Agenda and minutes

of the previous meeting held on 5 September 2018 attached.

RESOLVED that the Minutes of the meeting held on 5 September 2018 be signed as a correct record.

Report of the Director of Finance (Treasurer) (RC/18/17) attached.

The Committee received for information a report of the Director of Finance (Treasurer) (RC/18/17) that set out details of the treasury management performance for the second quarter of 2018-19 (to September 2018) as compared to the agreed targets for the year.

Adam Burleton, representing Link Asset Services – the Authority’s Treasury Management Adviser – was present at the meeting and gave an overview of the Service’s performance to date against the approved Treasury Management Strategy.  He made reference to the following points:

·         The first half of 2018/19 had seen UK economic growth post a modest performance at 1.5% with the interest rate remaining at 0.75% currently.  The quarterly inflation report forecast was that growth might rise to 1.8% in 2019 albeit with a caveat in terms of Brexit.  The Bank Base rate needed to be in the region of 1.5% by March 2021 for inflation to stay on track;

·         The bank base rate was currently 0.75% with a further rate rise forecast for the second half of 2019;

·         The Authority’s focus remained on security and liquidity of its assets over yield;

·         The Authority had outperformed the 3 month LIBID benchmark of 0.61% with a return of 0.86% in quarter 2 and investment interest of £0.043m; and

·         There had been no new borrowing in this quarter with none planned and current external borrowing reducing to £25.537m by the end of the financial year; and

·         the Authority had not breached its Prudential Indicators (affordability limits).

Report of the Director of Finance (Treasurer) (RC/18/18) attached.

The Committee considered a report of the Director of Finance (Treasurer) (RC/18/18) that set out the Service’s financial performance during the second quarter of 2018-19 against the targets agreed for the current financial year. The report provided a forecast of spending against the 2018-19 revenue budget with explanation of the major variations.

The Committee noted that it was forecast that spending would be £0.825m (1.12%) less than budget.  The Director of Finance (Treasurer) advised this was attributable largely to the savings on uniformed pay costs made as a result of the pay settlement for 2018-19 which was 2% instead of the 3% that had been included within the budget.

The Director of Finance (Treasurer) also explained the reasons behind the proposed budget transfers (£0.081m) as set out at Table 3 of the report.

Reference was made to the Community Infrastructure levy (CIL) and the Director of Corporate Services elaborated upon the utilisation of this within Devon & Somerset Fire & Rescue Service.  He undertook to submit a report to the Committee on this matter in due course.

RESOLVED

(a)        That the budget transfers shown in Table 3 of this report be approved;

(b)        That the monitoring position in relation to projected spending against            the 2018-19 revenue and capital budgets be noted;

(c)        That the performance against the 2018-19 financial targets be noted.

Presentation to be given at the meeting by the Director of Finance (Treasurer).  Slides attached FOR INFORMATION.

The Committee received for information a presentation given by the Director of Finance (Treasurer) in respect of the benchmarking survey that had been led by Devon & Somerset Fire & Rescue Service (DSRS) across the Fire Sector (for English Fire & Rescue Authorities {FRAs}) and which would be used to inform the submission to be made by the National Fire Chiefs Council (NFCC) for the next Spending Review.

The presentation covered the following areas:-

·         The level of total useable reserves held as compared with the revenue budget;

·         General fund reserves as compared with the revenue budget;

·         The reserves make up.

The Committee noted that the Service had a higher level of useable reserves held than the average for English FRAs, which was due largely to the strategy to invest in capital (58% of total reserves) as compared with the average (45%) and in Digital Transformation (16% of total reserves) compared with the average (2%).  The Committee commented that this reflected the Authority’s forward thinking strategy to invest in change that would help to secure a sustainable operating model.  The Committee also noted that the Authority’s total reserves was forecast to dip by 2022-23 in line with the national trend. 

