police reform a developing picture

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Police reform: a developing picture

1Police reform: a developing picture

Contents

Introduction and executive summary 2

Governance and accountability 6

Partnerships: collaboration and commissioning 14

Public communication and transparency 20

About us 29

Methodology

This report is based on:

• oursurveyofseniorpeoplefromwithinthepolicesectoron: risk leadership; partnerships and alternative delivery models; and public communication

• ourreviewofpoliceandcrimeplans,policeandcrimecommissioners’annualreportsandpolicefinancialstatementsproducedin2012/13

• ourreviewofpoliceandcrimecommissioners’websitesanduseofsocial media

• adetailedreviewofthe2012/13annualgovernancestatements andexplanatoryforewordsof150Englishcouncils,fireand rescueauthoritiesandpolicebodies,comparingthemtoourbest practice criteria

• arangeofcasestudiesillustratinggoodpractice.

2 Police reform: a developing picture

The Police Reform and Social Responsibility Act 2011 (PRSRA) has presented the sector with a wide range of challenges and opportunities. This report looks at how the sector is responding.

The PRSRA has resulted in significant changes to decision making structures in the police sector. The election of police and crime commissioners (PCCs) in November 2012 introduced a new model of governance and accountability in England and Wales. This aimed to “make the police more accessible, accountable and transparent to the public”1.

Police authorities have been replaced by two separate entities. PCCs and chief constables have been established in law as separate legal entities and given equal status as corporations sole.

Corporations sole are rare in the public sector. Many of the conventional governance norms and processes developed over decades in other sectors could not be transferred across to these new bodies. Governance and decision making arrangements needed to be re-considered within each entity and in the way they relate to each other.

To further complicate the governance considerations, although one corporation sole is directly accountable to the other, they share key governance mechanisms, including joint audit committees and internal audit functions. In addition, there has been a transient nature to the immediate arrangements while the sector prepared itself for ‘stage two’ – a comprehensive consideration of the legal and governance requirements which needed to be designed, approved and implemented by 1 April 2014.

While these changes have presented structural challenges, they have also provided the sector with opportunities to think about how best to shape itself for the future. These challenges cannot be met, nor opportunities realised, without strong governance frameworks that permit innovative and flexible solutions and maintain transparency, accountability and effective risk management.

This review focuses on three areas where the sector has opportunities to develop:

1 Governance and accountability: getting the most from the structures established through the new arrangements. Setting a tone from the top that views proper corporate governance as central to the successful delivery of local police and crime reduction priorities

2 Partnerships, collaboration and commissioning: implementing robust and proportionate governance arrangements for collaboration and commissioning, which retain accountability without stifling innovation

3 Public communication and transparency: engaging with the public and wider stakeholders to inform and assure them about service performance, financial performance and governance arrangements

Introduction and executive summary

1 Policinginthe21stcentury:reconnectingpoliceandthepeople,HomeOffice,July2010


Governance and accountabilityThe new governance and accountability structures in the police sector rely heavily on the strength and effectiveness of relationships. One of the central relationships is between the PCC and the chief constable. Despite some high profile incidents since the election of PCCs, the general perception is that this relationship is working well. Over 80% of respondents to our survey felt that PCCs have been effective in holding chief constables to account. All agreed that both parties have a shared vision for the next three years.

Some structural aspects are still developing and will take time to embed effectively, in particular joint audit committees and police and crime panels. Respondents to our survey did not identify PCCs or chief constables as one of the top three people responsible for good governance. This is a concern because, legally, they are charged with governance in their organisations. As the key decision makers and leaders in the sector, their clarity of direction and tone is crucial to the effective development of police governance.

Each police area has established a joint audit committee. Respondents largely regard these as effective.

However, the recent formation of these joint committees means many are still finding their feet. There are differences of opinion across the sector as to the role of the joint audit committee. Some have struggled to reconcile the advisory role envisaged by the Financial Management Code of Practice2 with a view that the audit committee should be holding the PCC and chief constable to account. Committees have also faced the challenge of providing assurance to two bodies, even though one of those bodies is responsible for holding the other to account.

PCCs and chief constables must take the lead in engaging with their committees, giving them a clear purpose with links to strategic objectives and risks. However, we also see a role for committees to work proactively with the PCC and chief constable, to make them ‘intelligent customers’ and ensure they understand and realise the benefits of an effective audit committee.

Respondents to our survey are divided almost evenly on the issue of how effective police and crime panels have been in holding PCCs to account. There is not always clarity or consistency of view about the exact role of the panel. Many of the relationships

between PCCs and police and crime panels have been framed in terms of the scrutiny aspects of panels’ roles. While this is an important function of panels, we feel that the PRSRA allows for a broader approach. Working collaboratively, PCCs and panels could also provide a lever for effective partnership working, particularly in crime reduction and prevention activity.

The PRSRA requires the panel to operate “with a view to supporting the effective exercise of the functions of the PCC for that police area”3. A healthy balance between challenge and support is required to maximise beneficial outcomes in each policing area.

The progress made in developing corporate governance has been encouraging. A lot has been achieved in a short time. This is particularly impressive given that, in many cases, police bodies have had to design new governance arrangements from scratch. As ‘stage two’ is implemented and governance arrangements become embedded, it will be important for PCCs and chief constables to be champions of strong governance, assurance and accountability frameworks in their local areas.

2 FinancialmanagementcodeofpracticeforthepoliceserviceofEnglandandWales,HomeOffice,20123Section28APoliceReformandSocialResponsibilityAct2011


Partnerships: collaboration and commissioningIn recent years, much has been made of constabularies’ ability to maintain police officer numbers and the capacity of forces to fight crime. However, a strategy that focuses primarily on capacity to respond to and deal with crime may not be sustainable in the economic climate.

PCCs may need to make brave decisions about the future shape of their service delivery models. There will be benefits in commissioning police services via collaborative working, which is already well underway in parts of the sector.

More can be done to develop effective cross sector approaches to preventing and reducing crime.

There were mixed views from our survey respondents about the impact of PCCs on partnership arrangements in the sector. It will be important for PCCs to track and alter negative perceptions in this area if they are to demonstrate a beneficial impact on partnership working.

The introduction of PCCs and changes in funding arrangements, meaning both police and crime reduction and prevention services are now commissioned from the same fund, provide an opportunity to develop better co-ordinated partnership working and accountability mechanisms based on outcomes.

Good crime prevention and reduction requires effective commissioning and partnership working. With finite budgets, doing this on a large scale may mean diverting money away from front line recruitment and deployment and into other crime reduction strategies. It may also mean working more with other agencies and organisations to prevent crime, rather than responding to it later.

However, it would be a brave politician who announces a reduction in police numbers to fund more preventative measures. In reality, there would need to be a period of time in which spending on numbers was maintained while spending on preventative measures embedded and took effect. This is not necessarily feasible in the financial climate.

Notwithstanding this, PCCs should still seek to be assessed not on the inputs – the number of officers, for example – but on the outcomes they achieve. A mature evaluation would judge them on the absence of crime, rather than their response to it. Moving to this position requires a shift in attitudes in the sector and more importantly in the minds of those assessing performance of police areas and holding them to account.

Good crime prevention and

reduction requires effective commissioning

and partnership working.


