Agenda item

To include a response from the Budget Task and Finish Group.

Elizabeth Hall gave a presentation regarding the 2016/17 budget, Capital Programme and Medium Term Financial Plan.

The achievements and financial position of the last four years were outlined and it was explained that the current grant settlement was for one year only with a further Formula Funding Review to occur in 2016/17 which was likely to mean increased top-slicing in 2017/18.

During 2016/17:

·         financial pressures were present due to the 1% pay award, an increase in NI and cost increases connected to employment benefits,

·         new investment would be made in recruitment and training,

·         £31.8 million of Capital investment would occur across the Alliance,

·         £9.1million of reserves would be required - £4.7m to support the budget and £4.4m for Rural, Business and Cyber Crime,

·         Savings of £6.5m were already in place,

·         An increase of 1.99% in the precept would raise £1.5m for West Mercia.

2017/18 and beyond – The Medium Term Financial Plan:

·         The Alliance had a savings target of £8.726m

·         The total capital programme for the Alliance was £87.585m, which included using £19.5m of reserves

·         West Mercia reserves would have an opening balance of £57.503m and a closing balance of  £27.563.

During the consultation on the proposed precept 317 responses were received. 57% said yes, 40% no, with 3% unclear. This was a small number of respondents but it was highlighted that even the people who said no appreciated the work of the front line police.

Paul Middlebrough had Chaired the Task and Finish Group which looked at the proposed budget. He thanked the two other members of the group as well as Adrian Blackshaw from the Police Audit Committee and Mark Sanders from the County Council's finance department for assisting them.

It was pointed out that it was a strange settlement as a large reduction had been expected and then at the last moment that did not happen. The Police Minister, supported by the Home Secretary had stated that for 2016/17 "direct resource funding for each PCC, including precept will be protected at flat cash levels, assuming that precept income is increased to the maximum amount available.  This means no PCC will face a reduction in cash funding next year compared to this year, and the majority will see marginal increases in funding".

As the settlement was only for one year a change was likely for the following year and this budget looked for flexibility for the new PCC with strong reserves and investment in revenue expenditure. It was recognised that efficiencies needed to be made and certain areas of expenditure were outside the control of West Mercia such as the nationally negotiated police pay.  The Panel's Precept task and finish group had considered what the impact would be if the precept was not increased by 1.99%.

Cllr Middlebrough also pointed out that the police grant per head of population in West Mercia was £104 per person while West Midlands got £156.

During the discussion the following main points were made:

·         The number of respondents to the consultation may be too small to be statistically relevant,

·         A Panel Member felt that as the reserves were 3 times greater than they needed to be and with the grant reduction being £630,000 it was a bit much to ask for £1.5 million increase from tax payers. They hoped the rationale for increasing the precept was not just because the Home Secretary said they could. They were reassured that that was not the case – there were a large number of unknowns and the present position would not be sustainable without further funding and savings. The reserves would be used to meet future top slicing and to invest in ICT and the estate without having to borrow. They also acknowledged that there was public concern for public safety and maintaining police numbers,

·         Councillor Middlebrough assured the Panel that the Task and Finish Group had looked at the capital investment and felt that it would help the alliance with Warwickshire. They had also had discussions on whether it was better to borrow or use reserves. They felt the proposal would leave as much flexibility as possible for the new PCC,

·         The PCC told the Panel that he challenged his staff to convince him that a rise was the right thing to do, which they had,

·         A panel member wanted reassurance that the large investment on new IT systems would be worthwhile and successful. Andy Champness (Chief Executive of the Office of the Police and Crime Commissioner) agreed there was significant investment in IT but it was necessary and all the systems had been tried and tested elsewhere. New hardware was needed as well as new software.

·         The panel were reassured that the new ESN radio system was a national system which was being brought in for all the emergency services and it would work with the new IT system,

·         It was clarified that the Bear Scotland agreement meant that holiday and sickness pay had to take bonus' and overtime into account,

·         The potential of raising income from providing training for other services had been considered but there was not the capacity to offer training to other services at present,

·         When asked 'what will the 1.99% pay for?', the PCC replied that West Mercia were the top force for increasing staff numbers in the last 12 months. 1.99% would protect the front line and pay to keep 40 officers,

·         A Panel member was concerned that the budget was not self-sustaining in the long term and wondered whether further Alliances were being considered. The PCC responded that they were continually looking for ways to work more efficiently with neighbouring authorities but a further alliance was not imminent. The Chief Constable pointed out that collaboration with other bodies and blue light services were moving ahead and also working with Local Authorities for example with Worcestershire County Council with the Place Partnership,

Paul Middlebrough proposed that the increase should be supported by the Panel and was seconded by Sebastian Bowen.  He also hoped the panel would support the incoming PCC and Chief Constable in any negotiations to get fairer funding for West Mercia.

The proposal was put to the vote:

In favour – 11

Against – 2

Abstein – 1

RESOLVED that the Police and Crime Panel accept the precept proposed by the Police and Crime Commissioner and issue a report to that effect.