MIT & PPU Units                                 300             250     MIT & PPU in place from 1.4.07, the
      Introduction of a centralised MIT & PPU,                                            gain has been reduced slightly due to
      improving performance in major incidents and                                        the number of staff being abstracted
      protecting vulnerable persons                                                       from Divisions.
 9.   Inkjet Printers                                             30              14      Only 40 printers have been removed at
      Replacement of inkjet printers with laser printers                                  the end of March, therefore the gain has
                                                                                          been reduced.
10.   OGC Buying Solutions                                         0              70      Savings achieved in Quarter 4 2007/08
      Use of OGC Buying Solutions frameworks and
11.   Digital Camera’s                                             0               6      All SOC officers were trained on the use
      Replacement of SLR camera’s with digital                                            of the digital cameras by the end of

         camera’s for all the SOC officers                                                                                                   September. Therefore the part year gain
                                                                                                                                             has been achieved.
 12.     NSPIS Case & Custody                                                       0                                   603                  Savings achieved during 2007/08, taken
         Introduction of the NSPIS Case & Custody                                                                                            from the NPIA template.
         Total Non-Cashable Savings                                               3,439                                7,192
         TOTAL EFFICIENCY SAVINGS                                                 6,734                               10,512
                                                                                                                           APPENDIX 2
                                           HMIC Force/Authority - Efficiency Plan Quarterly (Self Assessment)
Authority/Force:- Bedfordshire                                                     Likelihood of achievement of target for 2007/08 Yes/No
                                                                                                     (circle as appropriate)
                                                                                                         Q2 Q3 Q4
HMI:- Woking                                                                                         (circle as appropriate)

2007/2008 Net Revenue Expenditure (outturn)                                               £m 89.793
3% Target                                                                                 £m 2.694
A – Cashable gains carried forward from 2006/07 (See note 1)                              £m 0.525
B – Non-cashable gains carried forward from 2006/07 (See note 1)                          £m 3.225
C - Total Cashable Gains (See Note 2)                                                     £m 3.320
D - Total Non Cashable Gains linked to FLP                                                £m 2.073
E - Total Non Cashable Gains linked to BA                                                 £m 5.119
F - Total Non Cashable Gains (D+E) 1                                                      £m 7.192
G Total Efficiency Gains (C+F) (See note 3)                                               £m 10.512
Efficiency Gains linked to BTF recommendations (See Note 4)                               £m 1.075

Q1      Comment on progress of Efficiency Plan so far. (Any changes                       The Force have vastly exceeded the target of £2.694M for financial
to the overall plan, as approved by the Authority, should be attached)                    year 2007/08. This is mainly due to a vastly improved front line
                                                                                          policing outturn than envisaged. In addition to this the Force benefited
                                                                                          from a large carry forward from 2006/07 as well as the additional
                                                                                          inclusion of Case and Custody savings as requested for inclusion by
                                                                                          the NPIA

Note 1: Use the surplus carried forward figure shown on the HMIC certificate for 2005/06. The carry forward surplus (items A plus B) can not be exceeded but Forces may split this
between cashable and non-cashable In addition you may add FLP gains (net of items scored elsewhere in the efficiency plan).
Note 2: After adding any cashable carry forward from 05/06, should be at least 1.5% of NRE
Note 3: After adding any carry forward from 05/06, should be at least 1.5% of NRE
Note 4: The value of gains, included within the total at G, that derive from Bureaucracy Task Force recommendations.
Please use a maximum of 250 words to answer question in box opposite

Q2      If the projected total cashable gains at C above are The cashable savings are as per the signed cashable certificate.
significantly different from the cashable gains certificate provided at
the end of first quarter, or involve new or different measures from
those underpinning the cashable certificate, certified by the Chief
Officer and Treasurer, identify the changes and confirm they comply
with the terms of the certificate.

Please use a maximum of 250 words to answer question in box opposite

Q3      For each non-cashable gain over £100k [£1m Met Police only]     The 3 main non cashable savings are comprised of: 1) increasing
(other than FLP linked gains), please confirm that arrangements to      PCSOs – this has been monitored by the Neighbourhood Policing
manage any risks to force performance detailed in the EP are being      Programme Board in terms of actual PCSO recruitment and
implemented. Or, if risk management arrangements were not specified     deployment throughout the year. 2) Forensics – new processes were
in the EP, what arrangements are now in place? What triggers are in     put into place from 1 April 2007 which have reduced the number of
place?                                                                  submissions to the laboratory. This has been monitored monthly with
                                                                        spending levels being as anticipated. 3) Centralised MIT – the level of
                                                                        abstractions to major incidents are regularly monitored and have been
                                                                        enhanced following the collaboration with Hertfordshire in November,
                                                                        although the initial set up of the major incident team in Bedfordshire
                                                                        didn’t quite show the level of reduction in abstractions as expected
                                                                        due to existing major incidents.

Please use a maximum of 250 words to answer question in box opposite

Q4     What progress has been made to implement the action plan to The planned front line policing measure for the Force was prudent,
increase front line policing as recorded by the FLP measure?       due to pressures around Neighbourhood Policing and Protective
                                                                   Services. However, training and refresher information is given on a
                                                                   regular basis as to how time should be recorded under the activity
                                                                   analysis programme to ensure recording issues are as accurate as

                                                                          possible. In addition a considerable amount of work has been
                                                                          undertaken in relation to managing absence levels across the force.
                                                                          This as well as the roll-out of mobile data terminals has had a vast
                                                                          impact on the FLP measure for Bedfordshire in 2007/08 with a draft
                                                                          percentage of 70% compared to a planned figure of 68%.

Please use a maximum of 250 words to answer question in box opposite

Q5     For any gains in relation to which the Efficiency Planning         The Force has monitored the efficiency plan on a quarterly basis
guidance requires:                                                        completed in conjunction with the Finance Department, Performance
              a) HMIC to be satisfied that despite the baseline           Unit and Divisional Commanders. For non-cashable savings detailed
              assessment grading of a function a particular efficiency    information has been analysed to ensure that both the predicted
              gain has been demonstrated; or                              savings were being realised. A portfolio of evidence for each non-
              b) HMIC to be satisified that the planned gains did not     cashable saving is maintained to assist the reporting of the efficiency
              cause or contribute to a poor or declining baseline         plan performance to the Authority’s Finance Committee and
              assessment                                                  subsequently the full Police Authority

         How do you propose to so satisfy HMIC at the year end?

Please use a maximum of 250 words to answer question in box opposite

Q6      How is the Authority being kept informed of progress of the The Finance Committee has received a report at each of its meetings
efficiency plan (including performance) and changes in the frontline regarding progress against the approved plan. Issues such as FLP
policing measure?                                                    and overall performance have been reported regularly to the
                                                                     Performance Committee.

Please use a maximum of 250 words to answer question in box opposite

Signed......................... (Chief Officer)         Signed.............................. (Treasurer)

Date...............................                     Date...................................


Committee:                               Finance Committee
Date:                                    24 June 2008
Agenda Item:

Report Author:                           Chief Executive/Treasurer

Lead Officer:                            Deputy Treasurer

Subject:                                 2007/2008 Statement of Accounts

Purpose:                                 To consider the Statement of Accounts for

Background Papers:                       None

1.    Introduction

1.1   This report presents and comments on the Authority’s draft accounts for the year
      ended 31 March 2008.

1.2   The Accounts and Audit Regulations 2006 require the Authority to approve the final
      accounts for the year ending 31 March 2008 before 30 June 2008. The Authority are
      also required to publish the Statement of Accounts prior to 30 September 2008.

1.3   The formal audit of the Accounts by the Audit Commission is expected to commence
      on 21 July 2008 and last for approximately 4 weeks.

2.    Basis of the Accounts

2.1   The accounts are compiled and presented in accordance with the Statement of
      Recommended Practice (SORP) – The Code of Practice on Local Authority
      Accounting, as published by the Chartered Institute of Public Finance and
      Accountancy (CIPFA).

3.    Final Outturn 2007/08

3.1   The final outturn for the Authority is shown elsewhere on this agenda and reports that
      compared with a final budget of £91.211M the actual outturn was £89.793M providing
      a total underspending of £1.418M. It is suggested in the report of the final outturn how
      this underspending should be treated and the accounts reflect this proposal.
4.      Statement of Accounts

4.1     The Accounts and Audit Regulations 2006 and SORP state that the accounts must
        include the following:

        •   An explanatory foreword;
        •   A statement of Accounting Policies;
        •   A Statement of Responsibilities;
        •   An Income & Expenditure Account;
        •   A Statement of Movement on the General Fund Balance;
        •   A Statement of Total Recognised Gains and Losses;
        •   A Balance Sheet;
        •   A Cash Flow Statement;
        •   An Annual Governance Statement;
        •   Notes to the Accounts; and
        •   A separate Pensions Account for the Police Pensions Scheme

4.2     Explanatory Foreword

4.2.1   The explanatory foreword within the accounts highlights what is contained in the
        accounts and provides an overview of the financial position of the Authority in the
        financial review.

4.3     Statement of Responsibilities

4.3.1   This section of the accounts provides a very brief outline of the responsibilities of both
        the Treasurer and the Police Authority.

4.4     Annual Governance Statement

4.4.1   The Authority is responsible for putting in proper arrangements for the governance of
        its affairs, facilitating the effective exercise of the Authority’s functions and which
        includes arrangements for the management of risk and incorporating this in to an
        overarching Code on Corporate Governance, which is reviewed at least once per
        annum, from which an Annual Governance Statement is produced.

4.4.2   A full review of the Code on Corporate Governance has been undertaken and
        reported to the Audit & Business Assurance Committee who approved it at their
        meeting on 10 June 2008.

4.5     Accounting Policies

4.5.1   The accounting policies are the basis on which the accounts are compiled and are
        specified in the SORP. The accounting policies for 2007/08 have also been reviewed
        by the Audit & Business Assurance Committee and were endorsed at their meeting
        on 10 June 2007.

4.6     Income and Expenditure Account and Notes to this Account

4.6.1   This Account provides a summary of the Authority’s income and expenditure for the
        year 2007/08 and a comparison with 2006/07. Charges for, revaluations and disposal
        of, fixed assets are now dealt with through the Statement of Movement on the
        General Fund Balance and the Statement of Recognised Gains and Losses, as well
        as the movement on reserves.

4.6.2   The statutory format for the presentation of the Income and Expenditure account is as
        set out by CIPFA’s Best Value Accounting Code of Practice, as shown at page 19.
        This is compiled using activity based costing data used within the Home Office annual
        return and is in this format to allow inter force comparison.
4.6.3   The Income and Expenditure account is also shown in a subjective format in order for
        the reader of the accounts to determine how much we spend on police pay, premises
        etc. The notes to the account are to assist in the explanation of the items included.

4.7     Balance Sheet and Notes to the Balance Sheet

4.7.1   The Balance Sheet and Balance Sheet notes provide details of the financial position
        of the Authority as at 31 March 2008. It provides details of the assets, both fixed and
        current, held by the Authority, its liabilities and how these are funded.

4.7.2   The balance sheet shows that the Authority has negative equity, however, this is
        purely due to the fact that under Financial Reporting Standard 17 (FRS17) the
        Authority have to show its full pension liability. However, the financing of pensions is
        only required when the pensions are actually paid, therefore when this liability is
        excluded the net equity of the Authority is £37.2M.

4.8     Pensions Account

4.8.1   This account basically provides more detail around the expenditure and income
        associated with the Police Pensions Scheme, rather than, as with previous practice,
        just shown as a one line entry in the Income and Expenditure Account.

4.9     Cash Flow Statement and Notes to Cash Flow Statement

4.9.1   This statement summarises the inflow and outflow of cash during 2007/08 and
        removes any accruals from those figures included within the other statements in the

5.      Audit of Accounts

5.1     The timetable for the audit of the 2007/08 accounts is as follows:

        Official start of the audit                        21 July 2008

        Start of Public Inspection                         7 July 2008

        Completion of Audit                                22 August 2008

        Final day for Public Inspection of the Accounts    1 August 2008

        Date for Exercise of Public Rights                 4 August 2008

5.2     The audit opinion is expected during September 2008 and will be considered by the
        Audit & Business Assurance Committee also in September.

6.      Risk Assessment

6.1     The Accounts have been compiled in accordance with the appropriate Codes of
        Practice and by qualified Public Sector Accountants and therefore the risk likelihood
        is low, however the Accounts are subject to Audit scrutiny.

7.      Financial Implications

7.1     There are no financial implications associated with this report.
8.     Benefits

8.1    That Members have the ability to scrutinise the Statement of Accounts prior to its
       approval and audit process.

9.     Recommendation

9.1    That the Statement of Accounts be approved subject to audit by the Audit

Stephanie McMenamy
Chief Executive / Treasurer



                    STATEMENT OF ACCOUNTS – 2007/2008


Explanatory Foreword                                                 2

Financial Review                                                     3

Statement of Responsibilities                                        7

Annual Governance Statement                                          8

Statement of Accounting Policies                                     15

Audit Opinion                                                        21

Income and Expenditure Account

  - CIPFA Best Value Accounting Code of Practice                     22

  - CIPFA Subjective Classification                                  23

Statement of Movement on the Police Fund Balance                     24

Statement of Total Recognised Gains and Losses (STRGL)               25

Balance Sheet                                                        26

Cash Flow Statement                                                  27

Notes to the Accounts                                                28

Pension Fund Accounting Statement                                    46

External Advisers                                                    47

Glossary of Terms                                                    48

                                Peter Conniff
       Gillian Parker                           Stephanie McMenamy, ACMA
      Chief Constable                                   Treasurer

Explanatory Foreword
The Accounts of the Police Authority for 2007/08, which will be the basis for the Audit
Opinion, are set out on Pages 2 to 45. They consist of:

(i)      Financial Review – this outlines the Revenue and Capital spending in 2007/08
         and the financing, the major changes to the Accounts from 2006/07 and
         future prospects for the Authority (page 3)

(ii)     Statement of Responsibilities - this includes the financial responsibilities of the
         Police Authority and the Treasurer (page 7)

(iii)    Annual Governance Statement – this statement sets how the Authority has
         ensured that it has proper arrangements for governance of its affairs allowing
         it to effectively exercise its functions including the arrangements for the
         management of risk, during the financial year (page 8)

(iv)     Statement of Accounting Policies - the policies adopted in compiling the
         Accounts (page 15)

(v)      Audit Opinion - the statutory opinion for the Statement of Accounts (page 21)

(vi)     Income and Expenditure Account – The account summarises the Income and
         Expenditure for the year (pages 22/23). This is presented both in the CIPFA
         Subjective Classification and in accordance with the Best Value Accounting
         Code of Practice. In order to give a full presentation of the financial
         performance of the Authority during the year the balance on the income and
         expenditure account needs to be reconciled to the net expenditure position
         shown in the Statement of Movement on the Police Fund Balance.

(vii)    Statement of Movement on the Police Fund Balance – this statement
         summarises the differences between the outturn on the Income and
         Expenditure account and the net expenditure position on the Police Fund
         Balance (page 24).

(viii)   Statement of Total Recognised Gains and Losses (STRGL) - this statement
         shows the total recognised gains and losses during the year, including those
         that have not been reflected in the Income and Expenditure account (page

(ix)     Balance Sheet - Assets and Liabilities of the Authority at 31st March 2008
         (page 26)

(x)      Cash Flow Statement - the inflows and outflows of cash for revenue and
         capital purposes (page 27)

(xi)     Notes to the Accounts – The notes that support the core financial statements
         (page 28).

(xii)    Police Pension Fund Accounting Statement - Accounting statement for the
         Police Pension fund in accordance with the Police Financing Arrangements
         (page 45).

Financial Review
Revenue Expenditure
The 2007/08 Revenue Budget was set at £91.229M. Over spends of £0.019M from
2006/07 were carried forward providing a full budget for 2007/08 of £91.210M. Actual
expenditure for the year was £1.418M lower at £89.792M.

The financing of Revenue Expenditure was as follows:

Expenditure                                            89.792
Transfers to Reserves                                  /1.437
Net Expenditure                                        91.229
Met From:
      Home Office Grant                                39.321
      Revenue Support Grant                            (3.887
      Business Rates                                   23.163
      Council Tax                                      24.858

Net Surplus for the year                                  -

The underspend for the year of £ 1.418M arose in the following areas:

 Neighbourhood Policing Fund                           (0.286)
 Police Pay                                            (0.250)
 Police Staff                                          (0.160)
 Investment Income                                     (0.248)
 Specific Costs                                        (0.198)
 IS/IT                                                 (0.272)
 Interest Payable                                      (0.230)
 Training                                              (0.141)
 Other                                                 (0.095)
 Income                                                (0.266)
 Medical Fees                                           0.278
 Pension and Redundancies                               0.450

Transfers to/from Earmarked Reserves comprised:
 2006/07 Net Overspend                                 ((0.19))
 2007/08 Underspend                                    (1.418)
 Transfer to Insurance Reserve                         (0.385)
 Transfer to Capital Reserve                           (0.215)
 Chiltern Air Support – Revenue                        (0.003)
 Chiltern Air Support – Capital                         0.048
 Net transfer to Earmarked Reserves                    (1.992)

Police Fund
A transfer of £0.166M from earmarked reserves was made in 2007/08 and therefore
the Police fund now stands at £2.659M.

Capital Expenditure
Capital expenditure in the year amounted to £2.148M, compared with an original
programme of £7.779M. Payments are analysed on page 33.

Financial Review
The financing of Capital Expenditure was as follows:
 Capital Grants                                         1.148
 Borrowing                                              1.000
 Total                                                  2.148

Pension Reserves
The balance sheet includes a liability of £512.8M which is the commitment that the
authority has in the long-term to pay retirement benefits. This liability has a substantial
impact on the net worth of the Authority as recorded in the balance sheet, resulting
in a negative overall balance of £475.5M. However, statutory arrangements for
funding the deficit mean that the financial position of the Authority remains healthy
as the deficit of the LGPS will be made good by increased contributions over the
remaining working life of employees, as assessed by the scheme actuary. Finance is
only required to be raised to cover police pensions when the pensions are actually

Changes compared to 2006/07
The accounting policies were amended to take into account the following changes:
• Measurement of Fixed Assets
   The 2007 SORP requires the Fixed Asset Restatement Account to be replaced with
   a Revaluation Reserve which holds revaluation gains from 1 April 2007. Gains
   arising before this date (£35.841M) have been consolidated into the Capital
   Adjustment Account which was previously named the Capital Financing
   Account. This change has required the 2006/07 figures for these accounts to be
• Financial Instruments
   The SORP now requires the Authority to classify its financial instruments and then
   determine the measurement basis for each class of instrument. Whilst this is a
   change to previous practice, there is no impact to the Authority’s portfolio as the
   value of borrowing and investments are to be shown at amortised cost, as in
   previous years. However, the Authority is now also required to disclose the fair
   value of these loans and investments, which are detailed at note 28.
• Minimum Revenue Provision (MRP)
   MRP was previously calculated at 4% of the Capital Financing Requirement (CFR).
   The new statutory requirement is for individual Authority’s to determine its own
   MRP that it feels is prudent and that this should be agreed by the Authority. The
   Authority have agreed that 4% of CFR is still the most prudent approach for
   2007/08 and therefore this change has no impact on the accounts.

In the 2006/07 accounts, costs for the Training Department were included in “Other
Employee Expenses” in the Subjective Classification of the Income and Expenditure
Account. This was changed at the start of 2007/08 and training costs are now split
over the relevant headings e.g. pay, supplies and services etc. Therefore the 2006/07
figures in the subjective Income and Expenditure Account have been restated to
treat training costs in the same way as in 2007/08 in order that the figures are

Treasury Management
Treasury Management covers borrowings, investment, interest rate exposures, cash
balances, cash flow forecasting and banking relationships. The Chartered Institute of
Public Finance and Accountancy (CIPFA) has published a Code of Practice entitled
‘Treasury Management in the Public Services’ and the Authority has adopted the
Code as part of its Financial Regulations. In compliance with the Code requirements,
Treasury Management operations are carried out within an annually approved
Treasury Policy Statement which formalises the Treasury Management Strategy for the

Financial Review
A Treasury Management Financial Instruction sets out the detailed procedures to be
followed in carrying out the Treasury Policy of the Authority to ensure compliance with
the Treasury Policy Statement and Treasury Management Strategy for the year.

Details of Authority Borrowing are shown at note 28.

Bedfordshire Police Partnership Trust
Bedfordshire Police Partnership Trust is a charitable organisation supported by the
Police Authority with some of the County’s best known companies acting as founder
members. The objective of the Trust is to concentrate its efforts on community-based
issues relating to crime prevention, road safety, drugs awareness and other important
areas that have a direct bearing on the quality of life. The Force supports the day to
day administration of the Trust by providing a part time co-ordinator and
accommodation. A separate set of audited Accounts is published and can be
obtained from the Trust Co-ordinator via the Treasurer.

Future Prospects
Again for 2008/09, the Authority in setting its budget and level of spending has had to
balance the increasing demands on the Police Service with its impact on the Council
Tax. The actual Council Tax level set by the Authority to provide a one-off increase to
improving the policing services in Bedfordshire, has been questioned by Central
Government and business cases have been submitted by the Authority to justify such
an increase. There are still uncertainties about continuation of grant in excess of
£10.5M that provides for 150 police officers and 152 police staff and other non-staff

Excluding those reserves relating to retirement benefits, in accordance with FRS17,
and the Chiltern Air Support Unit, in accordance with FRS9, the operational reserves
and provisions of the Authority at 31st March 2008 remain broadly consistent with that
envisaged when the Budget was agreed except for the effect of the expected
spend on the Greyfriars replacement project slipping into future years. Police Fund
Balance totals £2.659M, Earmarked Reserves total £7.939M (as detailed on page 42)
and Provisions of £0.744M (as detailed on page 36)

Financial Review
Further information
Additional information on revenue and capital expenditure is detailed in the notes to
the accounts. Further information may be obtained from:

           Chief Executive/Treasurer
           Bedfordshire Police Authority
           Bridgebury House
           Woburn Road
           MK43 9AX

Any person interested also has a statutory right to inspect the Accounts at Police
Headquarters, Woburn Road, Kempston before the completion of each annual Audit
as publicly advertised. The Accounts are available for inspection during the period
7th July to 1st August 2008.

I certify that these accounts present
fairly the financial position of the
Authority as at 31 March 2008 and its
income and expenditure for that

Stephanie McMenamy
24th June 2008

I confirm that these accounts were
approved      by     the   Finance
Committee at its meeting on 24th
June 2008

Robin Younger
Chair of the Finance Committee
24th June 2008

Statement of Responsibilities
The Authority’s Responsibilities

The Authority is required:

•   to make arrangements for the proper administration of its financial affairs and to
    secure that one of its officers has the responsibility for the administration of those
    affairs. In this Authority, that officer is the Treasurer;

•   to manage its affairs to secure economic, efficient and effective use of resources
    and safeguard its assets;

•   to ensure that there is an adequate annual governance statement;

•   approve the statement of accounts.