Public communication and transparencyThe Government has placed local accountability at the centre of the PCC arrangements. The key accountability mechanism is the local electorate, who provide PCCs with a mandate and assess their performance in delivering against local priorities at the ballot box. To do this, the public needs to have access to a range of information which is easily accessible, understandable and reliable.

Research undertaken since the inception of PCCs has indicated that not all PCCs were complying with their statutory obligations to publish certain items of information. Our review of police and crime plans identified similar findings, with only 18 out of 42 including all six elements required by the PRSRA.

Despite not yet meeting all of their statutory transparency requirements, PCCs are engaging with the public and many have embraced social media as an accessible way to do this. Our analysis of PCCs’ use of social media identified:

• allPCCshavesomepresenceonTwitter

• 30haveaFacebookpage• 16haveachannelonYouTube. These forms of online communication, when combined with enhancements to the more traditional statutory reporting requirements, can provide an effective means of public engagement. They give local people access to those who provide their services and increase

accountability by enabling instant dialogue and feedback. We encourage local police bodies and their partners to continue developing this aspect of their communications.

Each PCC has produced a police and crime plan setting out how it plans to address local priorities. Our review of these priorities identified some consistent themes across PCCs. The most popular priority areas were:

• preventing crime –includedin63%of police and crime plans

• supporting victims – included in 51% of police and crime plans

• combating anti-social behaviour – included in 41% of police and crime plans.

Each PCC has also produced an annual report to communicate progress against local priorities. While many respondents saw these as a good way to promote local accountability, a quarter did not. Creating annual reports was challenging for PCCs in 2012/13 as they had only been in post for four months. However, all published some form of public facing document that captured progress or performance to date. Annual reports could be enhanced by the inclusion of financial information which is accessible to lay readers.

The majority of respondents to our survey felt that explanatory forewords and annual governance statements help the public to understand the organisation’s financial and risk management. Our review of explanatory forewords to the accounts and annual governance statements (AGSs) for 150 councils, fire authorities and police bodies found that most only met minimum standards rather than providing genuine insight.

The accounts, explanatory foreword and AGS allow the PCC and chief constable to communicate effectively to the electorate on how they are performing against their priorities and objectives. Few make the most of this opportunity. Many bodies present information in a way that is often incomprehensible to the lay reader.

In 2012/13, finance professionals had to make a number of difficult judgments about how best to account for the transition to PCCs and the creation of chief constables as separate legal entities. The result was a degree of variation across the sector that cannot be explained by local circumstances and which is not desirable in the long term as it prevents comparison of performance. The Chartered Institute of Public Finance and Accountancy (CIPFA) has clarified and confirmed its existing guidance on the requirements of police bodies, which should help to address these inconsistencies for 2013/14.


POLICE AND CRIME PANEL

The Government’s reforms to policing in the UK aimed to “make the police more accountable, accessible and transparent to the public”4. Strong governance and accountability are therefore at the heart of the PCC’s role. However, the Government has given each PCC and chief constable considerable freedom to design governance arrangements.

Governance and accountability

4 Policinginthe21stcentury:reconnectingpoliceandthepeople,HomeOffice,July2010

AUD

IT C

OM

MIT

TEE PUBLIC

POLICE AND CRIME

COMMISSIONER

CHIEFCONSTABLE

Police governance and accountability framework

Accountability

Assurances

This ‘blank sheet of paper’ approach means that governance arrangements have developed and matured differently across the country. However, the PRSRA mandates three governance structures that should be in place in every area. These are:

• therelationshipbetweenthePCCand the chief constable

• auditcommittees• policeandcrimepanels.

Relationships between the PCC and the chief constableOne of the greatest innovations in the new police governance structures is the creation of two new corporations sole: the PCC and chief constable. This moves governance away from the corporate board model which was in place under the police authority arrangements, to one in which both bodies are established as separate legal entities. The unusual situation of one corporation sole being accountable to

the other adds an interesting dynamic to governance and accountability in the sector. The relative complexity of the arrangement, coupled with the scope to develop and agree locally how they will work in practice, means that the relationship between these two individuals is key to ensuring good governance in the police.

It is difficult to measure reliably how those relationships are developing. However, 84% of respondents to our survey agreed that the PCC is

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effective in holding the chief constable to account. This suggests that inside the sector this aspect of the new arrangements is considered broadly effective. Nevertheless, the picture in each area will depend on the personalities involved. The high-profile cases of some chief constables leaving their posts have been discussed in detail by the Home Affairs Select Committee and in the press. Notwithstanding this, the level of chief constable turnover has not been as high as many might have expected prior to the election of PCCs in 2012.

Respondents to our survey were unanimous in their view that their PCC and chief constable have a clear, shared understanding of strategic priorities over the next three years. While the effectiveness of the new arrangements may be heavily dependent on the strength of relationships, there is much to suggest that the key one between PCCs and chief constables is currently strong.

14 2

5430

STRONGLY AGREE TEND TO AGREE

TEND TO DISAGREE STRONGLY DISAGREE

3070

0 0



The PCC and the chief constable have a clear, shared understanding of strategic priorities for policing over the next three years (%)

The office of the PCC is effective in holding the chief constable to account (%)

While the effectiveness of the

new arrangements may be heavily dependent on

the strength of relationships, there is much to suggest that the key one between PCCs

and chief constables is currently strong.

%


Audit committeesThe Financial Management Code of Practice (FMCP) requires that PCCs and chief constables have an independent audit committee5 and recommends that this requirement is met through a shared body. All PCCs and chief constables have established joint audit committees since November 2012.

The FMCP sets out the audit committee’s role as considering the internal and external audit reports and advising both bodies on good governance principles and risk management arrangements. It also recommends the following practical considerations:

• Membership – the audit committee should comprise between three and five members who are independent of the PCC and the force

• Terms of reference – the audit committee should establish formal, annually reviewed terms of reference covering its core functions. Best practice principles should be considered in determining the activities of the committee

• PCC and chief constable representation – the executive of the PCC and the force command team should be represented at audit committee meetings

Beyond this there is little in the way of police specific guidance about how the audit committee should be structured and what its role and functions should be.

The FMCP makes it clear that the role of audit committees is “to advise the chief constable and PCC”. However, many audit committee members see their role as one of holding the PCC and the chief constable to account. This points to a tension between the advisory role envisaged by the FMCP and a scrutiny role which many audit committee members may be more familiar with from their experiences outside of the police or, in some instances, in their role as former police authority members.

5 FinancialmanagementcodeofpracticeforthepoliceserviceofEnglandandWales,HomeOffice,2012

WHO DRIVES GOOD GOVERNANCE?

Oursurveyrespondentsidentifiedorganisations’mostseniorofficersashavingtheimpetustofostergoodgovernancearrangements.However,PCCsandchiefconstablesareseenaslessimportantdriversofgoodgovernance.Thisisaconcernastheyareofficiallychargedwithgovernanceintheirrespectiveorganisations.

0 5 10 15 20 25 30

CFO/treasurer

OPCCchiefexecutive

Deputy/assistantchiefconstable

Chiefconstable

Police and crime commissioner

Other


“The audit committee risks becoming a bulldog with rubber teeth.”

