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ITEM 7(c) TO POLICE AUTHORITY AGENDA

DATED 19 FEB 09 Police Authority Meeting

Thursday, 19 February 2009

Joint Report of the Chief Constable,

the Treasurer and Chief Executive of the Police Authority

1. REVENUE BUDGET AND PRECEPT REPORT 2009/10

Purpose of Report

1.1 To confirm details of second year of the new three-year local

government finance settlement for 2008/11, to summarise the proposed revenue budget allocations and to recommend the precepts on billing authorities for 2009/10.

Information and Analysis Background 1.1.1 This is a key report that will shape the way the Constabulary uses its

finances over the next year and indeed three years. More importantly it will determine the ability of the Authority and Constabulary to deliver an efficient and effective policing service to all communities of Derbyshire.

1.1.2 Derbyshire is not a well funded force. Derbyshire is now the fourth

lowest funded Force nationally in terms of spending per head of population. This marks a deterioration compared to our position as the sixth lowest funded Force last year.

1.1.3 Last year’s comprehensive spending review indicated some very limited

success in lobbying for the relaxation of grant floors. The fact remains that Derbyshire is set to lose a further £15m in government grant over the current three-year settlement period. This is on top of the £11m it has already lost to help compensate better funded forces. At around 3.2% the grant increase for Derbyshire is below the County Council at 6.4%, Fire at 4.3% and City Council at 3.9%.

1.1.4 Derbyshire is a very efficient force. It has delivered efficiency savings

of some £40m since 2002/3. Our Auditors assessed the Force’s performance on value for money at the highest level.

1.1.5 Consistently over recent years Derbyshire has the best performance

within the East Midlands in terms of crime reduction and detection and some of the best performance nationally in these areas. This has been delivered by a force facing above average risks with funding well below average. This signifies the scale of the value for money that the Force has delivered in recent years.

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1.1.6 Derbyshire Constabulary has managed its finances well. Through this prudent discipline, and supported by the Police Authority, it has built up reserves over a number of years, which will play a key role in helping the force deliver future efficiency. For example the Authority is committed to invest in the Centralised Contact Management Centre which is set to deliver future savings of some £1m per annum.

1.1.7 Reserves are a valuable resource that both help to cushion the impact

of budget reductions, while efficiencies are made, as well as providing much needed investment to help generate future savings. In a service as unpredictable as policing, reserves also help to cushion the impact of sudden operational demand, such as the range of incidents impacting on the force during November 2008.

1.1.8 Derbyshire Constabulary has made good use of the limited funding

provided within last year’s budget to start to “Close the Risk Gap”. In the space of six months it has implemented this complex project and the business change associated with it. This is now beginning to have a real impact on reducing our Public Protection Risks and better protecting the vulnerable.

1.1.9 The Authority and Force still have considerable risks that remain to be

addressed. These risks have been reviewed at the Force’s second Strategic Risk Seminar, attended by the Authority, Force, and Partners across the county together with national agencies. This confirmed the key policing risks that need to be addressed as part of the budget process. These are real risks that impact on the lives of many of the most vulnerable residents across Derbyshire.

1.1.10 The national policing agenda has changed over recent years.

Reducing and detecting crime is still very important, however the priority is moving towards protecting the most vulnerable in our community from threat and harm, whilst further enhancing the quality of our interaction with the public. The Home Secretary has announced her intention to abolish the national performance management framework for policing and introduce a single target to improve public confidence. As part of this all forces have now signed up to a National Policing Pledge which seeks to determine:-

• the style and quality of our service through how we answer calls for

service. • the manner which the Force attends incidents, how we work with

local neighbourhoods. • how the Force keep people informed. • how the Force deal with complaints.

1.1.11 During the second half of 2008, the financial climate across the world

changed dramatically, with substantial falls in investment returns and interest rates, not to mention the impact of soaring utility costs. All of these changes impact not only on the financial health of the Authority but also the policing risks that it faces during a period of recession.

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1.1.12 At a local level, this means that the Authority has to strike a difficult

balance between the impact of the police precept on local taxpayers and the resources that the Force needs to close the risk gap to deliver an efficient and effective policing service that protects local people.

1.1.13 In the changed financial environment the challenge is to prevent the

risk gap widening further as the Authority experiences greater budget pressures, before it can even consider action to close the risk gap further. The biggest challenge is to balance the Authority’s current budget and protect existing service levels. This challenge is made even greater because over 80% of all Force resources are spent on our officers and staff.

1.1.14 Three budget proposals are put forward in this paper. These are to:-

• Achieve parity of funding with neighbouring forces – even this

would still leave us considerably under-funded compared to many of our “most similar” forces, who are used as a bench-mark for measuring our performance.

• Address our highest priority policing risks and the impact of the

policing pledge.

• Break-even budget to maintain our existing service levels but without any additional resources to address the risks that we face.

1.1.15 The break-even budget is now based on a precept increase of 8.68%

rather than a precept increase of 8.8%. This is in order to remain within the Government’s existing capping criteria of a 5% budget increase. The change is a technical one and is due to a slightly better position on council tax collection funds which feeds into the precept calculation.

1.2 Our Current Funding Position

1.2.1 Before considering spending levels for 2009/10, it is important to be

aware of the current financial position for Derbyshire Police Authority. 1.2.2 The table below shows the increase in budget requirement and precept

in 2008/9 for each of the four main precepting authorities across Derbyshire along with comparisons with the national average budget increase for each class of authority.

Budget Increase Derbyshire

Precept Increase

Derbyshire Increase

National Average

Police Fire County City

4.6% 4.0% 3.5% 5.0%

3.7% 5.9% 9.6% 8.4%

4.3% 4.1% 8.1% 7.3%

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1.2.3 While much attention is focused on the level of the precept increase,

where Derbyshire Police was the second highest in the county, it is the overall budget increase that should be considered as this is the indicator of the ability of each authority to maintain and improve their existing services.

1.2.4 The table shows that Derbyshire Police had the lowest budget increase

in 2008/9 of all the main precepting authorities in Derbyshire at 3.7%. This was well below the increase for Fire (5.9%) and considerably below the increase for the City (8.4%) and County (9.6%).

1.2.5 The table also shows that Derbyshire Police was the only Authority with

a budget increase considerably less than the national average for the service class.

1.2.6 The main reason for the disparity between precept increases and the

overall budget increase is due to government grant increases.

1.2.7 Government grants provide a large share of the total funding for all authorities. This means that grant increases have a big impact on the overall budget increase. In the case of County and City Councils and the Fire Authority their grant increased by 9.4%, 5.6% and 7.5% respectively. The increase in Grant for Derbyshire Police was 3.2%.

1.2.8 While the County, City and Fire Authorities are improving their position

relative to their similar authorities, Derbyshire Police has fallen further behind similar forces. As already indicated, this means that Derbyshire Police are now the fourth lowest funded force in England and Wales compared to the sixth lowest last year.

1.2.9 The table below shows the impact of this under-funding compared to

our neighbouring forces. Compared to our “Most Similar” forces group the gap is even more stark with all but one force better funded than Derbyshire. Indeed four of our seven “most similar” forces having relative funding of between £28.5m and £37.7m more than Derbyshire.

Net Spend per Head

£

Derbyshire budget Increase at this

level Derbyshire 158.746 Neighbouring Forces Cheshire Leicestershire Nottinghamshire Staffordshire South Yorkshire Warwickshire

168.092 171.006 174.981 165.770 190.745 163.535

£9.3m £12.1m £16.1m £7.0m £31.7m £4.7m

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“Most Similar” Forces Cumbria Durham Humberside Norfolk North Wales Staffordshire Suffolk

196.282 193.528 187.512 166.135 191.542 165.770 152.222

£37.7m £34.5m £28.5m £7.3m £32.5m £7.0m

- £7.0m

Source: Cipfa Statistic Estimates 2008/9

1.2.10 Derbyshire Police relies more heavily on Government Grant than the majority of other Police Authorities. 69% of the Authority’s spending is met by grant with the remaining 31% met by police precept. Effectively this means that small budget increases can result in high precept increases.

1.3 Closing the Risk Gap 1.3.1 At the time of the last budget the Force and Authority agreed to invest

in improving its capacity for addressing serious and organised crime and protective services.

1.3.2 Over the first six months of the financial year the Force implemented

these budget proposals involving:-

• Reducing the number of policing sections from 20 to 13 with the consequential adjustments in supervisory (Sergeant) and management (Inspector) cover at section level.

• Changing the mix in Safer Neighbourhood Teams with PCSOs replacing police officers in a number of teams.

• The recruitment of 108 new officers and staff for protective services. • The installation of a modular building to bring together officers and

staff working in the central protective services team. • Establishing public protection teams in Belper, Buxton, Chesterfield

and Derby. • A reduction in overall roads policing numbers, with a greater focus

on the use of ANPR technology with a specialist road policing unit to deal with the intelligence stemming from the Authority’s investment in ANPR.

1.3.3 This investment has also meant that the Force has been in a much

stronger position to deal with the heightened risk of child protection demonstrated in the “Baby P” case. It has enabled the Force to address and respond to significant increases in Child abuse, Vulnerable Adult abuse and Domestic Violence referrals. The extra resources have also helped the force improve the way it works with other agencies to ensure that more of these cases are investigated and pursued.

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1.3.4 The Child Abuse Investigative remit has been widened and now includes all serious sexual assaults on a child under the age of 16 years, thereby providing a better service to victims and offenders and reducing the demands on Divisional response officers. The impact of ‘Baby P’ is being felt by all agencies; predominantly the Police and Social Care and the above referrals have been compounded by this. The national implications from the Haringey case have created more work on existing Serious Case Reviews (SCR’s), which are being managed within the Public Protection Unit.

1.3.5 There has been one Domestic Abuse Murder and two attempted

murders in this last quarter where the benefits of the new Domestic Violence Central Referral Unit and dedicated resources have assisted Major Crime Investigations. Domestic Abuse investigators have dealt with 125 offenders (Oct – Dec 2008) for offences of Attempted Murder, Rape, Kidnap, Drugs, Common Assault and Harassment. 58 of which were charged, 24 were put before a court to be remanded.

1.3.6 Working with other agencies plays a key part in addressing public

protection risks. Multi Agency Risk Assessment Conferences (MARAC) now covers the whole Force area, with Derby City MARAC being viewed nationally as best practice. The inaugural Senior Management Board of the MARAC has taken place and was very well attended by all agencies. 195 high risk victims have been managed in the City and 117 similarly high risk victims in the County.

1.3.7 The Force now has a dedicated point of contact, centrally for all Adult

Protection referrals. This has lead to greater efficiencies in service and more effective multi-agency working. From Jun-Dec 2008 there have been 219 referrals. A training programme to raise awareness of Adult Protection and particularly the Mental Capacity Act has commenced. A Strategic Group has been established with both the City and County to review policies, procedures and protocols in light of the Governmental Review of ‘No Secrets’ which is currently in the consultation phase. There are still significant gaps to address on a multi-agency basis.

1.3.8 Child Exploitation Investigation Unit, (CEIU) – The increase has

allowed the unit to become much more proactive in this challenging field of work. The unit managed 165 cases for the 12-month period, and the additional resources from the Closing the Risk Gap Project have created the capacity to revisit incidents that had already been closed and reinvestigate them. The previous workload per Officer was well in excess of national guidelines and was a matter of concern to the Force and the Authority. The caseload per officer has now reduced from 28 to 10 which bring it within national guidelines.

1.3.9 The Dangerous Persons Management Unit has changed working

practices to reflect national training and is more involved in the proactive arrest and interviewing of Registered Sex Offenders (RSO). The unit has arrested and interviewed 19 offenders since 6 October 2008. It has recalled seven offenders due to breaching their licence

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conditions. The caseload per Officer has reduced from 65 to 57, more in keeping with national recommendations.

1.3.10 The High Tech Crime Unit (HTCU) had an increase of two phone

examiners and two Digital Recovery Officers, they are all in post and are currently undergoing specialist training. However, it should be noted that these additional resources do not address the growing gap of 30% year on year increases in this area of police work. It does give the Force a proactive ability to deal with the high risk cases and to provide essential specialist support to major incidents as demonstrated after the murder of Kadeem Blackwood. The majority of their work remains related to paedophilia.

1.4 Our Current Performance

1.4.1 The economic recession not only impacts on Force budgets and

financial resources, it also presents new challenges in terms of service demand. While overall crime has reduced during 2008/9, the Force has recorded significant increases in domestic burglary (11.1%) and vehicle crime (2.5%). Indeed this marks the first increase in domestic burglary for over five years.

