Agenda item

Budget Precept

The Chairman has agreed to take this item as an urgent item.


The reason for lateness of the report being published is that the Government Settlement was not received until Thursday 23rd January 2020.


To receive and consider the OPCC’s proposed budget requirements and to independently scrutinise its appropriateness.


The following items of business were considered by the Chairman as urgent pursuant to section 100B (4) b) of the Local Government Act 1972. The item was considered to be urgent because the Office of the Police Crime Commissioner had not received the Government Settlement until Thursday 23rd January 2020.


The panel received a report by the Chief Finance Officer which set out the Police and Crime Commissioner’s (PCC) proposals for the 2020/21 budget, precept and the medium-term financial strategy.

The PCC introduced the proposal for a 4.34% increase on the Police and Crime budget precept.  The PCC explained that the Chief Constable had written to him to inform the budget setting and precept proposal. A copy of the PCC’s speech is attached at Annex 1.

A summary of the Chief Constable’s letter to the PCC is attached at Annex 2.

The PCC then invited the Chief Constable to address the panel


The Chief Constable thanked the Panel for their support of the last year and reflected on how the increased precept for 2019/20 had benefited the communities in Dorset. 


The PCC then continued to explain his proposal.


The Director of Operations then delivered a summary of the public consultation results.  There had been a good response to the precept survey with over 5000 people taking part.


87% of those who completed the survey were in support of additional funding for the Police and 75% were willing to pay an extra £1.25 a month, ie £15 a year, a figure £5 higher than the proposal the PCC was outlining to the panel.  A quarter of those who did not agree with a £1.25 increase were willing to pay more, but a number of people also felt further investment should come from Central Government.


Many respondents, regardless of whether they supported the precept rise or not, would like to see the presence of more officers.


The OPCC Chief Finance Officer addressed the panel.  She advised that there were considerable pressures around national agreed pay awards.  In addition to core and ring-fenced grants, it was proposed to put £200k in a separate reserve account for uniforms etc in preparation for the additional police officers who will be recruited over the next three years.  As Section 151 Officer, assurance has to be given on the adequacy of reserves, a reserve level of 3.5% was adequate but the focus needed to be on maintaining that level.  There was a robust budget in place but there would be challenges going forward with the Medium Term Financial Forecast.

Members asked the following budget related questions:-

1. The PCC has stated that Dorset Police continues to be affected by the impact of nine years of austerity.  Can the PCC give clarity on how this has diminished Dorset Police’s ability to keep people safe?


Response from PCC


Dorset Police’s ability to keep the public safe is inextricably linked to the policing resources it controls. In 2010, there were 1486 officers, and in 2019 there were 1223 – a reduction of 18%.

Whilst austerity impacted the number of officers and staff who are available for deployment to community, patrol and response functions – it also materially affected the number of officers and staff working to keep the public safe from hidden harms such as modern slavery, child sexual exploitation and county lines.

This has meant that the force has had to substantially re-engineer its processes and maintain a critical grip on efficiency, in order to keep people safe. I believe that is the position for most forces. In fact, what has changed in Dorset, again like other forces, is that the service has been unable to invest in the full range of new capabilities to tackle emerging threats and crime types.


The Chief Constable advised that areas of concern were county lines, serious violence and homicide.  He advised that while crime had plateaued innovation had come to a halt during the hardest years of austerity.


He referred to inspections by Her Majesty’s Inspectorate of Constabulary and Fire & Rescue Services (HMICFRS).  This was an external form of assurance that the panel members could access to see how the Police were keeping people safe.

The Chief Constable and the PCC re-iterated the uncertainty of receiving their budget for only one year ahead, which made it difficult to put longer term strategies in place.  The Government had been lobbied for a longer timeline and a fairer funding settlement.


It was suggested the Police and Crime Panel (PCP) Chairman write to the relevant authorities to try to pursue this aim whilst in the current phase of a new Government.  The Chairman agreed to engage with the Chief Executive of the OPCC to take this forward.


2   The Capital Grant is being further reduced meaning that some of the revenue budget will have to be used in order to meet the capital programme.  How much of the additional revenue will be required to support ongoing cost increases other than improvements in policing (salary increases etc)?


Response from OPCC Chief Finance Officer

There was no increase in grant to deal with any inflationary cost pressures. All of the increase in grant funding was in relation to uplift, therefore all of the increase in precept is being used to support ongoing cost increases such as pay awards, increments and the pressures on funding the capital programme. The reduction in the capital grant added another pressure that needed to be funded from the increased precept. There are no improvements proposed other than uplift, which will be provided for by way of a separate grant.