POLICEAUDITCOMMITTEEMEMBER

The PRSRA vests sufficient holding to account powers in the PCC and the police and crime panel. Audit committees should instead focus on their assurance role by ensuring their work plan concentrates on some or all of the following areas:

High risk projectsAudit committees need to focus their work on areas of change such as major construction projects, the establishment of new collaboration arrangements, or significant changes to staff structures or officer roster patterns. The independence of committee members will enable them to constructively challenge senior officers about the controls in place over significant risks, and to advise the PCC or chief constable where those controls are not effective.

CollaborationGood governance of collaboration arrangements requires both parties to be clear about who owns which risks. Where two or more organisations are working together, there is a danger that governance and risk management will fall between two stools, with each

party assuming the other has taken responsibility for managing particular risks. Audit committees are ideally placed to review the governance of significant collaboration arrangements to assess whether they remain fit for purpose in new organisational structures. They should consider how best to work with the audit committees of partner organisations to ensure there is a shared understanding of risks and assurances in place. In situations where forces are involved in long-term, wide-ranging collaborations, setting up a joint audit committee across forces, or holding periodic joint audit committee meetings across forces, might be appropriate.

Internal auditAudit committees are the champions of risk management and good governance in their organisations, so they need to be proactive in ensuring that internal audit support this agenda. The best audit committees are challenging internal audit teams to refocus their work on areas where it will add most value to the organisation, informed by their knowledge of key risks. Audit committees also need to ensure their providers are complying with new Public Sector Internal Audit Standards (PSIAS).

All of these activities will increase the value of the committee’s work and help ensure the committee becomes an

influential and authoritative source of advice about good governance and risk management practice.

There are a number of potential barriers to audit committee effectiveness in the police sector. Given how early in their development most audit committees are, it is too early to be sure that they are overcoming all of these barriers effectively.

Most independent members are engaged for four days a year, reflecting the typical quarterly cycle of meetings. However, to really understand the risks and possible sources of assurance, committee members need time to engage with both bodies outside of this cycle – perhaps by scheduling regular meetings with officers and staff, or by visiting the force’s operational bases.

Good governance of collaboration

arrangements requires both parties to be

clear about who owns which risks.


Another challenge for audit committees is to manage their time to meet the needs of both bodies. There is a real threat that the audit committee’s work plan and agenda is driven more by one party than the other. This risks weakening the effectiveness of the governance and assurance mechanisms supporting the other body.

Encouragingly, our survey suggests that audit committees are managing this aspect of their role successfully. Over 90% of respondents either agreed or strongly agreed that they were satisfied the audit committee allocates sufficient time to the business of both organisations to provide appropriate assurance to each on key issues and risks.

The role of the PCC in holding the chief constable to account adds a unique dynamic. Audit committees may need to provide assurance to the PCC to support them in this aspect of their role, or there may be points of contention between the PCC and the chief constable. There is a risk that committees find themselves unintentionally ‘taking sides’ or even acting as a ‘referee’. Having some clarity of purpose via a terms of

I am satisfied the audit committee allocates sufficient time to the business of both organisations to provide appropriate assurance to each on key issues and risks (%)

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reference which has been agreed by the PCC and chief constable will help to avoid some of the potential conflicts inherent in the new arrangements.

In our experience, audit committees are most effective where they have face-to-face meetings with the PCC and the chief constable. This seems an obvious point, yet over 30% of our survey respondents did not think that committee chairs were meeting regularly with the PCC and chief constable or other senior officers. Without this regular interaction, it is difficult for PCCs and chief constables to be clear about what they want from their audit committees and to be sure that they are getting it.

The PCC meets regularly with the chair of the audit committee to discuss risks and assurances (%)



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1024



39

8

29

The chief constable or an immediate report meets regularly with the chair of the audit committee to discuss risks and assurances (%)

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While PCCs and chief constables should be responsible for engaging with their audit committees and setting the committee’s overarching goals, there is an important role for audit committee chairs to assist PCCs and chief constables in becoming ‘intelligent customers’ of the committee. This process of education will help both parties to ensure that the committee’s work is adding value and should increase the impact and profile of the committee within both bodies.

GUIDELINES FOR AN EFFECTIVE AUDIT COMMITTEE

Thepresenceofaclearpurposethatislinkedtothestrategicobjectivesandrisksoftheorganisationstheyoperatewithin.Inapolicecontext,thismeansthatcommitteesshouldagreetermsofreferencewiththePCCandchiefconstable.

TheabilitytobalancethedemandsofthePCCandthechiefconstable.Havingaregulardialoguewithbothpartiesaboutwhatriskstheyfaceandwhatassurancetheyrequirefromthecommitteewillensurethecommittee’sworkhasimpact.Thecommitteeshould bepreparedtoadaptandimprovewhennecessary.

Planningworktomakeeffectiveuseoflimitedtime.Reviewstandingitemsonagendas,andconsiderwhethertheyaddressthekeyrisksfacedbythePCCandthechiefconstable.Auditcommitteeannualreportsallowcommitteestodiscusstheirowneffectivenessandcommunicatetheirimpactonthewiderorganisation.

Membershipiskey.Auditcommitteesneedaskilledchairwhocankeeptheworkofthecommitteeontrack.Thereneedstobeabalanceoffinancialandoperationalexperience.Committeeswithavariedbackgroundtend tobemosteffective.


Police and crime panelsThe picture of strong arrangements emerging between the PCC and chief constable contrasts with our findings about police and crime panels. Only 54% of respondents to our survey agreed that the police and crime panel is effective in its role of holding the PCC to account.

The police and crime panel is effective in holding the PCC to account (%)

“The police and crime panel is weak as water.”

“Tendency to behave in similar way to former police authority. Have not yet come to terms with their role as holding commissioner, rather than chief constable, to account.”

“They are still finding their feet.”

SURVEYRESPONSES

The requirements of the PRSRA mean that panels will always have a large and varied membership. This presents panels with both challenges and opportunities. They must include co-opted members representing each local authority in the police area, none of whom are necessarily used to working together. This potential unfamiliarity is not helped by the possibility for ‘churn’ in membership during a PCC term, particularly where the members’ authorities operate to different electoral timetables.

Panels must contain at least two independent members. Some panels have had difficulty finding members with the right set of skills and experience to fill these independent posts. Furthermore, it is not always clear which body is responsible for providing training, support and guidance to panel members. These structural problems make it difficult for the panel to scrutinise the work of the PCC effectively.

There is a broader issue of the limited formal powers afforded to panels under statute. One consistent difficulty that panels have faced is identifying exactly what their remit and role is and how to exercise this effectively. There have been suggestions from some quarters6that panel powers could be increased to deal with this uncertainty.

Much of the rhetoric surrounding panels has been adversarial and focused on the scrutiny element of their role in holding PCCs to account. This adversarial approach risks limiting the impact that they might have on policing and crime.

The PRSRA makes it clear that panels should support the PCC in the effective exercise of their functions. As a group of well-connected local politicians, police and crime panels can help PCCs to develop links and where necessary apply leverage in their local authorities. This potentially gives them a key role in the local police area, particularly in relation to partnership working on crime reduction and prevention.

6 HomeAffairsSelectCommittee–Policeandcrimecommissioners:registerofinterests,May2013



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A major barrier to panels having a more rounded role is the limited resources available for them. While PCCs and partners may be understandably reluctant to devote funds from their limited budgets to support panels, there needs to be a frank discussion about how to maximise the value of their role – even if that does require committing more resources to training, development and administrative support.