1.4.2 The table below shows current Force performance compared to a

similar period last year:

Recorded Crime: 01 April 2008 to 31 January 2009

01 Apr ’07-31 Jan ‘08

01 Apr ’08-31 Jan ‘09 Change %

change Total crime 64,448 62,307 -2,141 -3.3% House burglary 3,149 3,498 +349 +11.1% Vehicle crime 7,152 7,329 +177 +2.5% Criminal Damage 14,841 13,905 -936 -6.3% Violent crime 15,644 13,700 -1,944 -12.4%

1.4.3 The Force continues to deliver strong performance from within its

limited resources. The table below shows how the force has managed to maintain relatively high detection rates during what has been a challenging year with officer resources diverted to a number of high profile intensive policing operations. Previous experience provides evidence that greater pressure is likely to be placed on force resources as the recession deepens.

Sanction Detection Rate: 01 April 2008 to 31 January 2009 01 Apr ’07 -

31 Jan ‘08 01 Apr ’08 -31 Jan ‘09

% point change

Total crime 28.8% 27.2% -1.6 House burglary 22.5% 18.5% -4.0 Vehicle crime 18.1% 11.4% -6.7 Criminal Damage 17.5% 16.1% -1.4

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Violent crime 48.2% 47.4% -0.8

1.4.4 The above figures only show a part of the demand on force resources in the last year. 2008 saw an unprecedented number of significant police investigations, concentrated during November 2008.

7th - Operation Moorhen – Corporate Manslaughter 9th - Operation Marlin – Murder 11th – Operation Mint – Murder 12th – Operation Tansy – National Money Laundering 16th – Operation Mainsail – Death following police pursuit 16th – Operation Moscow – Serious Assault 20th – Operation Mistle – Attempted Murder

1.4.5 During this time the Force’s resources were severely stretched and

diverted away from other high priority areas. The Police Authority was briefed at the time by ACC Peter Goodman on the operational demands and the severe ‘stretch’ created on specialist and routine services.

1.5 Current Budget Position 1.5.1 The current financial year has been the most challenging that the Force

has faced for many years:-

• The Recession and in particular the credit crunch with sharp falls in investment returns has reduced the Authority’s investment income considerably.

• Policing Operations during November and the public

demonstrations earlier in the year have resulted in additional costs pressures that could not be predicted at the start of the year.

1.5.2 The Force is now projecting an over-spend of some £0.5m for the first

time in many years, reflecting the operational demands and the need to deal with the levels of risk and threat within a very tight funding position. This will in turn need to be covered from reserves, which the Authority has set aside to meet these extra unpredictable demands. Nevertheless it will still reduce the level of reserves we hold.

1.5.3 The over-spend also means that there will be far less under-spending

for budget holders to carry forward to next year. In previous years this has been used to cushion the impact of unforeseen demand or to make the necessary service improvements to further develop the organisation.

1.5.4 Overall this means that next year’s budget is likely to be an even more

challenging one.

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1.6 National Position 2008/11 Funding

1.6.1 On the 26 November 2008, Mr Vernon Coker, Police Minister issued the second year’s allocation for Police Grant for 2009/10. The final settlement figures for 2009/10 were then confirmed on 21st January 2009.

1.6.2 Total Government funding for police authorities will increase by 2.8% in

2009/10 with a further increase of 2.7% in 2010/11. By the end of the three year settlement period this will leave total funding for Police Authorities at £9,741m.

1.6.3 The funding is divided between general formula grant and grants for

specific purposes e.g. Neighbourhood Policing and Counter Terrorism. The respective allocations are set out in the table below. The biggest grant increase is for specific grants. This reflects significant additional government funding for national and regional Counter Terrorism measures.

National Figures 2008/09

£’m2009/10

£’m2010/11

£’m General Formula Grant 8,062

2.7%8,2812.7%

8,504 2.7%

Specific Grants 1,1654.5%

1,2013.1%

1,237 3.0%

Total Government Funding 9,2272.9%

9,4822.8%

9,741 2.7%

1.6.4 Elsewhere the Government maintained funding for capital schemes, at

£140m. 1.6.5 Revenue resources continue to be allocated, notionally, on the basis of

a revised funding formula, introduced in 2006/7. This set out to provide a more up to date and detailed assessment of the pressures facing individual police authorities. The new formula created considerable volatility within the funding settlement, with a number of authorities facing considerable reductions in their formula funding grant.

1.6.6 The Government continues to implement arrangements to protect

authorities that would otherwise lose grant. The Government is guaranteeing all police authorities a minimum “floor” increase of 2.5% in each of the three year settlement period.

1.6.7 This protection is funded by scaling back dramatically the higher increases that a number of Police Authorities, including Derbyshire, stood to gain under the new formula. These authorities also suffer a greater loss because the floor for Police Authorities has been set at a higher level than for other classes of authorities. This means that these Police Authorities have to contribute more in compensation to provide the higher minimum increase.

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1.6.8 The “floor” set by the Government for Police Authorities at 2.5% is considerably higher than for County and City Councils (1.75%), and Fire Authorities (0.5%). This has a significant impact on grant funding for individual authorities.

1.6.9 This issue was raised in the HMIC Review of Policing by Sir Ronnie

Flanagan, in the Police Green Paper ‘From Neighbourhood to National’ and in the recent Home Affairs Select Committee investigation into policing. The fact remains that the Government’s decision not to implement their own risk based formula continues to have a significant impact on the policing of this county, Derbyshire being the sixth biggest loser after the West Midlands, Avon and Somerset, West Yorkshire, Nottinghamshire and Bedfordshire forces. The East Midlands Picture

1.6.10 Nationally the East Midlands Region suffers the greatest loss of grant of any Government Region. All Police Authorities in the East Midlands lose grant under the floor protection arrangements. In total East Midlands Police Authorities stand to lose some £19m (3.6%) in grant in 2009/10, with Nottinghamshire facing the greatest loss (losing £8.4m), albeit from a substantially larger budget.

The Derbyshire Picture

1.6.11 In 2009/10, Public authorities within Derbyshire will lose some £33m as a result of grant floors. This is equivalent to 7.4% of the total grant paid to authorities in Derbyshire. The biggest losses are suffered by the County Council (£20m), City Council (£5.9m), Police Authority (£5m), and Fire Service (£1.4m).

1.6.12 It should also be recognised that overall Derbyshire Police has the

lowest grant increase within the County at 3.2%. This is some way below the grant increase for the County Council (6.4%), Fire Service (4.3%) and City Council (3.9%).

1.6.13 Police Authorities will continue to be expected to contribute to the

National Home Office target to deliver 9.3% efficiency gains over the three year settlement period 2008/11. All of these are now required to be cash releasing. This replaces the previous 50/50 split between cashable and non-cashable savings.

Capping 1.6.14 John Healey, Minister for Local Government wrote to all authorities on 9

December 2008, confirming the Government’s intention to cap excessive council tax rises. He says:-

The Government expects the average council tax increase in England to be substantially below 5% in 2009-10 and we will not hesitate to use our capping powers as necessary to protect council taxpayers from

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excessive increases, including requiring authorities to rebill if that proves necessary. This message applies to all classes of authority – including police and fire authorities.

1.6.15 While attention is always focussed on headline council tax increases,

the capping criteria also consider the overall budget increase. 1.6.16 In 2008/9 the Government called in all authorities with:-

• a budget increase of more than 5%

and • a precept increase of more than 5%.

1.6.17 The Government did not call in any authority that only exceeded one of

these two criteria. 1.6.18 For example, last year Suffolk was not called in even though it had a

Police precept increase of 9% because its overall budget increase of 4.9% was below the 5% threshold for budget increases.

1.6.19 In the case of the other Authorities that were caught by the criteria.

• Lincolnshire was required to set a lower police precept increase

(26%) for 2008/9. The authority had to rebill all of its residents, with costs in the region of £500,000. No limits on future police precept levels for Lincolnshire have been set.

• Cheshire, Leicestershire and Warwickshire retained their council

tax increase, which in the case of Leicestershire amounted to an increase of some 15.4%. Further Police Precept increases in the next two years (2009/11) will be limited to 3%.

• Bedfordshire, Norfolk and Surrey also retained their council tax

increase. Equally no limit was set for their police precept increase for 2009/10. The Government has however set a lower base budget against which future budget increases will be measured. In essence this means that if the council tax limit remains at 5% these three authorities will be able to set a council tax increase of at least this level next year and still escape the capping criteria.

1.6.20 The Minister for Local Government also indicated in the above letter

that:-

“No other decisions about capping in 2009-10 have been taken but it would be unwise for any authority to assume the capping principles set in previous years will be repeated”.

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Derbyshire Position

1.6.21 Next year our grant will increase from £109.162m to £112.620m, an increase of £3.458m (3.2%). This is in line with the level of grant projected in the three year comprehensive spending review.

1.6.22 Once again, the Government is withholding some £5m in grant from

Derbyshire Police to pay for protection for other police authorities, who would otherwise lose grant.

1.6.23 The grant increase for Derbyshire Police at 3.2% compares to the

national average increase of 2.8% for all police forces.

1.6.24 The County, City and Fire Authority’s grant will increase by 6.4%, 3.9% and 4.3% respectively. Grant protection for County, City and Fire Authorities is being phased out much more quickly.

1.6.25 The increases for District and Borough Councils in Derbyshire are

between 0.5% and 2.8%.

1.6.26 Overall formula grant is equivalent to £112.19 per head which compares to a grant of £132.30 per head in Nottinghamshire and £121.89 per head in Leicestershire.

1.6.27 The table below shows the resulting level of general government

support provided to cover the costs of the Derbyshire Constabulary in 2008/09 and 2009/10 together with the projected levels of grant in 2010/11. The level of grant prior to floor protection is also shown for information.

2008/09

£’m2009/10

£’m2010/11

£’m Principal Formula Police Grant Business Rates & Revenue Support Grant

63.421

45.741

65.214

47.406

67.057

49.096

Formula Grant 109.162 112.620 116.153

Raw Grant Before Floor Protection 114.718 117.654

120.644

Loss of Grant to Floor 5.556 5.034 4.491

1.6.28 The available resources to cover spending next year (2009/10) are

shown in the table below. This is based on an assumed Police Precept increase of 5%.

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2009/10

£mFormula Grant Police Precept (at 5%)

112.620 50.675

Available External Finance 163.295

Specific Grants 1.6.29 Additional revenue funding (Specific Grants) is provided for specific

initiatives over and above general policing spending met through formula grant. The table below shows these specific grants together with other grants provided for specific Force initiatives.

2008/09

£m2009/10

£m2010/11

£mCrime Fighting Fund Neighbourhood Policing Fund BCU Fund IPLDP Dedicated Security

4.54 3.49 0.61 0*

4.54 3.58 0.61*

0*

4.54 3.68

Total Specific Grant £8.64 £8.73 £8.22 Additional Rule 2 Grants £2.56 £2.56 £2.56

Total Specific Grants £11.20 £11.29 £10.78

1.6.30 The table below shows the breakdown for additional rule 2 grant. This consolidated three previous specific grants to give authorities greater flexibility on the allocation of these resources. The Government has also now classified specific grant for the initial police learning and development programme (IPLDP) as a rule 2 grant.

2008/11

£m

Special Priority Payments Rural Funding DNA Expansion Programme IPLDP

1.09 0.41 0.79 0.27

Total Grant – other purposes £2.56

1.6.31 The Government emphasises the need to maintain existing spending programmes and commitments. Given existing commitments there will, in reality, be limited flexibility. The amount of CFF Grant and three of the elements within the Additional Rule 2 Grant has not increased since 2005/06.

Rural Funding (£0.41m)

1.6.32 The above grant includes £0.407m for rural policing. It is intended to

continue to utilise this grant to support the 14 officers recruited for rural policing duties.

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Crime Fighting Fund (£4.54m)

1.6.33 Authorities are no longer required to maintain a specific number of police officers. Police Authorities facing challenging budget pressures can reduce police officer numbers without losing this important funding.

1.6.34 This creates some flexibility to look at the workforce mix and the

number of sworn officers. However, in the case of Derbyshire, it is important to consider the current low level of Police Officers and the efforts of recent years to address this imbalance.

1.6.35 The Home Office will continue to monitor the position and may withdraw funding, where performance has fallen as a result of reductions in police officer numbers. This will depend on whether the Home Office is satisfied by the Force’s proposals to address any dip in performance.

Neighbourhood Policing Fund (£3.58m)

1.6.36 The Government continues to fund the neighbourhood policing

programme through specific grants over the next two years. This will meet 75% of the cost of the 160 Government supported PCSOs in Derbyshire.

Basic Command Unit Funding

1.6.37 The Government has now indicated that it intends to continue the BCU fund for one more year. The settlement maintains funding at the 2008/9 level. The Government has not completed its review of how this grant is allocated in the future.

1.6.38 There are strong indications however that the government intends to

allocate this money direct to CSP and CDRPs, potentially through some form of participatory budget process. The Authority has recently received grant funding to undertake a participatory budget pilot by the end of March 2009.

