1

Nigel Hiller

Director of Finance

A Personal reflection

Financial Management

As reported by the BBC

2

The Home Office budget will reduce by 25.29% by the end of the CSR

6th largest % reduction of the 33 departments shown

Policing makes up the vast majority of the Home Office budget

Core Government police funding will reduce by 20% by 2014/15

3

Frontloading of Police Cuts Total Central Government Funding and year on year % reductions over the spending review period

7.8

8

8.2

8.4

8.6

8.8

9

9.2

9.4

9.6

9.8

2010/11 2011/12 2012/13 2013/14 2014/2015

£b

illi

on

0

1

2

3

4

5

6

%

Central govt funding % reduction on previous year

5

3

ACPO Survey – Estimated Police Officer Reductions

Equivalent to :-

North Wales

Dyfed Powys

South Wales

Gwent

West Mercia

Gloucestershire

Most of Avon & Somerset

National Police Officer Headcount Reductions will be equivalent to removing all police officers * from the following forces:-

* Comparator = Police officer headcount as of 31/3/10

14,253

ACPO Survey – Estimated Police Staff Reductions

National Police Staff Headcount Reductions will be equivalent to removing all police staff * from the following forces:-

Equivalent to :-

North Wales Dyfed Powys

South Wales Gwent

West Mercia Gloucestershire

Avon & Somerset Devon & Cornwall

Wiltshire Dorset

Merseyside Most of Cheshire

* Comparator = Police staff headcount as of 31/3/10

19,511

4

Why The Variation ?

Forces face different challenges based upon :-

• Funding sources

• Levels of reserves

• Workforce mix and profile

• Their ‘journey’ so far in making efficiencies

Different Gearing = Different Impact

£ 36.3 m Council Tax (12.4%)

£256.3 m Govt. Funding (87.6%)

£ 98.3 m Council Tax (48.5%)

£104.4 m Govt. Funding (51.4%)

SURREYNORTHUMBRIA

£ 36.3 m Council Tax

£205.0 m Govt. Funding

£51.3 m Funding Reduction (17.5%)

£ 98.3 m Council Tax

£83.5 m Govt. Funding

£20.9 m Funding Reduction (10.3%)

2010/11

(CIPFA estimates)

20% reduction in

Govt. funding from

above position

5

Reliance on Government Funding

11

0 10 20 30 40 50

Neighbourhood remodelling

Shared Service Centres

Outsourcing

New BCU/Policing Model

Collaboration (cash identified)

Reallocation of workforce between…

Response Remodelling

Middle office remodelling

Shift Pattern Review

Back Office Remodelling

Demand analysis

Methods in force and authority plans to obtain efficiency improvements

6

12

Standing At A Crossroads ?

PVfMU - The ‘Big Ticket’ Items

Objective 1: Converging ICT through ISIS, the Information Systems Improvement Strategy.

Objective 2: Moving to nationally-led police procurement.

Objective 3: Helping radically change the way in which the police’s support services are delivered.

(Note – themes include collaboration, business partnership and radical process change & improvement)

Objective 4:Assisting development of the police service’s capacity and capability on transformational change.

13

7

Workforce Based

Natural wastage

Recruitment freeze / Vacancy disestablishment

Overtime ban/Reduction

Stopping 30+ scheme

Ceasing temporary staff

Voluntary redundancy

Compulsory redundancy

Workforce Based

Non payment of SPP

Reduction in allowances over & above salary

Use of regulation A19

Changes to terms to conditions (Winsor)

Demand modelling / Shift pattern changes

8

Other Measures Increased income Generation

Lobbying for new charges

More local funding

Ceasing Services

Stopping/of service

• Ceasing partnership activity/contributions

• Process Changes

Business process re-engineering

• Reducing bureaucracy to reduce posts / manage the gap left behind

• Reduction of police estate / selling property assets

• Reduction of capital projects

Collaboration

Local Regional National

Neighbourhood

Policing

‘Normal’ demand

Specialist Ops,

Major Crime,

Forensics etc

HR, Finance etc

I.T.

Procurement

Air Support etc

9

What are ‘core services’?

Source: Demanding Times (HMIC)

Non Core Services?