The Treasurer’s Responsibilities

The Treasurer is responsible for the preparation of the Authority’s statement of
accounts in accordance with proper practices as set out in the CIPFA/LASAAC Code
of Practice on Local Authority Accounting in the United Kingdom (the SORP).

In preparing this statement of accounts the Treasurer has:

•   selected suitable accounting policies and then applied them consistently;

•   made judgements and estimates that were reasonable and prudent;

•   complied with the local authority SORP.

The Treasurer has also:

•   kept proper accounting records which are up to date;

•   taken reasonable steps for the prevention and detection of fraud and other

Annual Governance Statement
1.      Scope of Responsibility

Bedfordshire Police Authority is responsible for ensuring that its business is conducted
in accordance with the law and proper standards, and that public money is
safeguarded and properly accounted for, and used economically, efficiently and
effectively. The Authority also has a duty under the Local Government Act 1999 to
make arrangements to secure continuous improvement in the way in which its
functions are exercised, having regard to a combination of economy, efficiency and

In discharging this overall responsibility, the Authority is also responsible for putting in
proper arrangements for the governance of its affairs, facilitating the effective
exercise of the Authority's functions, and which includes arrangements for the
management of risk.

2.      The Purpose of the Governance Framework

The governance framework comprises the systems and processes, and culture and
values, by which the Authority is directed and controlled and its activities through
which it accounts to, engages with and leads the community. It enables the authority
to monitor the achievement of its strategic objectives and to consider whether those
objectives have led to the delivery of an appropriate, cost-effective service.

The system of internal control is a significant part of that framework and is designed to
manage risk to a reasonable level. It cannot eliminate all risk of failure to achieve
policies, aims and objectives; it can therefore provide only reasonable and not
absolute assurance of effectiveness. The system of internal control is based on an
ongoing process designed to identify and prioritise the risks to the achievement of the
Authority's policies, aims and objectives, to evaluate the likelihood of those risks being
realised and the impact should they be realised, and to manage them efficiently,
effectively and economically.

The governance framework has been in place within Bedfordshire Police Authority for
the year ended 31st March 2008 and up to the date of approval of the statement of

3.      The Governance Framework

The key elements of the six core principles set out in the Code of Governance are as

Focusing on the purpose of the Authority and on outcomes for the community and
creating and implementing a Vision for the local area

           The Authority through consultation with the public and businesses produces
           an annual policing plan and three year strategic plan that provide clarity
           around the Authority’s purpose, vision and objectives for the forthcoming
           The publication of the Authority’s key principles in its strategic and local
           plans incorporating national policing priorities.
           The setting and monitoring of targets are subject to close scrutiny by the
           Performance Committee.
            Regular independent reports from Internal and External Audit with follow
           up processes
           The Police Authority has an approved Risk Management Strategy.

Annual Governance Statement
         The Audit and Business Assurance Committee receives regular reports on
         the combined strategic risks of the Force and Authority and the individual
         operational risks of both Force and Authority as well as a breakdown of risks
         aligned to objectives. All strategic risks are owned and reviewed by
         relevant committees of the Authority.
         Established a Value for Money structure approach that also provides for
         scrutiny and provides a business assurance role for the Audit and Business
         Assurance Committee.
         Completion of the Audit Commission Use of Resources programme
         Internal and External audit Reviews
         Medium Term Financial Planning for both Revenue and Capital budgets.
         An agreed Committee structure with Terms of Reference that provide for
         performance management on all key areas of the business.
          Performance Committee that regularly scrutinises overall performance
         and activity data

Members and officers working together to achieve a common purpose with clearly
defined functions and roles

          Regular meetings of both the Force Executive and Force Strategy Board
         The development of a Police Authority business plan.
         Distinct portfolios for each member of the Force Executive.
         Annual self-assessment of Committee Effectiveness and a review of its
         Internal Controls.
         Self-assessment of the Authority’s performance management
         Introduction of a Lead Member Scheme
          HR Planning and Deployment Group
          Scheme of delegation
          Relationship protocol
          Full engagement with Partners through CDRPs & LAAs
          Collaboration Governance Arrangements

Promoting values for the Authority and demonstrating the values of good governance
through upholding high standards of conduct and behaviour

         The use of the Equality and Diversity Programme Board to oversee all
         diversity issues both internally and in service delivery.
         Professional staff in key support areas
         Comprehensive policies and procedural guides.
         The Authority has a monitoring officer to whom all Committee reports are
         sent prior to actual meetings.
         The Force’s Professional Standards Department which is responsible for
         investigating complaints against the police and internal conduct issues.
         The Force has a policy and means of confidential reporting.
         Mechanism for Audit and Business Assurance Committee to receive regular
         updates to progress on audit recommendations and the ability to bring
         action owners to account.
         Financial regulations and Financial instructions.
         Financial Management Scheme for devolved budgets
         The adoption of CIPFA’s Code on Treasury Management. Approved
         Treasury Management Policy, Strategy and Management Practises.
         Codes of Conduct for Staff and Members and polices on gifts and
         The Authority has a Standards Committee.

Annual Governance Statement
Taking informed and transparent decisions which are subject to effective scrutiny and
managing risk

          Specified terms of reference for all committees approved by the Police
          Schemes of delegation
          Schemes of Delegation and key responsibilities for Force Executive
          A Risk Management Board, reflecting the full spectrum of operational
          policing, strategic issues, support services and the Authority, regularly
          reviews areas of risk and feeds into the Force Executive
          Written reports to Committees available for public scrutiny

Developing the capacity and capability of Members and Officers to be effective

          The creation of a Member Development Scheme
          Regular workshops for Members and Force Portfolio Holders.
          Performance Development Reviews for all staff

Engaging with local people and other stakeholders to ensure robust public

           Separate Committee of the Authority for Community Engagement with
           Terms of Reference covering: Community Engagement, Partnership,
           Consultation and Communications.
           Joint Community Engagement Strategy with the Force.
           Regular stakeholder surveys

4. Review of Effectiveness

    The Authority has a responsibility for conducting, at least annually, a review of the
    effectiveness of its governance framework including the system of internal control.
    The review of effectiveness has been informed by the work of the internal auditors
    and the managers within the Authority and Force as well as the External Auditors
    and other review agencies. Brief comments on their roles are as follows:

♦   Police Authority

    The Police Authority approves the annual revenue budget, 3-year capital
    programme, the annual policing plan and the human resources plan each year.
    Regular monitoring and progress against these plans and strategies are carried
    out by the appropriate committees. The Authority and Chief Constable also
    produce annual reports at the end of each financial year.

    A new structure for Value for Money has been approved as well as the
    introduction of a lead member scheme to assist with scrutiny and closer working
    to achieve a common purpose.

    As part of the Authority’s value for money strategy a full review of back office
    functions has been undertaken which has resulted in the implementation of a
    Corporate Services structure.

Annual Governance Statement
    The Authority continues to work closely with the Chief Constable to ensure that
    the organisation is able to deliver an effective service through the use of
    environmental scanning and the views of the public of Bedfordshire and key
    partner agencies.

    A review of all of the Authority’s individual Committees has been undertaken
    during 2007/08 assessing the ability of the Committee to fulfil its terms of reference
    as well as reviewing the risks for which it is responsible and incorporating a self-
    assessment of its own performance.

    The Audit and Business Assurance Committee receive all reports of the internal
    and external auditor, annually review the effectiveness of both the internal and
    external audit functions and also in conjunction with the internal and external
    auditors the effectiveness of the management role.

♦   Force Executive
    The Force Executive comprises the Chief Officers who are responsible for the clear
    leadership of the Force, to provide early identification of strategic issues and to
    ensure that objectives flowing from the annual and strategic plans are delivered.

    A review of the Force Executive portfolios has been undertaken which has led to
    four distinct portfolios, these being Protective Services, Territorial Policing,
    Collaboration/Performance Management and Corporate Services.

♦   Risk Management Board
    During the financial year work has continued around ensuring risk management
    remains embedded within the organisation. The implementation of the bow tie
    methodology for risk management has provided for a greater ability to embed
    risk throughout the organisation.

    The Force Risk Manager continues to attend meetings with each of the Divisions
    to assist in the understanding of the risk management framework and to assist in
    driving out both the risks and opportunities within individual Divisional areas of

    To ensure, risks are considered with performance and the strategic objectives of
    the Force as well as to aid decision making and increase the ownership of risk
    management, the Force Executive and the Force Strategy Board now receive all
    risk registers.

    Each Committee of the Police Authority now reviews its own strategic risks on an
    annual basis as well as them being reviewed quarterly by the Audit and Business
    Assurance Committee. This, along with the Force Executive and Strategy Board
    reviewing all risks, provides for greater ownership across both the Authority and
    Force for risk management.

♦   Internal Audit
    Various internal audits were undertaken during 2007/08 reviewing both financial
    and non-financial controls. These audits are undertaken in adherence to CIPFA’s
    Code of Internal Audit Practice and the Accounting Practices Board guidelines
    for Internal Auditors.

    The audits continue to be undertaken on a risk-based approach in order that an
    effective audit service is provided, in accordance with section 114 of the Police
    Act 1996.

Annual Governance Statement
    The Internal Auditor in his annual report has stated that for the 12 months ended
    31 March 2008 Bedfordshire Police Authority had adequate and effective risk
    management, control and governance processes to manage the achievement
    of the organisation’s objectives.

♦   External Audit
    The District Auditor agreed the annual audit plan with Authority members and
    provided an unqualified opinion on the 2006/07 final accounts with very few
    weaknesses identified.

    The District Auditor provided their opinion on the Authority’s use of resources for
    2006/07 which showed that the Authority scored above average in all 5 areas

♦   HMIC
    All HMIC reports are considered by the Performance Committee who may under
    their terms of reference either take action or make any recommendations to the

    The Force has developed a tracker system that details all recommendations,
    areas for improvement and work in progress highlighted by the HMIC and
    monitors progress against these at the Force Business Change Sponsoring Group
    and via the three force programme boards.

    From 2007, HMIC moved from conducting high level inspections across a wide
    area of policing to concentrating its resources on key areas of risk. Phase 1 of
    these programmed inspections, in 2007, considered Neighbourhood Policing,
    Performance Management and Protecting Vulnerable People (covering Child
    Abuse, Domestic Violence, Public Protection and Missing Persons).

    The HMIC, in October 2007, issued its Phase 1 inspection reports. The outcome
    showed that Bedfordshire was graded poor in neighbourhood policing and
    domestic violence and fair in the remaining areas.

♦   Progress on Weaknesses Previously Identified
    The Statement on Internal Control for 2006/07 included 4 weaknesses against
    which action has been taken and has been reported to the Authority via various
    Committees, as follows:

       Tackling Serious and Organised Criminality

       The Force has collaborated on major crime with Hertfordshire and to date one
       of the weaknesses for Bedfordshire around major crime investigation, that of
       abstractions, has been addressed. Both forces have also benefited
       significantly from the resilience this collaboration has provided across the two

       The Force has created a dedicated Serious and Organised Crime Unit dealing
       with level 2 criminality which has undertaken a number of successful pro-
       active operations during 2007/08.

       In relation to Proceeds of Crime the Force has met the 2007/08 targets,
       imposed on it nationally, around volume and value of confiscations of both
       cash and assets.

Annual Governance Statement
       Protecting Vulnerable People

       A centralised Public Protection Unit has been created which has provided a
       consistent approach, across the organisation, for dealing with vulnerable
       people. It has also addressed a key weakness being the backlog around
       Domestic Violence at Luton for which measures have been put into place
       and this remains under control.

       Both of these areas featured heavily as part of the 2008/09 budgetary process
       to ensure that improved performance levels are sustained without impacting
       on other areas of operational policing.


       The Human Resources Committee has received regular reports on the
       progress being made to address the recommendations highlighted in the
       internal audit report. Considerable progress has been made in the areas
       highlighted although further work still continues around a skills matrix for the

5. Significant Governance Issues

•   Implementation of Neighbourhood Policing
    This area was graded by the HMIC as poor due to expected structures and
    processes not being in place at the time of the inspection. Processes have been
    put into place under the leadership of the Assistant Chief Constable (Territorial
    Policing) to address the performance in this area. A re-assessment undertaken by
    the HMIC would suggest that vast improvements have been made in
    Neighbourhood Policing although the Authority and Force will monitor this to
    ensure it is sustained

•   Protecting Vulnerable People
    This is another area that was graded as poor by the HMIC and is mainly linked to
    performance around domestic abuse. Processes have been out into place in the
    latter half of 2007/08 that again have shown an improved performance in this
    area and is also an area where additional growth has been included as part of
    the 2008/09 budget.

•   Business Continuity
    The internal audit of business continuity concluded that although business
    continuity plans were in place these were out of date. A process, to be
    completed, by October 2008 is currently underway to ensure that all of the
    Business Continuity plans are overhauled and that testing is undertaken during

•   Recruitment
    One of the key weaknesses highlighted by the internal auditor around recruitment
    was the perceived lack of workforce planning. The Assistant Director (People
    Services) has addressed this issue and for 2008/09 the force has a workforce
    planning model that will help towards addressing areas of priority recruitment and
    longer term sustainability.

Annual Governance Statement
•   Communications
    Another area highlighted by the internal auditors as one with limited assurance
    was around its control framework mainly the internal communications within the
    force. Improvements were made in this area at the end of 2007/08 around the
    force intranet however more improvements will now be made following the
    appointment of a Head of Communications into the Force structure.

Peter Conniff                    Stephanie McMenamy              Gillian Parker
Chairman                         Chief Executive / Treasurer     Chief Constable

June 2008

Statement of Accounting Policies
1. General
The Statement of Accounts has been prepared in accordance with the 2007 Code of
Practice on Local Authority Accounting in the United Kingdom which is recognised by
statute as representing proper accounting practice. The accounting convention
adopted is historical cost, modified by the revaluation of certain categories of
tangible fixed assets.

2. Recognition of Fixed Assets
All expenditure on the acquisition of capital assets, or enhancement expenditure
which adds to the value of existing assets is capitalised as fixed assets provided these
yield benefit to the Authority for a period of more than one year.

A de minimis value of £10,000 for capitalising individual projects has been adopted.

All expenditure on the acquisition, creation or enhancement of fixed assets has been
accounted for on an accruals basis.

3. Measurement of Fixed Assets
Land and Buildings are valued as at 1st April 2007 on the basis of market value for
residential or investment properties and existing use value for operational properties
as recommended by CIPFA and the Royal Institute of Chartered Surveyors (RICS).
These valuations have been prepared in accordance with the RICS Appraisal and
Valuation Standards (‘the red book’) and undertaken by Colliers CRC. Subsequent
revaluations are undertaken at three yearly intervals. An adjustment will be made to
the value of assets if there has been any material changes since the last valuation if
these changes are considered to be permanent.

Increases in valuations are matched by credits to the Revaluation Reserve to
recognise unrealised gains. Exceptionally, gains might be credited to the Income
and Expenditure Account where they arise from the reversal of an impairment loss
previously charged to the Income and Expenditure Account. The Revaluation
Reserve contains revaluation gains recognised since 1 April 2007 only, the date of its
formal implementation. Gains arising before that date have been consolidated into
the Capital Adjustment Account.

Furniture and equipment are held at historical cost less depreciation and intangible
assets are held at historical cost less amortisation.

Vehicles are held at historical cost less depreciation except for the Chiltern Air
Support Helicopters which have been revalued as at 1 April 2006. The useful lives and
estimated residual values of the vehicle fleet are based on the values held in the
vehicle fleet management system and these values are reviewed annually.

4. Impairment of Fixed Assets

FRS 11 – Impairment of Fixed Assets, requires the Authority to reflect a general fall in
prices or losses due to physical damage or deterioration in an asset. Where these
losses have resulted from clear consumption of economic benefits, they are
recognised through the Income and Expenditure Account. All other losses are written
off against any revaluation gains attributable to the relevant asset in the Revaluation
Reserve, with any excess charged to the Income and Expenditure Account.

Statement of Accounting Policies
5. Disposal of Fixed Assets
When an asset is disposed of, the value of the asset in the balance sheet is written off
to the Income and Expenditure Account as part of the gain or loss on disposal.
Receipts from disposals are credited to the Income and Expenditure Account as part
of the gain or loss on disposal (i.e. netted off against the carrying value of the asset at
the time of disposal). Any revaluation gains in the Revaluation Reserve are
transferred to the Capital Adjustment Account. Amounts in excess of £10,000 are
categorised as capital receipts (see para. 14) which are required to be appropriated
to the Usable Capital Receipts reserve from the statement of Movement on the Police
Fund Balance.

The written-off value of disposals is not a charge against council tax, as the cost of
fixed assets is fully provided for under separate arrangements for capital financing.
Amounts are appropriated to the Capital Adjustment Account from the Statement of
Movement on the Police Fund Balance.

6.      Depreciation

(i)       Buildings
          In accordance with FRS 15 - Tangible Fixed Assets, the usable lives of buildings
          have been assessed and depreciated on a straight line basis dependent on
          their useful lives. Depreciation is not charged on items classified as Works in

(ii)      Vehicles, Furniture and Equipment
          Depreciation is charged in full on plant, furniture and equipment commencing
          the year after acquisition on a straight line basis over 5 years and assuming a
          nil residual value. For vehicles, depreciation is charged on a straight line basis
          over their useful lives after taking into account their estimated residual values.

(iii)     Intangible Assets
          Intangible assets ( purchased software licences) are amortised on a straight
          line basis over 5 years, commencing the year after acquisition and assuming a
          nil residual value.

7. Charges to Revenue for Fixed Assets
The Authority is not required to raise council tax to cover depreciation, impairment
losses or amortisations. However, the authority has a statutory duty to make a
prudent annual provision from revenue to contribute towards the reduction in its
overall borrowing requirement. Depreciation, impairment losses and amortisations
are therefore replaced by the Minimum Revenue Provision (MRP) in the Statement of
Movement on the Police Fund Balance, by way of an adjusting transaction within the
Capital Adjustment Account. For 2007/08 the MRP has been calculated as 4% of the
Capital Financing Requirement.

8. Debtors and Creditors
The Authority’s Accounts are maintained on the basis of receipts and payments
converted at the year end to income and expenditure by bringing creditors and
debtors of material significance into account. The following exceptions are applied
consistently and their effect is not material on the Accounts from one year to the

Statement of Accounting Policies
(i)     Overtime paid to Police staff which has been claimed after the end of the
        financial year is not accrued;

(ii)    Electricity and similar quarterly payments are charged so that four payments
        appear in each year’s accounts. Payments are not apportioned between
        financial years. For monthly accounts, twelve payments are charged during
        the year;

(iii)   Travel expenses claimed after the end of the financial year have not been

9.   Funds Held on behalf of Third Parties
The Authority holds funds seized from individuals whilst enquiries are conducted under
the Proceeds of Crime Act 2002. The Authority will either return or repay these funds
(to the courts or the individual) on conclusion of the enquiries. The balance of Third
Party funds held at 31 March 2008 is shown in the notes to the accounts (note 25).

10. Stocks and Stores
The Authority holds stocks of uniforms, vehicle equipment, and other operational
equipment. These stock items are all valued at cost based upon the average cost
methodology. This is not consistent with SSAP 9, which requires stock to be valued at
the lower of cost or net realisable value. The difference between cost and net
realisable value is deemed to be negligible. Printed stationery is charged to the
Income and Expenditure Account in the year of purchase.

11. Provisions
Provisions are amounts set aside either to meet any liabilities or losses that are likely or
certain to be incurred, but uncertain as to the dates on which they will arise. The
Provisions as at 31st March 2008 are:

(i)     Insurance £645M
        This is for identified but unpaid claims at 31st March 2008 that are to be met
        under self funding insurance arrangements for combined liability, motor
        vehicle and fidelity guarantee.

(ii)    Airwave Equipment £100M
        The Airwave Equipment provision was established in 2002/03 due to a claim
        lodged by O2 (UK) Limited for damage to their equipment whilst being used by
        Bedfordshire Police.

In compliance with FRS12, the Authority also recognise in its accounts a contingent
liability of £42m resulting from a claim lodged for the disturbances of Yarls Wood
Immigration Detention Centre.

12. Reserves
Reserves are amounts set aside from the Income and Expenditure Account and
earmarked for future expenditure. As at 31st March 2008 these comprise of:

(i)     Insurance £1.293M
        This provides for partial self-funding of insurance for combined liability, motor
        vehicle and fidelity guarantee.

(ii)    Devolved Budget Reserves £0.968M
        This reserve contains underspendings from 2007/08 which have been
        earmarked for use in 2008/09.

Statement of Accounting Policies
(iii)   Pensions Reserve £0.500M
        This reserve is to provide for unexpected or extraordinary costs relating to
        Police Officer or Staff pensions.

(iv)    Collaboration/Performance Reserve £0.400M
        This reserve is to provide for costs specifically in relation to the following:
        • One-off costs associated with progressing future collaborations;
        • One-off costs associated with performance issues; and
        • One-off costs associated with the forthcoming Olympic Games.

 (v)    Capital Reserve £4.778M
        This reserve is comprised of revenue resources and is provided to assist in the
        funding of future years’ Capital Programmes.

13. Police Fund
The main Fund of the Police Authority into which the precept, government grants and
other income are paid and from which the cost of providing services is met. The
balance on the Fund represents the accumulated surplus of the Authority’s revenue
income over revenue expenditure.

14. Capital Receipts
Capital Receipts are principally the proceeds from the sale of fixed assets. Insurance
income from vehicle write-offs is also treated as Capital Receipts. Capital Receipts
are used to augment the capital resources of the Authority. Receipts less than
£10,000 are treated as de-minimis and included in the Income and Expenditure

15. Value Added Tax (VAT)
VAT is included in the accounts of the Authority, whether of a capital or revenue
nature, only to the extent that it is not recoverable.

16. Bad and Doubtful Debts
An assessment is made annually as to what level of debts are outstanding at the end
of the financial year are and a provision made for those debts deemed to be
doubtful, this has the impact of reducing the debtors balance shown within the
balance sheet.

17. Government Grant and Contributions
The Authority receives three main grants from the Government to support general
revenue expenditure. These are the Police Grant, Revenue Support Grant and a
share of the National Non Domestic Rate Pool. These grants are credited to the
Income and Expenditure Account in the year to which they relate. The Authority also
receives a number of additional specific grants from Government to help finance
specific policing initiatives. An analysis of government grants shown in the Cash Flow
Statement is shown at note 44. The Authority also receives a cash limited grant from
the Home Office to help finance the Capital Programme. This grant is credited to
Capital Grants Unapplied and transferred to the Capital Adjustment Account when

18. Pensions
The Authority participates in two Pension Schemes. Both Schemes provide members
with defined benefits related to pay and service.

(i)     Uniformed Police - Police Pension Scheme
        This Scheme is ‘unfunded’. The charge to the Accounts represents the
        applicable FRS17 charges as determined by the Actuary.

Statement of Accounting Policies
       The SORP requires a separate statement to be produced for this Account
       which is shown on page 45.

(ii)   Other Employees - Local Government Pension Scheme (LGPS)
       Subject to certain qualifying criteria, Police staff are eligible to join the Local
       Government Pension Scheme administered by Bedfordshire County Council.
       The Scheme is ‘funded’ and pension costs charged to the Authority’s
       Accounts comprise the employer contributions paid, as determined by the
       Actuary, along with premature retirement costs.

