08c Police Finances - Nigel Brook

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					  Police Superintendents’ Association
Annual Conference, 15th September 2010
               Nigel Brook
 Vice Chair, ACPO Finance and Resources
Police Finances:
Managing Restricted or Reduced Budgets
         Content

The Current Position

Risk Factors

Making the Savings
The Black Hole…..




           Cartoon by Paul Thomas, Daily Express
What does £179 billion look like ?
       Remember These ?




 £100 million this year
£545m per year by 2014
                The Current Position
 Emergency Budget Headlines
   No further cut in capital over Labour Plans
   Departmental Expenditure Cuts - £17Bn further cuts
   Protection to NHS, Overseas Aid, Education
   Average Real Cuts of 25% over 4 years
   If reflected in cuts on police budgets, £2.4Bn less
    spend
   Council Tax Freeze
                   The Current Position cont
 CSR
        20th October 2010
        3 years as usual ?     Nils Bohr :
 Provisional Settlement
        Nov / Dec 2010         Prediction is very
        At Authority Level     difficult, especially if
 Final Settlement – Jan 2011
                                it is the future !
 Budget Approval – Feb 2011
There’s a big train coming down the tracks
               toward you ….
A Range of Reactions…
             The Current Position cont.
 In June 2010 HMIC conducted a survey of all 43
  E & W forces.
 Only 9 forces indicated that they had costed
  change programmes to bridge the forecast gap.
 Only 8 forces regarded themselves as well
  prepared for the scale of cuts.
 27 had a large potential financial gap.
 13 had a low level of preparedness.
                   Possible scenario ?
25 % reduction in Police
Grant, NNDR & RSG
Freeze on Council Tax
Net reduction of 18.1 %
Equates to £ 2 billion
Equivalent to stopping policing
YaTH, Cleveland, Durham,
Northumbria, Cumbria, Lancashire
and Lincolnshire                Based on CIPFA Estimates 09/10
                    A People-Based Service

Employee costs account for 82% of
Gross Revenue Expenditure
Non employee costs are only 18%
18% of 09/10 total funding = £2 billion
                                               CIPFA Estimates 09/10

In scenario, funding reduction is £2 billion

Cannot cover funding gap from ‘other expenditure’ alone &
sustain service – so posts will inevitably be reduced
               Risk Factors - National
 Police Service has high Grant v Precept.
 A percentage cut in Grant is therefore more
  impactive.
 High levels of specific grant and partner
  contributions.
 Olympic Games.
 80% of spend is employee related.
 Some changes will need to take place via PNB.
                   Risk Factors - Local
In ‘Valuing the Police’ HMIC indentified that
individual Authorities / Forces most at risk are
those with:
    Low spend compared to their peers.
    Higher reliance on central govt funding (V precept).
    Smaller budgets.
    Less funding relative to their need.
            Risk Factors – Local cont
Low levels of reserves.
Low workforce turnover rates.
I would add :
High dependence on specific grants and
  partner contributions.
                 Making the Savings
In the short term (for 2011/12) many forces are :
Freezing Police Staff recruitment
Freezing Police Officer recruitment
Stopping use of agency staff
Reducing use of consultants
Cash limiting non pay budgets.
             Making the Savings cont.
 Identifying non core activities :
 Using flexible retirement, reduced hours.
 Offering voluntary early retirement.
 Using of reserves and balances.
 Reducing capital spending.
 Procurement savings (Demand management,
  Review of specifications, Contract re-
  negotiations).
                Making the Savings cont.
Longer term options (for 2012/13 and later) may include :
Collaboration (for both back and middle office) between
forces and with others.
Standardisation of equipment and uniforms.
National IT systems (ISIS).
Changes to the remuneration packages of officers and
staff.
Outsourcing some services.
Business process re-engineering (e.g. Quest) and
cashing in the savings.
                Making the Savings cont.
Experience so far suggests that the following will help :
Leadership by the whole ACPO team (not just the
FD/ACO).
Main lead as police ACPO member (e.g. CC or DCC).
Communication, communication, communication.
Involvement of all staff, managers, stakeholders.
Use of Benchmarking (e.g. HMIC VFM profiles, CIPFA
statistics).
              Making the Savings cont.
 Focussing the project review / management
  capabilities on savings (not just Accountants).
 Budget for up-front costs (not just redundancy
  costs).
 Review the ‘Management of Change’ policy as
  an early task.
 Use your performance management process.
                       Challenge
   To deliver, we will need Transformational change.
   Govt. Radical.
   Staff Losses.
   Impact upon Services.
The Menu
              Questions
There will be an opportunity to
 ask questions of all the speakers
 now.
Thank you. Heraclitus of Ephesus :
               ‘Nothing endures but change’