Agenda item

Each year, as part of the budget setting process, a Medium Term Financial Plan (MTFP) is prepared in order to show that the Force is financially sustainable in the medium term.

Witness:

Kelvin Menon, Chief Finance Officer (Office of the Police and Crime Commissioner)

Key points raised in the discussion:

1. The Chief Finance Officer outlined that the major change since the last report presented was the government-announced pay award for police officers. This added £3.3 million to the overall cost for each year. The Home Office had provided a grant of £1.8 million to offset some of that cost. The grant was allocated on the same basis as the formula grant, of which Surrey received the lowest share in the country.

2. A Panel Member asked about the likely situation of continued pay increases beyond 2% and whether this could result in discussions on the holding of a Council tax referendum. The Chief Finance Officer responded that the level of police officer pay was set centrally by the Pay Review Body and agreed by central government and was not subject to local judgement. The Government had implied that any percentage increase that was above the percentage included in Force budgets would be covered by additional funding, as had been the case in the current year (2022). The Government could also impose pay restraints on the public sector which would limit costs, thus, the need for a referendum was unlikely. In the past, the Force considered having a referendum but discounted it due to the significant cost of holding one.

3. A Panel Member asked about the impact of reductions in police staff and which roles were likely to be cut. The Chief Finance Officer explained that the Force was unable to make police officers redundant and it was likely that the Government would say that the increase of officers achieved through Uplift would need to be maintained. Therefore, savings would need to be found within police staff. Currently, the Force was running a high vacancy rate as they were struggling to recruit, particularly in areas such as IT where they were unable to match the pay of the private sector. The Force would try to minimise the impact of any staff savings by changing ways of working for example.

4. A Panel Member enquired about the likelihood of the Force issuing a Section 114 notice and the impact if that took place. The Chief Finance Officer explained that the Surrey was no worse position than any other Force in the country. No Force had issued a Section 114 notice before, however, it was a tool that was available if required. If actioned, all non-essential expenditure would stop but day-to-day policing itself would not be impacted.

5. A Panel Member asked whether more than one scenario had been considered. The Chief Finance Officer reassured the Panel that five different scenarios had been considered and the one presented in the report was a reasonable mid-point. In the spending review, the Government had promised extra funding for the police, but it was unknown currently how this funding would be divided. Therefore, no additional funding had been included. The Panel Member queried the recruitment freeze for Police Community Support Officers (PCSOs) and asked about the process of deciding on a budget between the PCC and Chief Constable. The Chief Finance Officer explained that the Force were in the process of creating its budget and would set out the different implications of varying budgets. It was then for the PCC to decide which choices were most appropriate. The Chief Finance Officer explained that PCSOs were being converted into fully warranted police officers. The PCC added that the PCC produced the Police and Crime Plan and then the Chief Constable decided how to deliver the Plan operationally.

6. A Panel Member noted that they would struggle to support an increase in the precept with the cost of living currently and suggested moving police staff into police officer roles. The Chief Finance Officer noted the importance of the work of police staff in preventing crime and assisting officers, but the suggestion could be explored. It may help to explain to the Panel what police staff do in a future report.

7. A Panel Member asked which capital projects were likely to be affected and whether this would include the redevelopment of the Force headquarters. The Chief Finance Officer explained that as interest rates rise, capital schemes that were due to deliver a net benefit may not anymore and they would be revisited at the time. The redevelopment of the headquarters was a ten year rebuild programme and affordability was central to this. There was a briefing planned for Wednesday, 28 September 2022 for Panel Members on the Estate Strategy.

RESOLVED:

The Panel noted the report.