Medium Term Financial Plan 2015/ /19. Annual Budget 2015/16

Transcription

1 Medium Term Financial Plan 2015/ /19 Annual Budget 2015/16

2 Avon & Somerset Key facts and figures 1,844 sq. miles 1.63m people +8% over 10 yrs Average Council Tax That s 14.57p per month +4.0% over 5 years p or 3.36p per week or 0.48p per day for an average household Avon & Somerset are the median force for council tax in England and Wales Main Grant Funding m Council Tax 94.09m 2015/16 Net revenue expenditure m -8.7% over 5 years That s p per person p.a. or 0.46p per person per day. 2015/16 Workforce 2,718 Police Officers; 361 PCSO s; 2,000 Police Staff

3 Contents Page Introduction 1 Revenue Plans - Our 2015/16 revenue budget 3 - Our 4 year revenue forecast 4 - Our key assumptions 5 - Our funding and income 6 - Our expenditure 12 - Our savings 15 Commissioning 18 Capital Plans - Our 5 year capital plan o Information and Communication Systems o Estates o Vehicles o Other 20 - Our capital financing 24 - Our Prudential Indicators 26 Reserves and Risk - Reserves 28 - Sensitivity Analysis 29 - Risk Manager 31

4 Introduction Our resources The government s Comprehensive Spending Review (CSR) is placing considerable pressure on all of our crime, community safety and criminal justice agencies. Avon & Somerset Constabulary has already made savings of 46m since 2010, largely due to organisational restructures, and natural attrition which released savings in departmental budgets and staff costs. We have protected front line officer posts by better matching resources to where and when they are most needed. We have identified a further 13m of new savings for 2015/16, which alongside a 1.99% increase in council tax police precept, has enabled a balanced budget. We have identified a further 4m of savings from 2016/17 and continue to model options for additional savings in 2016 and beyond. Our planning assumptions are that cuts to central government funding will remain for the entirety of the medium term, which when combined with growing inflationary cost pressures creates a need for us to continue to identify and deliver savings in order to balance our budget. Our medium term outlook is summarised as follows: 2015/ / / /19 Office of the PCC 1,381 1,396 1,421 1,451 Commissioning 3,265 3,265 3,265 3,265 Constabulary 268, , , ,203 TOTAL Gross Budget Requirement 272, , , ,920 Main grant funding (162,440) (157,242) (152,210) (147,339) Council Tax (94,090) (95,406) (98,263) (101,205) Other income (16,445) (16,445) (16,445) (16,445) TOTAL Funding and Income (272,975) (269,093) (266,918) (264,989) Further savings requirement Balanced 8,329 16,226 22,930 The net policing budget for 2015/16 has been set at m. This is funded by a combination of central government grants (65.5%) and council tax contributions (34.5%). 1

5 The PCC has taken the decision to raise the policing part ( precept ) of local council tax bills by 1.99% in 2015/16, which equates to an additional 3.41p per year for the average household. Having consulted extensively during 2014, the PCC is confident that the majority of residents across Avon & Somerset are in favour of an increase in light of the financial challenges that lie ahead. It is the intention of the PCC to continue to gauge local opinion on the matter, we have based our medium term planning assumptions on 1.99% increases year on year. Delivering value for money We believe that we can do more to provide value for money whilst delivering high quality services, but only by looking beyond agency and administrative boundaries and sharing innovation and good practice can we get the best deal for your money. Her Majesty s Inspectorate of Constabulary (HMIC) reviews police delivery of value for money on an annual basis. In their latest report on the matter, HMIC judged the force as being outstanding in its provision of a value for money service, one of only five forces nationally to receive this grading. This assessment reflects the work we have done to date in securing the financial position of the organisation, and transforming our services to better deliver these to the public at a lower overall cost. Whilst this assessment is welcome, it does not make the size of our future challenges any easier to bear. We recognise that there will need to be further tough decisions to enable us to continue to balance our budget. The disproportionate impact of ʻdampingʼ in the Governmentʼs funding formula has, for a number of years, contributed to Avon and Somerset s under-resourced position. This has seen funding redistributed to other areas in order to smooth annual changes in grant as opposed to being distributed on the basis of assessed need. Avon and Somerset Constabulary alone was under funded by 10.7 million in 2013/14 (the last year the Government published data on this) relative to the amount it is assessed to need. In total Avon & Somerset has lost out on over 110m since 2006/07 as a consequence of this formula. We welcome the Government s commitment to reviewing the current funding formula, and the application of this to the distribution of funding. At present however, we have made no assumptions about the likely impact of this over the medium term. Agencies in Avon and Somerset have a strong track record of delivering improvements in value for money. In 2008, Avon and Somerset Constabulary, Somerset County Council, Taunton Deane Borough Council and IBM entered into the ten year Southwest One (SW1) joint venture. This delivers shared Human Resources, payroll, finance, IT, estates management and procurement services to all three public bodies which has identified 18 million in procurement savings for the Constabulary alone over the period of the contract. We are now progressing the practical preparations for succession planning at the end of the contract in During 2014 three new operational and custody bases opened. These represent the substantial culmination of our 90m of Private Finance Initiative (PFI) project, which will also include a new tri-force firearms training facility expected to open in These new buildings present us with opportunities to transform and improve our services, as well as enabling us to deliver rationalisation and efficiencies across our wider estate. 2