1.6.39 The share of the BCU fund for Derbyshire in 2009/10 is £0.61m of the

£40m central fund. The Constabulary is proposing to align this funding to the priorities within the Local Area Agreements for Derby and Derbyshire.

1.6.40 The allocation for 2009/10 are set out below:-

2009/10£m

Derby Chesterfield Alfreton Buxton

0.244 0.160 0.138 0.073 0.615

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1.6.41 These extra resources are required to be targeted on local citizen focused issues, like anti-social behaviour and drugs, which make a real impact on the citizens’ quality of life. Divisional Commanders will work with their partner organisations to target the resources most effectively.

1.6.42 It should be noted that BCU Grant is allocated direct to BCU Commanders and that neither the Authority nor the Chief Constable has any direct control over this funding. BCU Commanders are required to work with their CDRPs to agree the use of their grant allocation.

Counter Terrorism Grant

1.6.43 The Government allocated a specific grant to fund 2.5 security posts in

Derbyshire for 2008/9. An announcement of the amount for 2009/10 is still awaited.

1.6.44 Members will have noted that in all cases except the Neighbourhood Policing Grant, no future increases for inflation are included. East Midlands Special Operations Unit (EMSOU)

1.6.45 During the previous CSR period, the Home Office provided an annual

start up grant of £4m to fund the East Midlands Special Operations Unit (EMSOU).

1.6.46 EMSOU brings together officers from the five East Midlands forces to

tackle serious and organised crime. This is perhaps the single most effective collaboration across England and Wales and is dedicated to addressing some of the protective services gap identified by the 2005 HMIC report. Members of the Police Authority have been briefed on the work of this unit.

1.6.47 In 2008 the Home Office gave a commitment to provide tapering

funding for EMSOU for the duration of the three year CSR period.

1.6.48 The funding for these three years is shown in the table below together with the share of funding that relates to Derbyshire Constabulary based on the funding formula.

£’m 2008/09 2009/10 2010/11Home Office Funding for EMSOU

2.000 1.500 1.000

Derbyshire Police Element 440 330 220

1.6.49 Derbyshire police is also now the lead force for the East Midlands Counter Terrorism Intelligence Unit. This unit receives 100% funding from ACPO (TAM).

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1.7 Base Budget 2009/12 1.7.1 The following analysis summarises the three-year budget projection for

2009/12. This shows the projected budget requirement to maintain existing services, taking into account all known commitments. This is set out in Annex 1(i).

Base Budget Projection (£’m) 2009/10 20010/11 2011/12

Previous Year’s Budget Requirement 157.223 165.530 171.341 Inflation – including Pay Awards and IncrementsOther Spending Pressures Additional Savings & Income

6.2293.570

-1.492

5.8090.552

-0.550

6.520-0.440-0.463

Net Revenue Budget 165.530 171.341 176.958

Projected Funding (incl Police Precept at 5%)

163.295 169.541 174.953

Base Budget Deficit

2.235 1.800 2.005

1.7.2 The table above shows that the Authority requires a budget of

£165.530m to maintain existing service levels. This is equivalent to a budget increase of £8.307m (5.3%).

1.7.3 Overall it shows that a significant deficit is projected based on the

following key assumptions:- • Government Grant increases in line with the three-year grant

settlement (i.e. increases of 3.1% in 2010/11 and estimated at 2% for 2011/12).

• Police Precept rises by 5% per annum. • Council Taxbase increases by 0.25% in 2010/11 and 0.75% in

2011/12.

1.7.4 Under these assumptions, the Authority faces a three-year deficit of some £6.040m.

1.7.5 The table below shows the impact on these figures of police precept

increases ranging from 0% to 15%.

Base Budget Surplus (Deficit) £’m

2009/10 2010/11 2011/12 3 years

15% increase year 1 2.599 3.288 3.378 9.265

10% increase year 1 0.181 0.743 0.685 1.609

8% increase year 1 (0.783) (0.271) (0.387) (1.441)

5% per annum precept increase (2.235) (1.800) (2.005) (6.040)4% per annum precept increase (2.717) (2.810) (3.600) (9.126)

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3% per annum precept increase (3.200) (3.814) (5.170) (12.184)0% per annum precept increase (4.649) (6.762) (9.693) (21.104)

1.8 Budget Requirement 2009/10

1.8.1 This section sets out the key assumptions under-pinning the base

budget for 2009/10. General Assumptions

Pay Awards 2009/12

1.8.2 The budget reflects three-year pay awards for both Police Officers and Police Staff as set out in table below.

2009/10 2010/11 2011/12Police Officers 2.65% 2.60% 2.55%Police Staff 2.60% 2.60% 2.58%

1.8.3 General Inflation 1.8.4 General Inflation is much harder to predict, with general inflation rising

as high as 5% in recent months, along with dramatic rises of up to 35% in fuel costs. By December 2008 inflation had fallen back to 3.1%. The assumption is for general inflation to be under the 2% target set by the Government.

1.8.5 Utility prices however are expected to remain high for some

considerable period and accordingly the estimates reflect an increase of 39% for gas and 68% for electricity.

1.8.6 Overall a central contingency of £0.525m will be held to cover general

inflation.

1.8.7 Pensions & Superannuation Police Officers

1.8.8 The changes to pension financing introduced in 2006/7 mean that the

budget now includes a general provision of 24.2% on all police officer pensionable pay. Contributions are paid into a pension account and used to pay pension benefits including lump sums and ongoing pensions. Any deficit will be met by the government and is no longer funded within the general revenue budget. Police Staff

1.8.9 Following the 2007/08 revaluation, employer contributions remain unchanged. The revaluation had a neutral impact with improved investment returns offsetting increased longevity. No account has been taken in the projection for the impact of the considerable market

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volatility on pension fund returns and employer contribution levels. At this stage this is impossible to predict but remains a substantial financial risk for the Police Authority and indeed all police and local authorities in general.

1.8.10 Other Spending Pressures (£2,078,000)

Details of the unavoidable cost pressures and identified reductions are included in Annex 2 these include:-

1.8.11 Treasury Management Income (£1,750,000)

The unprecedented decline in interest rates has had a significant

impact on Force budgets. Each 1% fall in interest rates costs the Authority £0.5m. Based on current interest rates, the Authority faces a loss of investment income of £1.75m. The projection assumes a limited improvement in this position over the next two years.

1.8.12 East Midlands Special Operations Unit (£243,000)

As stated previously Home Office Funding for this unit will reduce. This means that there is a need to increase the level of contribution paid by Derbyshire and the other four East Midlands forces. This also reflects an increase in funding (£80,000) agreed at a regional level for a Productivity Improvement Case relating to EMSOU’s technical capability.

1.8.13 Police Overtime (£339,000)

Next year the Force will incur extra overtime costs due to the timing of Bank-holidays. Essentially 2009/10 includes the two Easter Bank-holidays as normal whereas the financial year 2008/09 did not include any Easter holidays. In addition, because Boxing Day 2009 will fall on a Saturday an extra day will need to be paid for at the enhanced Bank holiday rate.

1.8.14 Case Preparation & Custody System (£125,000)

In 2008, the NPIA announced that it would no longer meet the ongoing maintenance costs of this system, which total some £500,000. Following lobbying from a number of forces the NPIA has agreed that it will withdraw the support it provides more gradually. This means that Derbyshire will need to make a contribution of some £125,000 towards the cost of this system in 2009/10.

1.8.15 Examination of Mobile Telephones (£120,000)

This reflects a cost pressure on the current 2008/9 budget that will continue in 2009/10 with the growth in mobile telephones submitted for forensic examination.

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1.8.16 CCMC Debt Charges (£236,000)

This reflects the anticipated initial borrowing costs for the CCMC. 1.8.17 Reserve Funding (£634,000)

With the agreement of the Police Authority, last year’s base budget was balanced by contributions from reserves of £0.634m, which needs to be contained in the base budget for 2009/10, if a similar contribution from reserves is to be avoided.

1.8.18 Other Unavoidable Changes (£123,000)

This covers funding for a number of unavoidable new pressures, i.e. ongoing revenue costs associated with capital schemes (£38,000), full year effect of a business continuity post created in 2008/9 (£29,000) and ongoing costs associated with mobile data terminals (£56,000).

1.8.19 Anticipated Savings (£1,492,000)

When reviewing the out-turn position the Authority has identified a

number of areas, where savings are being achieved, which will roll forward into the following years budget. In total these are some £1.212m, including additional income of £280,000, and they offset the unavoidable spending pressures identified above. These include:-

• Reductions in rent and housing allowances (£315,000) – as

eligibility reduces across the Force.

• Reduction in pension costs (£215,000) – As part of an ongoing review of eligibility for police officer injury allowances and a reduction in officers on the 30+ scheme for whom the force has to meet some pension cost.

Reduction in MRP debt repayments (£332,000) – last year the

government allowed authorities the option to write off the cost off funding new projects over the life of the project which may be longer than the debt period. By invoking this change the Authority will save some £332,000 although it will result in extra costs in later year because effectively the loan is paid off at a slower rate.

Transfer of Traffic Wardens (£172,000) – this reflects the transfer

of responsibility for traffic wardens to the County and City Council. Under these arrangements the County Council assumes responsibility for parking enforcement and the employment of traffic wardens.

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• Business Case CBRN Equipment (£115,000) – The Authority approved a one-off business case in 2008/09 to enable the Force to increase its resources for responding to CBRN incidents. This provision is not needed again for 2009/10.

Police Staff and Other Changes (£63,000) – these are mainly

associated with the cost of borrowed officers.

1.8.20 Additional Income (£280,000)

In addition to the above the Force anticipates a higher level of income in 2009/10 as follows:-

• Change to Specific Grants (£94,000) – relating to the Home

Office’s support for PCSO costs via the Neighbourhood Policing Grant

• Increased POCA Income (£75,000) – which reflects the increased

success in pursuing asset recovery under the proceeds of crime legislation. The income from the Recovered Assets Incentivisation Scheme – is volatile. Due to the length of time from investigation through to prosecution and subsequent confiscation, it is problematic to make any assumptions about annual income from this source, all of which is currently used to fund Financial Investigation in the Force.

• Partnership Contribution (£64,000) – this reflects a review of the

force’s partnership commitments.

• Other Income (£47,000) – this reflects a review of likely receipts in 2009/10 across a wide range of activities. For example, a new income source is from Driver Improvement and Speed Improvement courses, which are projected to earn £31,000 for the force in the first full year.

1.8.21 Capital Charges

These are technical figures, which reflect the cost of the use of assets within the accounts and are for information only

2008/09 2009/10 £m £m Buildings 0.5 0.5 Equipment/furniture 0.5 0.6 Helicopter 0.1 0.1

IT 2.0 1.8 Vehicles 1.0 1.2 Total 4.1 4.2

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Police Authority Budget 2009/10 1.8.22 The proposed budget for 2009/10 for the Police Authority, to include

Members Allowances, audit and other core costs, and the staffing costs for the Executive Office and Secretariat is attached at Annex 3.

1.8.23 The overall base budget, after adjusting for a budget virement from the

Force, has been contained at the same level as 2008/09. A provision for the staff pay award has been added. This is notwithstanding certain unavoidable cost pressures, particularly to resource the anticipated additional costs to the Police Authority of implementing the Taylor Review. These impact on professional fees and members allowances as there are likely to be considerably more Appeal Tribunals.

1.8.24 A budget has been included to resource support from the Force legal

team. Efficiencies have been delivered through the new internal audit contract and a tightening of the subsistence budget.

1.9 Efficiency Improvements

1.9.1 Derbyshire Police is an efficient Force. Our External Auditors, KPMG,

gave the force the highest possible (level 4) assessment for our overall use of resources, including value for money, which was also scored at level 4.

1.9.2 This reflects the arrangements in place across the force to deliver value

for money. In particular it reflects the achievement of the force in delivering very good performance from a very low cost base.

1.9.3 The Treasury has set an efficiency target for the Home Office to deliver

cash releasing efficiency gains of 9.3% of the 2007/08 gross revenue expenditure over the next three years.

1.9.4 The Home Office has not set specific targets for individual Forces but

each police authority is expected to set ambitious local targets for delivering efficiency improvements.

1.9.5 The definition of efficiency improvement is very broad. Essentially it

encompasses both cash and non cash efficiency. This can now include:-

• A cost reduction that results in a budget saving • A cost reduction that is used elsewhere within the force to address

policing risks • An improvement in efficiency that may release an officer/staff to

deliver another service elsewhere within the force.

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1.9.6 When setting efficiency targets it is important to consider the relative

spending level of individual Forces. Relatively high spending and well resourced forces will undoubtedly find it easier to deliver efficiency savings than low spending ones.

1.9.7 Derbyshire is now the fourth lowest spending Force nationally (per head

of population) and faces one of the toughest challenges. The Constabulary cannot continue to make efficiency savings without cutting into service delivery and potentially performance.