POA Category 2 - Dealing withthe Public

Local Call Centres / Front Desk

Central Communications Unit

Contact Management Units

Dealing with the Public

Command Team and SupportOverheads

POA Category 3 - CriminalJustice Arrangements

Custody / Prisoner Handling

Criminal Justice

Police National Computer

Criminal Record Bureau

Coroner Assistance

Fixed Penalty Schemes (CentralTicket Office)

Property Officer / Stores

Criminal Justice Arrangements

Command Team and SupportOverheads

POA Category 8 - InvestigativeSupport

Scenes of Crime Officers

External Forensic costs

Fingerprint / DNA Bureau

Photographic Image recovery

Other Forensic Services

Investigative support commandteam and overheads

POA Category 10 - SupportFunctions

Human Resources

Finance

Legal

Fleet Services

Estates / Central Building Costs

Information Communication

Technology

Professional Standards

Press and Media

POA Category 10 - SupportFunctions

Performance Review / CorporateDevelopment

Procurement

Training

Administration Support

Force Command

Support to Associations andTrade Unions

Freedom of Information

Social club support and Forceband

Insurance / Risk ManagementCatering

10

Alternative Delivery

Mechanisms

Steria – Cleveland

Police

G4S – Lincolnshire

Police

Cap Gemini –

Cheshire/Northants

Transformation

Birth of PCCs

Change in

Technology

Localism with

partners

Wish to support

SMEs

11

The Future

Two key roles of the

finance director

To create the

opportunities that

shape the future

To ensure stability

that the force can

rely on the services

I provide

12

Successful

businesses need

a reliable single

version of the

numbers

One view of the

truth

Understand your Business

13

Teamwork

Finance has to be a

business partner

actively engaged

with supporting the

business

Key Factors

14

Knowledge

Technical

Business

OR

Karen Wilson Hoggett Bowers

Knowledge

Expert

Awareness

V

Karen Wilson Hoggett Bowers

15

What is expected of FD?

Ensure robust controls and reliable numbers

Isolate key issues and opportunities

Challenge performance and plans

Contribute to and guide business debate

Find workable ways to achieve strategies

Give confidence to management team and Authority

Co-Pilot to CEO

Deliver and Engage

Lead and Influence Karen Wilson Hoggett Bowers

Key Skills

Karen Wilson Hoggett Bowers

Analytical Used in Objective situations

Fact or Numbers based

Process

Judgement Used in Subjective situations

Ambiguous

People

Reporting Used to ensure complete understanding

Information

Influencing

16

Key Personal Skills

Gravitas/Charisma

Engagement

Listening

Communication

Influencing

Flexible

Decisive

Delivery

Leadership

Solution Oriented

Challenging

Commercially

astute

Karen Wilson Hoggett Bowers

Clear Values

Commitment to Chief Constable’s vision

Everyone is valued and has a responsibility

to contribute

Open and honest communication

Honour our agreements

Learn and Share

Celebrate success & challenge poor

performance together

17

Environment

Competences

18

Give Praise

Understand your Business

19

Key issues for Cipfa financial

management panel

Integrated planning

Efficiency planning guidance

Partnerships

Advice for non financial managers

Budgets v Rolling Forecasts

Balance Sheet Management

Challenge

Recent Work

Counting Costs

Performance

Management

Benchmarking

IFAC

Developing a

Financial Strategy

Financial

Management Model

20

Financial Literacy

Clear strategy for Financial Competence

Approved employer Training

CPD

Different skills AAT

Cipfa

ICAEW

ACCA

CIMA

Managers

Board

Non -Executives

IFAC

21

Key Domains

Balancing Risk

22

Drivers of Sustainable Organisation Success

Financial Management Model

23

Three key Aims

Securing Stewardship

Supporting Performance

Enabling Transformation

Ensuring the foundations

are firm

24

Secret of Good Budgeting

Chief Constable

25

Director of Finance

Eeyore and Tigger - FT Leader

• There are two types of person: gloomy Eeyores and bouncy Tiggers. If the results of a new survey for CFO Europe magazine are to be believed, many chief financial officers cast themselves in the role of Eeyore working for Tigger. Only five per cent of CFOs regard themselves as more optimistic than their chief executive officers, while almost half are more pessimistic.

• Why? Some of the explanations that CFOs offer are misery itself. "CEO is a moron." "CEO lacks strategic imagination or long-term vision; substitutes hope and blind optimism." Evidently, for some CFOs, the boss is the sort of person who will grab the tartar sauce before leaping into a tank of piranhas.

• Perhaps CEOs and CFOs should swap jobs in an effort to appreciate each other's

perspective. The CFO would learn that the glass is half full of milk; the CEO would learn that the milk is sour. Yet the combination of cheerleading boss and depressive bean-counter may be a winning combination, like salt and pepper or peaches and cream.

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FT Leader Continued

• Gloominess is a worthy attribute for a financial officer. Some psychologists talk of "depressive realism", citing evidence that clinically depressed people may turn out to have a firmer grasp on reality than cheerier folk. That is perhaps taking things too far, but we would certainly advise against having a downcast CEO and a Panglossian CFO. The boss would be paralysed by pessimism while the CFO spun sunny lies to shareholders.

• Eeyore once grumbled of his companions: "They haven't got Brains, any of them, only grey fluff that's blown into their heads by mistake, and they don't Think." That is scepticism appropriate to a CFO, but if CEOs tried to Think, how would anything get done?