6 Revenue plans Our 2015/16 revenue budget 2013/ / /16 155, ,044 Police Officers Pay & Allowances 142,761 54,679 59,368 Police Staff Pay & Allowances 60,536 10,851 10,742 PCSO s Pay & Allowances 10,693 1, Indirect Employee Expenses 756 6,704 6,921 Pensions 7, , ,057 TOTAL EMPLOYEE COSTS 221,889 10,170 10,415 PREMISES RELATED EXPENDITURE 11,238 5,991 5,945 TRANSPORT RELATED EXPENDITURE 5,926 6,648 6,081 Communications and Computing 7,119 2,011 1,581 Forensic Investigation Services 1,599 10,773 10,685 Other Supplies and Services 10,515 19,432 18,347 TOTAL SUPPLIES AND SERVICES 19,233 22,584 22,982 THIRD PARTY PAYMENTS 24,714 4,739 3,857 CAPITAL FINANCING COSTS 4, , ,603 TOTAL CONSTABULARY EXPENDITURE 287,643 (8,508) (7,504) INCOME Special Grants (10,067) (7,222) (6,868) INCOME Other (9,247) 275, ,231 TOTAL CONSTABULARY 268,329 1,450 1,406 Office of the PCC (formerly Police Authority) 1,381 2,403 2,556 Community Safety Commissioning 3,265 3,853 3,962 TOTAL PCC & COMMISSIONING 4, , ,193 TOTAL NET REVENUE EXPENDITURE 272,975 (177,348) (171,186) Main Government Grant Funding (162,440) (17,083) (14,709) Other Grant Funding (16,445) (85,230) (90,298) Council Tax Funding (94,090) (279,661) (276,193) TOTAL FUNDING (272,975) 3

7 Our 4 year revenue forecast The following table provides a summary of our forecasts for revenue funding, income and expenditure over the next four years:- EXPENDTURE The budget requirement 2015/ / / /19 Office of the PCC 1,381 1,396 1,421 1,451 Commissioning 3,265 3,265 3,265 3,265 Constabulary Standstill budget 281, , , ,136 Constabulary Planned savings (12,917) (16,317) (16,706) (16,933) TOTAL Gross Budget Requirement 272, , , ,920 FUNDING AND INCOME Supporting the budget requirement Main grant funding (162,440) (157,242) (152,210) (147,339) Legacy council tax grants (14,709) (14,709) (14,709) (14,709) Victims grant funding (1,736) (1,736) (1,736) (1,736) Collection fund surplus (1,957) (500) (500) (500) Council Tax (92,133) (94,906) (97,763) (100,705) TOTAL Funding and Income (272,975) (269,093) (266,917) (264,989) Residual (Surplus)/Deficit Balanced 8,329 16,226 22,930 As the above table shows, our current forecasts and assumptions estimate that we will have to identify nearly 23m of further savings by 2018/19. These savings will be in addition to the 16.9m of savings already planned to be delivered over the next four years, and will build on the 45.9m of savings already delivered between 2010/11 and 2014/15. In total this equates to 86m of savings by 2018/19 against our 10/11 base budget a reduction of 29%. 4

8 Our key assumptions Our revenue forecasts are produced based on a range of assumptions about the future. 2015/ / / /19 FUNDING ASSUMPTIONS Reduction in Main Grant Funding -5.10% -3.20% -3.20% -3.20% Council Tax Precept Increase +1.99% +1.99% +1.99% +1.99% Council Tax Base Increase +2.12% +1.00% +1.00% +1.00% Council Tax Surplus 1.96m 0.50m 0.50m 0.50m Av. Band D Council Tax Precept p p p p EXPENDITURE ASSUMPTIONS Pay award September % % +1.00% +1.00% Pay award September % +1.50% +1.50% Pay award September % +2.00% Pay award September % General non-pay inflation +1.00% +2.00% +2.00% +2.00% Utilities inflation See Note % +5.00% +5.00% Fuel inflation See Note % +5.00% +5.00% National insurance changes m + 4.5m + 4.7m STAFFING ASSUMPTIONS No. of funded police officer posts 2,718 2,718 2,718 2,718 No. of funded police staff posts 2,000 2,000 2,000 2,000 No. of funded PCSO posts TOTAL Workforce 5 5,079 5,079 5,079 5,079 No. new officer recruits planned Pay Award Our assumption here pre-dates the actual announcement of the police staff pay award which is explained in more detail on page 13. Utilities inflation Our utilities budgets have been reviewed in detail, in conjunction with our energy bureau service. As a consequence of this review they have been re-baselined in 2015/16. The result of this exercise means that we have not inflated our gas or oil budgets in 2015/16, and have inflated our electricity budgets by 2.2% and our water/sewerage budgets by 3.6%. Fuel inflation Our fuel budgets have been reviewed in light of recent reductions to fuel prices. As a consequence of this we have not inflated our fuel budgets in 2015/16, but have reduced them in line with current prices and our forecast for these over the next 12 months. National Insurance changes From April 2016 changes to the State Pension will lead to an increase in the employer national insurance rate that is paid. The impact of this change is currently assessed to add 4.4m of additional cost to our budgets in 2016/17, rising thereafter in line with our pay award assumptions. Total Workforce This is the total workforce based on current plans, and therefore before addressing the residual deficit which is forecast over the next four years. This includes externally funded posts, but does not include any temporary funded posts that are currently being used to support our change programme. Planned new officer recruits This is the current number of new officers recruits planned across the next four years - this assumption is currently under review. 5