The figures included within the Accounts are based on the FRS 17 requirements, that
an organisation should account for retirement benefits when it is committed to give
them, even if the actual giving will be many years in the future.

This obligation to pay pensions benefits in the future is recognised as a liability in the
Authority’s balance sheet. In the service costs part of the Income and Expenditure
Account, transactions are recorded that indicate the change over the year in the
pension liability. The transactions are not cash-based but are instead actuarially
calculated amounts that reflect more accurately the true changes in the scheme’s
long-term liabilities.

The above balances and transactions are included in the accounts to provide a
more informative picture of the Authority’s pension schemes. Although to ensure
there is no impact on the level of council tax the account is adjusted through an
appropriation from reserves.

19. Officers’ Emoluments
Officers’ Emoluments are disclosed in note 3 to the accounts on a cash basis of gross
pay as notified in the P60’s to the Inland Revenue and including taxable benefits
within the P11D’s. The figures contained within the Income and Expenditure Account,
however, are prepared on an accruals basis in accordance with proper accounting

20. Financial Liabilities
Financial liabilities are initially measured at fair value and carried at their amortised
cost. Annual charges to the Income and Expenditure Account for interest payable
are based on the carrying amount of the liability multiplied by the effective rate of
interest for the instrument. Therefore the amount shown in the Balance Sheet is the
outstanding principal repayable and interest is charged to the Income and
Expenditure account. The fair value as at 31 March is also disclosed at note 28.

The Authority fully comply with the CIPFA Code of Practice ‘Treasury Management in
the Public Services’. A Treasury Policy has been approved by the Authority and
appropriate Treasury Management practices adjusted. The Authority also approve
an annual Treasury Management Strategy.

21. Financial Assets - Loans and Receivables
Investments are limited to approved investments as specified in the Local Authority
(Capital Finance) (Approved Investment) Regulations 1990 and are contained within
the Authority’s Treasury Management Strategy. These Investments are initially
measured at fair value and carried at their amortised cost. Therefore the amount
shown in the Balance Sheet is the outstanding principal receivable and interest
receivable is credited to the Income and Expenditure Account. The fair value as at 31
March is also disclosed at note 28.

Where assets are identified as impaired because of a likelihood arising from a past

Statement of Accounting Policies
event that payments due under the contract will not be made, the asset is written
down and a charge made to the Income and Expenditure Account. Any gains and
losses that arise on the derecognition of the asset are credited /debited to the
Income and Expenditure Accounts.

22. Group Accounts
The Authority has to determine whether it has interests in subsidiaries, associates or
joint ventures. In assessing the relationships for the Authority it has been determined
that there are no Group Relationships, however the Authority does have joint
arrangements that are not entities and as a result are required to disclose these
arrangements, for the Chiltern Air Support Consortium, the Chiltern Transport
Consortium, and the Bedfordshire and Hertfordshire Major Crime Unit within the
accounts of the Authority.

Audit Opinion

The Local Government Accounts and Audit Regulations require the opinion of an
auditor appointed by the Audit Commission be contained within the Statement of
Accounts whenever possible. By the date of the Police Authority on 24th June 2008
the District Auditor had not commenced the audit of the Accounts of the Police
Authority. The Audit Opinion will be included in the published Statement of Accounts
on conclusion of the audit.

                                       21 i
Income and Expenditure Account

CIPFA Best Value Accounting Code of Practice Classification

 2006/07                                           Gross       Income      2007/08     See
 Outturn                                        Expenditure                Outturn
  £’000                                            £’000         £’000      £’000

  102,882     Police Services                        120,815    (19,610)   101,205)

      860     Corporate & Democratic                     924                   924)
      200     Non-Distributed Costs                      640                   640)
  103,942     Net Cost of Services                   122,379    (19,610)   102,769)

       55)    Loss on Disposal of Fixed Assets                                  101)
      131)    External Interest Paid                                            162)    12
     (870)    Interest & Investment Income                                   (1,023)
      974)    Contribution to Pension Fund Account in respect of deficit      2,483)
              on Police Pension Fund Account
      300)    Pensions Interest Cost and Expected Return on Pensions           307)     32
              Assets – LGPS
   28,840)    Pensions Interest Cost and Expected Return on Pensions        31,600)     32
              Assets – Police Pensions
     (974)    Contribution to Corporate Costs re Police Pensions             (2,483)
     (644)    Net Change in provision for FRS 17 Liability                         -
  131,754)    Net Operating Expenditure

  (23,357)    Council Tax                                                   (24,858)
   (4,150)    Revenue Support Grant                                          (3,887)
  (21,496)    National Non-Domestic                                         (23,163)
  (38,332)    General Government Grants                                     (39,321)
   44,419)    Deficit for the Year                                           42,687)

             Stephanie McMenamy

Income and Expenditure Account

CIPFA Subjective Classification
2006/07                                                                  2007/08    See
 £’000                                                                    £’000
          Bedfordshire Police Force
  48,879    Police Pay & Allowances                                       49,029
  26,516    Police Staff Pay & Allowances                                 26,823
   2,922    Other Employee Expenses                                        2,572
  19,990    Police Pensions                                               17,710
   2,504    Premises                                                       2,587
   2,601    Transport                                                      2,554
   8,576    Supplies & Services                                            7,901
   3,048    Agency & Contracted Services                                   2,869
   5,051    Depreciation and Impairment                                    9,510     11

120,087                                                                  121,555
          Bedfordshire Police Authority
     171    Police Staff Pay & Allowances                                    245
       3    Other Employee Expenses                                            1
       2    Premises                                                           7
      11    Transport                                                         11
     460    Supplies & Services                                              419
     169    Agency & Contracted Services                                     141
     816                                                                     824

120,903     Gross Operating Expenditure                                  122,379

 (3,952)    Income from Fees & Charges                                    (4,219)
(11,248)    Specific Grants                                              (13,688)
 (1,761)    Deferred Government Grants                                    (1,703)
103,942     Net Cost of Services                                         102,769

     55)    Loss on Disposal of Fixed Assets                                 101)
    131)    External Interest Paid                                           162)    12

   (870)    Interest & Investment Income                                  (1,023)
    974)    Contribution to Pension Fund Account in respect of deficit     2,483)
            on Police Pension Fund Account
   300)     Pensions Interest Cost and Expected Return on Pensions          307)     32

            Assets – LGPS
 28,840)    Pensions Interest Cost and Expected Return on Pensions       31,600)     32

            Assets – Police Pensions
  (974)     Contribution to Corporate Costs re Police Pensions            (2,483)
  (644)     Net Change in provision for FRS17 Liability                         -
131,754     Net Operating Expenditure                                    133,916

(23,357)    Council Tax                                                  (24,858)
 (4,150)    Revenue Support Grant                                         (3,887)
(21,496)    National Non-Domestic Rates                                  (23,163)
(38,332)    General Government Grants                                    (39,321)
  44,419    Deficit for the year                                          42,687)

Stephanie McMenamy, Treasurer

Statement of Movement on the Police Fund Balance

Statement of Movement on the Police Fund Balance

2006/07                                                                       2007/08
 £’000                                                                         £’000

 44,419)      Surplus or Deficit for the year on the Income and Expenditure   42,687)

(43,819)      Net additional amount required by statute and non-statutory     (42,687)
              proper practices to be debited or credited to the Police Fund
              Balance for the year
    600)      (Increase)/Decrease in Police Fund Balance for the year                -

  3,093)      Police Fund Balance Brought Forward                               2,493
   (600)      Transfer to Revenue                                                   -
      -)      Transfer from Reserves                                              166
  2,493)      Police Fund Balance Carried Forward                               2,659

Note to Statement of Movement on the Police Fund Balance
2006/07                                                                       2007/08
 £’000                                                                         £’000

(43,819)   Net additional amount required to be credited to the Police Fund   (42,687)
           Balance for the year

           Amounts included in the Income and Expenditure Account but
           required by statute to be excluded when determining the Movement
           on the Police Fund Balance for the year

 (5,051)      Depreciation and Impairment of Fixed Assets                      (9,510)
  1,761)      Government Grants Deferred Amortisation                           1,703)
   (125)      Disposal of fixed assets                                           (200)
              Net charges made for retirement benefits in accordance with
 (4,402)              LGPS Pension                                             (3,518)
(47,196)              Police Pension                                          (46,276)

           Amounts not included in the Income and Expenditure Account but
           required to be included by statute when determining the Movement
           on the Police Fund Balance for the year

    173)      Statutory provision for repayment of debt                          166)
              Capital Expenditure charged to the Police Fund Balance:
                      In Year
  2,252)              From Reserve                                                49)

 (3,376)      Transfer from Earmarked Reserves                                    (64)
    270)      Transfer to Earmarked Reserves                                    2,056)
  2,479)      Employers Contributions payable to the LGPS                       3,396)
  9,396)      Employers Contributions payable to the Police Pensions Scheme      9,511

(43,819)      Total                                                           (42,687)

Statement of Total Recognised Gains and Losses

2006/07                                                                      2007/08
 £’000                                                                        £’000

44,419)    Deficit/(Surplus) on the Income and Expenditure Account for the    42,687)

 (2,073)   Deficit/(Surplus)arising from the revaluation of Fixed Assets            -)

(43,760)   Actuarial (Gains) and Losses on Pension Fund Assets and           (123,293)   33

 (1,414)   Total Recognised (Gains)/Loss for the year                         (80,606)

Balance Sheet

 As at 31st March 2007                                                     As at 31st March 2008
£’000         £’000                                                      £’000         £’000        See
                             Net Fixed Assets                                                       Note
   1,800                      Intangible Assets                             1,561

                              Tangible Assets
  39,738                      Land and Buildings                          32,761
   3,376                      Vehicles                                     3,396
   4,514                      Furniture & Equipment                        4,091
  47,628                                                                  40,248
                             Total Operational Assets                                                19
               49,428                                                                    41,809
                             Non Operational
                         -     Surplus Assets held for Disposal                              142     19

               49,428        Total Net Fixed Assets                                      41,951
                   145        Long Term Debtors                                                63

               49,573        Total Long Term Assets                                      42,014

                             Current Assets
     575                      Payments in Advance                            582                     21
     338                      Stock                                          279                     22
   2,777                      Debtors                                      2,771                     23
  11,898                      Short Term Investments                      14,139                     25
     395                      Bank                                           923                     24
      26                      Imprest                                         26                     24
  16,009                                                                  18,720
                             Current Liabilities
  (1,585)                     Receipts in Advance                           (715)                    26
  (5,579)                     Creditors                                   (6,492)                    27

  (7,164)                                                                 (7,207)

                 8,845       Net Current Assets                                          11,513
               58,418        Total Assets less Current Liabilities                       53,527

                             Long Term Liabilities
     (23)                    Creditors over one year                            -                    27
  (2,774)                    Loans Outstanding                            (3,798)                    28
 (11,480)                    Government Grants Deferred                  (10,929)                    29
    (426)                    Grants and Contributions Unapplied             (807)                    34
 (16,700)                    Liability – LGPS Pension Scheme              (9,329)                    31
(582,480)                    Liability – Police Pension Scheme          (503,446)                    31
    (667)                    Provisions                                     (744)                    30

             (614,550)                                                                (529,053)

            (556,132)        Total Assets less Liabilities                            (475,526)

                2,493)       Police Fund                                                 2,659)      34
                6,195)       Earmarked Reserves                                          8,020)      35
                     -       Revaluation Reserve                                             -)      36
               34,360)       Capital Adjustment Account                                 26,569)      37
              (16,700)       Pensions Reserve – LGPS                                    (9,328)      32
             (582,480)       Pensions Reserve – Police                                (503,446)      32

            (556,132)        Total Equity                                             (475,526)

                                                                     Stephanie McMenamy - Treasurer
Cash Flow Statement
         2006/07                                                              2007/08          See
 £’000        £’000                                                      £’000      £’000      Note

                        Revenue Activities
                        Cash Outflows
 66,607                 Cash paid to and on behalf of employees          68,605
 43,261                 Other operating cash payments                    38,327
             109,868)                                                               106,932
                        Cash Inflows
(23,357)                Precept Income                                  (24,858)
(21,496)                National Non-Domestic Rates                     (23,163)
 (4,150)                Revenue Support Grant                            (3,887)
(38,332)                Police Grant                                    (39,321)
(12,685)                Specific Government Grants                      (12,004)               44
 (4,025)                Cash received for goods and services             (5,148)
 (4,882)                Other operating cash receipts                      (104)
            (108,927)                                                              (108,485)
                941)    Net Cash Outflow from Revenue Activities                     (1,553)   41

                        Returns on Investments & Servicing of Finance
                        Cash Outflows
   117)                 Interest paid                                       133

                        Cash Inflows
   (844)                Interest received                                 (934)
                (727)                                                                 (801)

                        Capital Activities
                        Cash Outflows
  3,918                 Purchase of fixed assets                          2,594

                        Cash Inflows
    (70)                Sale of fixed assets                               (98)
 (1,768)                Capital grants received                          (1820)
               2,080)                                                                   676
               2,294)   Net Cash Outflow Before Financing                            (1,678)

                        Management of Liquid Resources
              (1,250)    Increase/(Decrease) in Short-Term                            2,150    43

                        Cash Outflows
                        Repayments of amounts borrowed
                        Decrease in Short Term Borrowing
                        Cash Inflows
                        New Loans Raised                                 (1,000)
                        (Increase) in Short Term Borrowing

               1,044)   (Increase) /Decrease in Cash                                  (528)    42

Notes to the Accounts
1. Issue of Statement of Account
The statement of accounts were considered by the Finance Committee and
authorised for issue on 24th June 2008.

2. Best Value
In order that all Police Authorities maintain their financial records on a consistent
basis, CIPFA, the public sector accountancy body, has produced a Best Value
Accounting Code of Practice. The Code provides guidance on how the costs of
policing are to be analysed to provide a comparable total cost between Authorities.
The analysis details the mandatory divisions of service required by the Code of
Practice. For 2007/08 there is only one mandatory domain which is “Police Services”.

3. Officers’ Emoluments
The number of employees whose remuneration, excluding pension contributions, was
£50,000 or more in bands of £10,000 were:

 2006/07           Remuneration Band (£)           2007/08

    89                050,000 – 059,999               99
    16                060,000 – 069,999               10
    10                070,000 – 079,999               10
     3                080,000 – 089,999               3
                      090,000 – 099,999               1
    1                 100,000 – 109,999               1
    1                 110,000 – 119,999               1
    1                 120,000 – 129,999
    1                 130,000 – 139,999               1
   122                      Total                    126

4. Members Allowances
Allowances to Members are paid based on legislation introduced in December 2001.
This has resulted in local agreements and in Bedfordshire, a basic allowance of
£8,487. Special responsibility allowances have also been approved ranging from
£3,183 to £16,974. Details of the Members Allowance Scheme can be found on the
Police Authority website. Total expenditure for members’ allowances and travelling
costs in the year was £233k compared with £236k in 2006/07.

5. Air Support Consortium
The Authority, together with Thames Valley and Hertfordshire Police own two
helicopters within a consortium arrangement. Direct operating costs are allocated to
the three forces based upon the actual number of flying hours during the previous 18
months with other overheads apportioned based upon resident population. The
contribution for Bedfordshire in 2007/08 was 19.1% of spend, totalling £375K (£355K in
2006/07). Any surplus obtained as a result of lower than expected expenditure is
transferred to the Consortiums reserve. The total revenue costs of the consortium are
shown below:

2006/07                                                    2007/08
 £’000                                                      £’000
    138)       Employee Costs                                   130)
     39)       Running Costs                                     31)
  1,683)       Aircraft Costs                                 1,693)
    204)       Capital Financing                                185)
    (87)       Income                                           (79)
  1,977)                                                      1,960)

Notes to the Accounts
The following assets/liabilities included on the balance sheet that relate to CASU are
as follows;

2006/07                                                   2007/08
 £’000                                                     £’000
    604)        Fixed Assets                                  641)
    144)        Long Term Debtors                              63)
    (23)        Creditors over one year                          -)
    (18)        Grants                                        (16)
    707)                                                      688)

    127)        Earmarked Reserves                              81)
    914)        Revaluation Reserve                              -)
   (334)        Capital Adjustment Account                     607)
    707)                                                       688)

6. Transport Consortium
The Authority, together with Thames Valley Police operate a consortium for vehicle
provision. Costs are allocated to the two forces in proportion to the size of the fleet.
Bedfordshire’s contribution for 2007/08 was £1.8m (23% of spend). The total costs of
the consortium are shown below:

2006/07                                                   2007/08
 £’000                                                     £’000
  1,781)        Employee Costs                               1,871)
    138)        Premises                                       139)
  1,745)        Running Costs                                1,941)
  1,634)        Insurance                                    1,684)
  3,029)        Vehicles                                     3,139)
   (765)        Income                                        (874)
  7,562)                                                     7,900)

The capital value of the vehicles is £2.755M and is included in the Balance Sheet.

7. Major Crime Unit Collaboration
The Bedfordshire and Hertfordshire Major Crime Unit (B&HMCU) became operational
during November 2007 and is a joint collaboration between the two forces. Expected
benefits from working together include increased availability of dedicated staff,
improved professionalism in the investigation of a wide range of serious offences and
critical incidents and better supervision, in addition to the deliver of better fiscal
management. The unit is jointly funded by the two forces pro rata to historic activity
levels. In addition the Home Office is providing three years set-up funding totalling
£300k. The table below sets out the income and expenditure on the unit during

2006/07                                                   2007/08
 £’000                                                     £’000
       -        Running Costs                                3,337)
       -        Set-up Costs                                   146)
       -        Total Expenditure                            3,483)
                Funded by:
        -       Bedfordshire Contribution                   (1,101)
        -       Hertfordshire Contribution                  (2,236)
        -       Home Office Grant                             (146)
        -                                                   (3,483)

Notes to the Accounts
8. Advertising & Publicity
In accordance with the Local Government Act 1986, the Authority is required to
disclose certain spending on advertising and publicity during the year. This consisted

2006/07                                                   2007/08
 £’000                                                     £’000
  117          Recruitment Advertising                      130
  171          Other Advertising                            )77
  )88          Authority Advertising and Publicity          )86
  376                                                       293

9. Lease Rentals
In 2007/08 the Authority did not make any material lease rental payments. At 31st
March 2008 there was no liability for payments in future years.

10. Agency & Contracted Services
This includes levies totalling £1.410M towards the cost of Forensic and DNA Testing.

11. Depreciation and Impairment
Under the capital accounting requirements the charges for depreciation and
Impairment to the Income and Expenditure Account were:

2006/07                                                   2007/08
 £’000                                                     £’000
   5,051        Depreciation of Fixed Assets                 3,134
        -       Impairment of Fixed Assets                   6,376
   5,051                                                     9,510

Impairment of Fixed Assets in 2007/08 related to a 15% reduction in market value for
operational properties and capital expenditure that did not add to the value of the

12. External Interest Paid
External Interest paid comprised:

2006/07                                                   2007/08
 £’000                                                     £’000
  125           PWLB Loan Interest Charges                     157
   6            CASU Loan Interest Charges                       5
  131                                                          162

13. Appropriation to/(from) Capital Adjustment Account
The transactions appropriated to/(from) the Capital Adjustment Account comprised:

2006/07                                                   2007/08
 £’000                                                     £’000
  (5,051)      Depreciation                                 (3,134)
               Impairment of Fixed Assets                   (6,376)
     148)      Minimum Revenue Provision (MRP)                 143)
      25)      Loan Repayments (CASU)                           23)
   1,761)      Government Grants Deferred                    1,703)
   2,252)      Revenue Contributions                            49)
    (125)      Vehicle Disposals                              (200)
    (990)                                                   (7,792)

Notes to the Accounts
14. Sponsorship
The Police Authority is allowed, under the Police and Magistrates Courts’ Act 1994, to
obtain sponsorship of gifts up to a value of 1% of the annual budget. The value
received during 2007/08 was £28K (£25K in 2006/07).

The Force supports the day to day administration of the Bedfordshire Police
Partnership Trust by providing a part-time co-ordinator and accommodation. A
separate set of audited Accounts is published by the Trust.

15. Police Property Act 1997
The Authority operates a Holding Account for the sale proceeds of unclaimed
property under the Police (Property) Act 1997. In accordance with the Act, the net
income is distributed to local charities on the recommendation of the Finance
Committee. During 2007/08 £24K (£12K in 2006/07) was distributed. The funds
available for distribution in 2008/09 totals £36K (£25k at 31 March 2007). The £36K is
held in the Authority’s bank account and is therefore included in the bank figure in
the balance sheet, however as the monies are to be distributed they are also
included in the creditors balance.

16. Supply of Goods and Services to Other Local Authorities
The Police Authority in 2007/08 secured income of £195k (£118K in 2006/07)
(equivalent to the expenditure incurred) from other Local Authorities under the Local
Authority (Goods & Services) Act 1970.

17. Related Party Transactions
The Financial Reporting Standard on Related Party Disclosures (FRS 8) and the 1998
Code of Practice require that material ‘related party’ transactions with the
Authority/Force are disclosed in the Statement of Accounts. A review to determine
related party transactions with the Authority/Force involved all Members and Senior
Officers of the Authority/Force. No material transactions were identified other than
those disclosed elsewhere in the Statement of Accounts.

18. Audit Fees
The Police Authority paid the following fees to the Audit Commission in relation to
external audit services for the 2007/08 Financial Year:

2006/07                                                  2007/08
 £’000                                                    £’000
   67          Statutory Audit                              70
    -          Certification of Grant Claims                )2
    -          Voluntary Improvement Work                    -
   67                                                       72

Notes to the Accounts
19. Net Fixed Assets

(i)    Changes in operational net fixed assets during the year:

                                                      Tangible Assets                    Total
                         Intangible    Land &       Vehicles     Furniture    Total     Fixed
                           Assets     Buildings                  & Equip
                           £’000       £’000         £’000        £’000       £’000     £’000
Book Value as at   1st      2,244)     39,764)        5,402)       7,486)     52,652     54,896
April 2007
Revaluation In Year

Additions                      53)        561)         831)          786)      2,178)     2,231)
Disposals                                      -       (684)                   (684)      (684)
Written Out                    (13)            -        (10)        (357)      (367)      (380)
Reclassification of                      (142)               -                 (142)      (142)
Gross Book Value as         2,284)     40,183)       5,539))       7,915)     53,637)    55,921)
at 31st March 2008

Depreciation as at 1st       (444)        (26)       (2,026)     (2,972)      (5,024)    (5,468)
April 2007
Depreciation for year        (292)     (1,020)         (612)      (1,209)     (2,841)    (3,133)
Impairment for year                    (6,376)                                (6,376)    (6,376)
Disposals                                              485)                     485)       485)
Written Out                    13)                       10)         357)       367)       380)
Depreciation and             (723)     (7,422)       (2,143)     (3,824)     (13,389)   (14,112)
Impairment as at 31st
March 2008

Net Book Value as at        1,561)     32,761)        3,396)       4,091)    40,248)    41,809)
31st March 2008

The freehold and leasehold properties which comprise the Authority’s Property
Portfolio were valued at 1st April 2007 by Colliers CRE, Chartered Surveyors, in
accordance with the Statements of Asset Valuation Practice and Guidance Notes of
the Royal Institute of Chartered Surveyors, following inspection of the properties.
Properties occupied for police operational purposes were valued on the basis of
Existing Use Value. This means the Market Value to the extent that the value
represents the price obtainable in the open market but disregarding potential
alternative uses. Residential properties were valued on the basis of Market value.