1.9.8 Over the last seven years the Force has already achieved

approximately £40m efficiency savings. The table below shows how these are broken down between:-

• Cashable Savings – which resulted in real cash being saved from

the budget e.g. reductions in posts following a police staff recruitment freeze, savings in putting the payment data for officer/staff salaries to the end of the month

• Non-cashable Savings – which did not save real cash but were about improvements in efficiency i.e. delivering a better service with the same staff e.g. improvements in the front-line policing percentage.

Cashable

Savings Non-cashable

savings

TOTAL

3 Years 2002/05

286,400 17,265,100 17,551,500

2005/06 4,230,000 5,370,000 9,600,000

2006/07 2,900,000 4,970,000 7,870,000

2007/08 934,300 1,973,000 2,907,300

2008/09 1,977,400 1,977,400

TOTAL 39,906,200

1.9.9 At the same time the Force is expected to maintain and indeed

enhance front line policing and deliver improved performance. 1.9.10 During 2008/9 the force anticipates that it will deliver efficiency savings

of some £1.977m. These stem mainly form the Closing the Risk Gap project, detailed above and include:-

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• Reducing the number of policing sections from 20 to 13. • Reducing the number of police officers within Safer Neighbourhood

teams and replacing them with PCSOs. • Civilianising a number of police officer roles within the new

protective services unit.

1.9.11 It is important not to confuse efficiency with cuts in service. Efficiency is about maintaining service levels, whereas cuts in service will reduce them.

1.9.12 If a substantial funding gap remains when the Authority has set its

budget, it is extremely unlikely that this gap can be closed without cuts in service and a subsequent deterioration in the service provided.

1.9.13 Cuts to close a budget gap, should not be classed as efficiency

because they do not enable the force or authority to maintain existing service levels. They would not therefore fall within the Government’s definition of efficiency.

1.9.14 Clearly the Force would like to use any savings that it generates to

reinvest in service delivery to meet the pressing policing risks that it faces.

1.9.15 As a guide a 1% efficiency target would enable the Force to address

some £1.8m of extra policing risk.

1.9.16 Achieving efficiency targets in future years will be much more challenging. It is still useful to make the distinction between:- • Redirection of Resources - efficiencies that will either make real

cash savings or immediately release resources to address the risk gap

• Quality Improvements – efficiencies that may lead to more efficient

ways of working and give officers a chance to deliver a better quality of service but will not result in the release of real cash savings or resources to address other high priority risk areas.

1.9.17 Plans to deliver the ambitious target are to be integrated into the Forces

Policing Plan. This may then form part of the evidence taken into account by the Audit Commission in making judgements about value for money within the Police Use of Resources Evaluation.

1.9.18 Following a detailed assessment it is considered that there is potential

for the Force to deliver a 6% efficiency improvement for the three years of the current CSR period, (excluding the use of any carried forward efficiencies from 2005/08). This totals £10.3m and is equivalent to efficiency savings of £3.4m in each of the three years. The proposed Efficiency Plan covering years 2008–11, is attached at Annex 4.

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Redirection of Resources

1.9.19 The efficiency plan includes the following efficiencies that will enable a redirection of resources to address other risks or to balance the Authority’s budget.

• Centralised Contact Management Centre – the plan assumes that

this will deliver real cash efficiencies of some £1m over the two years 2010/11 and 2011/12, this has been included in the financial forecasts for 2010/11 and 2011/12.

• Collaboration/Procurement Savings – it is estimated that the force

can make further savings by using either regional or national contracts.

• Closing the Risk Gap – this represents the remaining value of the

resources released from the closing the risk gap project, which have now been reinvested in public protection and other high risk areas.

• HR Transformation – the changes to working practices within HR

with the introduction of a service centre approach are expected to deliver real cash savings from 2010/11.

• Savings within Devolved Budget – these are set out in detail in

Annex 6 below and represent a number of budget reductions across a range of service areas. These have been used to fund immediate spending pressures in 2009/10.

• Injury Review Programme – this is an ongoing process to review

pension entitlement for officers who retired on health/injury grounds. Quality Improvements

1.9.20 The other type of efficiencies does not immediately release any cash or even full time officer/staff resources. This efficiency is more about improving processes and giving officers/staff more time to provide a better quality service e.g. assist with improving the policing pledge

1.9.21 Ultimately this efficiency can release real cash savings or full time

officer/staff resources but only if more work is done to reorganise the work of sections to release officers/staff.

1.9.22 The efficiency plan includes the following non-cashable efficiencies:

• Mobile Data – the plan assumes this will deliver efficiency of some

£1.020m when approximately 500 handheld devices are rolled out to officers across the Force.

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•

•

•

• Criminal Justice – streamlining the custody process with the

introduction of speedy files and changing the role of evidence review officers, will help to reduce the time that officers spend on preparing case files.

• Restorative Justice – this will give officers greater flexibility to

resolve issues without putting offenders through the criminal justice process. Experience in other forces has shown that this can save a considerable amount of officer time that would otherwise be spent on preparing a case file. The time released will help to improve the quality of service provided and address the policing pledge.

• Stop Account Policy – officers will no longer have to keep detailed

records for every stop and account which will represent a time saving for many officers. Again this will give them more time to deliver against the qualitative requirements of the policing pledge.

• Streamlining the PDR Process – again this will reduce the time

spent by officers and staff throughout the force with a simplified approach to agreeing targets and training plans.

1.9.23 The above efficiencies will release pockets of police officer and police

staff time. This will prove useful in helping to address the requirements of the policing pledge.

1.9.24 At the same time, further work will be undertaken to look at the potential

to release whole staff/officer resources that can be used to address the policing risks identified in this paper.

1.9.25 This could come from a number of areas including:-

Civilianising a number of existing police officer posts, although this carries with it a number of significant considerations for the Force and the Authority around capacity, capability, flexibility and resilience.

Redirecting resources from areas of lower risk to areas of greater risk.

Achieving efficiencies from restructuring.

1.10 National and Local Policing Priorities

1.10.1 It is important to set the budget within the context of National and Local

Policing priorities. The budget plays a key role in aligning the resources that the Authority and Force have to deliver these national and local priorities. The Home Secretary consulted on National Policing priorities in November. These are set out below.

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• Increase Public Confidence – particularly through the roll out of the National Policing Pledge and the introduction of a single performance measure based on public confidence in policing.

• Reduce overall crime – serious violence (particularly involving the use of guns, knives, gangs and sexual offences) and anti-social behaviour

• Criminal Justice – working in partnership to deliver more effective, transparent and responsive system to victims

• Work Jointly – to increase capacity and address serious organised crime and other protective services

• Counter Terrorism – and violent extremism • Improve use of Resources – delivering real efficiency savings by

more effective deployment of the workforce and realising the benefits of new technology.

1.10.2 In addition to these priorities, HM Inspectorate of Constabulary has

been undertaking inspection work to look at progress made by Constabularies and Police Authorities in addressing the Protective Services Risk Gap.

1.10.3 Serious and Organised crime links to many of the areas we have

identified locally. We are surrounded by numerous big cities and suffer disproportionately from travelling criminality. To date, we have mapped many local and ‘external’ organised crime groups active in the county causing significant harm. At a local level the Policing priorities for Derbyshire Police are set out within the current Local Policing Plan as follows:-

• Neighbourhood Policing – to minimise community harm. • Maintain low levels of Acquisitive Crime – to minimise volume

crime. • Reduce Violent Crime – to reduce threats from major crime and

dangerous offenders, particularly towards vulnerable people. • Maintain high detection rates – to minimise volume crime. • Terrorism and Serious Organised Crime – to deal with organised

crime and the criminality of those involved in terrorism or extremism. • Public Confidence and Satisfaction – to ensure continued trust in

the organisation. • Manage our resources efficiently and effectively – to sustain

organisational performance.

1.10.4 There is considerable overlap between national and local policing priorities. In many ways both set out to prioritise the work that needs to be done to address the key policing risks that the country and our county faces.

1.10.5 In addition to the above it is important that spending decisions also

consider the key targets agreed with the City and County Councils for Local Area Agreements. These are currently being refreshed and do not take account the single confidence target, which applies equally to

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the Police and our partners. The table highlights those targets which are common to both the City and the County Council.

Local Area Agreement Priorities

Derby City Council

Derbyshire County Council

• NI 15 Serious violent crime rate

• NI 17 Perceptions of ASB • NI 18 Adult re-offending

rates • NI 32 Repeat incidents of

domestic violence • NI 35 Building resilience to

violent extremism • NI 39 Alcohol harm related

hospital admission rates • NI 47 People killed or

seriously injured in road accidents

• NI 49 Number of primary fires and related fatalities and non-fatal casualties

• NI 111 First time entrants to Youth Justice System (aged 10-17)

• NI 16 Serious acquisitive crime rate

• NI 18 Adult re-offending rates

• NI 20 Assault with injury crime rate

• NI 32 Repeat incidents of domestic violence

• NI 39 Alcohol harm related hospital admission rates

• NI 40 Drugs users in effective

treatment • NI 47 People killed or

seriously injured in road accidents

• NI 49 Number of primary fires and related fatalities and non-fatal casualties

1.11 A Risk Based Approach to Budget Setting

1.11.1 Last year marked the start of a comprehensive risk based approach to

setting the budget. This aligned the budget process with the strategic operational risks facing the Force. This has recently been highlighted by the HMIC as notable practice within their national report on Protective Services “Get Smart – Planning to Protect”.

1.11.2 Previously, the Authority had always considered key corporate risks

when it set the budget. Essentially these are the organisational risks that the force faced around managing people, assets, information etc. During 2008, the Authority introduced its own risk management arrangements to complement those of the Force.

1.11.3 In this way the three assessments provide a comprehensive picture of

the operational and organisational risk facing the Force and Authority.

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1.11.4 During the autumn the Force undertook a major exercise to review its operational risks which is set out within the “Force Level Strategic Threat and Risk Assessment”.

1.11.5 The purpose of the Strategic Risk Assessment was to identify those

areas of greatest risk. Essentially a high risk area is where only limited resources had been allocated to address a substantial risk i.e. this creates a significant risk gap.

1.11.6 A key part of this work was to bring together the Police Authority, Key

Partners and Senior Officers across the force to consider the key risks that the Authority and Force faces and how best to address them.

Strategic Risk Seminar (October 2008)

1.11.7 This seminar set out to identify the most significant operational and

organisational risks that the Authority and Force will face over the next three years. There was quite properly an attempt to understand the most significant risks, which are summarised in the following table:- Operational Risks Organisational Risks 1. Level 2 Organised Crime Groups 2. Terrorism 3 Public Protection 4 Anti-Social Behaviour 5 Drugs Supply 6 Recorded Crime 7 Gun Crime 8 Alcohol Related Crime 9 Detection Levels 10 Community Cohesion

1. Finance 2. Managing our People 3. Managing our Information 4. Safer Detention of Prisoners 5. Protecting our Organisational

Integrity 6. Managing our Infrastructure 7. Business Continuity

1.11.8 At the risk seminar our partners emphasised the importance of

community cohesion. This has led to its inclusion within the top 10 identified operational risks. The fact that something does not feature in the ‘top 10’ significant risks does not indicate that this is not still a real issue for the Force and Authority.

1.11.9 Following the risk seminar another detailed piece of work was

undertaken to identify the work and investment that would be required by the Authority and Force to address these key risks. This work took account of the professional assessment of those business heads responsible for the work and also considered external guides such as ACPO standards, HMIC inspection, existing best practice and NPIA doctrine.

1.11.10 In particular the work built upon work already undertaken to assess the

risk gap for last year.

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1.11.11 In total the investment required amounts to some £5.4m and is detailed in Annex 5 as set out within the table below:-

Level II Organised Crime Groups 1,049,000 Terrorism 926,000 Drugs Supply - Gangs & Delinquent Peer Groups - Public Protection 955,000 Anti-Social Behaviour Included in

Policing pledge Levels & Detection of Volume Crime 1,550,000 Gun Crime 108,000 Community Cohesion 144,000 Managing Our People 200,000 Managing Our Information 385,000 Protecting Our Organisational Integrity 90,000 Managing Our Business Continuity - £5,407,000

1.11.12 At the same time last year the risk gap stood at some £7.9m. The above assessment therefore represents a reduction of some £2.5m in the level of risk faced by the Force and Authority, mainly as a result of implementing the closing the risk gap project.

National Policing Pledge

1.11.13 In addition to the above investment, further work has been undertaken

to look at the cost of implementing the National Policing Pledge. 1.11.14 The Government has indicated an expectation that the Policing Pledge

will play an important role in enabling forces and authorities to deliver their single public confidence performance target. Indeed the HMIC intends to undertake focused inspection activity based on the policing pledge and the Police Authority will be expected to ensure that the Force is communicating and delivering in line with the at times aspirational detail.