9 Our funding and income The Police and Crime Commissioner receives funding through grants from central Government, from partners in support of specific roles or initiatives, through fees and charges for the provision of certain services and from local tax-payers in the form of a precept on council tax bills. Main Government grant funding The following table details our assumptions around our Home Office main grant funding over the next four years:- 2014/ / / / /19 Main grant funding 171, , , , ,339 +/- on prior year -8, ,746-5,198-5,032-4,871 +/- on prior year (%) -4.8% 6-5.1% -3.2% -3.2% -3.2% Since 10/11 we have seen a comparable reduction of main grant funding of 33.0m/16.2% (after adjustments for consolidation of other grants). Over the course of the next four years we re forecasting further reductions of 23.8m, taking our cumulative reduction in main grant funding to 56.8m/27.9% by 18/19. Whilst the main grant funding provided by Government to all police forces is being reduced by 5.1% in cash terms against 14/15 levels, total government funding for policing is actually only reducing by 3.5%. The difference therefore is as a consequence of a freeze in the value of funding set aside for counter terrorism and for historic council tax freeze grants, as well as an increase in the value of topslices being made to main grant funding in support of funding for specific purposes and initiatives. These include:- Police Innovation fund ( 70m) this is a pot of funding that individual forces (or groups of forces) can bid for annually to partially support the cost of innovative, transformation projects. The funding will ultimately be returned to individual forces, however there will be conditions attached to this; Major Programmes ( 40m) this is funding that has been set aside to support the continuation of the Emergency Services Mobile Communications Programme (ESMCP), Home Office biometrics programme, and the National Police Data programme; Independent Police Complaints Commission ( 30m) this is funding to support growth in the IPCC to continue to take the lead on all integrity functions; Police Special Grant ( 15m) this is funding set aside to provide a contingency fund that can support individual police forces facing unplanned or unexpected additional pressures which might otherwise place them at financial risk; HMIC Police Effectiveness, Efficiency and Legitimacy (PEEL) Inspection programme ( 9m) this is funding to support the annual inspection regime of police forces being carried out by HMIC. 7 Calculated as the movement on the combined value of main grant and community safety funding in 13/14 as the community safety commissioning grant was consolidated into main grant for 14/15. 6

10 Beyond 2015/16 we are forecasting annual cash reductions equivalent to 3.2% p.a. This is consistent with the assumption being modelled by other forces, as it is the value notified to us by the Home Office and HMIC back in September In the absence of any other information this currently represents the best intelligence we currently have of the likely changes to our grant funding in the next spending round. The distribution of this funding is determined by a formula, based on factors designed to assess the relative need of each policing area in England and Wales. This formula was introduced in 2006/07, but as it created some large changes to the value of grant funding the government sought to minimise this impact through use of floors and ceilings (also known as damping) to manage annual changes to funding. Avon & Somerset were assessed to need substantially more funding than historic levels. However, through the use of floors and ceilings we did not see these increases in the level of actual funding. The government continued to apply the formula, and then overlay this with floors and ceilings, through until 2013/14. In 2014/15 the Government did not run the formula, opting instead to simply apply a standard reduction to grant across all forces (which created the same outcome that they had, in effect, been achieving before). In the 8 years that the Government ran, and published the results of the formula, Avon & Somerset was identified as requiring 110m/7.3% more in funding than it actually received across the same period. In both financial, and percentage terms this means that Avon & Somerset were the second largest losers of funds as a result of the application of floors and ceilings. The government has committed to reviewing the formula for distribution of funding across police forces, and the Home Office has already commenced work on this. The results of this work are not expected for some time yet, and even once finalised there are likely to be transitional arrangements in place to smooth the impact for individual forces. We are therefore not assuming any change to the current distribution of funds in the medium term. 7

11 Legacy Council Tax grant funding Since 2010/11 there have been a number of changes to the way in which police forces are funded, and this has resulted in two new grant streams both of which replace funds that would otherwise have been provided through council tax. 2014/ / / / /19 Council Tax Support 11,378 11,378 11,378 11,378 11,378 Council Tax Freeze 3,331 3,331 3,331 3,331 3,331 Council Tax grants 14,709 14,709 14,709 14,709 14,709 The Local Council Tax support grant was the result of the abolition of council tax benefit, and its subsequent replacement with local council tax discount schemes. Council tax benefit was managed locally based on universal rules of entitlement. The resultant reduction to funds collected and accounted for in the collection fund (administered locally by our collecting authorities) was compensated by a central government grant. Therefore the police, as a precepting body, received the totality of our council tax funding from the collection fund (regardless of whether this was actually collected or funded by the grant). The introduction of discount schemes changed that. These new schemes are locally designed, and therefore the rules of entitlement can (and do) differ from one authority to the next. As the new scheme deals in discounts, rather than application of a universal benefit, the Government no longer provides grant funding into the collection fund. Instead they now pay over grant funding directly to us as a precepting body. The result of this is that our council tax funding has reduced by the value of the total discounts now being applied, whilst our grant funding has increased by the value of this new grant. We are assuming that the value of this grant remains frozen at its 15/16 cash value (which is the same as the 14/15 value) throughout the medium term, reflecting the planning advice being provided to us by the Home Office. The council tax freeze grant has been provided to all local authorities that have chosen to freeze their element of local council tax bills. The scheme has been in operation since 2010/11 to varying levels. In Avon & Somerset we have received the following:- - 11/12 Council tax freeze grant equivalent of 2.5% precept increase ( 2.37m) p.a. for duration of the spending review (therefore continue to receive in 15/16); - 12/13 Council tax freeze grant equivalent of 3.0% precept increase ( 2.88m) payable in 12/13 only (therefore no longer received); - 13/14 Council tax freeze grant equivalent of 1.0% precept increase ( 0.96m) p.a. for the remainder of the spending review period (therefore continue to receive this in 15/16). Whilst a freeze scheme was also in place for 14/15 and 15/16, the decision of the PCC to increase our precept in both of these years means we were not entitled to receive the grant funding. Beyond 15/16 we are assuming that these grants continue to be paid at their historic cash value, mirroring our assumptions for the local council tax support grant.

