Procurement: Police finance reserves guidance

This guidance has been issued to Police & Crime Commissioners by the Minister for Policing & the Fire Service, following engagement with the policing sector.

This sets out the Government’s expectations around the information to be published by Police & Crime Commissioners on their financial reserves strategies. The Government intends to include this guidance in the next version of the Financial Management Code of Practice (statutory guidance) to be placed before Parliament.

Guidance

Each PCC should publish their reserves strategy on their website, either as part of their medium term financial plan or in a separate reserves strategy document.

The reserves strategy should include details of current and future planned reserve levels, setting out a total amount of reserves and the amount of each specific reserve held for each year.

The reserves strategy should cover resource and capital reserves and provide information for the period of the medium term financial plan (and at least two years ahead).

Sufficient information should be provided to enable understanding of the purpose(s) for which each reserve is held and how holding each reserve supports the PCC’s medium term financial plan.

The strategy should be set out in a way that is clear and understandable for members of the public, and should include:

• how the level of the general reserve has been set
• justification for holding a general reserve larger than five percent of budget
• details of the activities or items to be funded from each earmarked reserve, and how these support the PCC and Chief Constable’s strategy to deliver a good quality service to the public. Where an earmarked reserve is intended to fund a number of projects or programmes (for example, a change or transformation reserve), details of each programme or project to be funded should be set out

The information on each reserve should make clear how much of the funding falls into the following three categories:

• Funding for planned expenditure on projects and programmes over the period of the current medium term financial plan.
• Funding for specific projects and programmes beyond the current planning period.
• As a general contingency or resource to meet other expenditure needs held in accordance with sound principles of good financial management (eg insurance).