Updates

The Board approved the 2024-25 annual budget on 21 March 2024 which set out the spending plans for Police Scotland, Forensic Services and SPA Corporate regarding revenue, capital, and reform for the coming financial year.

The Authority received a core revenue funding increase of £75.7m (5.6%), £18.4m of which was required to meet the additional cost of the 2023-24 pay award. An additional £3.2m of revenue funding has been awarded in-year and this has been reflected in the revised budget.

The budget allocation for 2024-25 includes a core budget for a maximum of 16,600 officers (plus externally funded additionality e.g. Local Authorities) and police staff at 2023-24 budgeted levels.

A change in the employer pension contribution rates payable has resulted in a short-term benefit for the organisation. This has been used to fund VR/VER exit packages and additional pay costs.

FURTHER DETAIL ON THE REPORT TOPIC

Capital funding of £66.1m (including capital receipts and IFRS 16 adjustments) was allocated in the original 2024-25 budget, representing an uplift of £11.7m (22.1%). An additional £7.0m of IFRS16 capital funding has been allocated in-year to cover year-end accounting adjustments and £0.1m for a capital programme initiative.

Similar to previous years, £25.0m has been ring-fenced to support reform and transformation.

The report at Appendix A sets out the provisional net outturn for SPA/ Police Scotland for the year ended 31 March 2025. These figures are still subject to finalisation and external audit.

Revenue

• The provisional outturn position for the year ended 31 March 2025 shows core revenue net expenditure of £1,399.2m against total funding of £1,396.9m.
• This indicates an overspend of £2.3m, but when offset by an underspend in Revenue Reform of £2.5m, the overall net revenue position is an underspend of £0.2m which is broadly in line with the forecast breakeven position.
• Despite the breakeven position, there were some significant variances and financial challenges that had to be closely managed throughout the year.
• Police staff and officers’ numbers ran below budgeted establishment for the majority of the financial year creating an early underspend on the revenue budget. When coupled with a more efficient VRVER exercise, over-recovery of income and other one-off benefits, this allowed the Authority to fund additional pay award costs of £21m and additional revenue investment in 2024-25.
• Revenue investment bids totalling £13.1m were approved through the Revenue Investment Group to support modernisation of the workforce and police officer overtime, with
£6.4m of this expenditure incurred in FY 2024-25.

Capital
• The full year provisional outturn capital spend is £76.5m against funding of £76.5m, resulting in a break-even position.
• With only 55% of available funding spent by the end of quarter three, Capital Investment Group approved an overallocation of investment to be managed across financial years to mitigate the potential risk of slippage.
• These actions allowed effective management of capital position resulting in the Police Authority now delivering a balanced capital position in line with funding.

Reform
• The full year provisional outturn Revenue Reform spend is
£22.5m against funding of £25.0m.

• As part of the Quarter 3 forecast, Reform expenditure was reduced from £25.0m to £22.5m, with the balance of funding
£2.5m allocated to support pay award pressures.