Further Detail on Report Topic

The Head of Finance provides the routine finance report which outlines the year to date and forecast position for the revenue, capital, and reform budgets.

Appendix A provides the detailed Quarter 1 (Q1) finance report.

Revenue
The Q1 net expenditure forecast is £0.5m over budget, fully funded by GiA funding agreed through Autumn Budget Revision (ABR) transfers.

There are a number of significant offsetting variances that form part of the Q1 forecast. The main underspends (£14.1m) relate to Police Officer pay costs (£9.3m) as officer numbers are running below the budgeting assumption; one off benefits (£3.0m) and other reductions (£1.8m).

Against these underspends, there is an increase in expenditure (£10.1m) relating to bids approved by the Revenue Investment Group (RIG) predominately supporting workforce modernisation, learning training & development, and wellbeing; additional non-pay costs (£3.2m - supplies & services £2.3m and third-party payments £0.9m) and under-recovery of income (£0.8m).

A number of threats and opportunities are being monitored, some of which may crystallise in the Q2 forecast. A tracker is included in Appendix A that covers the expenditure approved at RIG and the VRVER budget, as the forecast assumes that these expenditure items will be delivered by 31 March 2025.

The year-to-date actual position versus budget is an underspend of £3.7m, explained by underspends in non-pay (£1.8m), police staff costs (£1.3m) and officer pensions (£0.6m).

Capital
The capital forecast at Q1 is £67.5m, £1.4m above the budget position of £66.1m.

This forecast overspend is fully funded and primarily compensated by an increase in capital receipts (£1.2m) and other capital grants receivable (£0.2m).

The capital forecast at Q1 requires £3.2m of slippage to be managed down over the year. £3.3m has been achieved to date from the original slippage target of £6.5m, mainly due to forecast underspends in the Digitally Enabled Policing Programme (DEPP) £1.9m and additional funding of £1.4m mentioned above.

Finance are engaging regularly with business areas to support delivery of their capital plans. The capital position and pipeline spend has been reviewed by the Capital Investment Group and any further decisions regarding spend allocations will be reflected in a revised Q1 forecast at an appropriate time.

Committed and uncommitted spend will continue to be monitored throughout the year and tracking of these is highlighted in Appendix A.

The year-to-date capital spend at P3 is under budget by £3.6m (net of slippage).

This underspend is mainly due to estates slippage for sub-contractors not ready to commence (£1.9m) and delays in transformation type spend (£0.7m) whilst the focus has been progressing in-flight projects from last year; and an underspend in Specialist Policing Equipment (£1.0m) as profiling of spend needs revised defined timelines for all projects.

Reform
The reform forecast at Q1 of £25.1m, £0.1m (fully funded) above the budget position of £25.0m.

The reform budget required £5.5m of slippage to be managed down over the financial year, £3.6m of this has been identified by the end of Q1, leaving £1.9m to be managed over the remainder of the year.

Reduction in FY slippage has been achieved due to transformation resource (£1.9m) under due to slippage in recruiting timescales, policing in a digital world training and capability (£1.0m) under due to delay in the business case and other items net (£0.7m).

Committed and uncommitted spend will continue to be monitored throughout the year and tracking of these is highlighted in Appendix A.

The year-to-date reform spend at P3 is over budget by £0.5m (net of slippage).