It was further noted that the Authority’s General Fund reserve was 7.1% currently compared to the English FRA average of 8.75% and it was expected that this would remain fairly static (dipping to 6.8%) compared to the English FRA average which was forecasting a dip to about 5% by 2022-23.  It was noted that 5% was the CIPFA recommended level for General Fund reserves.  An assessment had been undertaken which indicated that the Authority’s reserves needed to meet potential financial risks should be £5.329m with the Authority’s General Fund reserves currently held being ££5.315m.

In terms of the make-up of reserves, the Authority was not dissimilar to the other FRAs although the notable variance was that the Authority had invested substantially in Digital Transformation (16%) compared with the other FRAs (2%).

Councillor Drean expressed thanks on behalf of the Committee for the excellent work that had been undertaken by the Director of Finance and her team on the reserves benchmarking survey.

RECOMMENDATION that, in accordance with Section 100A(4) of the Local Government Act 1972, the press and public (with the exception of Dr Sian George, Andrew Andreou and Lisa Compton – Red One Limited) be excluded from the meeting for the following items of business on the grounds that they involve the likely disclosure of exempt information as defined in the following Paragraph of  Part 1 of Schedule 12A (as amended) to the Act:

·         Paragraph 3 (information relating to the financial and business affairs of any particular person – including the authority holding that information);

RESOLVED that, in accordance with Section 100A(4) of the Local Government Act 1972, the press and public, with the exceptions of Dr Sian George and Lisa Compton [Red One Ltd.] and Councillors Saywell [Authority appointed Non-Executive Director on the Board of Red One Ltd] be excluded from the meeting for the following items of business on the grounds that they involved the likely disclosure of exempt information as defined in Paragraph 3 of  Part 1 of Schedule 12A (as amended) to the Act, namely information relating to the financial and business affairs of any particular person – including the authority holding that information.

Restricted Minutes of the meeting held on 5 September 2018 attached.

(An item taken in accordance with Section 100A(4) of the Local Government Act 1972, during which the press and public, with the exceptions of Dr Sian George and Lisa Compton [Red One Ltd.] and Councillor Saywell [Authority appointed Non-Executive Director on the Board of Red One Ltd], were excluded from the meeting).

(Councillor Saywell declared a personal interest in this matter but in accordance with the dispensation granted by the Authority at its Annual Meeting on 8 June 2018 – Minute DSFRA/5(a) refers – remained in the room for this item).

RESOLVED that the Restricted Minutes of the meeting held on 5 September 2018 be signed as a correct record.

Report of the Director of Finance (Treasurer) (RC/18/19) TO FOLLOW.

(An item taken in accordance with Section 100A(4) of the Local Government Act 1972, during which the press and public, with the exceptions of Dr Sian George and Lisa Compton [Red One Ltd.] and Councillor Saywell [Authority appointed Non-Executive Director on the Board of Red One Ltd], were excluded from the meeting.

(Councillor Saywell declared a personal interest in this matter but in accordance with the dispensation granted by the Authority at its Annual Meeting on 8 June 2018 – Minute DSFRA/5(a) refers – remained for the debate).

The Committee received for information a report of the Director of Finance (Treasurer) (RC/18/19) that gave an update on the current financial position in respect of Red One Ltd. for Quarter 2 of 2018-19.

Report of the Director of Finance (Treasurer) (RC/18/20) attached.

(An item taken in accordance with Section 100A(4) of the Local Government Act 1972, during which the press and public, with the exceptions of Dr Sian George and Lisa Compton [Red One Ltd.] and Councillor Saywell [Authority appointed Non-Executive Director on the Board of Red One Ltd], were excluded from the meeting.

(Councillor Saywell declared a personal interest in this matter but in accordance with the dispensation granted by the Authority at its Annual Meeting on 8 June 2018 – Minute DSFRA/5(a) refers – remained for the debate).

The Committee received for information a report of the Director of Finance (Treasurer) (RC/18/20) that set out details of the credit risk assessment.

(SEE ALSO MINUTE *RC/14 ABOVE).