Agenda item

This paper provides a first look at the projections on the expected financial position of the Surrey Police Group for the period 2020/21 to 2024/25.

Witnesses:

David Munro - Surrey Police and Crime Commissioner

Kelvin Menon - Chief Finance Officer & Treasurer, Office of the Police and Crime Commissioner (OPCC)

Key points raised in the discussion:

1.    The PCC noted that at present Surrey Police was at a reasonably healthy financial position. Going forward, it was a worry that the collection rate of Council Tax would decrease as a result of Covid-19 and people being on furlough or unemployed unable to pay that tax. He added that future funding from Government was uncertain, but they were still committed to have a fundamental review of police funding and the formula, which was positive as Surrey Police’s share was unfair.

2.    A Panel member queried the assumptions made about increasing costs because of salary increments and if the figure in the report was a net figure, as the increasing cost annually suggested that the overall workforce was going up salary scale and rather than keeping a balance between junior and senior staff. The Chief Finance Officer & Treasurer responded that the increments were the net costs as the workforce was ageing.

3.    A Panel member queried the shortage of capital reserves which was unusual as the force had a lot of property assets to sell off and it would be a shame to use its limited revenue for capital. The Chief Finance Officer & Treasurer responded that the level of capital grant received was small at approximately £400,000 a year so capital receipts made up the rest of capital funding. The force had ambitious capital programmes which included investment in vehicles and ICT as well as the new Surrey Police headquarters in Leatherhead. 

4.    Responding to a Panel member’s query on where the savings would come from in response to the deficit over the next four years, the Chief Finance Officer & Treasurer noted that the levels of savings noted were only predictions based on assumptions. Increasing efficiency through greater utilisation of remote working and ICT as well as the rationalisation of estates would lead to some savings but delivering those levels of savings in line with previous years would be a challenge.

-       The PCC added that he hoped that he would not have to take many savings out of the budget and that national finances going forward would be strained.

5.    A Panel member queried the report which stated that 3.5% of Council Tax might not be collected due to Covid-19 which equated to approximately £5 million and whether the lack of house building contributed to that. The Chief Finance Officer & Treasurer responded that Surrey had a growth in the tax base every single year but this year there was no predicted increase in the tax base as building was slow due to Covid-19.

6.    Regarding the predicted deficit in Council Tax the Panel member noted that the PCC had written to Government and to Surrey MPs on the Council Tax deficit and asked whether it would be appropriate for the Panel to write to them as well asking them for support to meet that cost of Covid-19 - the Panel agreed to add that point to the recommendations. The Chief Finance Officer & Treasurer explained that he had been working closely with treasurers in the other Surrey districts and borough as well as Surrey County Council to assess what they thought the shortfall would be on Council Tax collection this year. The latest assessment was 3.5% and Government had said that the deficit could be spread over the next three years, they had not however indicated whether they would make the shortfall up - he welcomed the Panel’s support in writing to the Government and Surrey MPs.

-       The PCC responded that yes it would be helpful if the Panel reported their concerns to the Government and Surrey MPs and that PCCs had noted their collective concerns through the Association of Police and Crime Commissioners (APCC).

7.    The Chairman queried that if 1% of the Home Office grant equated to approximately £0.7million were the force anticipating an approximately 10% percent rise in Home Office Grant funding from £69.5 million at present to £76.7 million for 2021/22. In response the Chief Finance Officer & Treasurer believed that the figure was the overall Home Office grant including the uplift and would provide a fuller response in due course.

RESOLVED:

The Panel:

1.    Noted the initial outcome of the forecast, the likely need for additional savings and the challenge that this will present.

2.    Noted the current assumptions being employed in the scenarios and the risks therein.

3.    Commented as appropriate. 

4.    Agreed to write to Surrey MPs and the Government raising its concerns on the predicted 3.5% deficit in Council Tax collection.

Actions/further information to be requested:

1.    R26/20 - The Panel will write to Surrey MPs and the Government raising its concerns on the predicted 3.5% deficit in Council Tax collection.

2.    R27/20 - The Chief Finance Officer & Treasurer would clarify the apparent 10% rise in the Home Office Grant funding from £69.5 million at present to £76.7 million for 2021/22; and whether it was the overall Home Office grant including the uplift.