An effective scrutiny function will become increasingly important given the difficult decisions PCCs face. While there are pockets of good practice around the country, we suggest that the following features could improve panels’ work where they are not already in place:

• Aforwardplansettingoutthepolicyareasinwhichthepanel can most effectively support and challenge the PCC to improve overall outcomes

• Ensuringthefocusisonstrategicissuesthatreallymatterto stakeholders by engaging with the public and other partner organisations

• Reviewingthetrainingneedsofpanelmembersandidentifying resources to fund them

• Developingstrongermeansofcommunicatingwiththepublic to demonstrate the impact of the panel’s work – for example, using social media or webcasting meetings over the internet

The election of PCCs was a wholesale change in the way policing in England and Wales is governed. It is therefore understandable that governance structures continue to develop. The PRSRA requires each area to have an audit committee and a police and crime panel, but offers little direct guidance about what their role should be. We encourage all those involved in police governance to ensure that they are maximising the benefit they get from these two statutory requirements.

Embedding good governance is never quick or easy, but a sustained focus on a good governance culture can lead to genuine improvement in the way the PCC and chief constable work together for the benefit of the public they serve.

IMPROVING YOUR GOVERNANCE CULTURE

Investtimeinunderstandingyourgovernanceculture. Donotassumecurrentarrangementsareworkingwell.

Involveallthoseresponsibleforeffectivegovernance:PCC,policestaff,seniorofficers,policeandcrime panelmembers,andauditcommittees.Ensurethey areallalignedtoachievestrategicgoalseffectively andethically.

Reinforcetheprinciplethatgoodgovernanceequalsgooddecision-making,equalsgoodperformance.

Spendtimewithstakeholdersondemystifyinggovernance and spreading understanding that everyone shouldworkthisway.Itisnotjustataskforaudit andfinance.

Focusonrealbehaviourchange,notboxticking.

Identifyandsupportthosewhoarenotshowingthedesiredbehaviours.

Sharestoriesandrewardthosewhoexemplifythedesiredculturalchange.

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Partnerships: collaboration and commissioning

PCCs will need to take brave decisions about the future shape of their service delivery models. Different approaches could be appropriate for different aspects of their role with police services being commissioned via the collaborative working already well underway in the sector. This can provide economies of scale and efficiencies to demand-led areas of policing; and the capacity to fight and solve crime once it is committed. To meet their crime reduction and prevention responsibilities, a cross sector approach is key.

In recent years, much has been made of the police’s ability to maintain officer numbers and the capacity to fight and solve crimes. While the image of the bobby on the beat is compelling, we question whether this model is sustainable in the economic environment.

There remains a tendency to believe that an area with significantly higher police officer numbers and a higher number of solved crimes is performing more effectively than an area with fewer officers and fewer solved crimes. A more mature assessment may reveal that the reason there are fewer solved crimes is not because the police in that area are less effective, but because fewer crimes have been committed in the first place due to effective prevention strategies.

More can be done to develop effective cross-sector approaches to preventing and reducing crime through effective partnership working and may require the sector to commission services differently. This may mean diverting money away from the traditional front line of policing and into other crime reduction strategies and working with other agencies and organisations to prevent crime, rather than respond to it later.

Much good work has been done in this arena by community safety partnerships. However, the introduction of PCCs and changes in funding arrangements provide an opportunity to co-ordinate partnership working better and focus on outcome-based accountability mechanisms.

Police areas should seek to be assessed not on the inputs provided – for example, the number of officers – but on the outcomes they achieve. A mature evaluation of performance would judge them on the absence of crime, rather than their response to it. Moving to this position requires a shift in attitudes in the sector and more importantly in the minds of those assessing performance and holding the sector to account.


CollaborationPrior to the election of PCCs, the primary response to austerity was collaboration within the sector. Many forces either have well established collaboration agreements or are putting these in place. As explored in our recent ‘Fire and rescue collaboration’ report, these arrangements have been expanded in some cases to include local fire services. The many benefits in this type of arrangement can include:

• sharingcentraloverheadsacrossawider operational base

• economiesofscaleincombiningsimilar operations, such as vehicle fleet maintenance

• betteruseofassets,forexamplebyco-locating emergency staff and vehicles in the same building

• improvedresponsetimesthroughincreased co-responding

• moreco-ordinatedresponsestomajor incidents, as the police and fire staff are used to working together.

There are a number of positive examples of joint working. These include: front line service delivery, such as combined safety visits to vulnerable older people; co-locating police and fire staff in existing property; and procurement and build of joint headquarters and command and control centres.

A key feature of delivering these positive examples is a strong political and operational enthusiasm for closer working and a relentless focus on achieving the desired outcomes.

Much pre-existing public sector collaboration has focused on sharing back office functions such as human resources (HR), finance and information communications technology (ICT). In addition, police forces have also looked at the greater benefits that can be achieved through collaboration in front line services, including specialist service areas such as firearms, serious criminal investigation and forensic services.

It is difficult to assess accurately what impact the introduction of PCCs has had on collaboration arrangements. Responses to our survey would suggest a mixed experience: 30% of respondents disagreed that the creation of the office of the PCC has had a positive impact on the local police force’s pre-existing collaborative/partnership working arrangements. In a number of instances, PCCs have decided to take a different approach to collaboration from the direction set by the outgoing police authority.



The creation of the office of the PCC has had a positive impact on the local police force’s pre-existing collaborative/partnership working arrangements (%)

53

11

17

19

Several chief constables have

identified collaborative arrangements as

significant issues in their annual governance

statements.


While collaboration has many benefits, it also poses risks, which the sector will need to manage to ensure the benefits are realised. The need to establish effective governance arrangements will be central to this.

Our survey identified some concerns around the governance of collaborations. Although almost 90% of respondents agreed that appropriate governance arrangements are in place for overseeing collaborative arrangements, narrative comments suggested that those arrangements are not yet fully developed. Furthermore, several chief constables have identified collaborative arrangements as significant issues in their annual governance statements.

Whatever approach PCCs and chief constables decide to take, the impact of funding reductions means that doing nothing is not an option. Collaboration will continue to be a central plank in the sector’s development, particularly as it relates to making best use of police officers and an area’s capacity to respond to crime.

BS 11000: STRUCTURED COLLABORATION

In2010,thefirstnationalstandardoncollaboration,BS11000,wasreleased. Itrepresentsanevolutioninhowpartneringcanbemanaged.StructuredcollaborationisrelativelynewtotheUKandearlyadoptersincludethedefence,aerospaceandrailindustries.Therecouldbeconsiderablebenefitsforthepolicesectorinlearninghowtoapplytheconceptsandtoolssetoutinthestandard.These include:

• changingbehavioursandimprovingtrust,tomakecollaborationmoreefficientwithinandbetweenorganisations

• introducingacommonlanguagetoimprovecommunicationbetweenparties

• aligningaspirationsandcapabilitiesbetweenpartnersandplayingtoorganisations’strengthstoimproveproductivity

• providinggreatercontinuityandflexibilityofresources

• enhancinggovernance,forexamplebyadoptingsharedapproachestoriskmanagement

• promotinginnovationandcontinuousimprovement.