Intangible Assets consist of purchased software licences.
Impairment of Fixed Assets in 2007/08 related to a 15% reduction in market value for
operational properties and capital expenditure that did not add to the value of the

Notes to the Accounts
(ii)    Surplus Assets Held for Disposal

This relates to a property that was previously classified as operational, however has
become vacant during the year and is now available for disposal. The property has
been valued at £142k on the basis of Market Value.

(iii)   Statement of Physical Assets
        The number of assets as at 31st March 2008 comprised:

                                       2006/07      2007/08
Police Stations                          12           12
Radio Stations                            3            3
Police Houses                             4            3
Police House held for disposal                         1
Vehicles                                 297          314
Helicopter (share of)                     2            2

(iv)    Capital Expenditure
        Capital expenditure during the year was as follows:

                                       2006/07      2007/08
                                        £’000        £’000
Forensics Upgrade                          599           17
HQ Accommodation                           291           81
Minor Works                                427          204
Capitalised R & M                          163          237
Probationer Development Unit               220            4
Leighton Buzzard                            22            -
Enquiry Offices                             89           13
IPLDP                                       20            -
Other                                       49            5

IS/IT Strategy                             1056         795

Transport Strategy: Vehicles               983          747

Equipment                                   78           45
                                         3,997        2,148
(v)     Capital Financing
        The method of financing capital expenditure was as follows:

                                       2006/07      2007/08
                                        £’000        £’000
Capital Grant                             1,745        1,148
Borrowing                                     -        1,000
Capital Reserve                           2,252
                                         3,997        2.148
(vi)    Commitments under Capital Contracts
        The Authority has authorised expenditure in future years of £24.6M under its
        Capital Programme, of which £17.9M has been committed.

Notes to the Accounts
20. Long Term Debtors
Long term debtors relate to the Chiltern Air Support Unit:

 2006/07                                          2007/08
  £’000                                            £’000
   145           Chiltern Air Support Unit           63
   145           Balance at 31st March               63

21. Payments in Advance
These represent payments prior to 31st March 2008 for supplies and services.

22. Stock
Stock of uniforms and other operational equipment was valued at £279K on 31 March
2008 (£338K on 31 March 2007).

23. Debtors
Debtors, net of £33K provision for bad and doubtful debts (£14k in 06/07), may be
analysed as below:

 2006/07                                                     2007/08
  £’000                                                       £’000
    1,564        Government Departments                         1,991
    1,003        Other Local Authorities                          443
      210        Sundry Debtors                                   337
    2,777        Balance at 31st March                          2,771

24. Bank and Imprest
Bank represents the total of the Income, Payment and Interest account bank
balances. Balances relating to the Pension Fund Account are shown separately as
part of the Pension Fund Statement on page 45. Imprest is the total of the imprest
bank accounts held by Divisional and HQ offices.

25. Funds Held on Behalf of Third Parties
The Authority holds funds seized from individuals whilst enquiries are conducted under
the Proceeds of Crime Act 2002. The Authority will either return or repay these funds
(to the courts or the individual) on conclusion of the enquiries. Therefore, these funds
are excluded from the Authority’s accounts. As at 31 March 2008 the balance of
these funds was £404K (£389K at 31 March 2007).

26. Receipts in Advance
This relates to income received prior to 31st March 2008 funding activities that had not
commenced at that date.

27. Creditors
The creditors of the Authority can be analysed as follows:

 2006/07                                                     2007/08
  £’000                                                       £’000
  1,877          Government Departments                         1,994
  1,132          Other Local Authorities                        1,568
  2,558          Sundry Creditors                               2,913
    12           Stock                                             17
  5,579          Balance at 31st March                          6,492

Notes to the Accounts
Creditors over one year in 06/07 related to the Chiltern Air Support Unit £23k. There
are no long term creditors for 07/08.

28. Financial Instruments
The borrowings and investments disclosed in the balance sheet are made up of the
following categories of financial instruments.

                                     Long-Term                    Current
                                2006/07     2007/08         2006/07     2007/08
Financial Liabilities at
amortised cost:
-Loans Outstanding                  2,774         3,798

Loans and Receivables:
-Short-Term Investments at                                     11,898        14,139

Loans Outstanding represents the amount owing to external lenders in respect of long
term loans. The maturity period for these loans is between seventeen and twenty five
years and the borrowing is from the Public Works Loan Board.

Short-term Investments are temporary surplus funds, invested short term with those
financial institutions included within the Authority’s approved lending list.

Financial liabilities and financial assets represented by loans and receivables are
carried in the Balance Sheet at amortised cost. Their fair value has been calculated
below by calculating the net present value of the future cash flows using the
following assumptions:

•   The discount rate used is the applicable market rate on 31st March using bid
    prices where applicable.

•   For fixed term deposits it is assumed that interest is received on maturity.

•   The new borrowing rate has been used as the discount factor for PWLB borrowing.

                                                              31 March 2008
                                                          Carrying    Fair Value
Financial Liabilities                                           3,798       3,758

Loans and Receivables                                          14,139        14,137

The differences between carrying amount and fair value are not material.

Notes to the Accounts
29. Government Grants Deferred
Government grants applied to fund capital expenditure are credited to this account,
and credited back to Income and Expenditure Account over the expected life of the
assets, to offset the depreciation for those assets.

    2006/07                                               2007/08
      £’000                                                 £’000
     (11,486)    Balance at 1st April                      (11,480)
       (1,755)   Grants to Fund Expenditure                  (1,152)
        1,761)   Release of Government Grants                 1,703)
     (11,480)    Balance at 31st March                     (10,929)

30. Provisions
The Provisions are shown below and detailed on page 17.

    2006/07                                               2007/08
     £’000                                                 £’000
     (309)       Insurance                                  372
     (258)       Transport Consortium Insurance             272
     (100)       Airwave Equipment                          100
     (667)       Balance at 31st March                      744

31. Contingent Liability
As at 31st March 2008, a legal claim placed against Bedfordshire Police, by Group 4,
for the sum of £42M, due to the events that occurred at Yarlswood Detention Centre
on 14th February 2002, remained in dispute.

32. Retirement Benefits
As part of the terms and conditions of employment of its officers and other
employees, the Authority offers retirement benefits. Although these benefits will not
actually be payable until employees retire, the Authority has a commitment to make
the payments that need to be disclosed at the time that employees earn their future

The Authority participates in two pension schemes:
 - The Local Government Pension Scheme (LGPS) for police staff, administered by
    Bedfordshire County Council – this is a funded scheme, meaning that the
    Authority and employees pay contributions into a fund, calculated at a level
    intended to balance the pensions liabilities with investment assets.

-     The Police Pension Scheme for Police Officers – this is an unfunded scheme,
      meaning that there are no investment assets built up to meet the pensions
      liabilities, and cash has to be generated to meet actual pensions payments as
      they eventually fall due.

The cost of retirement benefits are recognised in the Net Cost of Services when they
are earned by employees, rather than when the benefits are eventually paid as
pensions. However, the charge we are required to make against Council Tax is
based on the cash payable in the year, so the real cost of retirement benefits is
reversed out through the Statement of Movement on the Police Fund Balance. The
transactions below are included in the Income and Expenditure Account during the

Notes to the Accounts
                                       Local Government               Police Pension
                                        Pension Scheme                   Scheme
                                      2006/07      2007/08          2006/07     2007/08
                                       £’000        £’000            £’000       £’000
  Net Total Cost of Service
    Current Service Costs                   3,700)        3,211)      19,990)     17,710)
    Curtailment and                           200)
         Settlement Cost

  Net Operating Expenditure
    Interest Costs                           2,800)       3,257)      28,840)     31,600)
    Expected return on                      (2,500)      (2,950)

  Net Expenditure to be met
  from Grants & Taxation
     Movement on Pensions                   (1,923)        (122)     (37,800)    (36,766)

The actual amounts charged against Council Tax for pensions in the year were as

                                       Local Government                Police Pension
                                        Pension Scheme                    Scheme
                                      2006/07      2007/08          2006/07      2007/08
                                       £’000        £’000            £’000        £’000

  Employers Contributions               2,479           3,396
  payable to the scheme
  Retirement Benefits payable                                        9,396       9,511
  to pensioners

The underlying assets and liabilities for retirement benefits attributable to the Authority
at 31st March are as follows:

                                    Government             Police Pension
                                  Pension Scheme              Scheme                  Total
                                  2006/07 2007/08        2006/07 2007/08        2006/07 2007/08
                                    £’M       £’M          £’M       £’M          £’M       £’M
Estimated liabilities in scheme    (58.8)     (54.0)      (582.5)   (503.4)     (641.3)     (557.4)

Estimated assets in scheme         42.1         44.6                             42.1         44.6

Net asset/(liability)             (16.7)        (9.4)     (582.5)   (503.4)     (599.2)     (512.8)

The liabilities show the underlying commitments that the Authority has in the long-term
to pay retirement benefits. The liability of £512.8M has a substantial impact on the net
worth of the authority as recorded in the balance sheet, resulting in a negative
overall balance of £475.5M. However, statutory arrangements for funding the deficit
mean that the financial position of the authority remains healthy:

The deficit of the LGPS will be made good by increased contributions over the

Notes to the Accounts
remaining working life of employees, as assessed by the scheme actuary.

Finance is only required to be raised to cover police pensions when the pensions are
actually paid.

Liabilities have been assessed on an actuarial basis using the projected unit method,
an estimate of the pensions that will be payable in future years dependent on
assumptions about mortality rates, salary levels, etc. The County Council Fund
liabilities have been assessed by Hymans Robertson, an independent firm of
actuaries. The Police Pension scheme liabilities have been assessed using the
Government Actuary Department’s FRS 17 spreadsheet (GFS) which has been
designed to satisfy the disclosure requirements contained within the Statement of
Recommended Practice. The actuarial valuations are as at 31 March 2008.

The main assumptions used within the calculations are:

                                        Local Government          Police Pension
                                         Pension Scheme               Scheme
                                       2006/07     2007/08      2006/07    2007/08
                                          %           %            %          %
Rate of inflation                         3.2        3.6          3.4         3.7
Rate of increase in salaries              4.7        5.1          4.9         5.2
Rate of increase in pensions              3.2        3.6          3.4         3.7
Rate for discounting scheme               5.4        6.9          5.4         6.9

The Police Pension Scheme has no assets to cover its liabilities. Assets in the Local
Government Pension fund are valued at fair value, principally market value for
investments, and consist of the following categories:

                                 2006/07                               2007/08
                       Value        Asset       Long Term    Value        Asset       Long Term
                                 Distribution     Return               Distribution     Return
                       £(000)        %             %         £(000)        %             %

Equity investments      26,300       62           7.8         25,090       56           7.7
Bonds                    6,700       16           4.9          7,408       17           5.7
Property                 4,300       10           5.8          4,352       10           5.7
Cash                     4,800       11           4.9          7,780       17           4.8
Total                   42,100      100           6.8         44,630      100           6.7

       Notes to the Accounts
       33. Movement on Pension Reserves

       The actuarial gains and losses identified as movements on the Pension Reserve can
       be analysed into the following categories, measured as absolute amounts and as a
       percentage of assets or liabilities at 31 March:

                              2003/04          2004/05             2005/06                2006/07          2007/08

                            £’000      %      £’000        %      £’000        %     £’000         %     £’000      %
Local Government
Pension Scheme

Differences between           2,500    12.3      900)       3.1     3,877     10.5         300)    0.7    (3,275)    7.3
the expected and
actual return on assets
Differences between             (94)    0.3     2,600)      6.0      (400)     0.7         (200)   0.3    (1,719)    3.2
actuarial assumptions
about liabilities actual
Changes in the                                 (8,100)     18.8    (7,354)    13.0        4,300    6.0    12,487)   15.0
demographic and
financial assumptions
used to estimate
                              2,406            (4,600)             (3,877)                4,400            7,493)

Police Pension

Differences between          (4,390)    1.2     7,370)      1.6       60)      0.0         (340)   0.1    12,490)    2.4
actuarial assumptions
about liabilities actual
Changes in the              (68,568)   19.0   (91,470)     19.6   (89,610)    15.3       39,700)   6.8   103,310)   20.5
demographic and
financial assumptions
used to estimate
                            (72,958)          (84,100)            (89,550)               39,360          115,800)

       34. Grants and Contributions Unapplied
       These are funds received from the Home Office which are to be carried forward to
       finance expenditure in future years.

          2006/07                                                            2007/08
           £’000                                                              £’000
               536)        Balance at 1st April                                   426)
             1,646)        Grants and Contributions received                    1,533)
            (1,756)        Grants and Contributions applied                    (1,152)
               426)        Balance at 31st March                                  807)

       35. Police Fund
       The Police Fund comprised general balances at 31st March 2008 of £2.659M.

Notes to the Accounts
36. Earmarked Reserves
The Earmarked Reserves are detailed on page 17 and comprise of:

 2006/07                                                2007/08
  £’000                                                  £’000
      232       Devolved Budget Reserves                     968
      908       Insurance Reserve                          1,293
    3,713       Capital Expenditure Reserve                4,778
    1,215       Pensions Reserve                             500
         -      Collaboration/Performance Reserve            400
       78       CASU Revenue Reserve                          81
       49       CASU Capital Reserve                            -
    6,195       Balance at 31st March                      8,020

37. Revaluation Reserve
The 2007 SORP required the authority to implement a Revaluation Reserve which
replaced the Fixed Asset Revaluation Account (FARA). The Reserve was introduced
with a zero balance with the balance on the FARA (£35.841M) being transferred to
the Capital Adjustment Account. The reserve records unrealised revaluation gains
from revaluations made since April 2007. There were no unrealised revaluation gains
for 2007/08.

38. Capital Adjustment Account
In accordance with the 2007 SORP the Capital Financing Account has been
replaced with the Capital Adjustment Account. The account provides a balancing
mechanism between the different rates at which assets are depreciated under the
SORP and are financed through the capital controls system.

 2006/07                                                2007/08
  £’000                                                  £’000
     (491)      Balance at 1st April                     34,360)
    2,252)      Contribution applied from Capital            49)
    1,761)      Government Grants Released                 1,703)
       148      MRP                                          143)
        25      CASU repayment of Loans                       23)
   (5,051)      Depreciation and Impairment               (9,510)
     (125)      Vehicle Disposals                           (200)
   35,841       Tr From FARA (see note 37)                      -
   34,360       Balance at 31st March                     26,569)

Notes to the Accounts

39. Summary of Movement on Reserves:

The Authority maintains a number of reserves in the Balance Sheet. Some are required to be held for statutory reasons, some are needed to
comply with proper accounting practice and others have been set up voluntarily to earmark resources for future spending plans.

                                Police Fund       Earmarked       Revaluation        Capital         Pensions             Pensions      Total Reserves
                                                 Reserves (see      Reserve         Adjustment     Reserve LGPS          Reserve –
                                                   Note 40)                          Account                          Police Pensions
                                   £’000             £’000             £’000          £’000           £’000                £’000            £’000

Balance as at 1st April 2007           2,493             6,195)                 -        34,360)        (16,700)            (582,480)        (556,132)

- Transfer to SMPFB                                        (64)                          (9,710)              (121)          (36,766)         (46,661)
- Transfer from SMPFB                                    2,055)                           1,919)                                                3,974)
Transfers Between Reserves                 166            (166)

Gains and Losses
in 2007/08:
FRS 17 Actuarial Gains and                                                                                7,493)             115,800)         123,293)
Revaluation of Fixed Assets

Balance as at 31st March 2008          2,659             8,020)                 -        26,569)         (9,328)            (503,446)        (475,526)
Notes to the Accounts

40. Summary of Movement on Earmarked Reserves:

                               Devolved         Insurance          Capital        Pensions        Collaboration     Chiltern Air       Chiltern Air          Total
                                Budget           Reserve         Expenditure                      /Performance       Support            Support           Earmarked
                               Reserves                            Reserve                           Reserve         Revenue             Capital           Reserves
                                                                                                                     Reserves           Reserves
                                 £’000            £’000             £’000          £’000              £’000           £’000               £’000             £’000

Balance as at                            232)             908)         3,713)         1,215)                    -              78                49)           6,195)
1st April 2007

- Transfer to SMPFB                   (15)                                                                                                      (49)            (64)
- Transfer from SMPFB                1,002                385               665                                                    3                           2055)

Transfers Between Reserves               (85)                               400        (715)                  400                                                     -

Transfer to Police Fund              (166)                                                                                                                      (166)

Balance as at                            968)         1,293             4,778              500)               400              81                     -        8,020)
31st March 2008
Notes to the Accounts
41. Reconciliation of Revenue Cash Flow
The table below shows the reconciliation of the Income and Expenditure Account to
the net cash inflow from revenue activities.

       2006/07                                                                    2007/08
   £’000     £’000                                                            £’000     £’000

                  (44,419)   Deficit for the Year                                       (42,687))

                             Non Cash Transactions
   (1,761)                   Deferred Government Grants                       (1,701)
    5,051)                   Depreciation and Impairment                        9,510
       84)                   Contribution to Provisions                            76
   39,723                    FRS17 Adjustments                                36,887
       (8)                   CASU (Surplus)/Deficit                              (26)
                  43,089)                                                                 44,746
         303)                 Increase/(Decrease) in Creditors                   754
                             (excluding capital creditors)
     (229)                    (Increase)/Decrease in Payments in                  (7)
     (318)                    (Increase)/Decrease in Debtors                     281
                             (excluding capital debtors)
    1,332)                    Increase/(Decrease) in Receipts in               (870)
         (27)                 (Increase)/Decrease in Stock                        59
                    1,061)                                                                   217

                     (727)   Servicing of Finance                                          (821)

                       55)   Disposal of Fixed Assets                                         98

                    (941)      Net Cash Inflow/(Outflow) from Revenue Activities           1,553

42. Movement in Cash
The movement in cash reflected in the Balance Sheet on page 26 is as follows.

                               As at 1st         As at 31st     Movement
                               April 2007       March 2008      in the year
                                 £’000             £’000            £’000

 Cash - Impests                        26)                 26            -
 Cash -Force                          395)                923          528
 Cash Police Pension Fund            (657)              (743)          -86
 Total                               (236)                206          442

Notes to the Accounts
43. Financing and Management of Liquid Resources (Cash Flow)
Financing and Management of Liquid Resources can be analysed as follows:

                                 As at 1st          As at 31st     Movement
                                April 2007         March 2008      in the year
                                  £’000              £’000             £000

  Short Term Investments           (11,750)           (13,900)         (2,150)
  New Loans Raised                   2,720)              3,720          1000)
  Total                             (9,030)           (10,180)           1,150

44. Analysis of Government Specific Grants (Cash Flow)
The Police Authority receives a number of Government Grants for specific purposes
as follows:

                                                 2006/07         2007/08
                                                  £’000           £’000
  Home Office Grants
          Crime Fighting Fund                       2,713           2,713
          Counter Terrorism                           919            1275
          BCU Fund                                    467             525
          Forensic Integration Strategy               217               -
          Special Operations                          198             279
          South East Allowance                        110               -
          Community Support Officers                  482             319
          Manpad                                      134             201
           LCJB Performance Management                122             123
           Drug Testing Programme                     309             304
           Rule 2 Grant                             1,698            1699
           Pension Top Up Grant                     1,662            1082
           Dedicated Security Posts                 1,006             962
           IPLDP                                      288             243
           NWNJ                                        93               -
           NPF Round 2                              1,383            1595
           Pump Priming Grant                         268               -
           Violent Crime Luton                        122               -
           Capacity Building for Specials              67              60
           Luton Weeks of Action                        -              80
           National Ports                               5             132
           LCJB - CJSSS                                 -             133
           Other                                      422             281
  Total Specific Government Grants                 12,685          12,006

Police Pension Fund Accounting Statement
    2006/07             Police Pension Fund Accounting Statement           2007/08
 £000     £000                                                          £000     £000
                        Contributions receivable
                        - From Employer
 (9,210)                        Normal                                  (9,343)
   (178)                        Early Retirements for Ill-Health          (143)
     (8)                        Reimbursement of Unabated Pensions of      (25)
                                ‘30+’ Police Officers
 (4,112)                - From members of the Pension Scheme            (4,154)
           (13,508)                                                               (13,665)
                        Transfers in
               (462)    - Individual Transfers in from Other Schemes                    (226)

                        Benefits Payable
12,090)                 - Pensions                                      12,779
 2,659)                 - Commutations and Lump Sums                     3,341
           14,749)                                                                 16,120)
                        Payments to and on Account of Leavers
    36)                 - Refund of Contributions                           28
   159)                 - Individual Transfers out to Other Schemes        226
               195)                                                                     254)
               974)     Sub-Total: Net amount receivable for the year               2,483)
                        before top-up grant

               (974)    Top-Up Grant from Police Fund                              (2,483)

                    -   Net Amount Payable/Receivable for the year                          -

     2006/07                                                                      2006/07
                        Net Assets Statement

                        Payments in Advance:
            1,037)      - April Pensions Paid March                                 1,109)

                        Creditors/Receipts in Advance:
               (380)    - Lump Sums                                                     (366)

                        Other current assets and liabilities
               (657)    - Cash                                                          (743)

                    -   Net Current Assets/Liabilities                                      -

Notes to the Police Pensions Accounting Statement

The Police Pension Fund Financing Arrangements require a separate accounting
statement for the Police Pension fund. These arrangements require the Authority to
credit the Police pensions fund with officer and employer contributions, incoming
transfers and other contributions specified by the regulations. Payments made from
the account include pension payments, lump sums and transfers out to other
schemes. There are no investment assets held, and the fund is balanced to nil each
year by receipt of a top-up grant from the home office to cover any deficit, or
paying over any surplus to the Home Office.
The fund’s financial statements do not take account of liabilities to pay pension and
other benefits after the period end.

External Advisers
The specialist nature and complexity of certain financial activities make it prudent for
the Police Authority to enhance the available internal expertise by using the services
of external advisers.

External advisers have been appointed to provide additional advice and guidance
in the following areas:

(i)     Financial Administration
        Financial services provided to the Police Authority during 2007/08 include the
        Internal Audit – Bentley Jennison
        Payroll and Pensions – Logica
        Treasury Management Advice - Sector

(ii)    Insurance
        Heath Lambert Group provide a service to the Police Authority which includes
        undertaking an annual review of insurance arrangements and putting these out
        to tender in accordance with EU regulations.

(iii)   Banking
        Banking services and advice are provided by National Westminster Bank plc.

(iv)    External Audit
        External Audit Services are provided by the Audit Commission.