12 Victims funding In 2015/16 we are due to receive new recurring grant funding in support of the PCC commissioning victim support services. The value of this grant in 15/16 is 1.74m, with an assumption that it will remain frozen at this cash value throughout the MTFP. In order to provide the visibility to this grant we have grossed this out, alongside our other main grant and legacy council tax grant funding. Whilst this might differ from the presentation used by other PCC s, we have done this so as to ensure that if this funding is consolidated into our main grant funding (which has happened with previous additional commissioning grants) we are able to clearly show the impact of this. Where it is necessary to adjust this for the purposes of national and statutory returns, by including the income against our net revenue budget (thereby reducing this from m reported above to m) we will do so. Council Tax (inc Collection Fund Surplus) The average council tax bill for policing in Avon & Somerset in 15/16 will be p, an increase of 1.99% or 3.41p on the 14/15 average bill. Since 2010/11 the cumulative annual increase in the average council tax bill has been 6.75p/4.02%. Avon & Somerset have the median council tax of all policing areas in England and Wales with 21 forces that have higher precepts (highlighted in red in the diagram opposite) and 21 forces that have lower precepts (highlighted in green). Within our south west region we are also have the median council tax position, with two force areas (Dorset and Gloucestershire) with higher average bills, and two forces (Wiltshire and Devon & Cornwall) with lower average bills. In total we expect to receive 94.1m in council tax receipts (including collection fund surplus) in 15/16, which represents 34% of the total funding in support of our net budget requirement. The following table details our assumptions around our council tax funding, including assumptions about the surplus on the collection fund, over the medium term:- 2014/ / / / /19 Council Tax income 88,464 92,133 94,906 97, ,705 Collection Fund Surplus 1,834 1, TOTAL 90,298 94,090 95,406 98, ,205 Av. Band D ( p) p p p p p 9

13 Our council tax income is collected on our behalf by our local collecting authorities, and is calculated based on a precept value set by the PCC applied over the council tax base as provided to us by our collecting authorities. The council tax base is calculated by expressing the total number of properties as if they were all rated at a band d. Against this tax base the collecting authority will then apply assumptions around the rate of collection and the anticipated entitlement to local discount schemes, and from this will set their local tax base which is then used for planning purposes. The following table sets out the annual movement in the tax base across each of our local collecting authorities:- Collecting Authority 14/15 15/16 Annual Change % B&NES 60, , % Bristol 115, , % North Somerset 73, , % South Gloucestershire 86, , % Mendip 37, , % Sedgemoor 36, , % South Somerset 56, , % Taunton Deane 37, , % West Somerset 13, , % TOTAL 516, , % The taxbase is forecast to grow by 2.12% in 15/16. All our local authorities are expecting tax base increases greater than 1%, with the most significant increases seen in Bristol (+3.57%) and in BANES (+2.51%). The surplus or deficit on the collection fund is forecast annually by our collecting authorities, and paid in the following year. In 2015/16 a surplus across all local collection funds has been identified, of which the share which will be distributed to the PCC is 1.96m. Final totals from each local authority area are set out in the following diagram: 10

14 Other Income The PCC receives a number of other income streams, all of which are accounted for within the Constabulary s net revenue budget. The following table provides a breakdown of this income:- 2015/16 Counter Terrorism Intelligence Unit (CTIU) grant funding 5,707 Dedicated Security Post (Bristol Airport) grant funding 1,746 Innovation fund grant funding 1,100 Local Authority grant funding 862 Criminal Record Bureau checking grant funding 538 MANPAD grant funding 114 INCOME Special Grant Funding 10,067 Road safety awareness referral income 2,709 Special policing services income 2,152 Transport services income 875 Estates income 581 Interest receivable 562 Corporate Learning and Development income 226 Other income 2,143 INCOME Other 9,247 TOTAL INCOME 19,314 11

15 Our Expenditure The Police and Crime Commissioner, in consultation with the Chief Constable, sets a budget detailing how the funding received will be spent. This budget supports the provision of policing and community safety across the communities of Avon & Somerset in accordance with the priorities set in the local Police and Crime Plan. The areas of spend can be categorised into three high level categories:- 2015/ / / /19 Office of the PCC 1,381 1,396 1,421 1,451 Commissioning 3,265 3,265 3,265 3,265 Constabulary (after savings) 268, , , ,203 TOTAL Expenditure 272, , , ,920 The Office of the PCC (OPCC) represents the budget that supports the work of the PCC and her team. In 15/16 this budget is set to reduce by 1.8% following the identification of savings. This saving is net of having accounted for inflationary pressures for pay and other areas of spend. The following table provides a breakdown of the 14/15 and 15/16 budget:- Office of the PCC 2014/ /16 Staff costs (inc PCC and training) 1, Transport and Travel costs Audit fees, inc costs of the joint audit committee Subscriptions (APCC, APACE, PaCCTS etc ) Communications, Media and PR Treasury Management Legal and Other fees Office stationery, ICT, events etc Custody visiting and volunteers TOTAL OPCC EXPENDITURE 1,407 1,381 Beyond 15/16 our MTFP assumes that there will be a need for this budget to increase in line with our general inflationary assumptions. These assumptions suggest it will be necessary to increase the OPCC to 1.45m by 2018/19. The Commissioning budget represents the funds set aside by the PCC to support the commissioning of community safety initiatives from a number of local groups and organisations. There is a separate section on our commissioning budget, and plans for the distribution of this later in the report. Beyond 15/16 it is assumed that the commissioning budget will remain frozen at its historic cash value.

