Finance Committee Item: 12
5February 2008
Efficiency Strategy 2008/09 to 2010/11
Report of the Chief Constable
Contact:Richard Croucher0845 045 45 45 ext 79-2342
Direct line: 01962 871471
Email:
1.Summary
1.1The Home Office is in the process of significantly reviewing the efficiency planning arrangements. The complete details are not yet finalised, but this report serves to make the Committee aware of developments of note that have been decided.
1.2The Authority will be required to evidence cumulative efficiency savings equivalent to the value of 9.3% of the 2007/08 gross revenue expenditure over the three year period 2008/09 to 2010/11. There is no requirement to produce a minimum level each year within the three year period.
1.3This report provides details of the progress to date regarding:
- new efficiency targets
- amended definitions of efficiency savings
- arrangements for measurement and assurance.
1.4This report recommends that:
- the report is noted.
2.Targets
2.1Instead of the existing annual 3% target (50% cashable and 50% non-cashable), a three year target of 9.3% of 2007/08 gross revenue expenditure has been set. The three year target is intended to allow authorities to take a more strategic approach to efficiency savings and invest to save.
2.2The target is for the delivery of aggregate efficiency and productivity gains by the 43 police authorities and forces in England and Wales. At this stage it is assumed that each authority will contribute pro rata to the target, but there appears to be potential for authorities and forces to vary the level of efficiency between authorities and forces.
2.3Cashable savings achieved during 2007/08 in excess of the cashable element of the 2007/08 target can be carried forward.
3.Definitions
3.1A Workforce, Efficiency and Finance Working Group will be established to define some of the aspects. The Group membership is weighted towards central government but will include representatives from ACPO and the APA.
3.2“Gross Revenue Expenditure” is still to be defined as adjustments may need to be made for significant expenditure that should not be included. However, it is clear that gross revenue expenditure will replace net revenue expenditure. This will result in a higher target to achieve and remove income and specific grants from the amounts that can be scored.
3.3Capital expenditure will continue to remain outside the scope of the target set (9.3% of 2007/08 gross revenue expenditure) but efficiencies achieved on capital spending can be used to count towards achieving the target.
3.4Significant changes have been made to the definition of “cashable” and “non-cashable” efficiency savings. The definition of cashable savings has been widened to the extent that the Home Office cannot envisage any efficiency saving that will not be cashable. Therefore, the distinction between cashable and non-cashable will be obsolete and all efficiency savings will be cashable.
3.5The definition of a gain has been amended to ensure that any efficiency gain must be net of the cost of achieving the gain. Previously, the value of central investment to achieve the gain did not have to be deducted from the value of the gain.
4.Measurement and assurance
4.1No annual targets are set, but a plan should be agreed and progress monitored. There is no requirement for a separate efficiency plan as this should form part of the local policing plan. However, a separate efficiency strategy will be developed and maintained to enable the Finance Committee to approve the efficiency strategy and monitor subsequent progress reports.
4.2The measures that will be used to assess whether planned outputs or outcomes have been achieved should be specified in the strategy. The measurements must demonstrate that:
- outputs have been maintained where the resource has been removed
- outputs have been increased if the resource has been re-applied
- the overall quality of output has been maintained
4.3It will be the responsibility of police authorities to decide whether efficiencies have been delivered. Assurance will also be provided through:
- Use of APACS measures
- Audit Commission PURE assessment
- HMIC risk based inspections
- HMIC inspections of police authorities
4.4The Working Group is also considering options for a peer review process. The final details are yet to be agreed but some intentions have already been set out. The process would include representatives from the Home Office, other central departments and agencies. The peer review would challenge the scale, ambition and content of plans. The peer review should also identify good practice.
5.Next steps
5.1The Hampshire Police Authority efficiency strategy cannot yet be produced due to the work still required on the definitions and arrangements. However, the Force has reintroduced Efficiency Strategy Liaison Officers (ESLOs) to identify potential efficiencies in order to begin the formulation of a plan. ESLOs are not additional personnel, they are suitable existing personnel nominated to represent their Operational Command Unit or Department. A report on the Hampshire efficiency strategy will be submitted to the next Finance Committee.
Section 100D (Local Government Act 1972) background papers
The following documents disclose facts or matters on which this report, or an important part of it, is based and has been relied upon to a material extent in the preparation of this report.
NB the list excludes:
- published works; and,
- documents that disclose exempt or confidential information as defined in the Act.
Title / Location
None / None
1