Glossary of Terms
ACCRUAL - A sum included in the final accounts to cover income or expenditure
attributable to an accounting period for goods supplied and received or work done,
but for which payment has not been received/made by the end of the period.

ACTIVITY BASED COSTING - A costing methodology which links inputs (expenditure)
with outputs (incidents/activities).

ACTUARIAL VALUATION - A valuation of assets held, an estimate of the present value
of benefits to be paid and an estimate of required future contributions, by an
actuary, on behalf of a pension fund.

ACTUARIAL GAINS AND LOSSES – For a defined benefit pension scheme, the changes
in actuarial deficits or surpluses that arise because (a) events have not coincided with
the actuarial assumptions made for the last valuation or (b) the actuarial assumptions
have changed.

AGENCY SERVICES - The provision of services by one body (the agent) on behalf of
another that is legally responsible for providing the service.

AUDIT COMMISSION - An independent body, responsible for the appointment of
external auditors to the Police Authority. Assesses whether the Police Authority makes
proper arrangements for economy, efficiency and effectiveness in its use of resources
and is also required to review the Authority’s corporate governance arrangements.

BEST VALUE - The means of reviewing services for areas of improvement revolving
around the 4 C’s: Challenge, Compare, Compete, and Consult.

BUDGET - A statement of the Authority's forecast of net revenue and capital
expenditure over a specified period of time.

CAPITAL EXPENDITURE - Spending on assets (e.g. land, buildings roads etc.) which
adds to and not merely maintains the value of an existing fixed asset. Expenditure
that does not fall within the definition must be charged to the Income and
Expenditure Account.

CAPITAL RECEIPTS - The money from the sale of land or other assets. Capital receipts
can be used to pay for new capital expenditure, within rules set down by the
Government, or to repay outstanding loans. They cannot be used to finance revenue

CARRY FORWARDS - Service under/overspendings that under the Authority’s Devolved
Budget Management Scheme, may be carried forward to the following year.

CIPFA - The Chartered Institute of Public Finance and Accountancy. This is the
professional body responsible for accountants working in the public service. The
Institute provides financial and statistical information on local government and public
finance matters. CIPFA is a privately funded body with charitable status.

CONTINGENT LIABILITY - A possible obligation that arises from past events and whose
existence will be confirmed only by the occurrence of one or more future events not
within the Authority’s control.

CREDITOR - An amount owed by the Authority to suppliers for work done or goods
received for which payment has not yet been made.

CURRENT SERVICE COST (PENSIONS) – The increase in the present value of a defined
benefit scheme’s liabilities expected to arise from employee service in the current

Glossary of Terms
CURTAILMENT – For a defined benefit scheme, and event that reduced the expected
years of future service of present employees or reduces for a number of employees
the accrual of defined benefits for some or all of their future service.

DEBTOR - Money owed to the Authority.

DEFINED BENEFIT SCHEME – a pension scheme other than a defined contribution
scheme. The scheme rules define the benefits independently of the contributions
payable, and the benefits are not directly related to the investments of the scheme.

DEPRECIATION - The measure of the wearing out, consumption, or other reduction in
the useful economic life of a fixed asset, whether arising from use, passage of time or
obsolescence through technological or other changes.

DIRECT REVENUE FINANCING - Resources provided from the Authority’s revenue
budget to finance the cost of capital projects.

EARMARKED RESERVES - Those elements of the Police Fund that have been set aside,
“earmarked”, for specific services.

EMOLUMENTS - All taxable sums paid to or received by an employee including the
value of any benefits received other than in cash.

FINANCIAL REGULATIONS - A written code of procedures approved by the Authority,
intended to provide a framework for proper financial management.

FINANCIAL YEAR - The period covered by a set of financial accounts - the Police
Authority financial year commences 1 April and finishes 31 March the following year.

FIXED ASSET - An asset that has value beyond one financial year.

FINANCIAL REPORTING STANDARDS (FRS) - These standards are developed by the
Accounting Standards Board and regulate the preparation and presentation of
financial statements. Any material departures from these standards should be
disclosed in notes to the accounts.

GOVERNMENT GRANTS - Assistance by government and inter-government agencies
and similar bodies, whether local, national or international, in the form of cash or
transfers of assets to an Authority in return for past or future compliance with certain
conditions relating to the activities of the Authority.

GROSS EXPENDITURE - The total cost of providing the Authority’s services before taking
into account income.

IMPAIRMENT - A reduction in the value of a fixed asset on the Balance Sheet due to
lack of maintenance or change of use.

INCOME - Amounts due to an organisation that have been or are expected to be

INTEREST INCOME - The money earned from the investment of surplus cash.

INVESTMENTS - A long-term investment is an investment that is intended to be held for
use on a continuing basis in the activities of the Authority for 365 days or more. A
short-term investment occurs when surplus funds are invested for 364 days or fewer.

LIABILITIES - Money owed to individuals or organisations that will be paid at some time
in the future.

Glossary of Terms
MINIMUM REVENUE PROVISION (MRP) - The minimum amount which must be charged
each year to the Authority’s Police Fund and set aside as provision for credit liabilities,
as required by the Local Government and Housing Act 1989.

NATIONAL NON-DOMESTIC RATES (NNDR) - A levy on businesses, based on a national
rate in the pound set by the government, multiplied by the ‘rateable value’ of the
premises they occupy. Collected by billing authorities in line with national criteria and
then redistributed among all local authorities and police authorities on the basis of

NET BOOK VALUE - The amount at which fixed assets are included in the balance
sheet, i.e. their historical cost less the cumulative amounts provided for depreciation.

OPERATIONAL ASSETS - Fixed assets held and occupied, used or consumed by the
Police Authority in the direct delivery of those services for which it has either a
statutory or discretionary responsibility. All Police Authority fixed assets are classified as
operational assets.

PAST SERVICE COST – For a defined benefit scheme, the increase in the present value
of the scheme liabilities related to employee service in prior periods arising in the
current period as a result of the introduction of, or improvement to, retirement

POLICE FUND - The main account of a Police Authority. Income from government
grants and the Precept is paid into the fund and day-to-day spending on services is
paid for from the fund. The year end balances on the fund are the general reserves
(or balances) maintained as a matter of prudence.

POLICE GRANT - The term used to specify all government grants to the Authority other
than revenue support grant.

PRECEPTS - The demands made by the Authority on the district councils to finance the
Authority’s expenditure.

PROVISION - An amount, set aside in the accounts, for liabilities that are likely to be
incurred but the amounts or the dates on which they will arise are uncertain.

PUBLIC WORKS LOAN BOARD (PWLB) - A Government agency which provides longer
term loans to Local Authorities at interest rates only slightly higher than those at which
the Government itself can borrow.

RELATED PARTY TRANSACTIONS - The transfer of assets or liabilities or the performance
of services, to or for a related party, irrespective of whether a charge is made.

RESERVES - Monies set aside by the Authority that do not fall within the definition of

REVENUE EXPENDITURE - The day-to-day running costs incurred by an Authority in
providing services.

REVENUE SUPPORT GRANT (RSG) - A grant paid by central government in aid of
Authority services in general, as opposed to specific grants, which may only be used
for a specific purpose.

Expenditure Account shows the Authority’s actual financial performance for the year
as measured by accounting conventions, however, the Authority is required to raise

Glossary of Terms
council tax on a different accounting basis, for example depreciation of fixed assets
cannot be charged to the Police Fund. Therefore the Statement of Movement on
the Police Fund Balance compares the Authority’s spend against council tax raised
for the year, taking into account contributions to and from reserves.

experienced by the Authority are reflected in the Income and Expenditure Accounts.
For example gains on revaluations of fixed assets are excluded because they arise
from valuation changes rather than from the Authority’s operating performance. FRS
3 requires all gains and losses to be included in the STRGL.

UNFUNDED PENSION SCHEME - A scheme where the costs of pensions and other
benefits, after accounting for employees’ contributions in the year, are charged to
the Income and Expenditure account e.g. Police Pension Scheme.

USEFUL LIFE - A term used to express the remaining life expectancy of a fixed asset
given reasonable repairs and maintenance are applied to it. This is then used to help
calculate the depreciation charge for that asset.

WORKS IN PROGRESS - The cost of work done on an uncompleted project at the
balance sheet date.


Committee:                                  Finance Committee
Date:                                       24th June 2008
Agenda Item:                                10(a)

Report Author:                              Chief Constable

Lead Officer:                               Assistant Director - Resources

Subject:                                    2008/2009 Revenue Budget Performance

Purpose:                                    To report progress on the implementation
                                            and management of the 2008/2009 revenue

Background Papers:                          None

1.    Background

1.1   The Financial Management Scheme requires the budget to be managed during the
      year within agreed resources; it anticipates that any extra expenditure / reduction in
      income will be contained by making compensating savings or exercising virement
      elsewhere within the overall budget.

2.    Revenue Budget Provision

2.1   Expenditure is monitored against the 2008/09 budget as approved by the Police
      Authority on 15 February 2008, this is comprised as below: Members should be
      reminded that at this stage the Authority still awaits the outcome of the designation
      process and therefore this budget position could potentially be subject to change.

       Force Budget                95,191
       Authority Budget               865
       Total Resources             96,056

3.    Latest Assessment
3.1   Details of budget provision, expenditure incurred up to 31 May 2008 and forecast
      outturn are provided at Appendix A. This shows, at this early stage of the year that
      an under spend of £0.250M will be the most likely outturn at the end of the financial
      year. This is broken down as shown below:

       Devolved Budgets                (250)
       Corporate Budgets                  0)
       Police Authority Budgets           0)

                                            10.a. 1
3.2     To provide further detail Appendix B provides an analysis of this latest assessment by

3.3     Devolved Budgets

3.3.1   At this stage of the year an underspending, of £0.250M, is expected on the devolved
        budgets with the key variances being as follows:

         •   Police Officer Costs – whilst the Force is committed to an extensive recruitment
             campaign this year, at present we remain under strength in terms of officer
         •   Premises – as part of the drive to specialise services instigated by the Corporate
             Services review the element of the budget relating to Premises is no longer
             looked after by the Divisions. Having removed these costs from Divisions it has
             become evident that an increased budget is required in this area.
         •   I.T. – early indications are that spend in I.T. may come in under the budgeted

3.3.2   Although at this early stage of the year, this report shows a forecast under spend it is
        recognised that Divisional Commanders are likely to divert these resources into areas
        of the service that will drive up performance, which may reduce this underspend over
        the course of the financial year.

3.4     Corporate Budgets

3.4.1   No variances are shown on corporate budgets at this early stage of the year

3.5     Police Authority

3.5.1   The current forecast of the Police Authority is that spend will break-even at the year-
        end, this is constantly reviewed by the Chief Executive/Treasurer.

3.6     Overview

3.6.1   This forecast is based upon expenditure incurred in the first two months of the year
        and therefore it is likely that this forecast could fluctuate throughout the remainder of
        the year.

3.6.2   It is also important to remind Members that all forecasts assume that both police
        officer and support staff pay awards will be at the budgeted level. If they exceed this
        level the impact on the forecasts could be quite significant.

4.      Police Officer Overtime

4.1     As a result of the Corporate Services restructure a group has been tasked with
        reviewing the processes involved and current interpretation of regulations relating to
        overtime. This working group will include representatives from Officer ranks, Police
        staff and Federation and has been formulated to ensure a consistent approach to
        overtime is adopted across all Divisions.

4.2     This is designed to build on the work that has already been achieved in recent years
        on driving the cost of overtime down across the Force. This is highlighted in the table
        below that shows the reducing cost of overtime to the Force over the last two years
        and early indication for 2008/09.

                                   2006/07             2007/08     2008/09 (est.)
                                    £’000               £’000         £’000
         Territorial Policing       2,612               2,594         2,300
         Protective Services        1,061               0,991         1,000
         Other                      0,006               0,045         0,050

                                             10.a. 2
          Externally Funded          0,756             0,392            0,400
          Total                      4,435             4,022            3,750

5.    Specific Government Grants

5.1   The force will continue to receive additional specific grants, mainly from Government
      Agencies, for additional expenditure incurred as a result of specific ring fenced
      initiatives. Appendix C details the larger specific grants that are expected to be
      received during 2008/09.

5.2   Since the budget has been set the Authority have been notified of a few additional
      grants, as shown below:

      •     PREVENT funding – funding has been received for an additional six officers,
            totalling some £0.316M, specifically to undertake additional roles specified under
            the PREVENT element of Counter Terrorism.

      •     Mobile Data – as mentioned elsewhere on the agenda, a grant of £0.474M has
            been received to further develop the mobile data technology within the force and
            therefore also to develop greater efficiencies through the use of this technology.

      •     Luton Airport – as appendix C shows, the Force is expected to receive £1.330M
            for the policing at Luton Airport, including the policing of MANPADs. Whilst this is
            at a consistent level to the previous year, it does include additional restrictions,
            particularly around the policing of MANPADs. The impact of these restrictions on
            the ability of the force to continue to provide a 24x7 unit at the airport is currently
            being assessed. The grant is likely to reduce over the next two years, thus
            placing further pressure on the Force’s ability to provide the same level of policing
            at the Airport in future years.

6.    Risk Assessment

6.1   Whilst the current forecasts are that expenditure will match budget for the year
      2008/09, the risks highlighted at 3.6 could significantly alter this situation and hinder
      the performance of the Force in meeting its objectives.

7.    Financial Implications

7.1   As mentioned at 6.1, the financial implications are minimal at this stage in the year
      but the stringent control of resources is paramount to ensuring that this remains to be
      the case during the financial year.

8.    Benefits

8.1   That the Force and Authority obtain clarity around the financial position of the
      organisation and be aware of the risks that could alter this situation.

9.    Recommendation

9.1   That Members note the report.

                                             10.a. 3
Report prepared by:
Stuart Goodwin
Principal Accountant

On behalf of
Gillian Parker
Chief Constable

                       10.a. 4
                                                                                         Appendix A

                              2008/09 Revenue Budget Summary

                                          Budget     Expenditure to 31st   Forecast   Forecast
                                         Provision        May 2008         Outturn    Variation
                                           £'000      £'000        %        £'000      £'000


Employee Expenses
  Police Pay                               48,311      7,358     15         48,061         -250
  Police Overtime                           3,750        560     15          3,750            0
  Police Staff Pay                         27,060      4,364     16         27,060            0
  Pensions                                 13,635      3,498     26         13,635            0
  Other Employee Costs                      2,657        278     10          2,657            0

Premises                                    2,518        490     19           2,618         100

Transport                                   2,429        308     13           2,429            0

Supplies & Services
  Equipment & Uniforms                      1,738        249     14           1,738           0
  I.T.                                      1,392        570     41           1,292        -100
  Other                                     5,197        590     11           5,197           0

Agency & Contracted Services                2,702        413     15           2,702            0

Capital Financing                             608           8     1             608            0

   Grants                                 -13,680      -1,607    12         -13,680            0
   Interest                                  -769        -168    22            -769            0
   Other                                   -2,857        -990    35          -2,857            0

   Contribution to Reserves                   500           0     0            500             0

                                            95,191     15,921    17          94,941        -250

Police Authority

   Employees                                   261         44    17             261            0
   External Audit                               70          7    10              70            0
   Bank Charges & Internal Audit                31          0     0              31            0
   Youth Action                                 35          1     3              35            0
   Members Allowances                          220         37    17             220            0
   Conferences, Grants & Subscriptions          56         33    59              56            0
   Consultancy & Publicity                     123         26    21             123            0
   Other Expenses                               69          4     6              69            0
                                               865        152    18             865            0

Total                                       96,056     16,073    17          95,806        -250
                                                                                      Appendix B
                          2008/09 Revenue Budget Monitoring
                            Analysis of Forecasted Outturn

The following table provides a brief analysis of the current forecasted outturn for each
                               Summary of Forecast Reports

                 Forecast       Forecast      Forecast
                  Report       compared      compared
                                   to            to
                               Divisional       Force
                                 Budget        Budget
                   £’000           %             %
Territorial Policing
         J Div            -              -              -
         C Div        (150)         (0.96)         (0.16)     Luton currently has a high level of police
                                                              officer vacancies. It is intended that these
                                                              under spends will be utilised to increase
                                                              performance on the Division.
Citizen Focus              -             -                -

Total for             (150)         (0.34)         (0.16)

Protective Services
    Protective      (100)           (0.41)         (0.10)     Protective Services currently has a high
     Services                                                 level of police officer vacancies. It is
                                                              intended that these under spends will be
                                                              utilised to increase performance on the

Corporate Services
      People               -             -                -
  Resources               -              -                -
     Estates            100            3.4             0.10   The process of amalgamating Forcewide
                                                              budgets for the Estate has highlighted a
                                                              shortfall in this area.
  Corporate                -             -                -
  Corporate                -             -                -
       IS/IT          (100)         (2.49)         (0.10)     Current vacancies and expected reduced
                                                              costs in technology.
Total for                  -             -                -

    Corporate              -             -                -

     Authority             -             -                -

Total                 (250)              -         (0.26)

                                             10.a. 5
                                                                                       Appendix C

                                       Grant Funded Initiatives


         •   Neighbourhood Policing       2,620       contribution towards the cost of employing
             Fund                                     Community Support Officers Forcewide

         •   Counter Terrorism            1,330       funding provided for the policing of Luton
                                                      Airport against the threat of terrorism, this
                                                      also covers the cost of policing MANPADS

         •   Dedicated Security           1,628       funding from the Home Office for 17
             Posts                                    dedicated security posts

         •   Basic Command Unit             418       a fund provided to individual BCU’s to
             Fund                                     compliment the CDRP monies made
                                                      available through partnering Authorities

         •   Drug Testing                   325       funding to conduct Drug Testing as part of
             Programme                                the Criminal Justice Interventions

For information, the grants already included as part of the National Settlement are:

         Crime Fighting Fund               2,713
         IPLDP                               238
         Additional Rule 2 Grant           1,698

                                            10.a. 6

Committee:                                Finance Committee
Date:                                     24th June 2008
Agenda Item:                              10(b)

Report Author:                            Chief Constable &
                                          Chief Executive/Treasurer

Lead Officer:                             Assistant Director – Resources & Chief

Subject:                                  2008/2009 Capital Programme

Purpose:                                  To report progress on the implementation
                                          and management of the 2008/09 to 2010/11
                                          Capital Programme.

Background Papers:                        None

1.    Original Programme

1.1   The Police Authority approved a three-year Capital Programme on 15 February at a
      total cost of £25.994M, with payments in 2008/09 of £6.398M.

2.    Revised Programme

2.1   Slippage totalling £0.291M resulting from the final capital outturn reported elsewhere
      on this agenda has been carried forward to the 2008/09 programme. In addition to
      this, to ensure the Force has sufficient training accommodation to support the
      increased number of probationers over the next 12 to 36 months, some temporary
      accommodation expected to cost £0.150M and funded from within existing resources
      is also included within the programme. This has the following effect on the capital

                                Total       Prior to   2008/09     2009/10        2010/11
                                Costs       1 April
                                 £’000       £’000      £’000       £’000          £’000
       Programme                 26,435        1,201      6,988     12,445          5,801

2.2   The reasons for the slippage from 2007/08 to 2008/09 are detailed in the 2007/08
      capital outturn report also featured on this agenda, negative figures relate to reduced
      spend in 2007/08 that is not required to be carried forward. Detail of slippage is
      shown in the table below:

       Strategy            Project                                       Slippage
                                                                     £’000      £’000

       Estates             Capitalised R & M                                       023
       IS/IT               Case & Custody                                 33)
                           ICCS Hardware Replacement                     100)
                           WAN Infrastructure                            (24)
                           Airwave                                       (71)
       ANPR                Luton Airport                                           230

3.    Latest Assessment

3.1   Details of the latest estimate of payments compared with the revised programme are
      detailed at Appendix A.

3.2   As the Appendix shows, the latest estimate of total costs compared to the revised
      programme is an increase of £0.345M from £26.435M to £26.780M. The main
      reasons for this variance is as follows;

        • Mobile Data – The announcement of external funding of £0.474M in 2008/09
             has enabled the Force to increase the programme for mobile data by £0.299M.
             Some of this grant can be utilised for expenditure already incurred which
             explains why the programme has not been increased by the full amount of the
        • Microsoft Software Assurance – It was originally anticipated that this project
             would commence in 2008/09, however, it has been brought forward by one
             year. An increase in the total cost has been offset by reductions in the
             projected spend on projects relating to desk top upgrades and CIMS.

        • A small increase in the grant available for ANPR at Luton Airport and a grant
           received for ANPR at Toddington Services means that these increases are
           fully funded.

3.3   The latest forecast of payments in 2008/09 shows an increase of £0.275M mainly due
      to the Mobile Data and Microsoft Assurance projects, as highlighted above. There are
      also some minor variances due to slippage on the Identity and Access Management
      project offset by earlier payments on Network Server upgrades.

3.4   Further detail of the progression of the major projects within the IS/IT strategy can be
      found at Appendix B.

3.5   Detail of the latest progression of the Greyfriars replacement project is included within
      the Estate Annual report contained within this agenda. Further updates will be
      included in future capital programme performance reports.

4.     Funding 2008/09 to 2010/11

4.1    Appendix C assesses the implications on resources as a result of the variations
       arising from the 2007/08 capital outturn.

4.2    As outlined in the revenue budget outturn report elsewhere on the agenda, due to
       underspendings in 2007/08 as well as the ability to re-classify certain reserves, the
       capital expenditure reserve has been enhanced to a greater figure, providing for
       greater flexibility around the Greyfriars replacement project.

4.2    Mainly as a result of the increases in this reserve the latest forecast of payments
       provides for a balance of resources totalling £2.589M at the end of the three year
       period under review.

5.     Risk Assessment

5.1    There are no risks to the achievement of the Force’s objectives arising from this

6.     Financial Implications

6.1    It is estimated that payments in 2008/09 will be £0.275M higher than the revised
       programme, this is more than offset by increases in external funding.

7.     Benefits

7.1    Successful implementation of the capital programme will contribute to the
       achievement of the Force’s objectives.