1.11.15 Clearly not all forces are funded or resourced at a similar level. In

addition, there are huge geographic variations that will impact on response times and the availability and accessibility of Safer Neighbourhood teams. This means that some forces are much better resourced than others to deliver the National Pledge.

1.11.16 In particular the pledge relies heavily on Neighbourhood Policing team

resources to deliver the level of responsiveness envisaged by the national policing pledge targets.

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1.11.17 The Government’s decision in 2007 to halt the third tranche of PCSO’s nationally meant that the force was left some 84 PCSO’s short of the Government’s original target to fund 244 PCSO’s for Derbyshire.

1.11.18 It would cost the force some £2.6m to fund these extra 84 PCSO posts.

Coupled with the PCSOs, already funded by our partners and through “Closing The Risk Gap”, this is probably a more realistic indicator of the number of the PCSO’s that the Force needs to achieve the national policing pledge.

1.11.19 Other costs of delivering the pledge mainly relate to IS systems and

their management. These add a further £1.5m to these costs.

1.11.20 In total it is estimated the Force and Authority would need to spend another £4.1m to give it the same level of resources as many other authorities have to deliver against this pledge. Risk Gap and Policing Pledge

1.11.21 The total risk gap, including the Policing Pledge is now some £9.5m as

shown in the following table:-

£’mRisk Gap Policing Pledge

5.44.1

Total 9.5

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DATED 19 FEB 09

1.11.22 There is a degree of overlap between the two areas in particular around

Safer Neighbourhood Teams. Providing additional PCSOs to meet the Policing Pledge would also address the anti-social behaviour risks identified in the risk gap assessment.

1.11.23 The Force recognises that it would be unrealistic to expect to close a

risk gap of this magnitude in one single year. Nevertheless it does give an indication of the additional level of risk that is borne by the Force and Authority and the total figure is similar to the comparative data at 1.2, where the levels of funding in Derbyshire are compared to the other East Midlands forces.

1.11.24 Put simply, our detailed and conservative analysis shows need against

risk supported by comparative data. Tellingly, the East Midlands forces are collectively comparatively under-funded and the question has to be asked about the level of service that could be achieved were there to be funding in line with some of the forces we are all compared to.

1.11.25 This risk gap also needs to be put in the context of the £5m per year

grant that is still withheld from the force and authority. It also needs to be considered in the light of the relative higher levels of funding for other forces in the region, who have over £12m of funding when compared to Derbyshire (para 1.2 above)

1.11.26 There is also the need to put this risk gap in the context of the budget

deficit of some £2.2m. This is shown in the table below

£’m Risk Gap Policing Pledge

5.4 4.1

Sub-TotalBudget Deficit at 5%

9.5 2.2

Risk Gap 11.7

1.11.27 The baseline projection shows that the Force faces a deficit of some £2.2m with a 5% precept increase. This provides no resources to close the risk gap or address the policing pledge. Moreover it creates an added risk because the force would need to cut service provision to address this budget gap as it equates to over 60 police officers. In turn this would add to considerable level of risk already faced by the Authority and Force.

1.11.28 These financial risks pose a real threat to the Authority and the Force.

All of these could have a damaging affect on public confidence. In terms of:-

• Financial Impact – if serious harm results through failure to

address one of the above, this will have a significant financial consequence for the Force, with the investigation effort and resources needed to address it.

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• Damage to service delivery – apart from the financial impact, funding a major investigation will also take resources away from local policing.

• Inspection Performance – with inspections focussed on serious and organised crime, failure to address risks in these areas will lead to a decline in the inspection performance of the Force.

• Damage to its reputation – the force has first hand experience of the impact of failures to address issues around domestic violence e.g. the widely publicised case of Tanya Moore.

• Health & Safety – Stockwell highlighted the considerable health and safety responsibilities for authorities and forces to address known or anticipated risks. Some of the criminality seen in Derby during the last year indicates the level of known risk – it is now incumbent on the Authority and Force to respond to this.

1.12 Budget Strategy

1.12.1 On 9 December 2008, the Finance, Admin and Resources Committee

considered the long-term budget strategy in the light of the risk gap.

1.12.2 The previous budget strategy needed to be updated following the Comprehensive Spending Review and to take into account the new risk based approach to budget setting.

1.12.3 The strategy outlines the respective roles of the Authority and Force in

addressing the risk gap outlined above.

• The Police Authority can choose to allocate additional resources in terms of police precept

• The Force can look at ways of delivering even more efficiency and

making service reductions in lower risk areas. This will mean that in some areas we do less or indeed do not deliver a service at all.

• The Police Authority and Force can decide what risks they are

prepared to accept and consider the best way to manage them without additional resources.

1.12.4 The strategy is designed to cover the period up to the end of this

spending review and sets out the following guiding principles:- 1.12.4.1 Maintain a prudent level of balances. This suggests that

the Force should retain a general reserve equivalent to at least 2% of its net revenue budget. This would result in maintaining general usable reserves of £3m.

1.12.4.2 Ensure that any revenue account shortfall is covered by

balances in 2009/10 and 2010/11. This means that the Authority must ensure that if it approves additional spending over and above its revenue budget resources, it must ensure

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that it has two years’ worth of reserves to cover this additional spending.

1.12.4.3 Consider setting Police Precept Increases at the

maximum level permitted by Government Capping Criteria. It is important that decisions on Police Precept are made with a full awareness of the scale and nature of the risks faced by the Authority and Force. They also need to recognise the loss of grant suffered by the Police Authority to fund the grant floor.

1.12.4.4 Consider using reserves to fund capital projects. This

will help reduce/avoid the long-term revenue financing costs associated with prudential borrowing.

1.12.4.5 Use investment income to support its revenue budget –

the Force will continue to use investment income to support its revenue budget.

1.12.4.6 Maintain lobbying pressure for a fairer grant settlement

for Derbyshire Police. To ensure that any contribution to the floor is minimised.

1.12.4.7 Consider opportunities to maximise the value of surplus

force landholdings – provided the Police Authority is satisfied that it can generate best value from the disposal of these assets.

1.12.4.8 At the same time the Force must continue its efforts to

achieve a balanced base budget that does not rely on the use of reserves by:

• Seeking opportunities to collaborate with other East

Midlands forces. • Keeping its Structure under review. • Moving resources away from lower risk areas. • Exploring further opportunities for Workforce

Modernisation . • Consider the workforce mix e.g. within Neighbourhood

Policing team.

1.13 Budget Proposals 2009/10

1.13.1 In brief the following factors will influence the budget for next year. • Existing base budget position – indicates that with a Police

Precept increase of 5%, the Police Authority faces a deficit of £2.235m in 2009/10 and some £6.040m over the next three years.

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• Government Funding – the Authority and Force loses out on Government grant of some £15m over the three-year CSR period 2008/11.

• Our Relative Funding Position – as stated earlier, we are the

fourth lowest funded Force. Comparisons with the our neighbouring forces show that our funding is at least £4.7m below the next lowest funded neighbouring force.

1.13.2 Against this the Authority will need to balance:-

• Risk Gap – this stands at some £5.4m and failure to address this

further means that the Authority and Force continue to carry risks that could result in real threat and potential harm to the most vulnerable people living in Derbyshire.

• National Policing Pledge – this is a new requirement introduced by

the Government in 2008. It would cost the Authority and Force over £4.1m to comprehensively address the pledge and through this further improve the trust and confidence in local communities – now the single most important outcome for policing as determined by the Home Secretary

• Our Relative Level of Risk - for Derbyshire Police, trying to

address the risk of a medium risk force with the resources of one of the lowest spending and funded forces nationally.

• New Performance Assessment Regime – that places increasing

pressure on forces to invest in protective services and will increasingly judge the performance of police authorities and forces based on their work in this area. This gap was first identified by the HMIC in 2005 and was the impetus for consideration of Force Amalgamations. HMIC have recently inspected all Force plans to address protective services and the Police and Crime Bill currently passing through Parliament provides for mandated collaboration where progress is not made.

1.13.3 Finally the Authority needs to be aware of:-

• The Capping Regime – the Government has indicated that it wants

overall council tax increases to be substantially less than 5%. Previous capping criteria called in any authority with both a council tax increase above 5% and a budget increase over 5%.

• The results of public consultation – the outcome of public

consultation with some 450 local residents indicated over 78% support for a police precept increase that would address most of our remaining risks and achieve funding parity with our neighbouring forces. This is set out in more detail below.

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1.13.4 As it stands, with a 5% precept increase the Force and Authority cannot maintain existing service levels, with the need to make cuts in service of some £2m over each of the next three years.

1.13.5 There is absolutely no resource within the base 5% precept increase to

address the remaining and significant policing risks or provide the investment needed to deliver the national policing pledge.

1.13.6 A 5% precept increase will not enable the Authority and Force to even

maintain its current funding position as the fourth lowest spending force.

1.13.7 The Police Authority needs to ask the question whether, given our

current financial position, it can sustain further cuts in service, without increasing the policing risks faced by the both the Authority and Force to an unacceptable level.

1.13.8 The other key question for the Authority is whether even standing still is good enough. The Authority has been briefed on the levels of threat and risk and the ever increasing ‘Policing Mission’. Together with the Force, they still face a considerable level of policing risk, with the added requirement and financial pressure to deliver the National Policing Pledge.

1.13.9 During public consultation there was strong support for addressing a

larger share of the risk that the Force and Authority face as well as starting to close the funding gap between ourselves and neighbouring forces.

1.13.10 Clearly this desire to invest in improvement has to be balanced against

the current financial climate and the impact of police precept increases on local Council Taxpayers. It should however be appreciated that the police precept accounts for approximately 1/10th of the overall council tax bill for Derbyshire Council Taxpayers.

1.13.11 The Chief Constable therefore informed the Police Authority on

8 January 2009 that he would be putting forward three budget options as follows:-

• Parity of funding with Neighbouring forces. • Addressing the highest priority risks, including the impact of the

policing pledge. • Breakeven budget over the three year budget planning period.

1.13.12 The following section explains these options.

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1.14 Budget Options

OPTION 1 – Parity of Funding with Neighbouring and East Midlands Forces

1.14.1 The table below shows the spending per head for Derbyshire Police

Authority compared to its neighbouring forces. It also shows how much the budget for Derbyshire Police would need to increase if it were funded at the same level as these neighbouring forces.

Spend per Head

£ Derbyshire budget

Increase at this levelDerbyshire 159 Cheshire Leicestershire Nottinghamshire Staffordshire South Yorkshire Warwickshire

168 171 175 166 191 164

£9.3m £12.1m £16.1m £7.0m

£31.7m £4.7m

Source: Cipfa 2008/9 Estimates 1.14.2 With the exception of South Yorkshire, a metropolitan police force,

funding for Derbyshire police is between £4.7m and £16.1m below its neighbouring shire forces. On average our funding is some £10m less than our neighbouring forces.

1.14.3 If Derbyshire were to close the gap with the next lowest funded of these

forces over the next three years this would require a budget increase of some 7.6%, which is equivalent to a 17.2% increase in our police precept in 2009/10 followed by increases of 5% in each of the next two years. This would result in the following budget surpluses that could be used to invest in policing risks and the policing pledge.

Base Budget Surplus (£’m) 2009/10 2010/11 2011/12 3 years

17.2% precept increase 2009/10 5% precept increase thereafter 3.659 4.405 4.560 12.624

1.14.4 This would provide resources to:-

• Serious & Organised Crime -. provide additional police officer resources to address local risk and threat around serious and organised crime.

• Terrorism - provide additional police officer resources to address locally identified risk and threat around terrorism activity.

• Major Incidents - Improve the resilience of the forces operational task force to ensure that it can deal with a concentrated number of major incidents similar to those experienced during November of this year as well as high profile public disorder.

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• Policing Pledge & Anti-Social Behaviour – employ an additional 50 PCSO’s to address the policing pledge and anti-social behaviour.

• Policing Pledge – invest in additional IT systems to address the policing pledge.

• E-Crime – provide additional officer and specialist resources to address Hi-Tech Crime and E-Crime.

• Public Protection – Improve intelligence capability around public protection to ensure that public protection resources are focused on protecting the most vulnerable in our community from risk and harm.

• Managing Our Information – to prepare for the impact of the Policing National Database.

1.14.5 In the following two years, if Derbyshire were to achieve parity with the

average level of funding for neighbouring police authorities the Force would need a year one increase of 17.2% followed by further police precept increases of 9.5% in 2010/11 and 2011/12. This would result in the following budget surpluses to cover policing risks and meet the policing pledge.


17.2% precept increase 2009/10 9.5% precept increase thereafter 3.659 6.959 10.079 20.697

1.14.6 In addition to the improvements outlined above this would deliver:

• Gun Crime and Level 2 Crime – improved intelligence capability to ensure that resources are focussed on the areas of highest risk

• Rape & Serious Sexual Offences – additional officer resources to help improve detection and conviction rates in this area.