011

6128

“Police authorities gave a strong governance model [for collaboration]. Now this has been abandoned and nothing tangible [has been] put in place.”

SURVEYRESPONSE

I believe there are appropriate governance arrangements in place for overseeing collaboration by the force (%)


will result in different types of service being commissioned in local areas. It will be useful for PCCs to consider some of the messages in our recent report ‘Responding to the challenge: alternative delivery models in local government’.

Partnership perceptionsSeventy per cent of respondents to our survey felt positive about the potential impact of PCCs on the commissioning of crime reduction and prevention services, while 30% had reservations about this.

In our ‘2014 local government governance survey’, we asked 80 local authority leaders whether the transition from police authorities to PCCs has had a positive impact on local partnership working arrangements. Fifty-nine per cent of respondents disagreed with this statement.

This discrepancy between surveys in the effectiveness of partnership arrangements suggests a lack of understanding of the other’s concerns and suggests that some of the relationships between PCCs and key local partners are not as strong as they need to be. It will be important for PCCs to track and alter these perceptions if they are to demonstrate a beneficial impact on partnership working and deliver their crime prevention and reduction objectives.

The transition from police authorities to police and crime commissioners has had a positive impact on local partnership working arrangements (%)

CommissioningThe PRSRA places responsibilities on PCCs for commissioning activities which lead to the prevention and reduction of crime. From October 2014, this will be extended to include victim services. Prior to the creation of PCCs, the responsibility for commissioning these services rested mainly with central government. Localising decisions about allocation of these funds is one of the fundamental changes brought about by the introduction of PCCs.

Community safety funding is now included as part of the overall police grant from the Home Office. Funding policing and key elements of crime reduction and crime prevention from the same fund presents PCCs with a unique opportunity to manage resources strategically across a number of themes. It gives them a chance to manage demand for those aspects of services which arise as a result of a crime being committed.

It will be for each PCC to determine the balance between allocating resources to reduce and prevent crime and maintaining the capacity to respond to crime effectively. In delivering crime reduction and prevention objectives, all PCCs will need to make brave decisions and explore different approaches to policing. Their ability to engage with partners and agencies throughout their areas will be key. In some cases, this



I believe that commissioning of crime prevention and crime reduction services will be improved as a result of the new PCC arrangements (%)

19 11

4624



12

392

47


The difference in perceptions might be explained by a lack of clarity over commissioning intentions. Although respondents to our police survey were generally positive about the PCC’s intentions in commissioning crime and prevention services, 30% disagreed with it altogether.

This uncertainty within the sector was mirrored when we asked respondents about their views on the office of the PCC’s expertise in commissioning crime reduction services, and the arrangements put in place to determine how to award grants and monitor the value for money achieved from grants awarded.

STRONGLY AGREE

STRONGLY AGREE

STRONGLY AGREE

STRONGLY AGREE

TEND TO AGREE

TEND TO AGREE

TEND TO AGREE

TEND TO AGREE

TEND TO DISAGREE

TEND TO DISAGREE

TEND TO DISAGREE

TEND TO DISAGREE

STRONGLY DISAGREE

STRONGLY DISAGREE

STRONGLY DISAGREE

STRONGLY DISAGREE

The office of the PCC has a commissioning strategy showing how it intends to commission crime prevention and crime reduction services (%)

22

27

27

22

8

3

8

5

48

49

49

46

22

21

16

27

The office of the PCC has sufficient expertise to commission crime prevention and crime reduction services for the local area (%)

The office of the PCC has adequate arrangements for determining how crime prevention grants should be awarded to third parties for the provision of crime prevention and crime reduction services (%)

The office of the PCC has adequate arrangements for monitoring the value for money achieved from crime prevention grants awarded to third parties for the provision of crime prevention and reduction services (%)


Approaches to commissioningMany PCCs are clear about what they want to achieve. But commissioning, like much of PCC arrangements, is still in its infancy.

A number of different approaches to allocating community safety funds have emerged since November 2012. Each PCC has adopted a slightly different point on the spectrum between ‘status quo’ – maintaining pre-PCC funding arrangements – and a ‘blank sheet of paper’ approach, with no funding guaranteed to existing providers. One difficulty for PCCs has been that, on election, many inherited funding commitments from the outgoing police authorities. Some have decided to honour all existing commitments while others sought to reshape commissioning earlier in their terms. Whatever their impact on the commissioning of local services to date, a challenge that persists is linking funding and inputs to outcomes which are the key measure of a PCC’s success.

SETTING UP AND MANAGING EFFECTIVE PARTNERSHIPS

Leadership and vision Seniorofficersneedtobeclearaboutwhatthepartnershipaims

toachieve,andtocommunicatethisvisioneffectivelytostaff,partnersandotherstakeholders.

Test the business case Any partnership should be supported by a business case that sets

outtheexpectedcosts,benefitsandrisks.Wherearrangementsarealreadyinplace,considerrevisitingthebusinesscasetoensurebenefitsarebeingdeliveredasenvisaged.

Set clear objectives and report on performance Thereshouldbeasuccinctlistofclear,outcome-focusedobjectives

forallpartnershiparrangements.Performanceagainsttheseshouldbemeasuredandreportedregularly,withclearresponsibilityforactionstoaddressanyunderperformance.

Get governance right Thereneedstobeclearaccountabilityfortheperformanceof

partnerships.Decision-makingprocessesshouldbestreamlinedenoughtoallowspeedyresolutionofoperationalissues,whilegivingtimeforadequatedebatebetweentheviewsofallpartners.Sharedmechanismssuchasjointassuranceframeworksandriskregisterscanhelppartnerstodevelopeffectivegovernancearrangements.

Build flexibility into the model Thedemandsplacedonpublicservicesarechangingallthetime,

sopartnershiparrangementsneedtoadaptinthesameway.Dependingonthetypeofarrangement,partnersmaywishto:agree periodic break points and build these into agreements; set milestonesatwhichtheywillrefreshthebusinesscase;andrevisitobjectivesandperformancemeasuresaspartoftheannualbudget-settingcycle.


Public communication and transparency

As public sector organisations, police bodies exist to serve society. They have a statutory duty to communicate with the general public and other stakeholders about their plans, performance and governance arrangements.

Transparency is an essential part of public life and as such forms a key part of what is expected of PCCs. Police bodies need the co-operation of the communities they serve to be effective in their role and this can only be achieved if those communities trust the information they are given. Where this trust breaks down, the impact on relationships can be irreversibly detrimental.

The Government has placed local public accountability at the centre of its police reform. Although police and crime panels have a role in scrutinising PCC performance, it is ultimately for the local electorate to provide PCCs with a mandate and assess their performance in delivering against local priorities. To do this, the public need to have access to a range of information which is easily accessible and trustworthy. Police bodies formally do this via:

• thePCC’spoliceandcrimeplan• thePCC’sannualreport• theannualaccounts,including

the explanatory foreword• theannualgovernancestatement.

While respondents to our police survey agreed that these formal requirements can add value, in practice this potential is not realised; the majority only meet minimum standards, rather than maximise opportunities to communicate effectively and transparently to the wider public. This is similar to our findings from our local government governance reviews which highlight a continued tendency for some organisations to treat statutory requirements as ‘tick-box’ exercises, rather than opportunities to engage with the public on how they are delivering their responsibilities.

