FURTHER DETAIL

A number of financial risks were highlighted as part of the budget approval process, some of which have materialised in the first half of the financial year causing significant pressure on the 2023-24 revenue position.

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.

Due to significant financial challenges the Scottish Police Authority faced this year, mitigating actions were agreed by Police Scotland Force Executive to bring the revenue and reform budgets collectively back in line with the funded position. These specific actions are monitored on a weekly/fortnightly basis, with regular monthly reporting to the Police Scotland Executive and SPA Resources Committee members, to provide assurance to the Authority of oversight of progress against delivery of the above plans.

Appendix A provides the detailed quarter three (Q3) finance report.

Revenue
• The Q3 forecast position of £1,357.8m shows an overspend of £5.0m against full year revised budget of £1,352.8m.

• This overspend requires additional funding, as requested by the Chief Executive (CE) of the Scottish Police Authority (SPA) to the Scottish Government (SG), to ensure a balanced position.

• As outlined previously, Q1 forecast originally highlighted net unfunded pressures of £18.9m, mainly due to overspends relating to pay; police staff costs, police officer overtime and police officer pensions.

• Mitigating actions and savings are being managed and delivered through our Policing Our Communities programme to bring spend back in line with the funded position. Operational impact of mitigating actions in delivering the savings are assessed in Appendix B.
• At the end of November, the CE of the SPA wrote to the SG requesting £5.0m of contingency funding due to significant risk around the delivery of the forecast.

• The year-to-date actual position versus budget is an overspend of £12.1m.

Capital
• The capital forecast at Q3 is £54.9m, £1.9m (fully funded) over the budget position of £53.0m.

• The Q3 forecast position requires £1.1m slippage to be slowed for the remaining part of the year, reduced from £17.3m at Q2 FC.

• The year-to-date actual position versus budget is an overspend of £3.7m.

• Over 88% of funding has been spent to date. Capital expenditure has required to be slowed for the remaining part of the year.

• As a result, no further commitments to be made in the current financial year, with £1.1m slippage still required within the committed spend or agreed exceptions category.

• Any slippage identified must be notified to Finance and should not be reallocated to other areas of spend.

• Capital expenditure that is not yet committed should continue to be progressed, but only for delivery after 1 April 2024.

Reform
• The Q3 forecast of £20.3m is in line with revised funding.

• As previously shown at Q2 forecast, the Q3 forecast continues to show that the reform funding has reduced to £20.0m. This was due to the decisions and mitigating actions agreed to help with the 2023/24 revenue position.

• The year-to-date actual position versus budget is an underspend of £2.3m.