3    The Policing Minister has stated that he expects back room police staff to be cut as part of the government’s financial uplift programme.  What direction has the PCC given to the Chief Constable in order to satisfy this requirement?

Response from PCC

Whilst the Policing Minister’s view has been reported in mainstream media this has not been received through official channels, and therefore this is not something that I have directed the Chief Constable about.

For avoidance of doubt, however, nine years of austerity have meant that the force has already optimised its so-called back-office staff. As many of these functions are shared with our alliance partners, or regionally, it has also become increasingly challenging to find further efficiencies.

There is however, still an expectation for efficiency, and whilst this has not been tightly defined by Home Office, forces currently consider areas such as value for money, procurement and increased efficiency from the use of technology in their considerations.

I have supported the Chief Constable in investing in technology to increase efficiency and automation in provision of back office services.  This includes the investment in e-recruitment, and e-vetting, both of which will increase productivity in these areas, allowing the current officer uplift programme (for example) to be delivered at a lower cost than would otherwise be the case. 

Longer term, such investment will lead to cost savings. 

I have pushed for 'service area reviews' to be included in the 2019/20 budget, reducing the cost of administrative support, business change, and training.  Finally, I have, through the Innovation Fund, also supported the employment of an efficiency officer, to oversee a range of innovative solutions to identify and embed best practice within the Force. 

4.  Section 4.2 of the report mentions contractual pay increments adding to cost pressures of £4.4M.  Have turnover and/or retirements been included in arriving at this figure or is it the highest staff costs spend that we can expect to see if all posts are filled for the whole year?

Response from OPCC Chief Finance Officer

The pay budget is built up on an individual post basis, calculating the exact cost for each officer or member of staff; adding in pay awards, any increments due, impact in on-costs etc. We then apply a vacancy factor of 5.9% to reduce down the pay budgets to take account of expected turnover, new staff starting on the bottom of the grade etc. This then gives a realistic pay budget for the amount we expect to spend, rather than the maximum amount that could be incurred.

5.  Can you clarify the nature of the posts deleted in section 4.3?  Does the deletion of these posts not add further pressure on the ability to sustain police officer numbers as required by the government?

Response from OPCC Chief Finance Officer

The posts referred to are police staff posts that have been vacant for an extended period of time and as a result the business has determined – through its workforce planning board – are no longer required as a result of the more efficient practices that have been developed. The posts are in back office and operational support business areas. The removal of these posts is not expected to have a detrimental effect on the Force, or the ability to sustain officer numbers. By streamlining back office functions, this approach actually supports the increase in frontline police officers.  This is further evidence of the efficiency work outlined in the answer to question three.

In response to further questioning regarding the overtime budget, it was hoped that the uplift of officers would reduce the overtime need.  The overtime bill had reduced but was still a challenge.  An additional number of officers would hopefully help staff wellbeing, reduce sickness levels and the need for overtime cover.  The Police now operated a three-year apprenticeship scheme which could potentially put additional strain on existing officers in the training of the new recruits.

6.  Section 4.8 outlines savings without being clear where they come from and at what stage the plans are to deliver them.  Given the requirement for the OPCC to deliver a balanced budget, what steps have been taken to gain evidence and assurance that the budget is credible and balanced?


Response from OPCC Chief Finance Officer


The £0.5m savings referred to are an in-year challenge, expected to be realised through ongoing procurement savings, and continual challenge of expenditure.  The Force has been subject to such an in-year challenge in most years, and has been able to meet this challenge - it is expected that this will again be the case in the coming year. The risk associated with this is considered minor, as this amounts to roughly one-third of a percent of the budget, although will be monitored throughout the year, and the Force will be required to evidence achievement of this target.


The Chairman questioned that the MTFS stated that savings, to the tune of between £4.5M and £7M out to 2024, have to be made.  The OPCC had earmarked savings of £500k this year in order to balance the budget.  Why not provide a stretch target, of say £1.5M, in order to make real savings and now bow wave the problem?  The Chief Finance Officer highlighted that the majority of the budget was utilised for staff costs (ie wages) and that there was intense pressure in the Capital Budget that severely curtailed any aspirations for further savings.


7.  The PCC sought a precept uplift of £15 in his public consultation.  This has subsequently been reduced by the government to £10.  With this 33% cut, what will not be undertaken in order to maintain focus on reducing crime?

