Finance & Business Planning
Activity Based Costing
Activity Based Costing (ABC) is a widely used costing system that seeks to place an accurate cost on what an organisation produces.
In policing, the ABC model has been developed to calculate the costs of policing activities – thus enabling managers to continuously improve policing services.
ABC is essentially a local management tool that focuses on the Basic Command Unit (BCU) and looks at the total cost of policing a given geographical area. It includes all policing services delivered by BCU staff, as well as contributions from headquarters operational or organisational support units.
This enables comparisons to be made over time across police forces and between BCUs, and provides managers with a suite of information on Best Value processes.
Benefits of ABC
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enables BCU Commanders to make better use of their resources
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enables Police Authorities and forces to identify how resources are being used and to make efficiency improvements, where necessary
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empowers police forces to justify additional resources by presenting their current resource usage accurately and transparently
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increases accountability and identifies gaps between resource usage and priorities – thus allowing better comparison between forces
For more, see ‘Benefits of ABC’ in the manual of guidance
Why it’s needed
As a key component of the Policing Performance Assessment Framework, ABC enables accurate comparison between police forces, and is key in identifying good practice and providing central assistance to weaker forces.
As of 2003-04, ABC is a mandatory requirement of the National Policing Plan.
Forces must submit ABC data to the Home Office once a year in accordance with the policing manual of guidance.
ABC manual of guidance
The ABC manual of guidance provides comprehensive guidance on the requirements and recommendations of the revised policing ABC model and facilitates the production of useful ABC data in each force.