16 The Constabulary budget represents the funds that are provided by the PCC to the Chief Constable in order to provide a policing service. The following table provide more detail on how this budget is broken down:- 2013/ / /16 155, ,044 Police Officers Pay & Allowances 142,761 54,679 59,368 Police Staff Pay & Allowances 60,536 10,851 10,742 PCSO s Pay & Allowances 10,693 1, Indirect Employee Expenses 756 6,704 6,921 Pensions 7, , ,057 TOTAL EMPLOYEE COSTS 221,889 10,170 10,415 PREMISES RELATED EXPENDITURE 11,238 5,991 5,945 TRANSPORT RELATED EXPENDITURE 5,926 6,648 6,081 Communications and Computing 7,119 2,011 1,581 Forensic Investigation Services 1,599 10,773 10,685 Other Supplies and Services 10,515 19,432 18,347 TOTAL SUPPLIES AND SERVICES 19,233 22,584 22,982 THIRD PARTY PAYMENTS 24,714 4,739 3,857 CAPITAL FINANCING COSTS 4, , ,603 TOTAL CONSTABULARY EXPENDITURE 287,643 At the time of setting the 15/16 budget the police staff pay inflation dispute has not yet been resolved. We had originally assumed that there would be an increase of 1% from September 2014, followed by a further 1% from September However, a new offer has been put before the staff associations which will replace both of these assumptions with a 2.2% increase (or 400 lump sum for first 9 spinal points) with effect from 1 st March 2015, with no further inflationary pay award until September If accepted this offer will lead to an underspend in 14/15, but an increased cost in 15/16. We have agreed with the PCC that the budget pressure created by this offer, if accepted, will be managed within existing budgets and if necessary will be smoothed with the use of reserves. Beyond 15/16 we have continued to adjust our budgets based on our key assumptions (as set out in the table on page 4), as well as to account for any known or planned changes. Key areas of future adjustment include:- Pay awards our working assumption is that inflationary increases to pay will continue throughout the MTFP. We are assuming police officers will see a further 1% award in September 2015, and then both officers and staff will see pay awards in September each year thereafter increasing annually by 0.5% (2016 = 1.5%; = 2017 = 2.0%; 2018 = 2.5%); 13

17 National Insurance reforms to the state pension, which take effect from April 2016, will result in an increase to our employer national insurance contributions. The impact of this is estimated to be 4.4m in 16/17, rising to 4.7m in 18/19; Incremental pay progression in order to support the cost of incremental pay progression (progression through pay scales based on length of service) we have made provision throughout our MTFP. At present this leads to an increase of 5.5m by 18/19; Inflationary adjustments all non-pay budgets are reviewed annually, and where deemed appropriate inflated to account for the impact of general or specific inflationary pressures. Our working assumptions beyond the adjustments made in 15/16 is an increase of 2% for general inflation, and 5% for utilities and fuel; Cost of capital in order to support our ongoing capital investment it is necessary to account for the revenue costs associated with this. Over the course of our MTFP we are forecasting to add less than 0.1m, however the profile of this sees a much higher investment in 15/16, offset by ongoing reductions throughout the remainder of the MTFP; PFI costs our MTFP fully reflects the forecast costs of the four PFI buildings, three of which became operational during 14/15 and one of which is due to become operational in 15/16. These costs have been offset by savings (see section on savings below); Growth it has been necessary to include some growth within our budget to reflect a number of areas, including the introduction of the integrated victims services (funded by the victims grant funding), the increase in police officer recruitment (to cover the costs of these officers whilst they undergo initial training), as well as adjustments in support of things such as the introduction of Domestic Violence Prevention Orders/Notices. In total, before the application of our planned savings, we anticipate that the Constabulary s expenditure would have to increase by 27.9m by 2018/19, and this is reflected in our MTFP. 14

18 Our savings Over the past four years it has been necessary to identify substantial savings from our budget in order to be able to set a balanced budget. The size of the savings required has been driven by both:- Reductions to funding; and Increases to our costs. In the four years since 2010/11 we have identified and delivered savings of 46m/15%. These have been driven equally by a reduction in our funding, as well as by an increase in our costs. Over the next four years we are forecasting a further 40m of savings will be needed in order to balance the budget, taking our cumulative savings since 2010/11 to 86m/29%. As we look to the future the need to identify and deliver savings is increasingly being driven by increases to our cost base, as opposed to reductions in our funding. This is as a result of:- Increased cost inflationary pressures into the future, particularly around pay which has seen a degree of restraint over the past four years; and Proposed annual increases in our council tax precept of 1.99%, which when combined with forecast tax base increases of 1.00%, results in our precept income growing by nearly 3% p.a, partly offsetting our forecast reductions to grant funding. Savings to date 2011/ /15 Up to the end of 2014/15 we will have delivered 45.9m in savings. These savings have come from across all areas of the force. They include:- 35.7m/78% of savings from pay budgets, of which:- o 5.7m has been achieved from pay contingencies and restructuring the way in which we budget for and manage pay across the Constabulary; o 5.1m has been achieved from reductions to overtime and allowances, including those changes to allowances brought about by the Winsor review into police officer Terms and Conditions; o 24.9m has been achieved from reductions to police officer and police staff posts across the organisation; 10.2m/22% of savings from non-pay budgets, of which:- 15