8.     Conclusion

8.1    It is estimated that payments in 2008/09 will be £0.275M higher than the revised

9.     Recommendation

9.1    That the Committee note this report.

Report prepared by:
Stuart Goodwin
Principal Accountant

On behalf of
Gillian Parker                                        Stephanie McMenamy
Chief Constable                                       Chief Executive/Treasurer

                                                                                                                                                                                             Appendix A
                                                                   Capital Programme 2008/09 to 2010/11
                                                                        Revised Programme                                     Latest Estimate (June 2008)                        Variation
                                                                    Prior to                             2010/11              Prior to                             2010/11            Payments
Strategy    Project   Description                     Total Cost    1/4/08         2008/09    2009/10    onwards Total Cost   1/4/08         2008/09    2009/10    onwards Total Cost 2008/09
                                                        £000         £000           £000       £000       £000     £000        £000           £000       £000       £000     £000       £000
Estates     B8001     Minor Works - 08/09                   200            0            200          0          0       200          0            200          0          0        0            0
            B8001     Minor Works - 09/10                   200            0              0        200          0       200          0              0        200          0        0            0
            B8001     Minor Works - 10/11                   200            0              0          0        200       200          0              0          0        200        0            0
            B8055     Capitalised R&M                       763            0            363        200        200       763          0            363        200        200        0            0
            B8080     Neigh'hood Policing Acc               200            1            199          0          0       200          1            199          0          0        0            0
            B8081     Greyfriars Replacement             15,000           39          2,830      9,000      3,131    15,000         39          2,830      9,000      3,131        0            0
            B80**     Temporary Training Provisions         150            0            150          0          0       150          0            150          0          0        0            0
            B80**     CCTV                                  400            0            200        200          0       400          0            200        200          0        0            0
IS/IT       B8030     Resource Management                    36            0            36          0          0         36          0            36          0          0          0            0
            B8033     Mobile Data                           883          458           175        150        100      1,182        458           474        150        100       299          299
            B8036     NMIS                                   84            4            40         40          0        104          4            40         40         20         20            0
            B8041     Command & Control                     500           29           171        300          0        500         29           171        300          0          0            0
            B8042     Case & Custody                         33            0            33          0          0         33          0            33          0          0          0            0
            B8043     CIMS                                  150           25           125          0          0        100         25            75          0          0       (50)         (50)
            B8052     Impact/MOPI                           675           98           302        275          0        675         98           302        275          0          0            0
            B8062     Network Server Upgrades               575          175           100         50        250        575        175           150        150        100          0           50
            B8064     Desktop Upgrades                      390            0           200        190          0        310          0           120         95         95       (80)         (80)
            B8076     Minor Systems                         400            0           100        150        150        400          0           100        150        150          0            0
            B8082     Telephony                             559           74           235        250          0        559         74           235        250          0          0            0
            B8033     ICCS Hardware Replacement             100           33            67          0          0        100         33            67          0          0          0            0
            B8085     WAN Server Infrastructure             126           36            90          0          0        126         36            90          0          0          0            0
            B80**     Identity & Access Management          400            0           200        200          0        400          0           150         16        234          0         (50)
            B80**     Video Conferencing                    100            0            50         50          0        100          0            50         50          0          0            0
            B80**     Microsoft Software Assurance          290            0             0        170        120        420          0            80        170        170       130            80
Airwave     B8044     Airwave                               771          229            42        250        250       771         229            42        250        250         0            0
ANPR        B8087     ANPR (Luton Airport)                  230                0       230          0           0      236               0       236          0          0         6            6
            B8088     ANPR (Toddington Services)              0                0         0          0           0       20               0        20          0          0        20           20
Equipment B8050       Equipment                             150                0        50         50          50      150               0        50         50         50         0            0
Transport   B8005     Vehicle Replacement                 2,200                0       730        720        750      2,200              0       730        720        750         0            0
            B8010     Air Support                           670                0        70          0        600        670              0        70          0        600         0            0

Summarised as;

Estates                                                  17,113           40          3,942      9,600      3,531    17,113         40          3,942      9,600      3,531        0            0
IS/IT                                                     5,301          932          1,924      1,825        620     5,620        932          2,173      1,646        869      319          249
Airwave                                                     771          229             42        250        250       771        229             42        250        250        0            0
ANPR                                                        230            0            230          0          0       256          0            256          0          0       26           26
Equipment                                                   150            0             50         50         50       150          0             50         50         50        0            0
Transport                                                 2,870            0            800        720      1,350     2,870          0            800        720      1,350        0            0
TOTAL CAPITAL PROGRAMME                                  26,435        1,201          6,988     12,445      5,801    26,780      1,201          7,263     12,266      6,050      345          275
                                                                                    Appendix B
Progress Report on the IS/IT Strategy

This Appendix provides a brief progress report on the largest projects included within the
2008/09 IS/IT Strategy.


Planning of the programme to ensure that the force has a resourced plan to deliver MoPI
compliance has been completed. Work over the last financial year has largely focused on the
implementation of the CIB, and the associated changes to business processes e.g. Stop
Search. There is continuing research, development and implementation of the local, interim
information systems requirements for the Information Management/IMPACT programme
(including MoPI), in the form of systems changes to BORIS and Memex, the force intelligence

Regional collaborative work has been continuing to specify the requirements for a medium
term MoPI solution. Investigations into the state of the market have identified that no supplier
currently has all elements of a complete MoPI solution developed, and this has meant that the
capital budget for this element of the programme has not been spent in 2007/08. Both in
business and technical areas it is hoped that a consistent approach can be taken to the
implementation of MoPI guidance regionally so that the benefits of collaborative purchasing
and harmonisation of processes are maximised. The scope and terms of reference of a
regional project to cover this area are currently being drawn up, under the IT Collaboration
Programme chaired by Herts DCC Simon Parr.

The Force received a favourable report following the NPIA MoPI Peer Review on 9th June
2008. It was found to have capitalised on the strengths identified in the Peer Review of
October 2007, and addressed all the development areas highlighted as part of that review.
The force was congratulated in particular on the progress in training between 80-90% of all
staff in MoPI and in planning a pilot for Review, Retention and Deletion (RRD) to commence
in September.

Areas suggested for development that will continue over the forthcoming months include the
implementation of the planned RRD pilot in CIB, the planning and implementation of a MoPI
audit programme and the implementation of a framework to ensure further purchase or roll-
out of IT systems, software and changes to corporate information are appropriately governed
to ensure they are compliant with MoPI principles.


IP telephony has now reached a level of maturity where the majority of Police Forces are
starting to trial its use. In Bedfordshire carried out a pilot project at Leighton Buzzard which
proved the technology and improved the facilities available to the users. Since then IP
Telephony has been rolled out to all new Force sites. These include Luton Airport, Stopsley
and the Purley Centre in Luton.

The roll out to existing sites has also begun and the telephone systems at the Saxon Centre,
Sandy and Leagrave have now been removed. The second (Southern) system is currently
being installed at Luton. We are currently awaiting expressions of interest to our contract for
the supply of the 1500 telephones required to complete the project. These will be installed
during the next 18 months starting with the smaller sites such as Dunstable and leaving HQ
until last.
                                                                            Appendix B (Con’t)
Network Server Upgrades

Over the past 12 months progress has continued in installing replacement network switches
and routers to improve network performance and resilience. Additionally, employing the latest
proven technologies, a Virtualised Server environment has been implemented. Server
virtualisation means that applications which previously required separate individual server
computers can run in their own individualised environments but on a common physical host.
This technology provides greater resilience together with cost savings and a reduced
environmental impact because less power and less cooling is required. The Bedfordshire
Police VM Ware environment comprises 5 physical hosts connected to a pre-existing Storage
Area Network

There are 68 virtual servers running on the 5 hosts. This total represents 17 additional, 33
removed and 18 redeployed. The environment has the capacity to support more virtual
servers and the virtualisation of the 5 further physical machines currently running the National
Management Information System [NMIS] is in train. Physical machines have been redeployed
to provide a replacement Citrix farm, additional middle-tier servers for the Crime Management
System, a 3 Blackberry server for additional resilience, additional Firewall capacity and so
on. Most of these cases would have necessitated the purchase of additional machines if
these servers had not been available to redeploy.

Additional virtual servers have been deployed for a new Estates application, upgraded service
desk system, Stop & Search, HOLMES print server for Hertfordshire-based users, end-point
security software and the like. Again it is clear that most of these cases would have
necessitated the purchase of additional machines if these virtual servers had not been
available. It has also been possible to create a Test & Development environment comprising
6 virtual servers.

Mobile Data

Rollout of the devices is progressing to schedule with over 1,200 devices issued to date. This
meets the project’s original target for full rollout however, due to an increase in the scope of
the rollout, a further 150 devices are still to be issued.

Recent development on the Blackberrys includes the following:

•   Remote input of intelligence reports into the Memex Intelligence System – this is now
    being piloted by a small number of officers.
•   KIN Questionnaires – two Neighbourhood Policing areas, Dunstable and Leighton
    Buzzard, are piloting the use of Blackberry for input of the KIN (Key Individual Network)

Work has just started on the development of Blackberry access to the Socrates system for the
remote input of Scene of Crime Reports

Bedfordshire Police has recently been awarded £474,050 of government funding for mobile
data. As this award fell short of the Force’s original application for £718,850 the workstreams
to be funded will be selected from the following items that were included in the bid. Decisions
will be based on individual business cases where appropriate:
                                                                            Appendix B (Con’t)

•   Purchase of remaining Blackberry devices and additional server hardware (in progress);
•   Development of Blackberry applications for Safer Neighbourhood Teams – this includes
    input of KIN questionnaire responses (in progress), access to community profiles,
    engagement strategies and action plans, problem solving and partner agency messaging;
•   Development of mobile access to Socrates for the input of Scene of Crime Reports (in
•   Further development of the Blackberry Crime Tasking application to include domestic
    violence risk assessment;
•   Development of mobile access to the Compact Missing Persons system;
•   Purchase and implementation of in-vehicle terminals for SNT vans and RPU vehicles.

As a result of the work carried out by the Force in relation to Mobile Data, Bedfordshire Police
has been short listed for the ‘Public Sector IT Project of the Year’ category of the Techworld
Awards 2008. The results are to be announced in June 2008.
                                                                      Appendix C

            Revised Capital Programme 2008/09 to 2010/11

                                        2008/09    2009/10       2010/11
                                         £000       £000          £000

Estates                                    3,942      9,600         3,531

IS/IT                                      2,173      1,646           869

Airwave                                       42        250           250

ANPR                                         256             0             0

Equipment                                     50         50            50

Transport                                    800        720         1,350

Total                                      7,263     12,266         6,050


External Borrowing (long term)             3,000      3,000         1,000

External Borrowing (short term)                       2,600

Repayment of Loan (short term)                                     (2,600)

Capital Receipts                                      3,537         6,655

Annual Government Grant                    1,536      1,297         1,297

Accumulated Government Grant                 405

Capital Financing Reserve                  5,278      3,798         2,087

Other External Resources
-      Airwave                                42        121
-      ANPR                                  256
-      Mobile Data                           474
-      Air Support                            70                      200

Total                                     11,061     14,353         8,639

Surplus / (Shortfall)                      3,798      2,087         2,589
                                BEDFORDSHIRE POLICE AUTHORITY

Committee:                                 Finance Committee
Date:                                      24 June 2008
Agenda Item:                               11

Report Author:                             Chief Constable and Chief Executive/Treasurer

                                           Chief Executive/Treasurer and
Lead Officer:                              Assistant Director – Resources

Subject:                                   Medium Term Financial Plan 2009/2010 to

Purpose:                                   To advise Members on the financial prospects
                                           in the Medium Term.

Background Papers:                         Strategic Plan 2008-11

1.     Background

1.1    The purpose of the Medium Term Financial Plan (MTFP) covering the period 2009/10 to 2011/12
       is to provide Members with a comprehensive review of the Authority’s financial position for this

1.2    The settlement for 2008/09 provided for provisional figures for 2009/10 and 2010/11 and these
       have been used as the basis for the MTFP.

1.3    To ensure the financial plan is robust it is imperative that it relates to the Authority’s and Forces
       3-year strategic plan as recently approved and published.

2.     Strategic Plan

2.1    As outlined in the MTP the Bedfordshire Police purpose is clear in that it intends:

       ‘To serve communities and make them safe from crime’.

       Through this purpose statement everything Bedfordshire Police do will have four key outcomes: -

       •   People are safer
       •   People feel safer
       •   People are more satisfied with the service they receive from Bedfordshire Police and
       •   People have more confidence in Bedfordshire Police.

2.2    The objectives in achieving the actions above will be based around our core services of
       Neighbourhood Policing, Protective Services, Incident Response, Crime Management and are as

       •   Neighbourhood Policing – To provide a visible and accessible local policing service, working
           with communities to identify and solve local problems.
       •   Protective Services - To protect the public from violent crime, organised crime and terrorism.
       •   Incident Response – To provide a timely and quality response to calls for service.
       •   Crime Management – To prevent, reduce and investigate burglary, robbery, vehicle crime,
           and other volume crimes.

2.3     In achieving these objectives the strategic plan highlights some of the activities required over the
        medium term as well as the importance placed on partnership working in all core services
        particularly in the areas of anti-social behaviour, neighbourhood problem solving, LAA’s and work
        with local agencies in the areas of adult and child protection. It also highlights the need to focus
        on collaboration with other Forces, further enhance workforce modernisation, as well as meeting
        changes in legislation and practice, particularly in areas such as MOPI, as well as preparation for
        the Olympics. There is also a pertinent need to focus on enhancements around the criminal
        justice process and the effective use of custody facilities.

2.4     In considering the report members should be mindful of a number of key issues that may affect
        the Medium Term financial outlook, these being:

        •   Local Government Re-organisation
        •   Sir Ronnie Flanagan’s Review of Policing
        •   Police Reform Green Paper
        •   Introduction of CAA (compulsory area assessment)

3.      National Financial Outlook

3.1     Finance Settlement 2008/2009

3.1.1   Members will recall that the settlement for 2008/09 resulted in Bedfordshire receiving a 3.3%
        increase on 2007/08 grant levels.

3.1.2   Council Tax increases for 2008/09 nationally, within the Police Service, mainly centred around
        5% increases based upon the assumed capping criteria. However, a number of authorities set
        precepts above this level with the highest being a 79% increase. Seven Police Authorities, as a
        result of increasing their budget requirement and council tax by more than 5%, have been
        designated for which the outcome is still awaited. The result of which could financially impact on
        the medium term plan.

3.2     Finance Settlement 2009/10 to 2010/11

3.2.1   As part of the three-year settlement announced in 2008/09 provisional grant figures have been
        provided for 2009/10 and 2010/11. For Bedfordshire the grant totals equate to a 3.3% increase
        per annum.

3.3     Future Years Settlement

3.3.1   The funding formula for 2011/2012 onwards is subject to review and therefore whilst the national
        settlement working group has convened its first meeting in looking at the intricacies of this, it is
        very difficult at this stage to predict the impact this may have on future funding levels.

3.4     Efficiency and Productivity

3.4.1   As members will be aware the efficiency/productivity target of 9.3% by 2010/11 was set as part of
        the 2008/09 three-year settlement. The delivery of this level of savings will need to be
        considered as part of the budgetary process for 2009/10 and 2010/11. For future years, it must
        be expected that a similar level of efficiency will be required and therefore future years planning
        needs to be based on achieving approximately 3% savings per annum over the medium term.

4.      Medium Term Forecast

4.1     The starting point for the three-year forecast is the approved Budget for 2008/09, of £96.056 M
        at outturn prices. Obviously, depending on the outcome of the designation process, this starting
        position may change. For comparative purposes all figures within the three-year forecast are at
        outturn prices, this does mean that broad estimates are also included for inflation.

4.2     Appendix A sets out the cash increase of the items listed below along with an estimate for
        inflation. It also shows the impact such pressures have on the Band D Council Tax. These
        figures are based upon a 3.3% increase in 2009/10 and 2010/11 and estimated increase of 3%
        for 2011/12. The tax base used is static for all 3 periods and is based on the 2008/09 actual tax
5.      Future Commitments

5.1     Mandatory Pressures

5.1.1   Police Officer Pensions

        Despite the funding arrangements of the police pension scheme having changed, the estimated
        level of ill-health retirements during the year, of one per annum, based upon historic data would
        appear to be too few. The average level over the past two years would suggest that provision
        should be included in the base budget for three ill-health retirements, thus creating an increase of
        £200K to the pensions budget.

5.1.2   Financing of the Capital Programme

        Whilst the financing linked to the additional borrowing required to fund the Greyfriars replacement
        project is included within the base budget. It is still assumed that borrowing of £1M will be
        required per annum to fund the remainder of the capital programme. This has the impact of
        increasing the revenue consequences in relation to interest and MRP by £0.1M per annum.

5.1.3   Local Government Pension Scheme (LGPS)

        The LGPS will undergo its triennial actuarial evaluation in time for April 2011. Whilst it is too early
        to determine what the actual impact of the evaluation will be it is prudent to assume that it will
        result in a financial pressure on the scheme, estimated at £0.200M.

5.1.4   Revenue Consequences of Capital Programme

        As outlined in the approved capital programme, there are revenue consequences of some
        £0.050M per annum resulting from capital expenditure. In addition as the budgeting process
        develops clarity will be obtained around continuation funding from NPIA, of such projects as case
        and custody, which may also have a financial impact.

5.1.5   IMPACT / MOPI (Management of Police Information)

        Whilst the longer term requirements of MOPI still remain unclear, it is essential that additional
        posts, around the central information bureau in relation to independent safeguarding and
        sensitive information are introduced to comply with the changes brought out by MOPI in the
        medium term. It is also expected that the Authority will face further revenue and capital costs
        associated with the Police National Database.

5.1.6   Investment Income

        Due to the planned use of reserves in financing the Authority’s capital programme the level of
        surplus resources available for investment will undoubtedly reduce in the three-year period thus
        reducing the level of income the Authority is able to achieve from such investments.

5.1.7   Incremental Drift

        Due to the annual progression through the respective pay-scales (i.e. incremental drift) for both
        Police Officers and Police Support Staff and the increase in the support staff in the previous
        financial years as a result of the civilianisation process. This cost tapers out as staff reach the top
        of their payscale.

5.1.8   Casualty Reduction Partnership

        As previously reported, future years activity in this area is totally dependant upon the levels of
        grant received by the County Council and Luton Borough Council. This is further confused due to
        local government re-organisation, therefore whilst it is too early to say whether this will have any
        financial impact it is highlighted here as a potential pressure.

5.1.9    Inflation / Cash Limited Costs

         An estimate has been made for the expected cost of ongoing inflation for each of the three years
         included within this report. Also included is an amount related to the fact that the Home Office has
         declared that certain specific Government Grants would be cash limited and therefore will not
         increase in line with inflation. This has the impact of increasing the cost locally of these initiatives
         including DNA, Special Priority Payments and South East Allowance as well as Neighbourhood
         Policing and the Crime Fighting Fund.

5.1.10 Luton Airport

         A recent re-assessment of ACPO TAM funding by the NCCP will result in the funding for the
         visible presence at Luton Airport reducing over the medium term from £1.0 M to £0.7 M by
         2010/11. Although legislation should be passed at around this time requiring airport operations to
         pay for policing until the legislation is passed there will be a financial pressure on the Force in
         retaining current levels of visibility.

5.2      Grant Aided Items

5.2.1    The specific grant related projects shown total some £10.5M and contribute towards the cost of
         150 police officers and 152 police staff posts (including 128 PCSOs)

5.2.2    With this level of specific grants it should be noted that any reduction in the level of these grants
         that is not matched by an increase in the funding formula will create a large financial burden on
         the revenue budget and Council Tax. In most instances the continuation of these grants will not
         be known until the Autumn.

5.2.3    It was noted as part of the 2008/09 settlement that the funding for the Drug Pilot Scheme would
         be reviewed during 2008/09 with the possibility of it ceasing from 31 March 2009. The forecast
         therefore assumes that this funding will cease, however the 10 Detention Officers it funds will
         need to continue.

5.2.4    The Authority receives other specific grants that are not listed that are used to provide services
         over and above the core. The loss of these grants, particularly the BCU grant, may also require
         an additional impact on the Council Tax dependant on an assessment of their continuing need.

5.3      Financial Impact

5.3.1    The summary of the three-year forecast attached at Appendix A is shown below:

      Year                   Cash Increase                              Council Tax Implications
                       Year on Year        Cumulative                  Year on Year          Cumulative
                      £000s            %             %                     £           %               %
      2009/10        99,759              3.86           3.86          142.71            5.50            5.50
      2010/11       103,298              3.55           7.54          148.64            4.15            9.87
      2011/12       106,950              3.54          11.34          157.62            6.04           16.51

5.3.2    The cash increase provides the total increase on the previous year’s budget for those highlighted
         pressures and estimated cost of inflation. The cumulative increase is based upon the 2008/09
         budget of £96.056M, obviously this is subject to the announcement on designation, which at this
         stage remains unknown.

5.3.3    The increases in Council Tax assume that the level of Government Grant is as highlighted in
         paragraph 4.2 i.e. a 3.3% per annum for 2009/10 and 2010/11, with an estimated 3% increase for
         2011/12. Whilst this level of grant is only indicative at this stage, the table above highlights the
         level of Council Tax increase required for the three-year period to fund the mandatory financial
         pressures. The Cumulative increase is based upon the 2008/09 Band D Council Tax of £135.28.

5.3.4    The outlined financial impact as summarised at 5.3.1 above includes a number of assumptions
         regarding both expenditure and funding which will not be confirmed until late Autumn.

5.4     Other Financial Pressures

5.4.1   Whilst the following list of financial pressures are not deemed mandatory it is felt that it is useful
        to provide Members with advance notification of those areas that will need to be fully costed and
        built into the budgetary process later this year. In addition to this list resources around serious
        and organised crime and prolific offending will need to be assessed to ensure these areas, which
        are national pressures, are appropriately resourced.

         Financial Pressure                                       2009/         2010/        2011/
                                                                  2010          2011         2012
         CBRN (currently subject to a national review)              20            -            -
         Regional and Collaborative arrangements                   100           100           -
         (Protective Services)
         Training (particularly protective services)               50            50             -
         Special Constables                                        50            50            50
         (Workforce Modernisation)
         Forensics - Custody                                       100            -             -
         Taser roll-out                                             -            100            -
         Total                                                     320           300           50

5.4.2   In addition to these it is inevitable that over the medium term there will be financial pressures
        surrounding the professionalism of criminal justice and changes brought about by CJSSS as well
        as a requirement to support the policing in the build up to the Olympics in 2012.

6.      Reserves

6.1     The reserves held by the authority are discussed in detail within the 2007/2008 outturn report.
        However, due to potential pressures on reserves in relation to Luton Airport and Yarls Wood it
        would not be prudent to use any general reserves over the medium term to support the budget. In
        terms of earmarked reserves, it is pertinent that the capital expenditure reserve is maintained to
        support the Greyfriars replacement and that a performance and collaboration reserve is
        introduced, which will also provide for one-off costs relating to the Olympics in 2012. A full list of
        reserves, based upon the 2007/08 outturn report is shown at appendix B.

7.      Capital Programme

7.1     As previously reported significant investment is required over the medium term for the
        replacement of Greyfriars and information technology for which the revenue costs are
        incorporated either in the base budget or with the medium term projections.

8.      Risk Assessment

8.1     Appendix A highlights that for the medium term, the mandatory pressures require council tax
        increase in their own right of nearly 5%. Therefore, any other financial pressures will need to be
        met through rationalisation and efficiencies in other areas.

9.      Financial Implications

9.1     Mandatory pressures require Council Tax increases in each of the 3 years of approximately 5%
        and therefore any further growth will need to be met from current levels.

10.    Benefits

10.1   The benefits of the three-year plan are to highlight to Members the financial pressure faced by
       the Authority at an early stage in the financial year in order that these are reflected in the
       budgetary process for the forthcoming years.

11.    Conclusion

11.1   The three-year forecast clearly demonstrates that there are financial pressures faced by the
       Police Service in Bedfordshire over the medium term and highlights the need for a continued
       proactive and structured approach to the Authority's future service and financial planning.

