City of London PEEL 2018
How efficiently does the force operate and how sustainable are its services to the public?
The force is good at meeting current demand and using its resources. We have carried this judgment over from our last inspection in 2017. However, the force needs to improve how it plans for the future. In particular, it needs to show how it will address the gap in its budget over the next five years.
The force has a good understanding of how demand for its services is likely to change over time.
The force consults the public well. It has a good understanding of what skills it will need for the future and is good at developing its people.
The force works well with a range of other forces and organisations.
The force’s plans are ambitious and innovative and should put it in a strong position for the future. But this can only happen once the force achieves a balanced budget.
How well does the force use its resources to meet the demand it faces?
This question was not subject to detailed inspection in 2018/19, and our judgment from the 2017 efficiency inspection has been carried over.
How well does the force plan for the future?
Areas for improvement
- The force needs to address the deficit it has identified in its medium-term financial plan.
We set out our detailed findings below. These are the basis for our judgment of the force’s performance in this area.
Assessing future demand for services
The force has carried out detailed work to evaluate its future demand. During 2017 external consultants carried out work to assess future demand over the next 5-10 years. It understands there will be an increasing working population with more people travelling through the area, more visitors and an increased number of licensed premises. It has assessed that it will have a 10 percent rise in mental health incidents that it attends, and that cyber-enabled offences will make up over 60 percent of its recorded crime. The force also thinks that artificial intelligence could automate at least 15 percent of its work. Although this assessment provides the force with a strong base to understand its future demand, it must make sure that its demand planning matches the resources it has to address the budget deficit it has identified in its medium-term financial plan.
The force has used the results of a consultant-led demand and value for money review to inform its change plan, known as the ‘Transform programme’. This began in January 2018 and is to run over the next two to three years. Its objective is to develop services against demand and decide which resources will be required in the future. It is intended that a new structure and new ways of working for the force will be agreed by June 2019, with implementation starting in 2020. This is an ambitious plan and considers changes in technology to help it better understand demand, particularly with fraud and cyber-enabled crime. It also considers emerging demand such as the opening of Crossrail which will mean the force needs more resources for the higher numbers of people who will visit the area during the night.
Understanding public expectations
The force has a good understanding of what the public wants and how expectations are changing. It uses this understanding to inform its view of the future and adapts its services appropriately. The force serves a unique community, made up of a small number of residents, a very large number of workers and visitors, and many businesses including banking institutions and commercial enterprises. The force has good links with businesses, residents and workers and it uses well-established meetings to find out what the public wants. The force introduced a new survey process in 2018 that includes both online and street surveys. This doubled the number of people consulted, compared with last year. The force is using this to improve its understanding of public expectations and inform its priorities.
The force uses this understanding of changing public expectations to inform its future plans for recruitment and workforce planning. It recognises that specialist skills to combat fraud and cyber-enabled crime will be required in the future. It is using innovative ways to bring these skills into the force with the use of specialists funded by industry. We think this is good practice and shows the force understands the things that its communities want.
The force has set out a clear vision for the future. Its priorities and plans are informed by its understanding of future demand and changing public expectations. Its Transform programme will involve a period of continuous development that will match resources to demand to meet the priorities it has set out in its policing plan. The force has a comprehensive understanding of its workforce requirements and skills gaps. It is focused on maintaining frontline operational resources and undertakes regular recruitment to ensure that gaps are filled. A recent transferee recruitment campaign brought the detective strength up to establishment.
The force is part way through a very detailed evaluation of its future workforce requirements. It understands the changes in demand it is likely to face and is compiling options as to what the workforce will need to look like to meet that demand. The current workforce strategy is comprehensive and includes leadership development, skills audit, talent management and recruitment plans for its skills gaps. It will also continue to take in officers from other forces.
Based on attrition rates of people leaving and joining, and predicted retirements over the next five years, the force’s workforce plan and recruitment strategy aim to recruit 100 probationers and 220 transferees. The force is using its Transform programme to identify what skills it needs to meet the force’s eight strategic objectives (counter terrorism, fraud, cyber-crime, roads policing, public order, anti-social behaviour, vulnerable people, and violent and acquisitive crime). For example, cyber and digital changes mean the workforce will need different skills, requiring officers and staff to increase their technological skills and knowledge. The force sees that, with fewer people choosing a ‘career for life’ in policing, it needs robust workforce planning processes to ensure continued resilience. The force has staggered its planned recruitment over the next year to meet its savings targets and thereby address its budget shortfall. The force told us this won’t change its long-term recruitment plans because these depend on the results of the Transform programme.
