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Financial Management
4.1 General issues surrounding the funding arrangements for the Scottish Crime Squad have been addressed earlier in the report. This section will look at the financial management of the Squad in more detail. The Scottish Crime Squad Commander has considerable financial delegation from the Scottish Executive with regard to the management of the budget, and day to day monitoring is undertaken by the office manager. There is little scope for further budget devolvement although the syndicate detective inspectors are responsible for managing an allocation of overtime.
Invoicing
4.2 The Scottish Crime Squad experienced problems in the past with the late invoicing from forces for recoverable expenses and this formed the basis of the 1996 Inspection Report Recommendation that a "review be undertaken of the current invoicing arrangements of forces to provide more consistent financial information to the Squad in order to enhance the budgetary monitoring process". The flow of information has improved, however 3 forces still submit quarterly invoices, with the other 5 providing more informative monthly information. A revised payment schedule has also allowed the Scottish Crime Squad to provide the Scottish Executive with more accurate budgetary information.
Budget
4.3 1995 saw the emergence of greater budgetary control for Chief Constables and the abandonment of force establishment figures being set by the Secretary of State. However this would not seem to apply to the Scottish Crime Squad and the collaboration agreement clearly states that before fixing the establishment in any given year, the Common Police Services Committee will require the approval of the Secretary of State (First Minister). However, as in every other police organisation the great majority of expenditure is on staff pay, the budget will always exercise a constraint over the number of persons within the organisation. Despite the current Scottish Crime Squad establishment being set at 101 police officers, the Squad are permanently running some 5 or 6 officers short as they find "gapping" of appointments the only way to manage within budget. There is no provision for overspends which would be (and have been) deducted from the following year's budget. The budget estimates are currently submitted about 14 months before the commencement of the financial year to which they will apply to enable them to go through the various committee structures. As they are submitted at the then current pay rates, no account is taken of any possible inflation factor, so that any increase in budgetary provision can easily be swallowed up in staff cost pay rises. The allocated budget for 1999/2000 has been set at £6,339,000 which is 0.7% above that for 1998/99. This includes both capital and revenue expenditure and when looked at in more detail the revenue budget for 1999/2000 is 2.2% higher than the previous year. However given that over 88% of expenditure will be on staff costs, there is still little capacity to accommodate inflation let alone expand. It can be understood therefore why Scottish Crime Squad management have had to resort to gapping to manage the budget and why for yet another year there is little likelihood, without cutbacks in other areas, of the employment of the additional two approved field intelligence officer posts within the SCIO. While acknowledging the increase in support staff in non operational roles, it is also noted that there has been no increase in police strength over the same period. The actual police officer strength at 31 March 1999 stood at 94, the same as it was 7 years earlier in 1992.
The chart below shows the police and support staff strength of the Scottish Crime Squad over the last 10 years.
Figure 7: Police and support staff strength of Scottish Crime Squad
The following table shows the budget for the Squad for the last 5 years, indicating capital and revenue expenditure. The figures in brackets denote the percentage variation from the preceding year.
Figure 8: Scottish Crime Squad Annual Budget
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Total Budget |
Revenue |
Capital |
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1995/96 |
£5,960,000 |
£5,747,000 |
£213,000 |
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1996/97 |
£6,130,000 (+2.8%) |
£5,790,000 (+0.7%) |
£340,000 (+60%) |
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1997/98 |
£6,253,000 (+2%) |
£5,831,000 (+0.7%) |
£422,000 (+24%) |
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1998/99 |
£6,296,000 (+0.7%) |
£5,874,000 (+0.7%) |
£422,000 (-) |
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1999/2000 |
£6,339,000 (+0.7%) |
£6,002,000 (+2.2%) |
£337,000 (-20%) |
Value for Money
4.5 Scottish Crime Squad management are alive to the opportunities for efficiency savings and since the last inspection have put a number of measures into place. These include:
HMIC does not wish to dampen the evident enthusiasm of the squad management to improve value for money in contractual arrangements. However, when the process used was examined it revealed potential difficulties arising from the familiar problem that the squad does not have a formalised legal existence. Accordingly there is no book of rules through which tendering and procurement can take place, nor can the Squad legitimately enter into contracts in its own right. This would seem to leave individuals unacceptably exposed if things go wrong. In the longer term this could be addressed by constituting the squad as a legal body, and this possibility may be considered as part of the wider review of Scottish policing referred to earlier in the Report. In the meantime the use of a lead authority should be considered.