In recent years, there has been a growing debate over the length and clarity of public sector accounts. Police bodies have done little to address this concern. The financial reporting elements of annual reports could be enhanced to meet the needs of lay readers and the wider public to address this issue. Thinking innovatively about how to meet statutory reporting requirements is key to enhancing transparency and engagement with the public. This is particularly the case

given the creation of the PCC and the chief constable as separate corporations sole, coupled with the unique accountability relationship between the two, creates a challenge for accounting professionals.

As well as these formal outputs, PCCs have established other, more immediate mechanisms for engaging with the public, particularly via social media. This development is encouraging and, along with enhancements to the formal statutory reporting requirements, could provide a well-balanced and effective means of communicating with their electorates.


Transparency and engagementOne measure of transparency is the public availability of key information about the PCC, its office and how it is carrying out its role. This aspect has been the subject of a number of reviews since PCCs were elected.

In November 2013, Grant Thornton sponsored the CoPaCC thematic, ‘PCC Statutory Transparency’7. This focused on PCC compliance with publishing the information listed by the Elected Local Policing Bodies (Specified Information) Order 2011 and its subsequent amendments to facilitate their accountability to the public. The findings suggest that PCCs were not yet meeting all statutory requirements. These findings were supported by a similar, independent exercise undertaken by the National Audit Office (NAO)8.

While this quantitative assessment of PCC transparency is useful, it does not take into account the qualitative aspects of published information and the apparent desire by PCCs to achieve high levels of transparency.

However, simply ensuring compliance by publishing the information required by statute is not enough to secure the levels of transparency to which PCCs aspire. Consideration also needs to be given to how best to make information accessible to the public.

The transition from police authorities and subsequent change of governance structures means that less information is automatically available via the records of public meetings. Therefore, to achieve high levels of transparency, PCCs have to be proactive and innovative in publishing data and engaging with the public.

While performance against the order may be mixed, PCCs are using a variety of channels to communicate with their electorate. This includes face-to-face meetings with the public – for example surgeries, public appearances and regular public meetings. Ninety-eight per cent of PCCs also make a record of meetings available via their website and nine PCCs have introduced webcasting of meetings.

PCCs are making good use of online communications and social media. Research for this report indicated that most websites are easy to locate and navigate but, in some cases, the information sought was not immediately apparent. In some instances documents were so deeply buried they would not be sufficiently accessible to an interested member of the public.

7 CoPaCC–PCCstatutorytransparency,November20138 NationalAuditOffice(NAO)–Policeaccountability:landscapereview,January2014


All PCCs have some presence on Twitter, either their own account or a corporate account set up in the name of their office. Most PCCs are also active tweeters, with 33 accounts showing tweets less than a day old, seven posting tweets within the last week, only one with tweets over a month old andonewithnoactivityatall.Facebook(71%)andYouTube(38%) were particularly popular with PCCs, while other social media used include Flickr, LinkedIn, Google+ and Pinterest.

There are real benefits in this approach to social media. It provides a platform for PCCs to distil their messages and present them in an accessible format which can often be more engaging than formal publications. It also provides a means for local people to access those who provide their services and share their thoughts and concerns. This increases accountability by providing a mechanism for instant dialogue and feedback. We encourage local police bodies and their partners to continue to develop this aspect of their public communications and the value it adds to their engagement with the public.

EXAMPLES OF GOOD WEB COMMUNICATIONS

Humberside PCC’swebsitewasparticularlyeasytonavigate,withgoodcontent

Northamptonshire Police and PCC have a shared website,whichiswellconfiguredtobeviewedonatablet.Eachorganisationhasitsowntabonthewebsitemakingiteasyfortheusertomovequicklybetween thetwo

West Midlands PCCwastheonlyPCCwhereall25disclosuresrequiredbytheSpecifiedInformationOrdercouldbefound.ThiswasachievedbydedicatingapageofthePCC’swebsitetotheinformationrequiredundertheorderandprovidinglinkstowheretheinformationwasavailable

Greater Manchester PCChasafunctionwhichallowstheusertosearchfordecisionsbydaterange,decisionmaker,decisionstatusandkeywords.Thereisalso afilter,soausercanselectonlykeydecisions. Thisfunctionwillbeincreasinglyuseful

Staffordshire PCC’sYouTubechanneliswellorganisedinsteadofbeingjustalistofvideos

Use of digital and social media by PCCs (%)

16

30

41

41

9

0 10 20 30 40 50

YouTubechannel

Facebook

Minutes/papersonwebsite

Twitter

Webcastmeetings


22

Thecrimeanddisorderreductiongrantswhichtheelectedlocalpolicingbodyis to make and the conditions(ifany)towhichgrantsaretobemade

Quality was variable and the excessive lengths of some plans impaired their effectiveness as a means of communicating with the public. However, very few plans were of poor quality throughout. The most robust section tended to be that dealing with the thematic strategies, priorities and direction that the individual PCC wanted to take with policing.

The several reports that were very good throughout, in general, included:

• therequiredelementsinaformatthatwaseasytounderstand

• well-definedtargets,sothatthepublicwouldbeabletojudge how well the PCC had performed

• enoughdetailtogivethereaderanunderstandingofthe challenges faced by the local area and how the PCC intended to meet those challenges.

Police and crime plansPCCs are required to produce and publish a police and crime plan. To comply with the PRSRA, these plans should include information about areas such as crime objectives, financial and other resources, how performance will be measured, and crime and disorder reduction grants.

Of the first police and crime plans published by the 42 PCCs in England and Wales, only 18 plans comply with every requirement in the PRSRA. The most common missing element – in 20 plans – was the disclosure of the crime and disorder grants.

Compliance with the police and crime plan elements required by statute (%)

Complies

0 20 40 60 80 100

42

Theelectedlocalpolicingbody’spoliceandcrimeobjectives

37

Thepolicingofthepoliceareawhichthechiefofficerofpoliceistoprovide

38

Thefinancialandotherresourceswhichtheelectedlocalpolicingbodyistoprovidetothechiefofficerofpolicetoexercisehis/herfunctions

40

Themeansbywhichthechiefofficerofpolicewillreporttotheelectedlocalpolicingbodyontheprovisionofpolicing

35

Themeansbywhichthechiefofficerofpolice’sperformanceinprovidingpolicingwillbemeasured

There is a marked difference in the way PCCs approached this opportunity to communicate their ambitions to the public. Every plan had its own format. Length differed from four to 92 pages, although the most common was between 28 and 32 pages and the shortest statute-compliant plan was 18 pages long. Tone was similarly diverse, with some reading as a high level policy document and others as a personal message to the electorate.