The force is ambitious in its plans to increase the size of its special constabulary and to further increase the number of volunteers it has, who bring specialist banking and cyber expertise to the force. The force has made good use of external funding opportunities to fully budget for these plans.
Following its 2010 consultation about revaluing public sector pensions, the government announced, in 2016 and 2018, reductions in the discount rate it uses to set contribution rates for the unfunded public service pension schemes. These include the police service pension scheme. A lower discount rate will result in higher contribution rates for the employer. The official notification of a lower rate in September 2018 did not allow the police committee time to include the impact in their financial planning. In December 2018, the government announced a pension grant for 2019/20. It allocated funding to each force to specifically help the police pay for these increased costs in the next year. The police committee must now plan for how they will finance the increased costs in the following years, assessing the impact on their officer numbers and their ability to provide effective and efficient services.
The revenue medium-term financial plan previously indicated a balanced budget for 2018/19, but with an annual deficit increasing to £5m per annum by 2021/22. However, in late 2018, the force discovered the financial forecasts had been based on incorrect data and flawed assumptions. This included a failure to account for an existing budget gap and the double counting of the national and international city grant. This means the force faced an unbalanced budget for 2018/19 and a more significant deficit over the next five years.
Following further detailed work by the force and the police committee, the budget gap for 2018/19 and 2019/20 has been addressed. The force is using savings it has already made, identified by its Transform programme, and further in-year savings, which include better use of agency workers, staggered recruitment through the year, and the use of additional income from training and support the force provides to other organisations. The police committee holds the reserve for the force and has agreed in principle to find the additional resources to fill the budget gap in the short term. Further work is needed to address the gap over the rest of the medium-term financial plan, which adds up to £12.8m.
Leadership and workforce development
The force is good at developing its workforce and leaders. Its workforce plan is updated every six months to ensure that the force understands its current priorities, demands and threats, mapped against its workforce numbers, skills and demographics. The workforce plan is supported by a five-year recruitment plan, which details the promotion, transferee and other bulk recruitment campaigns to ensure the force meets its demand. There is also a five-year training plan that considers the skills required across the force. All this activity is described in the force’s corporate plan.
The force maintains good governance over workforce planning, with structures in place at directorate and force level to scrutinise the filling of existing posts. Talent management schemes are evident and include workplace shadowing and mentoring. The force also has succession plans in place for its senior leadership teams and has used external recruitment successfully over recent years to bring specialisms and experience into the force at senior ranks.
Ambition to improve
The force’s plans are ambitious and innovative. The demand and value for money review, the strategic threat and risk assessment process and the Transform programme, plus continued investment in estate and IT, should place the force in a strong position for the future. Resources are in place to achieve change, and the force has achieved savings in the past and continues to identify appropriate areas for efficiencies and investment. But all savings over the foreseeable future will be used to cover the budget shortfall and can’t be reinvested in the force. It is too early to make a judgment on the success of the Transform programme. We look forward to assessing this over the next few years.
The force failed to identify flawed planning assumptions in its financial planning during 2017/18. This means the budget gap wasn’t recognised until a temporary finance director, who was brought into the force in mid-2018, spent several months reviewing the force’s finances. The force and the police committee were told of the shortfall in late 2018 and set up a joint group to review the assumptions made for the 2018/19 budget and for the future years of the financial plan. New measures have been put in place. These include the recruitment of a new finance director who will sit on the management board of the force. Recent work by the force and the police committee to change the structure of the financial management and planning teams appears to be positive. We will assess the impact of these changes over the next year.
The force is part way through its IT transformation programme and has an IT strategy in place to provide it with a reliable, resilient and secure infrastructure. The force recognises that it is currently in deficit with its IT provision. It has an ageing technology infrastructure, some of which is from the last decade. The IT provision is via a managed service with the City of London Corporation. Together, they have plans to provide technology that will improve the force’s response to cyber-crime and fraud, and support hot-desking and home working for its staff. The IT renewal phase one, which is underway, is fully funded to £6m. However, the remaining plans, which could total £9m, still require funding to be agreed with the City of London Corporation. All capital spending plans will need to be reviewed to make sure funding is available for them in light of the revenue budget deficit over the next five years.
The force is involved in a wide range of collaborations, including those with other police forces in the UK and around the world, and public and private organisations, mostly as part of its response to economic crime. In 2017, we said that the force could do more to review the benefits and drawbacks of all its collaborative work and the force has included this as part of its future design planning. The force is now included in the pan-London blue light collaboration programme, which makes the most of its purchasing power.
In 2017, we said that the force should ensure that it understands the level of service that can be provided at different levels of costs. Its annual review of fees and charges 2018/19 has gone some way to identifying the full economic cost per hour of officers and staff, including their available productive hours.Summary for question 2