11.2   In the coming months, consideration will be given to the options available to align future spending
       levels with the indicative Home Office figures for likely resource availability.

12.    Recommendation

12.1   The Committee recommend that the three-year forecast be considered as an initial basis for
       planning the three-year revenue budgetary process for the period 2009/10 to 2011/12.

Stephanie McMenamy                                       Gillian Parker
Chief Executive / Treasurer                              Chief Constable

                                                                      APPENDIX A
                   MEDIUM TERM PLAN - 2009/10 TO 2011/12

                                                       2009/10     2010/11    2011/12
                                                          £000        £000       £000

Previous Years Cash Budget                             96,056      99,759    103,298
2007/08 Council Tax at Band D                           £135.28

Additional Pressures

        Police Officer Pensions                           200           0          0
        Financing of Capital Programme                    100         100        100
        Local Government Pension Scheme                     0           0        200
        Revenue Consequences of IT Capital Programme       50          50         50
        MOPI                                               75          50          0
        Investment Income                                  50          50         50
        Incremental Drift                                 200         200        200
        Casualty Reduction Partnership                      0           0          0
        Cash Limited Grants                               150         150        150
        Luton Airport                                     100         100          0

Grant Aided Items
      Crime Fighting Fund                                2,713       2,713      2,713
      Crime Fighting Fund                              (2,713)     (2,713)    (2,713)
      Airport / MANPADS                                  1,330       1,330      1,330
      Airport / MANPADS                                (1,330)     (1,330)    (1,330)
      Single Pot (re DNA, SPP, Rural)                    1,937       1,937      1,937
      Single Pot (re DNA, SPP, Rural)                  (1,937)     (1,937)    (1,937)
      Security Expenditure                               1,628       1,628      1,628
      Security Expenditure                             (1,628)     (1,628)    (1,628)
      Community Support Officers                         2,620       2,620      2,620
      Community Support Officers                       (2,620)     (2,620)    (2,620)
      Drug Pilot Scheme                                    328         328        328
      Drugs Pilot Scheme                                     0           0          0

Inflation / Contingency                                  2,450       2,511      2,574

Budget at Outturn Prices                               99,759     103,298    106,950

Year on Year Cash Increase                               3,703       3,539      3,652
Year on Year Percentage Increase                        3.86%       3.55%      3.54%
Cumulative Increase                                     3.86%       7.54%     11.34%

Year on Year Council Tax Increase                       142.71      148.64     157.62
Year on year Percentage Increase                        5.50%       4.15%      6.04%
Cumulative Increase                                     5.50%       9.87%     16.51%
                                                       APPENDIX B



                                                       As at 31

           Police Fund                                   2,659
           Collaboration / Performance Reserve             400
           Devolved Budgets Reserve                        968
           Pensions Reserve                                500
           Insurance Reserve                             1,293
           Capital Expenditure Reserve                   4,778

           Total                                        10,598



           Insurance                                        644
           Airwave Equipment                                100

           Total                                            744

Committee:                               Finance Committee
Date:                                    24th June 2008
Agenda Item:                             12

Report Author:                           Chief Constable

Lead Officer:                            Assistant Director - Resources

Subject:                                 2007/2008 Treasury Management
                                         Annual Report

Purpose:                                 To report on the Treasury Management
                                         activities of Bedfordshire Police during

Background Papers:                       None

1.    Background

1.1   This report summarises the treasury management operations that Bedfordshire
      Police have engaged in during the 2007/08 financial year.

1.2   In the administration of its treasury management operations, the Bedfordshire Police
      Authority has adopted a Treasury Policy Statement, compiled in accordance with
      CIPFA’s code of practice “Treasury Management in the Public Services”. A
      requirement of the Treasury Policy Statement is for an annual report on treasury
      management to be presented to the Finance Committee. This is the report for
      2007/08, which outlines how operations complied with the agreed Treasury
      Management Strategy for 2007/08.

2.    Strategy for 2007/2008

2.1   The Treasury Management Strategy for 2007/2008 was agreed by the Finance
      Committee on 1 February 2007 and can be summarised as follows:

           •    that the main treasury management activity of the Authority would be as a
                lender of funds during 2007/2008. Borrowing would be infrequent and
                short term in nature;

           •    that long-term borrowing may be undertaken from the Public Works Loan
                Board (PWLB) to finance capital expenditure during 2007/2008 if it is
                deemed necessary.

           •    that the benefits of restructuring the long-term debt portfolio would be
                considered and kept under review during 2007/2008.

2.2   This strategy was pursued throughout the year.

3.             Interest Rates

3.1            Bank base rate was 5.25% at the beginning of the year. It was increased by
               0.25% on two occasions early in the financial year, this happened in May and July.
               Similar drops in January and March meant that the base interest rate finished the
               year as it started at 5.25%. Short-term rates were generally at or slightly above the
               base rate apart from a dip in February and March when rates started to drop.

3.2            Long term interest rates (25 years) normally applicable to the Authority’s
               borrowing requirement fluctuated somewhat during the year ranging from 4.48%
               to 5.10%.

3.3            The graph below shows the monthly movement in bank base, short term and 25
               year Public Works Loan Board (PWLB) interest rates during 2007/2008. This
               shows the 7-Day (Local Authority) interest rate mirroring the base rate while the
               PWLB stayed below the base rate.




      Rate %

                                                                                  Base Rate

               3.00                                                               7 Day (Local Authority)

                                                                                  PWLB 25 Year








                                                           Month end

4.             Long Term Borrowing

4.1            The Police Authority is able to borrow to finance capital expenditure from Central
               Government via its agent, the Public Works Loan Board. Board funds are usually at a
               lower rate of interest than is available from the money markets.

4.2   During the financial year £1M was borrowed in August 2007 from the PWLB. This
      was a 25-year loan taken out at a fixed rate of 4.75%. This compares to the potential
      borrowing of £2.7M set out in the Treasury Strategy Statement as a result of lower
      spend in the capital programme.

5.    Restructuring of Debt Portfolio

5.1   Market conditions were monitored throughout the year but no opportunities to
      undertake beneficial restructuring of the debt portfolio were identified during 2007/08.

6.    Short Term Borrowing

6.1   Throughout 2007/08 the Police Authority was in a net lending position with borrowing
      only necessary for short periods on a few occasions. Due to the late receipt of the
      revenue support grant in March 2008 the Authority exceeded its overdraft facility of
      £1M for a few days. The bank approved this and compensation will shortly be paid to
      the Authority by the Department for Communities and Local Government.

7.    Investments

7.1   The Police Authority had surplus funds throughout 2007/2008. These funds were
      invested in approved investments through the London Money Market. Periods of
      investment were always less than 365 days and made with a view to maintain the
      necessary liquidity to meet expenditure throughout the year.

7.2   The average daily level of investment during 2007/2008 on the London Money
      Markets was £16.8M and varied from £10.7M to £20.8M. In addition to this a
      Special Interest Bearing Account was maintained with an average balance of
      £0.7M throughout the year. Interest from these two sources generated £1.026M.
      This being £0.276M higher than anticipated at the beginning of the year.

7.3   All investment activity was undertaken in accordance with the Treasury
      Management Strategy.

8.    Performance Measurement

8.1   The Police Authority applies appropriate performance measurement to its treasury
      operations in accordance with CIPFA recommendations; the success of cash flow
      management and hence temporary investment and borrowing activity is measured
      by comparing the actual rates of interest achieved and borne against the average
      Local Authority 7-Day Rate.
8.2   For the year ending 31 March 2008 the average interest rate achieved from
      temporary investments on the London Money Markets was 5.90%, which
      exceeded the average Local Authority 7-Day Rate (the benchmark) of 5.60% over
      the same period. This return achieved is higher than could have been obtained by
      placing the cash in a normal deposit account with a bank or other institution.

9.     Prudential Indicators

9.1    Under the prudential code the following treasury management indicators were set
       for 2007/08:

        Authorised limit for external debt                                             £14.7M
        Operational Boundary                                                            £7.4M
        Limits for interest rate exposure
                          Upper limit for fixed rate borrowing as an absolute          £6.4M
                          Upper limit for variable rate borrowing as an                -£7.9M
                          absolute amount

9.2    The authorised limit for external debt and the operational boundary were not
       exceeded during the year.

9.3    The limits for interest rate exposure are also shown. This year they have been
       expressed as absolute amounts as opposed to percentages used in previous
       years. Fixed rate borrowing was £3.7M compared to the upper limit of £6.4M
       reflecting the reduced amount of borrowing taken compared to the Treasury
       Strategy Statement. Variable rate exposure, short-term investment net of short
       term borrowing, was £10.750M at its lowest point, well above the indicator of

9.4    The Authority in approving the Treasury Management Strategy for 2007/08
       approved the prudential indicator for the Capital Financing Requirement (CFR) at
       £7.1M. The starting point for this was the previous year’s CFR adjusted for the
       capital programme for 2007/08. The actual CFR for 2007/08 was £4.432M
       reflecting the lower capital spend during the year.

9.5    The final 2007/08 prudential indicator is the ratio of financing costs to net revenue
       stream that was set at -0.35%. The actual figure of -0.80% reflects the fact that
       less interest was paid in 2007/08 because only £1M of loans were taken out
       compared to the anticipated £2.7M. In addition to this, more interest was received
       than expected because interest rates were higher than anticipated. This
       combination of factors meant that financing costs were lower than anticipated.

10.    Risk Assessment

10.1   There are no risks to the achievement of objectives arising from this report.

11.    Financial Implications

11.1   The income was £0.276M higher than originally budgeted for. This is reflected in the
       2007/08 revenue budget final outturn report featured elsewhere on this agenda.

12.    Benefits

12.1   There are no additional benefits to those shown in paragraph 11.1.

13.    Conclusion

13.1   The following summarises treasury management transactions in 2007/08.

                             Long Term            Temporary        Temporary            SIBA
                             Borrowing            Borrowing       Investments
                               £’000                £’000            £’000              £’000
       Balance as at 1         2,720                  -             011,750              146
       April 2007
       Raised                   1,000                 -             81,800              0691
       Repaid                     -                   -             79,650                -
       Balance at 31            3,720                 -             013,900             ,837
       March 2008

13.2   The average daily level of funds available for investment during 2007/08 was £16.8M,
       compared to £17.4M, the previous year. Net interest income was £1.026M (including
       SIBA) compared to an original budget of £0.750M, the increase reflecting the higher
       than expected interest rates during the year.

14.    Recommendation

14.1   That Members note the report

Report prepared by:
Stuart Goodwin
Principal Accountant

Gillian Parker                                        Stephanie McMenamy
Chief Constable                                       Chief Executive / Treasurer


Committee:                                 Finance Committee
Date:                                      24th June 2008
Agenda Item:                               13

Report Author:                             Chief Constable

Lead Officer:                              Assistant Director - Resources

Subject:                                   2008/2009 Treasury Management
                                           Operations Report

Purpose:                                   To report on the Treasury Management
                                           operations that have taken place since the
                                           last report to this Committee.

Background Papers:                         None

1.      Background

1.1     This report summarises the Treasury Management operations that have taken place
        in the 2008/09 financial year.

2.      Borrowing/Investment Operations

2.1     Long Term Borrowing

2.1.1   No long-term borrowing has been undertaken since the last report to this Committee.

2.2     Short Term Borrowing

2.2.1   No short-term borrowing has taken place in this financial year. Any short falls in daily
        cash flow have been met by the Authority’s overdraft facility (£1.00M).

2.3     Investment

2.3.1   Levels of investment on the money markets have varied from £13.9M to £19.3M, as
        at 6 June 2008 the amount invested was £19.3M. In addition to this a “Special
        Interest Bearing Account” (SIBA) has been used to invest residual funds that are
        either lower in value than we are able to invest in the money markets or are required
        at very short notice. The average balance of this account has been £0.9M this
        financial year, the balance as at 6 June being £0.354M.

3.    Performance

3.1   Performance is measured by comparing the actual rates of interest achieved and
      borne against the average Local Authority 7-day rate.

3.2   For the year to date the average interest rate achieved from temporary investment is
      5.83%. This is 0.58% higher than the average Local Authority 7-day rate of 5.25%
      over the same period. This high differential is as a result of investments made before
      rates started to drop and is likely to reduce during the year.

3.3   The interest earned on the Investment Account (SIBA) is 0.1% below the base rate,
      i.e. currently 4.9%.

4.    Summary of Treasury Management Transactions

4.1   The following summarises the treasury management transactions for the current
      financial year.

4.2   Current Borrowing & Investments

                             Long Term            Temporary        Temporary             SIBA
                             Borrowing            Borrowing       Investments
                               £’000                £’000            £’000               £’000
Balance at                     3,720                  -              13,900               837
1 April 2008
Raised                            -                   -              15,700                -
Repaid                            -                   -             (10,350)              483
Balance at                      3,720                 -              19,250               354
6 June 2008

4.3   The following diagram shows the month end levels of temporary borrowing and
      temporary investment for the last twelve months. Also shown is the average daily
      level of temporary investment net of temporary borrowing for each month. All figures
      shown exclude the investment account detailed in paragraph 2.3.1. The monthly
      average shown on this chart is usually higher than the month end figure because the
      larger out flows of cash tend to happen at month end.

                                 Month End Investment £'M
                                 Month End Borrow ing (short term) £'M

      20.0                       Average Net Investment £'M






























                                                                    Month Ending

4.4                 For the financial year to date the average daily level of investment has been £17.1M
                    with interest of £0.168M earned to 31 May. The base interest rate reduced from
                    5.25% to 5.00% in April 2008. Despite this it is expected that investment income will
                    reach the budgeted total of £0.769m by year-end.

5.                  Risk Assessment

5.1                 There are no risks to the achievement of the Force’s objectives arising from this

6.                  Financial Implications

6.1                 The budgeted figure of £0.769M investment income during 2008/09 should be

7.                  Conclusion

7.1                 Projected income from interest earned on investments is expected to equal the
                    budgeted figure.

Gillian Parker                                                      Stephanie McMenamy
Chief Constable                                                     Chief Executive / Treasurer

For Publication                               Finance Committee
                                              24 June 2008
                                              Item No. 14






The report asks the Authority to consider the review of Financial Regulations and
agree a revised version to be effective from 19 July 2008.


That the Authority

1. Approves the proposed changes to Financial Regulations to come into
   effect from 19 July 2008 and

2. Agrees that an annual review of Financial Regulations be considered by the
   Finance Committee in June each year.

1.     Background

       It is good practice to review Financial Regulations on a regular basis to
       ensure they are up to date and meet the objectives of the Authority.

       A review has been completed and the revised Financial Regulations are set
       out in Appendix A.

2.     Proposal

       To maintain the effectiveness and clarity of Financial Regulations an attempt
       has been made to modernise the language used in the document. It has been
       necessary to change references to job titles such as Clerk, which becomes
       Chief Executive / Treasurer.

       The proposed amendments also take account of changes in responsibilities
       since the last review. All amendments reflect existing responsibilities. Any
       subsequent changes will be reflected in future reviews of the document.

3.     Financial Implications

       There are no additional financial implications arising from this report.

4.     Risk Management Implications

       There are no specific risks associated with the proposals in this report and the
       improved clarity of Financial Regulations should reduce the risk of breaches

      as a result of uncertainty over the interpretation of the meaning of some
      sections in the document.

5.    Recommendations

      That the Authority

      •   approves the proposed changes to Financial Regulations to come into
          effect from 19 July 2008 and

      •   agrees that an annual review of Financial Regulations be considered by
          the Finance Committee in June each year.

Stephanie McMenamy

Chief Executive / Treasurer

1          INTRODUCTION .......................................................................... 3

2          FINANCIAL MANAGEMENT .......................................................... 5

    2.1    INTRODUCTION ............................................................................. 5
    2.2    THE POLICE AUTHORITY ................................................................. 5
    2.3    THE AUDIT AND BUSINESS ASSURANCE COMMITTEE ......................... 5
    2.4    THE TREASURER ............................................................................ 5
    2.5    THE CHIEF EXECUTIVE ................................................................... 7
    2.6    THE CHIEF CONSTABLE .................................................................. 7
    2.7    THE ASSISTANT DIRECTOR (RESOURCES) ........................................ 8
    2.8    OTHER FINANCIAL ACCOUNTABILITIES. ...........................................                8
           Virement                                                                                     8
           Treatment of Year-End Variations & Local Balances                                            8
           Accounting Policies                                                                          8
           Accounting Records and Returns                                                               8
           The Annual Statement of Accounts & Annual Governance Statement                               9

3          FINANCIAL PLANNING .............................................................. 10

    3.1    POLICY FRAMEWORK.....................................................................10
    3.2    PREPARATION OF THE POLICING PLAN ............................................10
    3.3    BUDGETING .................................................................................10
           Budget format                                                                              10
           Budget & Capital Programme Preparation                                                     10
           Preparation of Three-Year Revenue Forecast                                                 11
           Budget Monitoring & Control                                                                11
           Variations To Approved Budgets                                                             11
           Out-turn Reporting                                                                         11
           Efficiency and Productivity Targets                                                        11
           Budget Preparation Guidelines                                                              11
           Maintenance of reserves                                                                    12

4          RISK MANAGEMENT & CONTROL OF RESOURCES ...................... 13

    4.1    INTRODUCTION ............................................................................13
    4.2    RISK MANAGEMENT ......................................................................13
    4.3    INTERNAL CONTROL......................................................................13
    4.4    AUDIT REQUIREMENTS..................................................................13
    4.5    INTERNAL AUDIT ..........................................................................14
    4.6   PREVENTING FRAUD AND CORRUPTION...........................................15
    4.7   ASSETS .......................................................................................15
          Control of stock / Inventory                                                                  15
    4.8   TREASURY MANAGEMENT & BANKING .............................................16

5         FINANCIAL SYSTEMS & PROCEDURES ....................................... 17

    5.1   INTRODUCTION ............................................................................17
          General                                                                                  17
    5.2   INCOME AND EXPENDITURE ...........................................................17
    5.3   PAYMENTS TO MEMBERS AND EMPLOYEES.......................................18
    5.4   TAXATION....................................................................................18
    5.5   ORDERING & PAYING FOR WORK, GOODS AND SERVICES .................18

6         EXTERNAL ARRANGEMENTS & PARTNERSHIPS ......................... 19

    6.1   INTRODUCTION ............................................................................19
          Partnerships / Collaborations                                                            19
    6.2   GIFTS, LOANS & SPONSORSHIP .....................................................19
    6.3   EXTERNAL FUNDING .....................................................................20
    6.4   WORK FOR THIRD PARTIES............................................................20
    6.5   INTELLECTUAL PROPERTY RIGHTS ..................................................20

7         APPENDIX A – FINANCIAL INSTRUCTIONS ............................... 21


To conduct its business efficiently, Bedfordshire Police Authority ('the
Authority') needs to ensure that it has sound financial management policies
in place and that these are strictly observed. Part of this process is the
establishment of financial regulations that set out the Authority's financial

Financial regulations provide the framework for managing the Authority’s
financial affairs. They apply to every member and officer of the Authority and
anyone acting on its behalf.

The regulations identify, and provide clarity about, the financial
responsibilities of the Police Authority. Chief Constable, Chief Executive /
Treasurer, Assistant Director (Resources) and all budget holders.

More detailed financial instructions (as per Appendix A), to supplement these
regulations, shall be issued and maintained by the Chief Constable in
consultation with the Chief Executive / Treasurer.

Beyond the scope of this document, financial regulations link with other
internal regulatory documents. For example, code of corporate governance,
contract standing orders, schemes of delegation, financial instructions,
guidance and instructions and employee codes of conduct.

The Chief Constable, Chief Executive / Treasurer and Assistant Director
(Resources) shall maintain a written record where decision-making has been
delegated to members of their staff, including seconded staff.

All staff have a general responsibility for taking reasonable action to provide
for the security of the assets under their control, and for ensuring that the
use of these resources is legal is properly authorised, provides value for
money and achieves best value.

The Chief Executive / Treasurer and Assistant Director (Resources) are jointly
responsible for maintaining a continuous review of the financial regulations
and submitting any necessary additions or changes to the Authority for
approval. The Assistant Director (Resources) is responsible for reporting,
where appropriate, breaches of the financial regulations to the         Chief
Constable, the Chief Executive / Treasurer and Authority.

The Chief Constable is responsible for ensuring that all police and police staff
are aware of the existence and content of, and have access to the Authority’s
financial regulations and other internal regulatory documents and that these
are observed.

The Chief Executive / Treasurer is responsible for ensuring that all Police
Authority staff are aware of the existence and content of, and have access to,
the Authority’s financial regulations and other internal regulatory documents
and that these are observed.

The Assistant Director (Resources), in conjunction with the Chief Executive /
Treasurer, is responsible for issuing advice and guidance to underpin the
financial regulations.

Any police officer or police staff member who knowingly, or by negligence,
breaches these financial regulations may be subject to disciplinary action and
in some instances may incur criminal liability.

Any reference to ‘officer’ or ‘employee’ includes police officers, police staff
and officers and employees of the Police Authority.


Financial management covers all financial accountabilities in relation to the
running of the Authority and the Force. All Members, Authority officers, police
staff and police officers have a duty to abide by the highest standards of
probity in dealing with financial issues.

The Police Authority is responsible for approving the financial policy
framework and budget. It is also responsible for approving and monitoring
compliance with the Authority’s overall framework of accountability and
control, and for monitoring compliance with the agreed policy.

Functions may be delegated to the Chief Constable, Chief Executive /
Treasurer, Committees of the Authority or joint arrangements with other
public bodies. The Authority’s Scheme of Delegation approved by the Police
Authority is set out separately.

The Authority shall, prior to 1st March each year, approve a revenue budget
for the following financial year. The draft budget shall be prepared by the
Chief Executive / Treasurer and the Chief Constable in, such a form as the
Authority may from time to time determine.

In accordance with the Home Office Financial Management Code of Practice,
the Authority shall encourage the delegation of financial management to the
Chief Constable and the Force provided that:

a) there are sufficient safeguards to enable the Chief Executive / Treasurer to
discharge properly his or her statutory obligations, and
b) the financial dealings of the Authority and of the Force are conducted
properly and in a way which meets the requirements of best practice.

The Audit and Business Assurance Committee is responsible for reviewing the
external auditor’s reports, the annual audit letter, the internal auditor’s work
plan and progress, and may consult directly with the internal and external
auditors. The Committee also makes recommendations to the Police
Authority for approval of the Annual Governance Statement and the
Accounting Policies used in the production of the statutory Statement of
Accounts of the Police Authority.

The Police Authority’s is required under the provisions of Section 151 of the
Local Government Act 1972 to appoint as Treasurer a suitably qualified
officer responsible for the proper administration of its financial affairs. The
Treasurer’s main duties are:

•   provide financial advice to the Authority on all aspects of its activity,
    including the strategic planning and policy making process
•   assist members in seeking to obtain best value for money
•   advise the Authority on financial propriety
•   ensure that arrangements are in place so that accurate, complete and
    timely financial management information is provided to the Authority
•   ensure that the annual statutory accounts are properly prepared
•   provide an effective internal audit service and assistance in providing safe
    and efficient financial arrangements
•   ensure that secure treasury management arrangements (including loans
    and investments) are in place.
•   advise the Authority on the safeguarding of assets, including risk
    management and insurance,
•   arrange for the determination, issue and receipt of the annual Council Tax
•   advise the Authority on budgetary matters including any consequent long
    term implications.
•   to review reports containing financial information.