• Violent Crime – significant improvement in firearms capacity to provide greater resilience in particular in relation to more serious policing operations and incidents of public disorder.

• Serious Organised Crime – further enhancement of test purchase activity.

• Policing Pledge & Anti-Social Behaviour – a further 75 PCSOs to bring neighbourhood policing numbers in line with the national average.

• Policing Pledge – administrative support to improve monitoring arrangements.

• Special Branch – additional resources to deal and respond to the lower level risks highlighted by the East Midlands Counter Terrorism Intelligence Unit.

• Policing Pledge & Volume Crime – sufficient officers resources to attend every crime.

• Community Cohesion – to employ a co-ordinator for community cohesion within each of the four policing divisions.

• Adult Protection – Introduce a vulnerable investigation team to focus on the increasing risk area of adult protection.

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• Immigration and Honour Killing – further resources to address the growing risk associated with crime stemming from immigration and the threat of honour killing and human trafficking.

• Road Crime – additional resources to increase capacity to investigate and manage serious and fatal road traffic collisions.

OPTION 2 – Addressing the highest priority risks

1.14.7 In many ways, this option is very similar to the above option. A budget

increase of 7.4% would result in a precept increase of 16.4% and deliver the following additional resources over the next three years to address high priority policing risk and the policing pledge.


16.4% precept increase in 2009/10 5% precept increase thereafter 3.273 3.996 4.128 11.397

1.14.8 This would provide resources to:-

• Serious & Organised Crime - provide additional police officer resources to address locally identified risk and threat around serious and organised crime activity.

• Terrorism - provide additional police officer resources to address locally identified risk and threat around terrorism activity.

• Major Incidents - Improve the resilience of the forces operational task force to ensure that it can deal with a concentrated number of major incidents similar to those experienced during November of this year as well as high profile public disorder.

• E-Crime – provide additional officer and specialist resources to address Hi-Tech Crime and E-Crime.

• Policing Pledge & Anti-Social Behaviour – employ an additional 40 PCSO’s to address the policing pledge and anti-social behaviour.

• Policing Pledge – invest in additional IT systems to address the policing pledge.

• Adult Protection – Introduce a vulnerable investigation team to focus on the increasing risk area of adult protection.

• Public Protection – Improve intelligence capability around public protection to ensure that public protection resources are focused on protecting the most vulnerable in our community from risk and harm.

• Managing Our Information – to prepare for the impact of the Police National Database.

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OPTION 3 - Breakeven Budget over three years

1.14.9 The final option is for a Breakeven Budget. This is based on a budget increase of 4.99% and a precept increase of 8.68%. The three-year impact of this level of funding is shown in detail in Annex 1(ii) and summarised in the table below:-

Base Budget Surplus (Deficit) (£’m) 2009/10 2010/11 2011/12 3 years

8.68% precept increase 2009/10 5% precept increase thereafter (0.458) 0.073 (0.023) (0.408)

1.14.10 The above option produces a small deficit in 2009/10, which can be met

from balances with very small surpluses achieved in each of the next two years.

1.14.11 This option protects the investment that the Force has made to date to

improve its protective services capability. It also protects the investment made in the fight against more serious and organised crime and its impact on Derbyshire communities.

1.14.12 The breakeven position does provide for some limited additional

spending in a number of areas where it is considered that extra spending is mainly unavoidable. The Force has identified efficiency savings to cover these additional costs which are set out in detail in Annex 6 and include:-

Efficiency Savings

• Workforce Modernisation Proposals for Criminal Justice and

Corporate Development. • Reduction in Enquiry Office staff numbers. • Rationalisation of Business Manager Posts – with B & C Divisions

sharing a Business Manager. • An overall reduction of nine police officer posts with a net increase

of 1.6 police staff posts.

Extra Spending • Additional Software Licences for Hi Tech Crime Unit and Forensics

Case Management System. • Increases in costs for computer printers and other consumables (a

budget pressure in the current year). • Two additional staff to cover the requirements of the new national

police database. • One additional staff post for disclosure to meet the requirements. • Centralising training and equipment for working at heights to comply

with Health and Safety legislation. • Increase in IT staffing and software costs associated with supporting

a wider range of systems.

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• To support the vehicle seizures project.

1.14.13 Failure to address spending pressures in these areas would only lead to an over-spend during the year, which would put even greater pressure on force balances.

1.14.14 Delivering this breakeven budget will present a real challenge to the

Force. The current year’s budget has been supported by carry forwards which has enabled individual formations to offset the impact of cost pressures and policing operations during the year.

1.14.15 2008 has seen one of the highest and most concentrated levels of

policing demand for a number of years. Given the growing complex nature of criminality, the impact of the economic down-turn and the pressures to improve the quality of service to communities, all the indications are that this trend will continue. Even within a standstill financial position, the Force will find it extremely difficult if not impossible to contain spending within this break-even budget.

1.14.16 The break-even budget set out at Annex 7 only maintains the

Authority’s and Force’s current low funding position.

1.14.17 This still means that the Authority and Force will be carrying a significant level of risk, perhaps greater than any other force nationally. This is demonstrated by recent national assessments of risk and threat around serious and organised crime. This shows that Derbyshire is a medium risk force, carrying greater risk than most of the surrounding forces but with one of the lowest levels of funding nationally to address the risk.

1.14.18 The break-even budget provides no resources to address further the

significant policing risk that the Force faces as outlined in Annex 5. This policing risk represents real threat and harm to some of the most vulnerable in our community and this analysis has been developed in partnership with a wide range of our criminal justice partners and validated externally. Failure to address this risk does not only impact on the Authority and Force but clearly also impacts on our Criminal Justice and Community Safety Partners across the County.

1.14.19 Moreover, the Force faces one of the greatest challenges in addressing

the Policing Pledge. It will be doing this with proportionately the third lowest number of PCSOs nationally and some of the lowest number of neighbourhood policing resources nationally. This has been made even more challenging given the stretch target the Government has given to Derbyshire Police and its partners to improve public confidence in policing across the county.

1.14.20 Next year the Audit Commission introduces the Comprehensive Area

Assessment which will assess the effectiveness of public bodies across Derbyshire and how they work together to deliver effective public services. Clearly any failure to provide additional resources to address

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the policing pledge and our policing risks may impact heavily on this assessment and how the performance of Derbyshire Police and its Partners is viewed within the local community.

1.14.21 Delivery of the break-even budget is heavily dependant on the level of

policing operations the force may face over the year, with only limited reserves to cover any extra costs if policing demand remains at 2008 levels.

1.14.22 Even with a break-even budget the Force may face the need to take

tough decisions during the year if it is to contain spending within the break-even budget.

1.14.23 There are no viable options to put forward to deliver precept increases

below 8.68% without impacting severely on the level of service provided by Derbyshire Police and in particular its performance.

• Over 80% of our costs are people related – this means it would be

extremely hard to make substantial cuts without impacting on the number of officers, police staff and community support officers that we employ.

• The recession means that our policing demands are increasing with the first increase in burglary for five years – this will place increasing pressure on the number of (reactive) officers we have to respond to calls for service and means we cannot reduce officer numbers in those areas.

• Recent high profile child protection cases coupled with our increased general awareness of the risks around domestic violence and public protections – means that we cannot go back from the investment we have already made on these areas.

• The complex policing operations of the last year have shown that our resources to deal with Terrorism and Serious Organised crime are stretched and cannot be reduced any further.

• We have already reshaped a number of our general administrative services following a previous review of our Finance and Administration department.

1.14.24 This means that the only potential areas for service reduction are:

• Neighbourhood Policing – this would have a severe impact on the

forces already limited resources to deliver the national policing pledge. In turn this would undoubtedly impact on public confidence

• Partnership funding – currently we contribute some £0.945m to

community safety and other partnerships, which is a real strength for policing across Derbyshire.

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1.15 Contribution from Reserves

1.15.1 When the current 2008/9 budget was set, the Authority decided to

make a contribution of £634,000 from reserves to support the budget. The Authority also made a commitment to at least 5% police precept for the next two years to sustain the three-year budget plan.

1.15.2 This section considers the current level of reserves and their future use.

1.15.3 Essentially the Force holds reserves for two main reasons:-

• To provide a cushion to protect against unexpected events or

emergencies. This is usually referred to as a general reserve. Currently the Authority maintains a general reserve of £3m, which is equivalent to 1.91% of its budget requirement.

• To put aside money to pay for specific items of spending in the

future i.e. earmarked reserves. These help to ensure that future commitments do not have a destabilizing impact on future budgets or indeed future police precept levels.

1.15.4 Annex 8 provides a forecast of the level of reserves over the three-year

financial planning period to March 2012. 1.15.5 The Authority’s reserves have reduced by some £6.4m from £29.4m in

April 2008 to £23m at the end of March 2009. These have mainly been used to:-

• Fund the force’s revenue budget (£1.1m). • Use of carry-forwards from previous years (£1.7m). • Fund capital schemes (£1.1m). • Fund the Centralised Contact Management Centre (£2.2m).

1.15.6 Of the remaining £23m in reserves at the end of March 2009, £16.9m is

committed to meet future spending as set out in the table below. This leaves available reserves of £6.1m, including a proposed invest to save reserve of £1m.

Total Reserves

23.0

Of these £16.9m set aside to cover future PFI costs to self-insure and reduce overall insurance costs to fund the capital programme over next 3 years to invest in a new CCMC to deliver future savings to be spent in the current year i.e. carry forwards to cover the cost of anticipated deficits to meet identified operation priorities held for helicopter joint committee to offset future IT/IS costs

6.0 2.2 4.6 1.6 0.6 0.5 0.5 0.3 0.1 0.5

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to offset the cost of police officer ill health pensions Total Available Reserves

6.1

Of these General Reserves Operational Priorities Reserve To invest to deliver future savings

3.0 2.1 1.0

1.15.7 Most of the Authority’s reserves are allocated to deal with future spending pressures covering:- Operational Priorities - this reserve is held under the control of the

Chief Constable to fund specific operational priorities including the impact of major policing operations within the County.

Major Incidents – the Force has not experienced a high level of

major incidents until the current year. Reserves may be required to meet a higher than anticipated level of major incidents, although the Force does have further general reserves of some £3m to call upon to meet these pressures.

Ill-health Pension Costs - Reserves may be needed to cover

future pension costs for injury on duty and ill health retirements, which are not funded by the new pension arrangements.

Capital spending pressures – set aside to fund the CCMC and

other capital schemes set out within the capital programme report also included on this agenda.

Funding future growth pressures – the three year funding

settlement means there is little prospect of any additional grant resources in each of the next two years. Some reserves may need to be retained to cover any unavoidable pressures that may arise over the next two years.

1.15.8 The break-even budget proposals are based on a contribution of

£458,000 from the operational funding reserve. This will reduce the reserve to £1m.

1.15.9 It is proposed that this reserve is re-designated as an invest to save

reserve to help invest in a range of investment proposals to help release efficiency to close some of the remaining risk gap faced by the Force and the Authority.

1.15.10 In view of the above it is proposed that all other reserves are

maintained at their existing level.

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1.15.11 It should be noted that at this stage there is no proposal to increase the

helicopter reserve to fund a replacement helicopter. Currently a number of alternatives for the replacement of the helicopter are being considered by the Joint Nottinghamshire and Derbyshire Committee, including prudential borrowing.

1.15.12 It is important to be aware of other Capital programme spending

pressures from 2011/12.

1.16 Financial Outlook

1.16.1 The Force and Authority face a new economic climate in the years ahead.

1.16.2 While current grant levels and capping limits are tight, indications are

that they will be even tighter in future years.

1.16.3 This will make it even more difficult for the Government to make any further moves to remove the inequality in grant funding caused by the imposition of grant floors, which protects authorities that are already better funded than Derbyshire.

1.16.4 Indeed plans to review the funding formula could easily mean that the

sad reality is that the Force and Authority and the communities of Derbyshire never gain the benefit of the changes to the funding formula introduced in 2006/7.

1.16.5 With the Government providing lower grant settlements and setting

tighter limits on Council tax increases, it is extremely unlikely that there will be extra resources to invest in Policing Services to close the risk gap or provide extra resources to deliver the policing pledge.

1.16.6 This means the Authority and Force will rely entirely heavily on

delivering efficiency savings to enable redirection of resources to address the risks that they face.

1.16.7 The Force and the Authority have a clear understanding of the risks

that they face. This is likely to grow as we improve our ability to gather intelligence, to work with partners and to listen to communities. This already features strongly when making decisions on the allocation of resources.