Administration Charges
4.6 The issue of the administration charge, levied by Strathclyde and Lothian and Borders Police, was raised during the 1996 inspection of the Scottish Crime Squad, and is still a matter of continuing discussion. Strathclyde Police act as 'bankers' for the Squad, receiving the quarterly Scottish Executive grant and paying out bills on behalf of the Squad. The majority of the money paid back out relates to reimbursement of the salaries of seconded officers. Strathclyde Police inherited this function on the disaggregation of Strathclyde Regional Council in 1996 and have continued the arrangements along similar lines. However there is no service level agreement setting out the services provided, their extent or individual cost.
4.7 Some of the services provided by Strathclyde Police relate solely to the banking service that they supply to the Squad. These include provision of regular financial advice, preparation of annual audited accounts, processing of invoices etc. Others relate to services which are available for the Squad to call upon such as the availability of an audit department, assistance with IT and printing facilities, availability of legal assistance and an annual data protection audit. The remaining services are those provided in respect of Strathclyde Police officers seconded to the Scottish Crime Squad, such as payroll, advertising of Scottish Crime Squad vacancies within force, personnel and career development functions. Strathclyde Police charge a 4.4% administration charge in relation to all the above services. This is calculated not as an exact amount of what it costs to provide the services but on the basis that such services, provided in force, represent some 4.4% of the Strathclyde Police budget. Strathclyde Police do not levy any similar personnel or payroll charge in relation to officers seconded to central service at the Scottish Police College.
4.8 Lothian and Borders Police currently charge the Scottish Crime Squad a flat rate annual administration charge of approximately £23,000, which is nearly double the 1995/96 figure. In seeking clarification from the force prior to HMIC's inspection, the Squad were advised that it covered overheads in relation to the occupation of the premises at Lothian and Borders Police Headquarters. HMIC have established that the costs are broken down as:
4.9 None of the other forces charge the Scottish Crime Squad any administration charge, although payment is made for rent of accommodation within Stonehaven and Dunfermline offices.
4.10 HMIC does not wish to get into a debate about whether the sums of money being charged are appropriate and must stress that the Scottish Crime Squad are very happy with the level of services provided. However HMIC considers that there should be a nationally agreed standard as to what constitutes a legitimate charge, and that there should be service level agreements between the provider of services and the Scottish Crime Squad as the customer. These should lay out the type and extent of service provided together with how any charge is arrived at. Without this, it is not possible to tell whether the principles of best value are being met, nor will it be possible to fully project the financial implications in any change to the size or structure of the Squad. HMIC are, however, encouraged to learn that Lothian and Borders plan to implement Service Level Agreements on 1 April 2000. HMIC look forward to reviewing this at the next inspection.
Accommodation
4.11 The Scottish Crime Squad took occupancy of its new Headquarters and Branch Office at Osprey House, Paisley in November 1996. The purpose built accommodation provides an excellent working environment for the Squad and SCIO but the same unfortunately cannot be said of the accommodation for the Edinburgh branch. This comprises a small suite of rooms within the headquarter's building of Lothian and Borders police, and has been the subject of repeated comment by HMIC in respect of its inadequacy. The cramped working conditions do not assist in maintaining structured working and the confidentiality of information, and there is little privacy available for personnel issues to be discussed. There are no facilities for officers to change clothing and limited locker space has been sacrificed to provide much needed storage for operational equipment. The decision to locate the next two Northern Constabulary officers to be seconded to Stonehaven instead of the Edinburgh branch, has been heavily influenced by the shortage of accommodation in Edinburgh and the recent acquisition of additional office space at Stonehaven. While this move alleviates the accommodation problem it nevertheless constitutes a shift of Scottish Crime Squad resources away from the capital city.
4.12 HMIC are encouraged to learn that recent negotiations between the Scottish Crime Squad and Lothian and Borders Police offer the prospect of an increase of 50% in accommodation. The issue of accommodation and consequent location of Scottish Crime Squad officers is integral to the function of the Squad. However much strategic direction may be given by the centre, location of syndicates will always have a bearing on the activity they carry out. It cannot help but be influenced by ease of access to partners, targets, main routes of travel etc, all of which determine the feasibility and cost of operations. Scottish Crime Squad management are very aware of this and HMIC are confident that due consideration will be given to the strategic element in the location of any future offices. HMIC are not, however, in a position to judge whether the increased accommodation proposed addresses the issues outlined in the inspection. Thought has obviously been given to issues arising from ministerial consideration of whether the Scottish Crime Squad might be increased in size and there has been some examination of where additional personnel would appropriately be located. HMIC recognises that nothing final has yet been decided but would urge that any review of the size of the Scottish Crime Squad must first seek to determine its future role and then endeavour to seek to provide a structure which enables that role to be effectively delivered. In particular HMIC would encourage consideration of the outcomes the Squad is intended to achieve rather than inputs in the form of numbers of staff. Satisfactory outcomes may be achieved by a combination of a range of inputs including intelligence, technology, training and personnel.
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