The Treasurer has certain statutory duties in relation to the financial
administration and stewardship of the Authority. This statutory responsibility
cannot be delegated, namely reporting any potentially unlawful decisions by
the Authority or the Force on expenditure, securing the production of a
statement of the Authority’s accounts and maintaining an adequate and
effective internal audit of these accounts.

The Treasurer is responsible for advising the Police Authority about whether a
decision is likely to be considered contrary to or not wholly in accordance
with the budget. Actions that may be 'contrary to the budget' include:

•   Initiating a new policy
•   Committing expenditure above the budgeted level
•   Causing the total expenditure financed from council tax, grants and
    corporately held reserves to increase.

Section 114 of the Local Government Finance Act 1988 requires the
Treasurer to report to the Police Authority and external auditor if the
Authority or one of its officers:

•   has made, or is about to make, a decision which involves incurring
    unlawful expenditure
•   has taken, or is about to take, an unlawful action which has resulted or
    would result in a loss or deficiency to the Authority
•   is about to make an unlawful entry in the Police Authority's accounts.

In connection with these duties the Treasurer

•   must nominate a properly qualified deputy should he or she be unable to
    perform the duties under section 114 personally

•   must be provided by the Authority with sufficient accommodation and
    other resources - including legal advice where this is necessary - to carry
    out the duties under section 114.

To enable the Treasurer to discharge his or her responsibilities, the Chief
Constable shall provide the Treasurer with any information required, shall
allow the Treasurer access to the documents and records under their control,
and shall comply with the Treasurer's recommendations regarding the form
of and method of keeping any financial records or the operation of any
financial procedures.

Section 113 of the Local Government Finance Act 1988 requires that the
Treasurer shall also be a member of one or more of the bodies listed:

•   The Institute of Chartered Accountants in England & Wales
•   The Institute of Chartered Accountants in Scotland
•   The Chartered Association of Certified Accountants
•   The Chartered Institute of Public Finance and Accountancy
•   The Institute of Chartered Accountants in Ireland
•   The Chartered Institute of Management Accountants, and
•   Any other body of accountants established in the U. K. and for the time
    being approved by the Secretary of State for the purposes of this section

The Chief Executive is responsible, through the monitoring officer, for:

•   Reporting any actual or potential breaches of the law or maladministration
    to the Authority
•   Ensuring that Police Authority Members are advised of the financial
    implications of all proposals.
•   Seeking approval on any matter liable to affect the Police Authority’s
    finances materially, before any commitments are incurred.
•   Advising the Police Authority Members and officers about who has the
    authority to take a particular decision.
•   Signing contracts on behalf of the Police Authority.

The Chief Constable, and those working for the Chief Constable, have day to
day responsibility for the financial management of the Force within the
financial policy framework, the agreed budget and rules of virement. The
Chief Constable has delegated the responsibility for the provision of services
such as payroll, pensions, and general financial administration within the
Force as well as other services such as the management of procurement and
fleet to the Assistant Director (Resources).

The Chief Constable is responsible for ensuring that Authority members are
advised of the financial implications of all proposals and that the financial
implications have been agreed by the Assistant Director (Resources) and that
the Chief Executive / Treasurer has been consulted.

The Assistant Director (Resources) undertakes the role of Force Finance
Director as prescribed by the Home Office Financial Management Code of
Practice. The Assistant Director (Resources) is responsible to the Chief
Constable for financial activities undertaken in the Force and should have a
place on the Chief Constable's senior policy team.

The Assistant Director (Resources) is required to be a member of one of the
accountancy bodies outlined at 2.4 above and is responsible for all financial
activities undertaken within the Force or contracted out by the Force.


Virement may be defined as the permission to spend more under one budget
head when matched by a corresponding reduction on some other budget
head, always providing that the total budget is not already overspent or
expected to overspend.

The approval of the Authority is required when the virement proposals imply
significant changes of major policy as defined in the Scheme of
Delegation/Financial Regulations, relate to sums in excess of the limits
defined in the Scheme of Delegation/Financial Instruction (Financial
Management Scheme) or involve additional revenue commitments in future

No commitment shall be entered into on behalf of the Authority that would
either lead to expenditure exceeding the Budget provision or income falling
short of Budget provision. As soon as a potential overspending or loss of
income is identified, it should be reported in accordance with Financial

Any reports to the Police Authority proposing action which would lead to
additional expenditure or loss of income which could not be contained within
current Budget provision must include the financial implications for the
current year and the ongoing full year effect. This also applies to proposed
action that can be contained within the current Budget if it represents a
change of policy. Such reports will be presented to the appropriate
Committee jointly by the Chief Constable and Chief Executive / Treasurer.

Treatment of Year-End Variations & Local Balances
The Police Authority is responsible for agreeing procedures for carrying
forward under- and overspending on budget headings. The current approved
limits are detailed in the financial instructions, financial management

Accounting Policies
The Assistant Director (Resources) in conjunction with the Chief Executive /
Treasurer is responsible for selecting accounting policies and ensuring that
they are applied consistently.

Accounting Records and Returns
The Assistant Director (Resources) in conjunction with the Chief Executive /
Treasurer is responsible for determining the accounting procedures and
records for the Authority in compliance with nationally imposed reporting
standards and codes of practice, as appropriate

The Annual Statement of Accounts & Annual Governance Statement
The Chief Executive / Treasurer in conjunction with the Assistant Director
(Resources) are responsible for ensuring that both the annual Statement of
Accounts and Annual Governance Statement are prepared in accordance with
the CIPFA/LASAAC Code of Practice on Local Authority Accounting in the
United Kingdom: A Statement of Recommended Practice (the SORP). The
Finance Committee is responsible for scrutinising the Annual Statement of
Accounts and recommending that the Authority formally approves them.

The Chief Executive / Treasurer is responsible for issuing public notices
regarding the inspection of the Accounts and the completion of the external

The Chief Executive / Treasurer has the responsibility for collecting
information from Members and Officers regarding related party transactions
for inclusion as a summary in the Statement of Accounts.


The Police Authority is responsible for agreeing the financial policy framework
and budget. In terms of financial planning, the key elements are:

•   the annual Local Policing Plan and Three Year Strategic Plan
•   the Financial Strategy
•   the Revenue Budget
•   the Capital Programme
•   General and Earmarked Reserves

The Chief Constable is responsible for proposing the policing plan to the
Police Authority for approval. This must contain:

•   the ministerial priorities set by the Home Secretary
•   local priorities, after consultation with the public
•   performance targets, linked to the above priorities
•   efficiency and productivity targets


Budget format
The general format of the revenue budget and capital programme proposed
by the Chief Constable on the advice of the Assistant Director (Resources),
will be approved by the Chief Executive / Treasurer, subject to any directions
by the Police Authority. The draft budget should include the sums allocated to
different services and projects, proposed precept levels and contingency and
reserve funds.

Budget & Capital Programme Preparation
The Chief Executive / Treasurer is responsible for ensuring that the overall
annual revenue budget and capital programme prepared by the Chief
Constable accords with statutory requirements, before it is presented for
approval by the Police Authority.

The Chief Constable in consultation with the Assistant Director (Resources) is
responsible for issuing guidance on the general content of the budget, as
soon as possible following its approval by the Police Authority.

It is the responsibility of the Chief Constable in conjunction with the Assistant
Director (Resources) to ensure that the revenue budget and capital
programme proposals reflect the priorities outlined in the Local Policing Plan.

The Chief Executive / Treasurer is responsible, in conjunction with the
Assistant Director (Resources), for ensuring the estimates contained within
the budget are realistic and prudent.

Preparation of Three-Year Revenue Forecast
The Chief Constable is responsible for proposing the three year revenue
forecast for medium-term financial planning to the Police Authority for
approval. This must contain:-

•   details of the strategic direction of the force
•   proposals for changes to levels of existing services, nationally or locally
•   known commitments
•   impact on the revenue budget and precept.

Budget Monitoring & Control
The Assistant Director (Resources) is responsible for providing appropriate
financial information to the Police Authority to enable both revenue budgets
and the capital programme to be monitored effectively.

It is the Chief Constable’s responsibility to ensure that income and
expenditure is properly monitored and controlled and take appropriate action
to avoid exceeding the budget and capital programme allocations, alerting
the Chief Executive / Treasurer to any problems that may arise.
The procedure for approving capital expenditure proposals is detailed in the
financial instructions.

It is the responsibility of the Chief Executive / Treasurer to control the
Authority’s element of the budget.

Variations To Approved Budgets
The Police Authority is responsible for approving procedures for agreeing
increases or reductions to overall approved budgets and for determining the
circumstances in which a decision will be deemed to be contrary to the
budget or policy framework.

Out-turn Reporting
The Chief Constable shall, in conjunction with the Assistant Director
(Resources), report on the outturn of income & expenditure to the Police
Authority as soon as practicable after the end of the financial year.

Efficiency and Productivity Targets
The Chief Constable is required to include details of the efficiency and
productivity targets with the Annual Policing Plan. A quarterly report shall be
presented, plus an end of year report annually, to the Police Authority.

Budget Preparation Guidelines
Guidelines on budget preparation are issued by the Assistant Director
(Resources). The guidelines will take account of:

•   legal requirements
•   the medium-term financial forecast
•   Local Policing Plan/ Policing Strategy
•   the operational requirements of the Chief Constable
•   spending pressures and efficiency plans
•   other relevant government guidelines
•   other internal policy documents

Maintenance of reserves
It is the responsibility of the Chief Executive / Treasurer to advise the Police
Authority on the level of prudent reserves that the Authority should maintain
in accordance with the CIPFA LAAP Bulletin 55, 2003, as referred to by the


It is essential that robust, integrated systems are developed and maintained
for identifying and evaluating all significant risks to the Force and Authority.
This should include the proactive participation of all those associated with
planning and delivering policing services.

The Police Authority, taking account of advice from the Chief Executive /
Treasurer, is responsible for approving the general arrangements for risk
management and insurance. The Chief Constable is responsible for
implementing and developing the risk management strategy and for
promoting a culture of risk awareness throughout the Force, including the
identification of business continuity plans in the event of an unexpected

Internal control refers to the systems of control devised by management to
help ensure that the Police Authority’s objectives are achieved in a manner
that promotes economical, efficient and effective use of resources and that
its assets and interests are safeguarded.

The Chief Executive / Treasurer, in conjunction with the Assistant Director
(Resources), is responsible for advising on and implementing effective
systems of internal control. These arrangements need to ensure compliance
with all applicable statutes and regulations, and other relevant statements of
best practice. They should ensure that public funds are properly safeguarded
and used economically, efficiently, and in accordance with the statutory and
other authorities that govern there use.

It is the responsibility of the Chief Constable, with advice from the Assistant
Director (Resources), to establish sound arrangements to achieve continuous
improvement, economy, efficiency and effectiveness and for achieving
financial performance targets.

The Chief Constable and the Chief Executive / Treasurer will conduct a review
at least once a year of the effectiveness of the system of internal control and
will include an Annual Governance Statement, prepared in accordance with
proper practices, in the Annual Statement of Accounts.

The Accounts and Audit Regulations 2003 require the Police Authority, to
maintain an adequate and effective internal audit function that primarily
provides an independent and objective opinion to the organisation on the
degree to which the internal control environment supports and promotes the
achievement of the organisation’s objectives. It objectively examines,

 evaluates and reports on the adequacy of internal control as a contribution to
 the proper, economic and efficient use of resources.

 The Audit Commission is responsible for appointing external auditors to the
 Authority. The basic duties of the external auditor are governed by section 15
 of the Local Government Finance Act 1982, as amended by section 5 of the
 Audit Commission Act 1998.

 The Police Authority will, from time to time, be subject to audit, inspection or
 investigation by external bodies such as the Audit Commission, HMIC and HM
 Revenue and Customs, who have statutory rights of access to all documents,
 facilities and information necessary for audit and inspection purposes.

 The Audit and Business Assurance Committee under the Chairmanship of an
 Authority member other than the Chairman of the Police Authority has the
 responsibility for ensuring that the Police Authority and Force follow the
 necessary regulations regarding audit and other statutory inspections.

 The Authority, on the advice of the Chief Executive / Treasurer, shall
 maintain or procure an adequate and effective internal audit of the activities
 of the Authority.

  The Chief Executive / Treasurer or their representative, including an internal
  auditor acting on behalf of the Authority, shall:
•    have authority to enter at all times on any premises or land used by the
     Authority and to have access to all correspondence, documents, books or
     other records of any employee of the Authority or the Chief Constable and
     appertaining in any way to the activities of the Authority
•    be entitled to require any explanation considered necessary to establish
     the correctness of any matter under examination, and
•    have the authority to require any employee of the Authority or the Chief
     Constable to produce cash, stores or other Authority property under his /
     her control.

 In procuring internal audit, the Authority shall have regard to the CIPFA Code
 of Practice for Internal Audit in Local Government.

 The Chief Executive / Treasurer shall be notified immediately by the Chief
 Constable, through the Assistant Director (Resources), of all financial
 irregularities or suspected irregularities, or any circumstances which may
 suggest the possibility of irregularities in the exercise of any of the Police
 Authority's functions, and should be notified in writing of the results of any
 police investigation.

 Each budget holder shall take steps to minimise the risk of financial
 irregularities occurring.

The Chief Constable has responsibility for the development and maintenance
of an Anti-Fraud and Anti Corruption strategy which applies to the Force and
the Authority. That strategy is designed to prevent and detect fraud and
corruption and identify a clear pathway for investigation and remedial action.
It is based on a series of inter related procedures covering culture,
prevention, internal control system and training on detection and

Police Authority Members are required to operate within Section 117 of the
Local Government Act 1972, which requires declaration of any pecuniary
interests in contracts and prohibits the acceptance of fees or rewards, other
than by means of proper remuneration. Members are also required to
operate within current organisational rules and regulations, including
Bedfordshire Police Authority Standing Orders and the Local Code of Conduct.
These matters are specifically brought to the attention of Members at an
induction course and in the induction pack and include the declaration and
registration of any potential areas of conflict between Members' Bedfordshire
Police Authority duties and responsibilities and any other areas of their
personal or professional lives.

Where financial irregularity is suspected or discovered, the Chief Constable
is, through the Assistant Director (Resources), to notify the Chief Executive /
Treasurer (who will notify the Head of Internal Audit) immediately.

The Chief Executive / Treasurer will ensure that the Chief Constable keeps
proper records of the Authority’s assets and that they are properly
maintained and securely held. The Chief Constable will also ensure that
contingency plans for the security of assets and continuity of service in the
event of disaster or system failure are in place.

Control of stock / Inventory
The Supplies Department will control the issue of personal issue items, such
as uniforms by the maintaining of kit lists that will detail items both issued
to, and returned by, police officers and members of the police staff.
The issue of vehicle parts (tyres, filters etc) must be recorded on the Force’s
“Tranman” fleet management system.

To achieve control and security over the purchase of small non-electronic
assets, individual departments are required to maintain inventory lists for
audit inspection which detail location, value and current holder.
Electronic devises such as, Blackberries, laptop PCs and desktop PCs are to
be listed on an asset register held by the IT/Communications department.

The Police Authority has adopted the key recommendations of CIPFA’s
Treasury Management in the Public Services: Code of Practice. Accordingly,
the Police Authority will maintain effective treasury management as follows:

•   A Treasury Management Policy Statement, stating the policies and
    objectives of its treasury management activities will be developed and
•   Suitable Treasury Management Practices (TMPs), setting out the manner
    in which the Police Authority will seek to achieve those policies and
    objectives, and prescribing how it will manage and control those activities
    have been agreed by the Police Authority.

The Police Authority will receive an annual report from the Chief Constable on
the activities of the treasury management operation.

The Police Authority will ensure proper implementation and monitoring of its
treasury management policies and practices. Responsibility for the execution
and administration of the treasury management decisions is delegated by the
Chief Executive / Treasurer, to the Assistant Director (Resources), who will
act in accordance with the Policy Statement, TMPs, CIPFA’s Prudential Code
for Capital Finance in Local Authorities and CIPFA’s Standard of Professional
Practice for Treasury Management.

The Assistant Director (Resources) will ensure that the Chief Executive /
Treasurer is informed when any bank accounts are opened or closed.


Sound systems and procedures are essential to an effective framework of
accountability and control.

The Chief Executive / Treasurer is responsible for approving the Police
Authority’s accounting systems, the form of accounts and the supporting
financial records. The Chief Constable through the Assistant Director
(Resources) is responsible for operating the Police Authority’s accounting
systems. Significant changes made by the Chief Constable to the existing
financial systems or the establishment of new financial systems must be after
consultation with the Chief Executive / Treasurer.

The Chief Constable should ensure that Police Staff and Police Officers
receive relevant financial training that has been approved by the Assistant
Director (Resources).

The Chief Constable must ensure that, where appropriate, computer and
other systems are registered in accordance with data protection legislation.
The Chief Constable must ensure that police staff and police officers are
aware of their responsibilities under data protection and freedom of
information legislation.

5.2 Income and expenditure
The Chief Constable is responsible for ensuring that there are proper
procedures in place to ensure that all income due is collected, banked and
accounted for.

The Chief Constable must ensure that fees and charges for goods and
services are reviewed at least annually and the Authority is advised of

All outstanding income will be pursued until it is determined as economic to
pursue, at which time arrangements will be made to write it off. The Police
Authority is responsible for approving procedures for writing off debts as part
of the overall control framework of accountability and control.
Annual Bad debts can be authorised by the following personnel up to the
limits in the table:

                                       Authorising Officer
   Up to          5,000         Assistant Director (Resources)
                              Assistant Director (Resources) and
   Up to         15,000
                                  Chief Executive / Treasurer
   Above         15,000                 Police Authority

Debt write off over £15,000 will be subject to a separate report to the
Finance Committee for recommendation to the Authority that the write off
should be approved. The report will cover reasons for the proposed bad debt
write off.

5.3 Payments to Members and employees
The Chief Constable through the Assistant Director (Resources) is responsible
for all payments of salaries and wages to all employees, including payments
for overtime and allowances.

The Chief Executive / Treasurer is responsible for payment of allowances,
salaries and wages to all Police Authority Members and Officers.

5.4 Taxation
The Chief Executive / Treasurer, in conjunction with the Assistant Director
(Resources) is responsible for advising the Chief Constable, in the light of
guidance issued by appropriate bodies and relevant legislation as it applies,
on all taxation issues that affect the Police Authority.

The Chief Constable through the Assistant Director (Resources) is responsible
for maintaining the Police Authority’s tax records, making all tax payments,
receiving tax credits and submitting tax returns by their due date as

5.5 Ordering & Paying For Work, Goods and Services
All orders for the supply of Work, Goods and Services must comply with the
applicable process set out in the Authority’s Contract Standing Orders.

Individual external purchases shall be fully compliant with the financial
instructions relating to ordering and processing of goods and services. .

An Official Purchase Order must be issued prior to any Works, Goods or
Services being supplied with the exception of where such Works, Goods or
Services are being purchased via the Government Procurement Card (GPC).


6.1 Introduction
The Police Authority and the Chief Constable provide a distinctive leadership
role within the community to make Bedfordshire safer through the most
effective and efficient delivery of the right police services for the area. This
role is enhanced through a variety of external arrangements.

Partnerships / Collaborations
Where Bedfordshire Police Authority is the lead partner the Police Authority’s
financial regulations and standing orders apply.

The Chief Executive / Treasurer and Assistant Director (Resources) are
responsible for promoting the same high standards of conduct with regard to
financial administration in partnerships that involve the Police Authority and
the Force.

The Chief Executive / Treasurer and Assistant Director (Resources) must
ensure that the accounting arrangements to be adopted relating to
partnerships and joint ventures are satisfactory. Consideration must also be
given, in consultation with the Chief Constable and the Chief Executive /
Treasurer, to the overall corporate governance arrangements and legal issues
when arranging contracts with external bodies. The Chief Executive /
Treasurer must ensure that the risks have been fully appraised before
agreements are entered into with external bodies.

The Chief Constable is responsible for ensuring that appropriate approvals
are obtained before any negotiations are concluded in relation to work with
external bodies.

All collaborations should be covered by collaboration agreements, as legally
required under section 23 of 1996 Police Act, and will include governance
arrangements, particularly where an individual Police Authority delegates
their responsibility to another body. All collaboration agreements will be
presented to the Police Authority for approval.

6.2 Gifts, Loans & Sponsorship
The Assistant Director (Resources) is responsible for ensuring that all gifts of
money, gifts or loans of other property, including sponsorship, which are
received by Bedfordshire Police Force, its officers or staff, are properly
recorded in the Authority’s accounts.

The Chief Constable may accept gifts, loans and sponsorship on behalf of
Bedfordshire Police from any source, which has genuine and well-intentioned
reasons for wishing to support specific police projects. In return the provider
may expect some publicity or other acknowledgement, such as displaying an
organisations name or logo. This is acceptable provided that it does not
dominate or detract from the purpose of the supported project.

Gifts and loans and sponsorship should not be accepted where there is a risk
of offending the integrity or propriety of the police.
Priority shall be given to meeting the needs of the Force rather than those of
any sponsor and care should be taken to avoid associations with
inappropriate sponsors, giving the impression that sponsors have accrued a
commercial advantage, entering into projects of dubious or limited benefit
and allowing unacceptable conditions to be attached to sponsorships.

The total value of gifts, loans and sponsorship accepted should not exceed a
maximum equivalent value of 1% of the Force annual Net Budget
Requirement. The Chief Executive / Treasurer must ensure that the Police
Authority maintains a register which records all gifts of money, gifts or loans
of other property, including sponsorship, which is received by either its
members or its staff.

6.3 External Funding
The Chief Constable, through the Assistant Director (Resources), is
responsible for ensuring that all funding notified by external bodies is
received and properly recorded in the Police Authority’s accounts.

6.4 Work For Third Parties
The Chief Constable is responsible for approving the contractual
arrangements for any work for third parties or external bodies, including the
identification of all risks related to that work.

6.5 Intellectual Property Rights
Where Bedfordshire Police Authority is the sole owner or part owner of
Intellectual Property Rights the Police Authority’s financial regulations and
standing orders apply.

The Chief Executive / Treasurer and Assistant Director (Resources) must
ensure that the accounting arrangements to be adopted relating to
Intellectual Property Rights are satisfactory.

                                                                     APPENDIX 'A'

                           FINANCIAL INSTRUCTIONS

These Financial Regulations require that Financial Instructions (to be drawn up
jointly by the Chief Executive/Treasurer and Chief Constable) shall be issued to
cover in more detail the following issues:-

      Financial Management
      Imprest Accounts
      Collection of Income
      Write Off Procedures
      Contracting Procedures
      Treasury Management
      Inventories and Security
      Voluntary and Unofficial Funds
      Procurement Cards
      Ex Gratia Payments


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