1.16.8 The main routes to redirect resources are set out in the agreed budget

strategy as follows:

• Collaboration – Derbyshire is one of the prime movers taking forward collaboration across East Midlands forces. The five forces are working closely together and have identified some 20 collaborative projects. These projects include, serious and organised crime, covert technical support, demand management,

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public protection and high tech crime as well as call handling, The expanded East Midlands Special Operations Unit is an example of the five forces joining together to increase their capacity to address level 2 policing challenges.

• Structural change – the force has reduced the number of policing

sections to release police officer resources both to address service pressures at a local level and to address the major operational force risks

• Moving resources away from lower risk areas – national and

local risk assessment indicate that roads policing is an area where the Force faces below average risk compared to other forces. The force has reduced and subsequently redeployed resources in this area.

• Workforce Modernisation – nationally forces are facing the need

to review the mix of front line and support staff that they use to provide services. The relaxation of the crime fighting fund criteria gives forces nationally far more opportunity to vary the mix of support staff and police officers. The key test will be ensuring that the force has the right people to do the job be they police officers, police community support officers or police staff.

• Workforce Mix – It is essential that the Force puts its police officers

into areas where they can best use their skills to address the new and emerging risks that the force faces. It is also essential that in making any changes the force is aware of issues of capacity, capability and overall resilience - given the likely demands of organised crime, terrorism and the 2012 Olympics. The Force has reviewed the mix of police and community support officer resources within safer neighbourhood teams. The recruitment of additional PCSOs has released police officers to work in other higher risk areas e.g. Public Protection.

• Invest to Save – in addition to the areas identified above, it is

important that the force looks at opportunities to invest to save. Equally it is important to recognise that generating efficiency can require some initial investment. The Authority’s major invest to save project is the Centralised Contact Management Centre.

• Making better use of Technology – mobile data terminals are an

example of where the force is using new technology to enable officers and PCSOs to spend more of their time in the community rather than in a section station or beat office

1.16.9 Many of the options identified above require some initial investment to

make them happen. Sometimes this investment can be in the form of new equipment (e.g. mobile data terminals), new buildings (CCMC) or indeed the cost of employing additional police staff to release police officers for more specialised policing roles.

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1.16.10 The Authority and Force need to retain a fund to invest to save to move

resources towards other high priority areas. The areas for investment have already been set out in some detail in the section on efficiency and these include:-

• Mobile Data Terminal – further investment of £750,000 would fund

a further 500 mobile data terminals, which would enable all operational officers in one policing division to have mobile data terminals

• Kick Start Workforce Modernisation – further investment of

£500,000 would fund an additional 20 police staff/PCSO’s, which could potentially release police officer posts elsewhere within the Force.

1.16.11 Regardless of this the Authority and Force still face the need to

consider real cuts in service and in the future may be forced to consider making cuts in lower priority services.

1.17 Other Factors Affecting the Authority’s Budget

Police Officer and Community Support Officer Numbers

1.17.1 The funded strength for Derbyshire is currently 2072 police officers,

which is equivalent to 2.08 officers per head of population. 1.17.2 The actual strength can vary around this level depending on the timing

of retirements and the recruitment process. During 2008/9 the Authority agreed to maintain the funded strength at well over 2072 officers to assist with the reorganisation of policing sections under the Closing the Risk Gap project.

1.17.3 The 2009/10 budget cannot continue to fund the strength at this slightly

higher level and the Force will need to ensure that over the year it does not exceed this level for long periods. This would create further pressure on local policing.

1.17.4 Indeed these proposals envisage a slight reduction in police officer

numbers, through a number of workforce modernisation measures outlined above. This will reduce the police officer strength to 2063.

1.17.5 Under the workforce modernisation programme the Force is committed

to ensuring that it has the right people with the appropriate skills to do the job. In many but not all cases this will be police officers. However, in other cases the Force will look to pursue workforce modernisation opportunities either to release police officers into other high priority areas or to make savings.

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1.17.6 The Force no longer has to continue to maintain its police officer

numbers at or above the target, previously set by the Home Office under the Crime Fighting Fund. It will continue to receive this funding provided it can show that this has not had an adverse impact on force performance.

1.17.7 Equally the Front Line Policing Measure has also been abolished.

Nevertheless the Force will clearly want to ensure that as far as possible Police Officers are working on essential operational and public facing roles. Indeed a key challenge for the Force over the next year is to look at ways to reduce bureaucracy and enable officers to spend as much time as possible out policing the community that they serve.

1.17.8 In addition to police officers the Force currently funds 183 PCSOs. The

number of PCSOs has increased during the last year as a result of the Closing the Risk Gap project.

1.18 Reliance on External Grants 1.18.1 It is important for the Authority to be aware that the financial position is

underpinned by significant additional specific grant funding. It is worth noting that grant in this form amounts to some £11m in 2009/10 and for the subsequent two years. It is also significant that many grants remain at the same level as 2005/6 with no inflationary increase.

1.18.2 This presents a medium term risk if this funding is transferred into

general police grant. Under the current floor arrangements this creates a substantial risk that the force will not receive an equivalent increase in Grant to cover this loss in specific grant.

1.18.3 There is also a more immediate risk that the review of the BCU grant

may result in this grant being paid direct to Crime and Disorder Reduction Partnerships rather than BCUs who rely heavily on this funding to fund much of their targeted partnership activity. The Authority and Force have received a grant to pilot participatory budgeting. It is likely that in future this BCU grant may be allocated in this way.

1.18.4 Central funding supports a number of key operational areas, in particular neighbourhood policing. If and when funding ceases, difficult choices have to be made between making up the shortfall via the Police Precept, cutting back on operational activities, or attempting to identify equivalent cashable savings in support services.

1.18.5 A number of police staff posts are funded in this way and whilst some are on fixed term contracts equating to the period of grant funding, current employment environment and law dictates that it is not always viable to employ staff on this basis. The Authority therefore should be mindful of this risk area when considering options for the future.

1.19 Risk Analysis

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1.19.1 The table below assesses the financial risks associated with the

budget proposals and the actions taken to address these risks.

1 Crime Fighting Fund – the Force may lose this grant if it does not maintain existing performance

The rules on CFF have been relaxed and now present a very low risk of loss of grant to the force. The budget proposals are designed to maintain and improve on the force’s existing PPAF assessment.

2 Reliance on investment income to fund base budget – volatility in interest rates may have a significant impact on force income

The budget is based on a significantly reduced level of investment income

Maintain reserves at a reasonable level.

3 Police Pensions – volatility in police officers retirements can have a significant impact on force budgets.

The risk associated with police pensions has reduced significantly under the new pension financing arrangements

The Force will continue to hold reserves in the event that ill-health pension payments which cannot be met within its revenue budget.

4 Police Staff Pensions – sharp reductions in investment returns.

A revaluation of the Staff Pension Fund took place in 2007 with no increase in pension contributions w.e.f 2009/10 The next revaluation will take place in 2010/11 and come into effect in 2011/12.

At this stage the market is too volatile to predict

There is a high risk that investment returns will lead to a substantial increase in employer contributions

At this stage this cannot be quantified and has not been included in the Financial Projections.

5 Revenue Funding – the Force Look to match commitments

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relies heavily on specific grants to fund a significant share (7%) of its net revenue budget.

with funding period i.e. avoid using funding to pay for ongoing spending.

Keep under review funding opportunities and other funding streams that may replace certain revenue funding e.g. LAA

6 Review of BCU grant may result in grant being paid direct to CDRPs

Work with partners to influence targets within LAAs

Undertake Participatory budget pilot to gain experience of alternative ways of distributing the BCU grant.

7 Major Incidents – potential impact on police overtime of a number of major incidents

Maintain balances (operational priorities reserve) at a realistic level to provide for the additional cost of major incidents.

The level of balances has been reviewed

8 Reliance of use of reserves to fund base budget needs.

Following the three year grant settlement this has reduced.

This provides a realistic timescale for the Force to identify savings.

9 Unforeseen spending Items Maintain reserves at a realistic level to ensure that they can sustain items of unforeseen spending

Frequently update three-year financial forecasts to provide a more realistic view of future spending commitments.

Specific insurance reserve exists to cover insurance excess.

10 Savings – damaging impact on Force performance

Maintain focus on monitoring and managing performance.

Identify areas of risk/ deterioration as part of monitoring process and consider the allocation of resources to address these within the three year financial strategy.

11 Rising cost pressures around Review existing allocation of

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training and vehicle costs training resources and deployment of police vehicles.

12 Failure to invest in level 2 pressures will have damaging impact on force performance

Lobby for fairer funding settlement for Derbyshire Constabulary.

Options reviewed following CSR2007.

1.20 Previous Years' Precept and Budget Increases

1.20.1 Police Precept and budgets since 2001/02, supported by the Authority,

have increased as follows (standstill requirements are included to place the actual increases in context):-

Standstill

Precept Approved Precept

Standstill Budget

Approved Budget

2001/2002 2002/2003 2003/2004 2004/2005 2005/2006 2006/2007 2007/2008 2008/2009 2009/2010

0.6% 9.0% 13.9% 4.6% 15.7% 9.7% 5.0% 2.2% 8.68%

6.00% 22.00% 21.50% 9.94% 5.00% 4.75% 5.0% 4.6%

-

4.3% 3.1% 5.7% 3.8% 7.3% 7.3% 4.3% 3.0% 4.99%

5.3% 5.7% 7.5% 5.2% 4.3% 4.2% 4.3% 3.7%

- 1.20.2 Whilst the Government to-date have not challenged any precept

increase for Derbyshire Police, the Minister for Local Government and the Regions have made it very clear that if necessary the Government would not hesitate to use their capping powers.

1.20.3 It is worth remembering that while a number of police authorities chose to exceed the 5% indicative limit last year, Only one, Lincolnshire was required to set a lower precept increase and rebill. The table below shows those authorities with a precept increase of over 5% in 2008/09, together with their spending per head of population and the level of grant they contribute to the funding floor.

Precept Budget Spend per Contribution Police TotalForce Increase Increase 100,000 To(-)/From Offficers Employees

% %

Pop (£) Floor (£'m)Per

100,000 Per 100,000Lincolnshire 78.9% 29.0% 169,961 -2.746 170.50 322.0Cheshire 17.0% 6.8% 168,093 9.117 214.24 390.8Leicestershire 15.4% 6.5% 171,006 -3.420 234.87 423.0Warwickshire 12.9% 6.7% 163,535 -2.746 183.45 356.4Cleveland 10.0% 4.1% 223,299 0.534 307.54 464.8Surrey 9.7% 6.0% 176,462 4.599 178.12 382.8Bedfordshire 9.6% 5.3% 162,614 -3.761 215.68 379.9Suffolk 9.0% 4.9% 152,222 2.070 187.75 330.1

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Norfolk 8.3% 5.3% 166,135 2.157 198.46 391.5Derbyshire 4.6% 3.7% 158,747 -5.558 209.21 369.3

1.20.4 It is worth noting that:-

• Five of these nine authorities were receiving compensation from the grant floor. The remainder all suffered smaller losses than Derbyshire.

• All forces, bar one had higher spending per head of population than Derbyshire.

• Four forces had a higher number of police officers per 100,000 population than Derbyshire.

• Six forces had higher number of officers and police staff per 100,000 population than Derbyshire.

• Two of the above forces (Norfolk and Suffolk) are in our new “Most Similar" Force Group.

1.20.5 The Minister has powers under which, if he deems the budget is

extreme, he may:-

• Designate the Authority (i.e. Cap the Budget). • Nominate for the police precept increase for the following year. • Set a notional budget to be used for future comparisons. When

assessing the budget increase.

1.20.6 Last year the Minister chose to require Lincolnshire to re-bill. Leicestershire and Cheshire were instructed to keep precept levels at 3% or less for each of the next two years.

1.20.7 No other substantive action was taken against any of the other

authorities.

1.20.8 If the Authority were to be capped then re-billing costs of approximately £500,000 would result.

1.21 Prudential Code 1.21.1 Whilst the Prudential Code relates to new capital controls, it does

impact on the revenue budget. Any agreed long term borrowing, meeting all the Prudential Code guidelines will have ongoing revenue implications over a long period.

1.21.2 During 2007/8 the Authority approved Prudential Borrowing as a means of funding the new Central Contact Management Centre (CCMC). The costs of taking on this borrowing are reflected within the budget projections set out within these budget proposals.

1.21.3 Separate reports on this agenda deal with the Capital Programme and also the Prudential Indicators for the Authority.

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1.22 The Chief Constable's Budget Recommendation

1.22.1 This is a crucial budget year for Derbyshire Police. Our priority is to protect the most vulnerable in our community, with our resources stretched to deal with organised crime, terrorism, domestic violence, child protection, and the management of dangerous persons in the community. The recession only increases risk and demand in these areas.