EXAMPLES OF GOOD POLICE AND CRIME PLANS

Hampshire – targetspulledoutofthetextviabull’s- eyegraphicswereveryattentiongrabbingandclear. Thereportwaswell-structuredandwellsignposted

Leicestershire –numericpointsandtrendswereillustratedwithgraphs,makingitsimplertoseethepointsbeingmade.Thestructurewaseasytonavigate.Theappendixwasgoodforquickreferenceasthesedocumentsareverylong.Thetargetsandhowthey aretobemeasuredwerefullydefined

Nottinghamshire –thisgaveaninformativebreakdownofthePCC’svisionandabreakdownofactionstosupportthisandwhowouldcarrythemout.Itgavearationaleforeachtarget


PREVENTINGCRIME

SUPPORTINGVICTIMS

ANTI-SOCIALBEHAVIOUR

PROTECTINGFROMHARM

WORKFORCEISSUES

63% 51% 41% 39% 39%

PERCENTAGE OF PLANS THAT HOLD THAT PRIORITY

Police and crime plan themesEach PCC approaches their role differently and their objectives and priorities will reflect local priorities. The top five priorities in police and crime plans are shown below. These emphasise the changing role of the police in general. Preventing crime and protecting the vulnerable are complex social issues that are not always associated with the traditional view of the police’s role. These objectives cannot be delivered by the police alone. Instead, they require co-operation and co-ordination of the constabulary, local authorities, NHS bodies and the communities and neighbourhoods involved.

Partnership working is seen as important to most if not all police areas; 17% of PCCs place it as a specific priority in their plans. PCCs have specific powers and responsibilities in relation to crime prevention and reduction and have the power to award grants to deliver this aspect of their role. This gives them a unique ability to act as the focal point for partnership working in local areas. Given the relative infancy of their role, they can also act as catalysts for change where existing arrangements may not yet be delivering as effectively and as efficiently as they could.

The majority of police and crime plans include some target-based measures of performance with only eight out of 42 plans having no defined targets. Where targets were present, there was usually a balance of quantitative and qualitative targets. Only one PCC had purely quantitative targets and two had purely qualitative ones.

There is much debate about the role of targets in policing and the wider public sector. While some might consider targets to be crude, they can provide an objective means for performance to be measured and agreed. Given the potential tensions that could exist between PCCs, chief constables and other stakeholders, targets can establish transparency about what has and has not been achieved. However, effective corporate governance is essential in establishing and maintaining organisational cultures which are robust enough to resist the negative behaviours that may emerge in the desire to meet targets.

PCCs and chief constables need to play a key role in setting and managing the delivery of their objectives. They need to encourage their organisations to view targets rationally and be open to thinking outside the set framework of responses. Reporting of performance against targets needs to be undertaken with an understanding of the wider environment and context. Qualitative assessment of outcomes achieved is as important as quantitative assessment of targets met. Put simply, meeting a target of reducing crime may, in reality, be due to an increased reluctance on the part of victims to report said crime. This may, in turn, be driven by a reduction in confidence in the police. These wider contexts are essential in understanding true performance.

Many PCCs have either refreshed, or are planning to refresh, their police and crime plans as part of the annual business planning and budget setting process. While there is no requirement to update the plans annually, we think doing so represents best practice and encourage other PCCs to consider this approach.

Top five police and crime plan priorities


Annual reportsAll 42 PCCs published an annual report in 2013, meeting this key requirement of their responsibilities.

Three quarters of our survey respondents were positive about the role that annual reports play in promoting local accountability. However, this means that a quarter of respondents do not feel that annual reports add to local accountability. Given that an annual report should be a public record of what has been achieved over a period, it is disappointing that such a large proportion of respondents question their value.

PCCs were in a difficult position in 2012/13, having only four months’ activity to report. However 27 out of the 42 annual reports included progress made in delivering the police and crime plans.

Some of the more thoughtful approaches used performance data from the prior, local police plan to inform areas of focus for a revised police and crime plan. These also disclosed actions to achieve the police and crime plan objectives.

Many reports discussed office structure, complaints against the PCC and collaboration activities. Future plans and activities were not commonly discussed in detail, but were at least referred to in 32 of the reports.

Very few of the reports were badly constructed or hard to read. They usually followed a booklet structure but one annual report was presented as a single page summary of what the PCC had done in their first four months in office. From reading all of the reports, it is clear that PCCs struggled to find a balance between the breadth of scope and a deep enough analysis of decisions made by the PCC during the year. A common solution to this was to signpost where further information could be found, an indication that the transparency agenda is having a useful impact.

Annual finances and budgetary outcomes were a feature in 29 of the 42 reports. While many disclosed the precept percentage for 2013/14, this was not always accompanied by any disclosure of the budgetary and financial outcomes for 2012/13. Overall, reporting of financial performance in annual reports could be enhanced.



19 6

4728

Some of the more thoughtful approaches used

performance data from the prior, local police plan to inform areas of focus

for a revised police and crime plan.

Annual reports are a good way to promote local accountability (%)


Our ‘2014 Local government governance review’ provides examples of local authorities who have ‘decluttered’ their financial statements, making them more user friendly and understandable to the public. Police bodies have yet to embrace the ‘decluttering’ agenda. While more user friendly financial statements should be the ambition for the sector, annual reports represent an opportunity to provide financial information to the wider public which should not be missed.

EXAMPLES OF GOOD ANNUAL REPORTS

Avon and Somerset included a gooddiscussionofwhatactionsthe commissioner had taken already against the priorities in thepoliceandcrimeplan.

Lincolnshire had a good balanceofbackwardandforwardlookinginformationinthereport.

Boththesewerewelllaidoutandalsohadlinkedtexttofurtherdocumentation on medium term financialplans,budgets,policeandcrimeplan.

Financial statements

Police accountingThe introduction of PCCs created a unique accounting challenge in 2012/13. The PRSRA created two separate legal entities from the former police authority. Under stage one of the legislation, all contracts, assets and liabilities transferred from the police authority to the PCC. Accounting standards require that financial statements present the substance of transactions, rather than their legal form. CIPFA issued guidance9

to the sector which set out some of the considerations that practitioners needed to take into account in reaching judgments about who had the control (in accounting terms) over assets, liabilities, income and expenditure. This included a checklist to support the sector in making and documenting these considerations.

In practice, these considerations are complex and the exercise in 2013/13 was made more difficult because finance officers were trying to make judgments on governance and accountability arrangements whose details were still developing. It was also complicated by the fact that the statutory override, which allowed PCCs to offset the impact on the police fund of certain notional costs, did not apply to chief constables.

This led to an array of different accounting treatments being adopted in 2012/13, particularly in accounting for employee costs. In some areas,

9 LAAPBulletin95–CIPFApolicepanel–practitionerbriefingnoteonassetandliability(includingemployment)recognitioninpoliceandcrimecommissionerandchiefconstableaccounts,March2013


1931

2822

Local authority and police financial statements are generally considered to be too long and not readily accessible to a lay reader. In the police, this situation has been exacerbated by the need to produce separate financial statements for the PCC and the chief constable. Respondents to our survey were split about the impact that this has had on transparency for users. Fifty per cent agreed and 50% disagreed that this requirement has improved transparency about how financial resources are consumed by each body.

I believe the requirement to produce financial statements separately for the PCC and for the chief constable improves the transparency for users of the accounts on how financial resources are consumed by each body (%)



out of an overarching principal and agent relationship, should assist the sector in arriving at more consistent accounting in 2013/14.