19 o 2.4m has been achieved from our premises costs, which has resulted from some rationalisation across the estate, as well as savings achieved through reviews of utilities and cleaning contract, and a review into the business rates payable on some of our estate; o 0.6m has been achieved from our transport services costs, which include improved ways of managing our fleet, as well as savings from reviews into the use of pool cars (increased use of to reduce reliance on individual staff using their own vehicles) and reductions in our use of hire vehicles; o 6.4m from supplies and services which includes the release of contingencies held against the delivery of savings in previous years, as well as savings realised from ongoing procurement savings achieved through contractual control arrangements, as well as challenging the underlying drivers for spend in the first place; o 0.5m from savings in our payments to partners, brought about as a consequence of ongoing review of our financial commitments to partners and the identification of efficiencies and savings; o 0.1m from our capital financing budgets, brought about through review and reduction to these costs where possible; and o 0.2m increase in our income budgets, achieved through tightening of mechanisms and our controls around charging and recovery of our income. Savings in 2015/16 Our planned savings for 2015/16 total 12.9m, which when combined with our savings over the previous four years, bring our cumulative savings total to 58.8m. These savings include:- 6.8m of savings from pay budgets, of which:- o 0.9m from further savings to allowances and overtime budgets; o 5.9m from further savings resulting from reductions in police officers and police staff, which predominantly is the final realisation of the savings from our new operating model; 5.8m of savings from non-pay budgets, of which:- o 1.0m from reductions to our premises budgets, including reductions to repairs and maintenance budgets, utilities, rates and other associated costs; o 0.6m from reductions to our travel and transport budgets, including further savings from the improved management of these budgets; o 3.4m from our supplies and services budgets, including the release of 2.3m contingency held against the delivery of savings in 2014/15; o 0.5m from our third party payments budgets following ongoing review of these budgets, as well as the release of one-off contributions made in previous years; 16

20 o 0.2m increase to our income budgets achieved through ongoing review and challenge of our income budgets to reflect actual recurring levels of income. 0.3m of savings which continue to be worked on. Savings beyond 2015/16 We have identified a further 4m of savings to be delivered by the end of 2018/19. Of these planned savings, 1.3m will come from pay budgets, 1.5m will come from non-pay budgets with a residual of 1.2m which continues to be worked on. Our MTFP identifies that we will need to realise a further 22.9m of savings by 2018/19, and this target remains the focus of our ongoing work to transform the organisation and deliver balanced budgets into the future. The Constabulary s Corporate Change Board (CCB) is responsible for commissioning and monitoring change. These processes are well established, and it is therefore through this structure that we will continue to bring forward the work necessary to realise these savings. Options for how these savings will be achieved include:- Realisation of previous, non-cashed efficiencies through investments made in things such as Mobile Working and Digital Evidence programmes; Realisation of savings from our announced strategic alliance with Wiltshire Constabulary; and Achievement of savings from our enabling functions through planning for the end of the Southwest One contract. 17

21 Commissioning The PCC has developed a commissioning and grants strategy which ensures that the financial decisions are made fairly and transparently, and have consideration of the needs and rights of different members of the community. As part of this approach the PCC will:- Undertake effective planning so we have a clear rationale for commissioning activity with resources allocated according to need; Work in partnership with other commissioners on shared outcomes and issues of joint priority; Work with the market to enable optimum service delivery and put in place proportionate and transparent purchasing and outcomes monitoring ; Remain outcome focussed so we know the impact we are having on service users and communities while maximising the positive social and environmental impact we have in delivering services. The PCC remains committed to improving the economic, social and environmental wellbeing of Avon and Somerset and considering Social Value and sustainability in the decisions we make. Community Safety In 2015/16, the PCC has made 1.82m available to support Community Safety activity and initiatives that are linked to the delivery of this plan across Avon and Somerset. This includes:- 602,000 made available via local Community Safety Partnerships; 730,000 for a Drug and Alcohol Arrest Referral service across Avon and Somerset; 237,000 Youth Justice Diversion Fund which will be made available to Youth Offending Teams to deliver diversionary projects that tackle youth offending and divert vulnerable young people away from crime and ASB; 227,000 to support the Sexual Assault Referral Centre in supporting vulnerable victims of sexual assault; 23,000 to support Appropriate Adult Schemes. Victims Services There have been a number of changes to the responsibility of the PCC for commissioning in 2015/16. In particular the PCC has new responsibilities for commissioning local victim services. As identified above the PCC is in receipt of 1.74m of new grant funding to support victims services in 2015/ m of this funding has been provided to the Constabulary, which has been combined with existing budgets to create the Lighthouse service for integrated victim and witness care. The remaining 0.71m, which will be combined with ring-fenced unspent funds from previous years, will be used by the PCC to support the development of an integrated approach to supporting victims, focusing on those that have suffered the greatest impact from crime or ASB. This work is overseen by an Integrated Victims Board. 18