1.22.2 Over the last five years the Force has delivered outstanding

performance from the resources that it has. Crime has reduced in each of the last five years with over 25,000 fewer victims of crime than five year ago. Burglary and Vehicle Crime are at their lowest level for 28 years. In short we are one of the most improved and consistently high performing forces in England and Wales – this position is supported by external inspection.

1.22.3 Few of the above crime reduction statistics, however, relate to public

protection, to terrorism or to the growing threat of serious and organized crime. Maintaining the current performance is harder than ever. Burglary of houses and non residential premises is starting to rise for the first time in five years. Local residents also have a relatively high fear of crime compared to our neighbouring and similar forces. Recent events including the murder of Kadeem Blackwood and associated gun/gang culture within Derby add further to these pressures.

1.22.4 Our current funding means that Derbyshire Police is the fourth lowest

funded Force nationally. We are falling further behind against other Forces. At the same time we face the risks of a mid range Force – not surprising given the size of the Force, the proximity of a number of major conurbations and the fact we host the second most visited national park in the world. Our funding falls a long way short of the risks that we face.

1.22.5 We are a very efficient Force. We have delivered efficiency savings of

some £40m over the last six years. Many of these have been ploughed back into meeting a number of the new risks that we have faced. At the same time we have delivered real cash savings of over £8m to close our budget gap. The Audit Commission has given the force the highest possible (level 4) score for Use of Resources, including value for money.

1.22.6 We face a challenging financial future just to prevent our risk gap

getting any wider. Our budget deficit is up to £2m for each of the next three years, depending on the level of police precept agreed by the Police Authority. During this time we will continue to lose out on government grant of approximately £5m annually.

1.22.7 Despite a number of reports urging the government to implement the

new funding formula in full, they have been much slower to phase out

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protection for Police Authorities than for other classes of authority. For example our grant stands to increase by 3.2% next year compared to increases of 6.4%, 3.9% and 4.3% for the County, City and Fire Service respectively. Clearly this has a real impact on the level of precept that each of these authorities can afford to set.

1.22.8 Risk and Harm is growing for the most vulnerable in our community.

Domestic violence cases alone have risen by 31% since 2005, with a 360% increase in high risk domestic violence offenders. Child protection cases have increased by 21%. The sharpest rise is for adult protection an area where we are gaining a greater understanding of the threat and harm with a 333% increase in referrals.

1.22.9 We understand more about the operational risks that we face in other

areas with 52 active organised crime groups (OCG) identified within our county and another 26 crime groups attacking us from outside. Each of these causes substantial harm on our local communities and it is our responsibility and duty to ensure each OCG is being addressed through operational activity. The tragic murder of Kadeem Blackwood in Derby pointed to the risk and threat presented by the OCGs and the 29 street gangs across Derbyshire. Drug use continues to present another key risk with some 15000 problematic drug users across Derbyshire (half being young people).

1.22.10 It should come as little surprise that pressure on our officers and staff is

growing, with 175% increase in high risk domestic violence caseload and almost 100% increase in hi tech crime referrals (half of which relate to paedophilia). Recent events in Haringey and indeed elsewhere point to the risk and harm these increased workloads can present and the negative consequences of failure.

1.22.11 We have made a good start in dealing with these risks but there is

much more that needs to done. We have made the very most of the limited help that the Police Authority provided last year within its budget. The Authority’s £1.3m investment in February 2008 has helped us to free up the equivalent of £3.2m of police officer resources to direct to new high priority risk areas. This includes extra officer/staff resources for domestic violence, for child abuse for local drugs teams, for serious and organised crime and for specialist roads policing. We have also achieved a further small increase in Safer Neighbourhood Teams

1.22.12 We have already had to make significant changes to help to meet these

risks. This has included reducing the number of policing sections across the force from 20 to 13. We have reduced the number of police officers in Safer Neighbourhood teams, replacing them with additional Community Support Officers. We have also had to cut the number of overall police officers in roads policing teams, a key LAA target but not an identified high risk area for the Force. These were not measures we sought to take but were necessary to free up the additional resources to be available for building our protective services capacity and capability within the available finances.

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1.22.13 We take seriously our responsibilities for protecting the public,

particularly the vulnerable, and know that we must direct our resources to deal with these high priority risks. Considerable risks still remain around our ‘protective services’ and the more serious crime. This is exacerbated by the recession which is also putting pressure on volume crime, such as burglary, theft of vehicles, shoplifting and acquisitive crime – previous recessions have also shown that the stress and pressures of reduced incomes and unemployment can be taken back to the home and it is likely we will see increases in referrals of domestic violence and child protection. The national policing pledge also presents a real challenge to deliver effective public facing services with the third lowest number of Community Support Officers nationally.

1.22.14 We realise the impact that our spending decisions have on local people.

We do not want to increase the burden on council taxpayers any more than we really have to at this difficult time. Nevertheless we cannot both protect the most vulnerable in our society and deliver a budget increase any less than 5%.

1.22.15 There is a real risk that we will have to reduce officers and staff

numbers if there is not sufficient funding made available. As one of the lowest funded Forces with very low staffing levels, there is little room for further efficiency. Any reductions in our ability to invest in policing will have to result in reductions in some of the officers and staff deployed to protect and serve the public.

1.22.16 In the current environment it is essential to maintain our officer

resources to respond to and deal with calls from the public. Clearly we cannot reduce our already limited numbers that cover public protection and serious organised crime. We have recently reviewed the Force Administration and Finance departments, making considerable savings, and there are few, if any, options to reduce these further. This only leaves Safer Neighbourhood teams where we have some of the lowest numbers nationally and which will play a key role in delivering the National Policing Pledge.

1.22.17 At a time when the Government and our local Community Safety

Partners are placing a great deal of emphasis on improving public confidence, we cannot face the prospect of having to reduce neighbourhood policing numbers. Likewise, the real commitment we have built over several years to working in partnership is one of the great strengths of the Force and it would be a retrograde step to reduce our investment in this area at a time the thrust of policing is around local people, working with partners and increasing trust and confidence.

1.22.18 I therefore ask that you consider the three options put before you and

agree at the very least to maintain the current level of investment in policing in Derbyshire.

1.23 Police Precept and Public Consultation

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1.23.1 During November and December 2008, consultation evenings were

held in all four policing divisions and attended by some 450 members of the public. The consultation exercise included a comprehensive presentation from the Chief Constable on the policing issues followed by an explanation of the Authority’s budget by the Treasurer.

1.23.2 Those consulted were clearly concerned about the impact the withheld government grant has on the Constabulary and its relative funding position compared to neighbouring forces. The public were also concerned about the extent of policing risk faced by Derbyshire Police and the real impact this had on local communities.

1.23.3 The public were consulted on four budget options to achieve:-

• Parity of funding with our neighbouring forces. • Our outstanding risks being addressed. • Maintain our existing spending levels (break-even) budget. • No increase in police precept.

1.23.4 The overall results were as follows:-

• 49.8% supported a budget to achieve parity with neighbouring forces.

• 29% supported a budget to address our outstanding risks. • 18.4% supported a budget to maintain our existing services (break-

even budget). • 2.7% supported a zero increase in the police precept.

1.24 Business Meeting

1.24.1 Annex 9 sets out the issues discussed at the Authority’s Business

Consultation meeting with non-domestic ratepayers and district councils. The statutory requirement is to consult on the proposed level of expenditure before setting the precept.

1.25 Precept Recommendation

1.25.1 The Authority needs to decide the budget requirement for 2009/10 and

the consequential precepts on Billing Authorities and Council taxes. Based on the recommended budget level, the precepts to be issued to the district councils are detailed in Annex 10.

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1.26 Statutory Requirements of the Local Government Act 2003

1.26.1 There is a duty placed on the Treasurer to report to the Authority when

it is making its statutory calculations required to determine its precept. The Authority is required to take the report into account when making these calculations.

1.26.2 The report must deal with:- the robustness of the estimates included in the budget

and the adequacy of reserves for which the budget provides.

1.26.3 Department of Communities & Local Government (CLG) advises that the professional advice of the Chief Finance Officer is required on these two questions, and that they are connected with matters of risk and uncertainty.

Assurance Statement from the S151 Officer - Treasurer to Derbyshire Police Authority

1.26.4 When setting the Budget and Capital Programme for the forthcoming

year the Police Authority must be satisfied that adequate consideration has been given to the following:−

1.26.4.1 Government policy on police spending, as applied to the Police

Authority. 1.26.4.2 The medium term implications of the Budget and Capital

Programme. 1.26.4.3 The CIPFA Prudential Code. 1.26.4.4 The size and adequacy of general and specific earmarked

balances. 1.26.4.5 Whether the proposals represent a balanced budget for the

year. 1.26.4.6 The impact on the Council Tax. 1.26.4.7 The threat or risk of capping.

1.26.5 The Act requires that Members have regard to the report of the Treasurer in making their budget decision. Where this advice is not accepted, this needs to be formally recorded in the minutes of the Authority meeting.

1.26.6 Three options are presented for consideration by members, and my report can only deal with these three as presented. Any other options considered by the Police Authority may require my further consideration and report.

1.26.7 I have reviewed the matters that have been considered in drafting the three proposed budget options and the consequential budget requirement, and level of the police precept. I am satisfied that the

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procedures adopted by the Finance Department are sufficiently robust to ensure the financial data collected is accurate and forms a strong basis for the preparation of the estimates both for 2009/10 and in projecting into the medium term. A balanced budget is presented, although Option 3 would require a moderate and containable use of reserves in accordance with existing Police Authority policy.

1.26.8 Whilst I consider the level of reserves overall to be adequate for meeting estimated future expenditure, it should be noted that the level of General Reserve is at the very lower limit of the Authority’s policy of 2.0% at £3m, and I propose that the level of the General and other reserves be reviewed during 2009/10.

1.26.9 The Government has indicated strongly that in setting Council Tax levels for 2009/10, it expects the average Council Tax increase in England to be substantially below 5% and it will not hesitate to use its capping powers as necessary. The capping criteria used in 2008 resulted in calling in authorities where there was an above 5% increase in both the Budget Requirement and Council Tax.

1.26.10 Of the three options as presented in this report, Options 1 and 2 would exceed the capping criteria as applied in 2008/09, as they exceed 5% in both categories. The recommendation in respect of Option 3 would deliver a recommended Council tax increase of 8.68% in the Band ‘D’ police precept, which is above the generally accepted cap of 5%, but the increase in the Budget Requirement, however, is within 5%. There is a potential risk of the Police Authority being called in to explain its actions, and capping is a risk.

1.26.11 In Derbyshire, the policing element of Council Tax is about 10% of the total

bill. 1.26.12 I am satisfied that the estimates included in the budget and the adequacy

of reserves for which the budget provides are sound. I am also satisfied with the arrangements for Capital budgeting and for compliance the Prudential Code.

1.27 Legal Considerations

1.27.1 The Police Authority must notify a precept to the billing authorities prior

to 1 March and in so doing must set a realistic revenue budget. Section 19 of the Police Act 1996 requires a special majority for decisions about precepts, regarding budget decisions. Such decisions are only valid if the Authority members approving them constitute at least half of the total membership at the time of the decision and include more than half the Councillor members at the time.

1.28 Crime and Disorder Implications

1.28.1 The proposals within this paper will protect the Constabulary’s operational capability.

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1.29 Equal Opportunities Considerations

1.29.1 Inherent in the report.

1.30 Financial Considerations

1.30.1 Inherent in the report.

1.31 Background Papers

1.31.1 Local Government Finance Settlement.

1.31.2 Billing Authorities correspondence on tax bases.

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OFFICER RECOMMENDATIONS

1. That the Authority agrees the highest priority risks (Section 1.11.7) and the

associated financial and service consequences of the risk gap as set out in Annex 5.

2. That the Authority accepts the additional pressures of delivering the Policing Pledge as set out in Section 1.11.13.

3. That the Authority agrees the budget strategy as set out within Section 1.12.

4. That the Authority agrees to set a three-year efficiency target of 6% (excluding carried forward efficiencies) and associated plan as set out in Annex 4.

5. That the Authority considers the following options for a budget requirement and associated budget increase and Band D increase.

Option 1 Option 2 Option 3Budget Requirement £169,189,465 £168,802,213 £165,072,871Budget Increase 7.6% 7.4% 4.99%Band D Increase 17.2% 16.4% 8.68%

6. That the Authority agrees the following associated with its agreed option:

• Budget Requirement. • Budget Increase. • Band D Increase.

7. That the Authority determines the police precept resulting form its chosen

option.

Option 1 Option 2 Option 3Police Precept £56,613,749 £56,226,497 £52,497,155Band D Precept £173.97 £172.78 £161.32

8. That the Precepts be issued to the Billing Authorities as detailed in

Annex 10.

9. That the Authority recognises and accepts the remaining risks that are not addressed or funded by proposals within this report as set out in Section 1.14.

10. That the Authority agrees in principle to create an invest to save reserve

totalling £1m.

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