As well as guidance from CIPFA, there are a number of other emerging issues that will shape the future of accounting for police bodies. Stage two transfers will formalise the governance and accountability arrangements for local areas, in many cases allowing the legal form to catch up with the substance of arrangements already in place. In addition, chief constables have been given the statutory override which was unavailable to them in 2012/13. Police accounting will continue to develop in line with other aspects of the sector.

employee costs and liabilities were recognised in the chief constable’s financial statements. However, other areas took the view that the chief constable was exercising no control whatsoever and instead was acting only as an agent of the PCC. The bodies that adopted this approach produced accounts that contained zeros throughout the primary statements. Our analysis of final published financial statements for police bodies showed that of the 42 police areas in England and Wales:

• 23areasrecognisedincomeandexpenditureinthefinancial statements of the chief constable

• 19areastreatedthechiefconstableasanagentofthePCCand produced chief constable financial statements with zeros throughout

• sixofthesemadeanexplicitreferencetothechiefconstable acting as an agent of the PCC but almost all included some discussion of why they had adopted this approach

• 19ofthe23alsoaccountedforsomeassetsorliabilities in the chief constable’s balance sheet.

Some variation in financial accounting may be expected as a result of local circumstances and interpretation of accounting standards. However, this cannot explain the wide national variation in accounting treatment and presentation. This does not aid transparency nor provision of meaningful information for parties seeking to compare performance between chief constables.

In local authority accounting panel (LAAP) Bulletin 98A, CIPFA reiterated its earlier guidance on police financial statements (contained in LAAP Bulletin 95) that police bodies should be making assessments of control so that items of expenditure are shown in the individual accounts of both the PCC and the chief constable. It further stated, “the existence of distinct responsibilities under statute relating individually to the PCC and chief constable that cannot be delegated mean that a single overarching principal and agent relationship between the PCC and the chief constable cannot exist”. This clarification of existing guidance, and the ruling

THE MET LEADS THE WAY

TheMetropolitanPoliceunderwentthetransitiontoMayor’sOfficeforPolicingandCrime(MOPAC)andCommissionerofPoliceoftheMetropolis(CPM)in2011/12.Its2011/12accountsfollowedanassessmentofcontroloveritstotalexpenditure,withtherelevantitemsofexpenditurebeingshownineithertheMOPACortheCPMaccounts.TheCPMfinancialstatementscontainedanOperatingCostStatement,butthebalancesheetdidnotrecordanyentries.

TheMetropolitanPolice’sthinkinghasalwaysfocusedonanassessmentofcontrol.Theycontinuedtodeveloptheiraccountingtreatmentinlightofnewguidanceandin2012/13theCPMaccountsshowedaComprehensiveIncomeandExpenditureStatementandapensionliability inthebalancesheet.


CASE STUDIES FROM 2012/13

Surreybeganthenewaccountingprocessearly.Itmadeaconcertedefforttoreflectthenewgovernancestructuresinlinewithaccountingstandards.Thisabilityanddrivetoadapt to a changing environment ensured that the accounts accuratelyreflectedthesubstanceoftransactionsratherthanthelegalform.

Merseysideproducedasetofaccountsthatclearlyandinnovativelysetoutthebasisofthekeyjudgmentstheyhadmadeinarrivingattheiraccountingframework.

Greater Manchester producedaverytransparentsetofaccounts.Itwaslaidoutwellandwritteninplainlanguagewithtechnicaljargonreducedtoaminimum.

Cumbriahasmadeitsaccountsaccessibletoawideaudience,astheyareavailableindifferentlanguages,largeprint,Brailleandaudio.CumbriaalsomadeaconcertedefforttoadapttothechangesandensuretheiraccountsreflectedthesubstanceofthearrangementsinplacebetweenthePCCandchiefconstable.

Explanatory forewords and annual governance statementsExplanatory forewords and annual governance statements (AGS) provide a valuable opportunity for police bodies to present information in an engaging, jargon-free way. In 2012/13, they also provided police bodies with a means of explaining the impact of the transition to PCCs during the financial year. Over 70% of respondents to our survey agreed that the explanatory foreword and AGS help the public to understand the organisation’s financial and risk management. This suggests that the sector understands the value explanatory forewords and AGSs can add to the public’s understanding of key aspects of governance and financial performance.

As part of our ‘2014 local government governance review’ we evaluated 150 explanatory forewords and AGSs against a range of indicators for quality and compliance with requirements. This analysis, which included police bodies, indicates that the majority are only just achieving minimum requirements. The sector is not yet making the most of these opportunities to present user friendly financial information and demonstrate the strength of their governance arrangements. There remain opportunities to enhance the impact of these documents to maximise the opportunities afforded to engage with the public and make this key information transparent and accessible.


Grant Thornton UK LLP is a leading business and financial adviser with client-facing offices in 25 locations nationwide. While we understand regional differences and can respond to needs of local authorities, our clients can also have confidence that our team of local government specialists is part of a firm led by over 185 partners and employing more than 4,200 professionals, providing personalised audit, tax and specialist advisory services to over 40,000 clients.

Grant Thornton has a well established market in the public sector, and has been working with local authorities for over 30 years. We are the largest employer of CIPFA members and students and our national team of experienced public sector specialists provide the growing range of assurance, tax and advisory services that our clients require.

We are the leading firm in the public sector audit market. This includes working with 14 police areas; representing 37% of this specialist sector. This depth of experience ensures that our solutions are grounded in reality and draw on best practice. Through proactive, client-focused relationships, our teams deliver solutions in a distinctive and personal way, not pre-packaged products and services.

Alongside our work in the police sector, we are the largest supplier of audit and related services to the Audit Commission, and count 40% of local authorities in England as external audit clients. We also audit local authorities in Wales and Scotland via framework contracts with Audit

Scotland and the Wales Audit Office. We have over 180 local government and related body audit clients in the UK and over 75 local authority advisory clients. This includes London boroughs, county councils, district councils, city councils, unitary councils and metropolitan authorities, as well as fire and rescue authorities. Across the NHS, our national practice clients comprise 18 foundation trusts, 49 trusts and 79 clinical commissioning groups.

We take an active role in influencing and interpreting policy developments affecting local government and responding to Government consultation documents and their agencies. We regularly produce sector-related thought leadership reports, typically based on national studies, and client briefings on key issues. We also run seminars and events to share our thinking on local government and, more importantly, understand the challenges and issues facing our clients.

About us

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‘GrantThornton’meansGrantThorntonUKLLP,alimitedliabilitypartnership.

GrantThorntonisamemberfirmofGrantThorntonInternationalLtd(GrantThorntonInternational).Referencesto‘GrantThornton’aretothebrandunderwhichtheGrantThorntonmemberfirmsoperateandrefertooneormorememberfirms,asthecontextrequires.GrantThorntonInternationalandthememberfirmsarenotaworldwidepartnership.Servicesaredeliveredindependentlybymemberfirms,whicharenotresponsiblefortheservicesoractivitiesofoneanother.GrantThorntonInternationaldoesnotprovideservicestoclients.

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Contact us

Head of PolicePaul GradyT 020 7728 [email protected]

Deputy Head of PoliceIain MurrayT 020 7728 [email protected]

For further information on any of the issues explored in this report, please contact:

London, South East & AngliaPaul GradyDirectorT 020 7728 [email protected]

NorthMick WaiteDirectorT 0161 234 [email protected]

South WestLiz [email protected]

WalesBarrie [email protected]

MidlandsJohn [email protected]

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