22 Community Action Fund The PCC has also made 200,000 available through the Community Action Fund to deliver community safety initiatives linked to the PCC s priorities. These funds will be administered by Avon and Somerset Police Community Trust. Voluntary and Community Sector The PCC has agreed a charter with the Voluntary Sector which sets out her commitment to liaising closely with voluntary sector umbrella organisations, consulting the voluntary sector in decision making processes and respecting the capacity, needs and priorities of those organisations and their service users. Further details about OPCC commissioning and grants can be found online: 19

23 Capital plans Our 5 year capital plan Our draft capital programme identifies planned expenditure of 51.6m over the next five years, with 43.4m (84.1%) of this spend forecast across the first three years. The following table provides a summary of this position:- 2015/ / / / /20 TOTAL Info & Comms Systems 4,432 1,879 1,951 1, ,711 Estates 9,909 10,230 5, ,754 Transport 3,578 2,340 2,410 2,435 2,215 12,978 Other ,115 TOTAL 18,144 14,674 10,558 4,597 3,586 51,559 The plan focusses on new additional spend. It will therefore be in addition to any reprofiling and carry forward of committed funds from the 14/15 capital programme. As at the end of 14/15 Q3 we were forecasting a carry forward of 7.8m, which if correct would mean actual capital spend of 59.4m over the next five years. The Information and Communication Systems plan identifies a total of 9.7m ( 14.3m including anticipated carry forward of 14/15 plan) over the next five years, representing 18.8% (24.0% including carry forward) of the total plan. The following table summarises the draft capital programme for Information and Communication Systems (I&CS):- 15/16 16/17 17/18 18/19 19/20 TOTAL Replacement and renewal ,501 1, ,351 Projects Corp Systems 2, ,550 Projects National Systems 76 1, ,726 Projects Regional Systems 1, ,033 Projects Data/Telephony Projects - Security TOTAL 4,432 1,879 1,951 1, ,711 The above table shows that the IC&S part of the programme will fall into six distinct areas:- a. Replacement and renewal programme In 15/16 the only item included in this programme is a contingency for unscheduled IT spend which is included annually to cope with these types of pressure which occur from time to time. Beyond this there is provision for the replacement of end-user devices (desktops, laptops, mobiles etc ), website server and Comms operator touch screens; 20

24 b. Projects Corporate Systems The entirety of our planned spend in this area is concentrated into 15/16 ( 2.55m). This predominantly ( 2.0m) relates to the costs of the ATLAS project which is expected to deliver our new crime, intelligence, case and custody system during the course of 15/16. The remainder of the plan includes provision for progression of business analytics ( 0.5m) and a small amount in relation to our workforce management system ( 0.05m); c. Projects National Systems The majority of planned spend in this area of our capital programme relates to the Emergency Services Mobile Communications Programme (ESMCP). We anticipate expenditure will be incurred in 16/17 prior to go live in 17/18, and although the precise nature of our costs remains uncertain, we have included a provisional sum of 1.2m. We will continue to monitor this national programme and refine our assumptions accordingly In addition we have a small provision in 15/16 in support of an e-commerce project ( 0.08m), and 0.45m in 17/18 in support of upgrades to the national HOLMES system; d. Projects Regional Systems The only planned spend in this area of the capital programme is in 15/16. This is for our regional STORM platform ( 0.2m - recognising the contribution that ourselves, Gloucestershire and Wiltshire Constabularies have committed to supporting this new software), and for the regional digital evidence management (DEMS) project which we re co-ordinating on behalf of the region; e. Projects Mobile and Fixed Line Telephony The project to deliver new voice and data communications throughout the Force area is set to continue into 15/16 and 16/17, delivering Wide Area Network (WAN) upgrades, Voice over IP (VOIP) infrastructure and video teleconferencing; f. Projects Security The project to replace and upgrade our encryption software is now planned for 15/16, and provision of 0.25m has been included here to recognise this. The above position represents our best estimate of likely capital spend over the next five years. As will always be the case however, there will be changes to this as the projects and programmes progress. Known uncertainties include:- a. IDIOM This is a national integrated offender management system that the Home Office currently supports, but which they are looking to pass over to another provider. Southwest One have proposed to host on behalf of all police forces, and if so there may be costs and income that would need to be managed through the accounts of Avon & Somerset; b. Southwest One end of contract Our Southwest One contract is due to reach the end of life in 17/18. There is currently no provision for any IT costs which might have to be incurred as a consequence of this; c. STORM hardware Included in the programme are the capital costs of the STORM software, but what we have not included is any hardware costs. This is currently under review. As and when the above uncertainties, as well as any other emerging issues, priorities or opportunities emerge, we will bring them forward for discussion, and if required approval prior to their inclusion within the capital programme. 21

25 The Estates plan identifies a total of 27.8m ( 29.4m including anticipated carry forward of 14/15 plan) over the next five years, representing 53.8% (49.5% including carry forward) of the total plan. The following table summarises the draft capital programme for Estates:- 15/16 16/17 17/18 18/19 19/20 TOTAL Replacement and renewal ,900 Projects HQ Site 4, ,984 Projects Rationalisation 5,235 9,420 5, ,870 TOTAL 9,909 10,230 5, ,754 The above table shows that the Estates part of the programme will fall into three distinct areas:- a. Replacement and renewal programme This area of the programme makes provision for ongoing electrical, central heating and fire precautions work in order to ensure our existing estate remains serviced to appropriate standards; b. Projects HQ Site The projects specifically relating to our HQ site that require budget over the life of this capital programme include the completion of the central store project ( 1.3m - due to be completed in 15/16), as well as provision for the potential relocation of the mounted facilities to HQ ( 1.0m - expected to be progressed in 15/16). In addition to this there is provision for refurbishment of the training school 0.8m in 15/16 and 2.4m in total across the five years), 0.6m in 15/16 for progressing the wind turbine project, 0.4m in 15/16 for installation of solar panels at HQ and at Avonmouth workshop, and smaller projects in support of traffic management, security and operational facilities; c. Projects Estates Rationalisation This is the largest, and most complex part of the capital programme, as it reflects the current plan for the delivery of estates strategy to reduce our physical footprint and deliver savings. In total there are 24 separate projects, ranging from co-location of neighbourhood policing teams with partners, through to larger projects such as our plans for Trinity Road (Bristol), Yeovil, Bath, Weston-Super-Mare and Taunton. The profile and pattern of our Estates spend set out in this plan represents our best estimate of likely costs and timeframes for these projects. However, experience suggests that these types of projects are hard to forecast accurately both in terms of timing (through delays, or opportunities requiring postponement or bringing forward of projects) as well as costs (as consequence of the opportunities that arise, and unforeseen issues such as removal of asbestos etc ). As in previous years we will monitor the progress against this capital plan, and report this to Chief Officers and to the PCC on a quarterly basis. 22

26 The Transport plan identifies a total of 13.0m ( 14.6m including anticipated carry forward of 14/15 plan) over the next five years, representing 25.2% (24.6% including carry forward) of the total plan. The following table summarises the draft capital programme for Estates:- Replacement and renewal Non-specialist vehicles Replacement and renewal Specialist vehicles Projects Pool car infrastructure 15/16 16/17 17/18 18/19 19/20 TOTAL 2,685 2,340 2,310 2,435 1,835 11, , TOTAL 3,578 2,340 2,410 2,435 2,215 12,978 The above table shows that the Transport part of the programme will fall into three distinct areas:- a. Replacement and renewal Non-specialist vehicles - This area of the programme provides funds for both marked vehicles and unmarked vehicles ongoing replacement in accordance with our utilisation of the fleet. At present this assumes no growth in the number of vehicles needed as a consequence of the operating model. A detailed review of the fleet, and the requirements of the operating model is underway and should an increase be identified as necessary this will be the subject of a business case brought forward; b. Replacement and renewal Specialist vehicles This area of the programme provides for the replacement of our more specialist vehicles within the fleet. The plan over the next five years includes replacement of Police Support Unit vans, refurbishment of two horseboxes, replacement of the dive truck and the replacement of 3 detainee transport vans; c. Projects Pool car infrastructure This small project is to purchase four additional Traka cabinets, and to introduce an online self-service pool car booking system. The aim of this project is to further increase the use of pool cars and thereby reduce the cost of reimbursing individuals for the use of their personal cars. Included within our plan is 1.1m which relates to other projects (no anticipated carry forward from 14/15 plan) over the next five years, representing 2.2% (1.9% including carry forward) of the total plan. The following table summarises what is included here:- Replacement and renewal ANPR Replacement and renewal - Other 15/16 16/17 17/18 18/19 19/20 TOTAL TOTAL ,115 23

27 The above table shows that the Equipment part of the programme will fall into two distinct areas:- a. Replacement and renewal ANPR This provides for the ongoing replacement and renewal of our automatic number plate recognition (ANPR) cameras and equipment; b. Replacement and renewal Other This provides a general contingency of 0.1m p.a. for replacement and renewal of operational equipment on an ad hoc basis. Our capital financing The following table summarises the plan for how this capital programme might be financed:- 2015/ / / / /20 TOTAL Capital grant 1,959 1,959 1,959 1,959 1,959 9,795 Revenue contributions ,700 Capital contributions Capital receipts 11,343 9,299 5,634 1, ,182 Earmarked capital reserve 3,213 2,676 2, ,993 Borrowing TOTAL 18,144 14,674 10,558 4,597 3,586 51,559 As the above table demonstrates we have a number of sources of funding for our capital programme:- a. Capital grant This is an annual grant provided to all police forces by the Home Office to support ongoing capital expenditure. The value of the grant in 14/15 was 2.32m, but this has been reduced in 15/16 to 1.96m (a reduction of 0.36m/16%). For the purposes of our planning we have assumed that the value of the reduced grant will remain frozen in cash terms over the course of the capital programme. Therefore in total capital grant will fund 9.8m, which is 19% of the total funding needed; b. Revenue contributions This is the value of recurring revenue base budget to support the capital programme. The value of 0.74m has remained consistent for several years, and there is no intention at present to reduce this funding in our MTFP. The total revenue contributions will fund 3.7m, which is 7% of the total funding needed; c. Capital contributions This funding consists of innovation funding in support of our digital evidence project, as well as planned contributions from our regional partners towards the cost of this project. In addition it also includes anticipated funding from Wiltshire and Gloucestershire Constabularies in support of the software costs of the new STORM platform. The total capital contributions will fund 0.9m, which is 2% of the total funding needed; d. Capital receipts This funding represents the sale proceeds (minus the costs of sale) from the disposal of our assets, mainly our land and building assets. The estates