Response from OPCC Chief Finance Officer


The consultation was based on a number of assumptions as the Commissioner had to consult the public before we knew the finance settlement. The £10 increase in precept is enough to undertake all activities as planned in 2020/21 without compromising the Force focus.


Had the referendum limit allowed the £15 increase, there would have been more we could have done to improve the position in future years such as:


·       More of the ring-fenced grant could have been set aside for uplift infrastructure costs in years 2 and 3 of the programme. We estimate the costs will be more than the £200k we have been able to set aside therefore there will be additional pressures in future years

·       The budget for revenue contributions to capital would have been further increased to improve the sustainability of the capital programme and reduce borrowing costs in future years


Following further questioning the panel were advised that there would be more improvements on offer if the precept had risen by £15 per annum rather than the maximum £10 permitted by Government.


With reference to maintaining the focus on reducing crime, the PCC felt this would be an area his successor would likely be would be focusing on.  Due to financial cuts the PCC believed that the ability to reduce crime had been lost and this was a national problem that Central Government would need to put back in their sights.


8.  Noting that 25% of respondents to the PCC’s online survey did not endorse a financial uplift of £15 a year, what choices did the PCC scrutinise in order to arrive at the conclusion that any uplift was required?


Response from PCC


My treasurer has already explained that the consultation was based on a number of assumptions due to the delay in the police funding settlement and the precept ‘rules’. Prior to launching the consultation, in close liaison with the Force, I considered the likely consequences of a wide range of precept levels – including raising by smaller and greater amounts.


The £15 figure was determined as, based on the assumptions at the time, this was the figure that would make good on the government’s promise for an uplift in police officers in Dorset.


Given the eventual settlement, a balanced budget could be achieved with a £10 rise (a third less than that which had been consulted on). I was aware not only that the higher figure had been supported by 75% of respondents, but that an even greater number – 85% - believed that Dorset Police required extra funding.


From further analysis of the consultation – and not forgetting the hundreds of conversations that I had with members of the public – it was clear that, there was overwhelming support for paying more precept. Furthermore, the most important thing for Dorset residents – even if they didn’t endorse a financial uplift – was to see more officers in their neighbourhoods. As I have said, to make good on the government’s pledge of 50 new officers in Dorset, I concluded that the maximum flexibility on precept was required.


The panel members congratulated the OPCC officers for their public consultation exercise and for the quantity of responses.


9.  What financial risk does the PCC see on the horizon for his successor, and what strategies has he put in place in order to manage these risks?

Response from OPCC Chief Finance Officer


There are a number of financial risks on the horizon. The medium term financial forecast shows substantial gaps over the next 3 years but this is based on a number of assumptions. There are risks around these assumptions such as the expected Spending Review over the summer and the confirmation of future years requirements for the uplift programme as the numbers have not yet been confirmed and there are suggestions that there may be top slices for higher threat areas. How national infrastructure such as the Emergency Services Network is funded could also increase costs in the future.

There may also be positive risks such as a review to the police funding formula. If it were similar to the last review and is actually implemented this could see additional resources coming to Dorset.

In terms of strategies to mitigate against the risks, a number of actions have already begun. In terms of the OPCC commissioning budget, the Commissioner has left £250,000 of commissioning funding for the new PCC to allocate as they see fit.  

The Business planning cycle has already begun with a discussion at our Resource Control Board last week scenario planning and developing plans to balance the budget over the medium term.

In relation to the Capital Budget we have introduced a new Capital Strategy Group to address the risks within the capital programme and the impact this has on the revenue budget.

Reserves are the ultimate mitigation against financial risk therefore the approach to improving the resilience of our balances however possible is an important positive step


In response to panel questions, the PCC explained he would have a period of one week in post to assist the new PCC with ongoing affairs, this was the same as outgoing Members of Parliament.  The incoming PCC would also be supported by the Office. His advice to his successor would be to listen to both local and national advisors and undertake continual lobbying to get fairness in national funding for the force.  He felt that his successor should bring modern investigation to fraud and recruit investigators to look at keeping the most vulnerable safe on-line.


The Panel Chairman (Mike Short) proposed supporting the PCC’s recommended precept increase and this was seconded by Cllr Trent.  The proposal was unanimously agreed.


Decision: that the Police and Crime Panel support the PCC’s proposal to increase the precept for 2020/21 to £70,106,575, equivalent to a Band D charge of £240.58, an increase of £10 per annum or £0.83 per month


Supporting documents: