Agenda and minutes

of the previous meeting held on 14 December 2018 attached.

RESOLVED that the Minutes of the meeting held on 14 December 2018 be signed as a correct record.

The Chair of the Committee, Councillor Bown, to MOVE the Minutes of the meeting held on 10 December 2018, attached.

RECOMMENDATIONS

                    (i)        That the recommendation at Minute HRMDC/16 (Localism Act – Pay Policy Statement 2019-20) be considered in conjunction with agenda item 14 below; and

                   (ii)        That, subject to (i) above, the Minutes be adopted in accordance with Standing Orders.

The Vice-Chair of the Committee, Councillor Vijeh, MOVED the Minutes of the Committee meeting held on 10 December 2018 which had considered, amongst other things:

·         a report on absence management;

·         a report on workforce culture, diversity and inclusion; and

·         a report on the proposed Pay Policy Statement for 2019-20

RESOLVED

(i).       that the recommendation at Minute HRMDC/16 (Localism Act – Pay Policy Statement 2019-20) be considered in conjunction with Minute DSFRA/43 below; and

(ii).      that, subject to (i) above, the Minutes be adopted in accordance with Standing Orders.

The Chair of the Committee, Councillor Healey, to MOVE the Minutes of the meeting held on 18 January 2019.

RECOMMENDATION that the Minutes be adopted in accordance with Standing Orders.

The Chair of the Committee, Councillor Healey, MOVED the Minutes of the Committee meeting held on 18 January 2019 which had considered, amongst other things:

·         an external audit progress report and sector update;

·         a report on the external audit plan for the year ended 31 March 2019;

·         a report on group accounts for the Authority and Red One Ltd;

·         a report on progress against the approved internal audit and review plan 2018-19; and

·         a report on corporate performance reporting.

RESOLVED that the Minutes be adopted in accordance with Standing Orders.

The Chair of the Committee, Councillor Coles, to MOVE the non-restricted Minutes of the budget meeting held on 7 February 2019.

RECOMMENDATIONS

      (i)             That the recommendation at Minute RC/18  (Financial Performance Report 2018-19:  Quarter 3) be approved;

     (ii)             That the recommendations at Minutes RC/19 (Capital Strategy), RC/20 (2019-20 Revenue Budget and Council Tax Levels), RC/21 (Capital Programme 2019-20 to 2021-22) and RC/22 (Treasury Management Strategy (including Prudential and Treasury Indicators) Report 2019-20) be considered in conjunction with agenda items 9 and 10(a) to (c), respectively, below;

    (iii)             That, subject to (i) and (ii) above, the Minutes be adopted in accordance with Standing Orders.

(SEE ALSO AGENDA ITEM 16 BELOW)

The Chair of the Committee, Councillor Coles, MOVED the Minutes of the Committee meeting held on 7 February 2019 which had considered, amongst other things:

·         a treasury management performance report for quarter three of the 2018-19 financial year;

·         a report on performance against approved budgets as at quarter three of the 2018-19 financial year;

·         a report on capital strategy;

·         a report on the proposed revenue budget and council tax levels for 2019-20;

·         a report on the proposed capital programme 2019-20 to 2021-22;

·         a report on the proposed Treasury Management Strategy (including prudential and treasury indicators) for 2019-20;

·         restricted Minutes of the Committee meeting held on 15 November 2018; and

·         a report on the financial performance of Red One Ltd. to quarter three of 2018-19.

RESOLVED

(i).       that the recommendation on budget transfers as set out at Minute RC/18(b) (Financial Performance Report 2018-19:  Quarter 3) be approved;

(ii).      that the recommendations at Minutes RC/19 (Capital Strategy), RC20 (2019-20 Revenue Budget and Council Tax levels), RC/21 (Capital Programme 2019-20 to 2021-22) and RC/22 (Treasury Management Strategy [including Prudential and Treasury Indicators] Report 2019-20) be considered in conjunction with Minutes DSFRA/38, DSFRA/39(a), DSFRA/39(b) and DSFRA/39(c), respectively, below; and

(iii).     that, subject to (i) and (ii) above, the Minutes be adopted in accordance with Standing Orders.

(SEE ALSO MINUTE DSFRA/45 BELOW)

Report of the Director of Finance (Treasurer) (DSFRA/19/1) attached.

The Authority considered a report of the Director of Finance (Treasurer) (DSFRA/19/1) to which was appended a Medium Term Financial Plan outlining funding, income and expenditure forecasts for the Authority for the next five financial years (to 2023-24), as required by the Fire & Rescue National Framework for England.

The Plan identified how the financial forecast was constructed (including funding sources and expenditure/cost forecasts) together with savings targets over the period covered and the Change & Improvement Programme (Safer Together) which would be the principal vehicle for delivering the savings.

RESOLVED that the Medium Term Financial Plan as appended to report DSFRA/19/1 be endorsed.

Report of the Director of Finance (Treasurer) (DSFRA/19/2) attached.

The Authority considered a report of the Director of Finance (Treasurer) (DSFRA/19/2) setting out a high-level view of how capital expenditure and the way it was financed contributed to the provision of services, as required by the 2017 Prudential Capital Code.  The Capital Strategy also provided an overview of how associated risk was managed, the implications for future financial stability and set out the governance process for approval and monitoring of capital expenditure.

The Capital Strategy had been considered by the Resources Committee at its meeting on 7 February 2019 which had resolved to commend it for endorsement by the Authority (Minute RC/19 refers).

RESOLVED that, as recommended by the Resources Committee, the Capital Strategy as detailed in report DSFRA/19/2 be endorsed.

Report of the Director of Finance (Treasurer) and Chief Fire Officer (DSFRA/19/3) attached.

The Authority considered a joint report of the Director of Finance (Treasurer) and Chief Fire Officer (DSFRA/19/3) on the proposed revenue budget and associated Council Tax levels for 2019-20.

A provisional local government settlement for 2019-20 of £21.961m had been announced on 13 December 2018, the last year of the four-year grant settlement accepted by the Authority. The Settlement Funding Assessment represented a reduction for 2019-20 of 2.91% over 2018-19 and an overall reduction of 25.34% by when compared to the settlement for 2015-16. 

The government had also announced a threshold of 3% for Council Tax increases for the 2019-20, beyond which local authorities would be required to hold a referendum.  The proposed budget contained provision for a 2% pay award for all staff.  Each 1% pay award equated, for this Authority, to a cost of £0.540m which was greater than the income that an additional 1% Council Tax increase would generate (£0.510m). The report also identified, however, the view of the Director of Finance (Treasurer) that, in light of an indicative cost of £2.3m to hold a referendum, consideration of a Council Tax increase in excess of 3% was not a viable option for this Authority.

A core spending requirement of £77.482m (representing a 4.89% [£3.611m] increase over the 2018-19 budget) for 2019-20 had been identified and, in light of the referendum threshold, two associated Council Tax options were proposed:

Option A – freeze Council Tax at the 2018-19 level (£84.01 for a Band D

property); and

Option B – increase Council Tax by 2.99% above the 2018-19 level (£86.52

for a Band D property) – an increase of £2.51pa (21p a month).

The report identified savings of £2.340m to be delivered in 2019-20 which would be sufficient to balance the budget should Option B be approved.  Should Option A (Council Tax freeze) be approved, however, then an additional £1.525m savings would be required to balance the budget.  It was proposed that this be met by reducing the revenue contribution to capital.  In the event that Option B was approved (2.99% Council Tax increase), then it was proposed that the revenue contribution to capital be increased to £2.614m, of which £0.300m would be earmarked contribution from Red One Ltd.  This would be in line with the Authority’s strategy to reduce reliance on borrowing to fund investment in asset infrastructure.

While a balanced budget (inclusive of savings) for 2019-20 was proposed, the report also identified that the Medium Term Financial Plan indicated that additional savings would be required beyond 2019-20 to plan for a balanced budget.  These savings ranged from, cumulatively, £7.3m by 2022-23 (assuming a 2.99% Council Tax increase for each financial year in question) to £12m (assuming a Council Tax freeze).

As required by the Local Government Finance Act 1992, non-domestic rate payers had been consulted on the proposals for Council Tax levels. Additionally, public consultation had also taken place. The consultation had been conducted by telephone surveys and by using social media. The results of the  ...  view the full minutes text for item DSFRA/39a

Report of the Director of Finance (Treasurer) (DSFRA/19/4) attached.

The Authority considered a report of the Director of Finance (Treasurer) (DSFRA/19/2) on the proposed three year capital programme 2019-20 to 2021-22.  In constructing the programme, considerable effort had been made to ensure that the impact of borrowing was maintained below the 5% ratio of financing costs to the net revenue stream – one of several Prudential Indicators previously agreed by the Authority.  Additionally, while the Authority had a strategy seeking to reduce reliance on external borrowing, the proposed Capital Programme 2019-20 to 2021-22 (and indicative Capital Programme 2022-23 to 2023-24) indicated that the Authority would need either to borrow up to £19m (for investment in assets to remain a current levels) or restrict the amount of funding available for the capital programme and task the Service with rationalising its capital requirement.

The report outlined the proposed budget for both estates and operational assets (vehicle replacement/equipment) for 2019-20 to 2021-22 (with associated prudential indicators) and indicative budgets for 2022-23 to 2023-24 (with associated indicative prudential indicators).

The draft programme had been considered at the meeting of the Resources Committee on 7 February 2019 which had resolved to commend it to the Authority for approval (Minute RC/21 refers).

RESOLVED that, as recommended by the Resources Committee:

(i).       the draft Capital Programme 2019-20 to 2021-22 and associated Prudential Indicators, as detailed in report DSFRA/19/4 and summarised in Appendices B and C respectively to these Minutes, be approved; and

(ii).      that, subject to (i) above, the forecast impact of the proposed Capital Programme from 2022-23 onwards on the 5% debt ratio Prudential Indicator, as indicated in the report, be noted.

(SEE ALSO MINUTE DSFRA/36(c) ABOVE)

Report of the Director of Finance (Treasurer) (DSFRA/19/5) attached.

The Authority considered a report of the Director of Finance (Treasurer) (DSFRA/19/5) setting out, amongst other things:

·           a treasury management and investment strategy for 2019-20, with associated indicators; and

·           a Minimum Revenue Provision statement for 2019-20.

The Local Government Act 2003 and supporting regulations required the Authority:

·           to ensure that its capital investment plans were affordable, prudent and sustainable; and

·           to establish a treasury management strategy setting out its policies for borrowing and managing its investments, giving priority to the security and liquidity of those investments.

In doing so, the Authority was required to “have regard to” the Prudential and Treasury Management Codes produced by the Chartered Institute for Public Finance Accountancy (CIPFA). The strategy and prudential indicators as set out in the report were compliant with the latest iterations of the CIPFA Codes.

The proposed Treasury Management Strategy, Annual Investment Strategy and Minimum Revenue Provision Statement for 2019-20 had been considered by the Resources Committee meeting held on 7 February 2019 which had resolved to recommend their approval to the Authority (Minute RC/22 refers).

At the conclusion of the debate on this item, the Members of the Authority asked that their appreciation for the work of the Director of Finance (Treasurer) and the finance team in producing the budget reports be placed on record.

RESOLVEDthat, as recommended by the Resources Committee:

(i).     the Treasury Management and Annual Investment Strategy for 2019-20 as detailed in report DSFRA/19/5 be approved;

(ii).     the Prudential Indicators and Treasury Management Indicators as detailed in the report and set out at Appendix C to these Minutes be approved; and

(iii).    the Minimum Revenue Provision (MRP) statement for 2019-20, as set out in the report and attached to these Minutes as Appendix D, be approved.

(SEE ALSO MINUTES DSFRA/36(c) AND DSFRA/39(b) ABOVE)

Report of the Director of Finance (Treasurer) (DSFRA/19/6) attached.

The Authority considered a report of the Director of Finance (Treasurer) (DSFRA/19/6) setting out a proposed response to the consultation from the Ministry of Housing, Communities and Local Government on its proposals to reform the Business Rates Retention Scheme.  The consultation and proposed response covered areas including a reset of baseline funding, establishment of a safety net and levy, tier splits and pooling, simplifying the system and reducing volatility and setting up the system.  The deadline for submission of responses was 21 February 2019.

RESOLVED that the proposed Consultation response as outlined in report DSFRA/19/6 be approved and submitted to the Ministry of Housing, Communities and Local Government.

Report of the Director of Finance (Treasurer) (DSFRA/19/7) attached.

The Authority considered a report of the Director of Finance (Treasurer) (DSFRA/19/7) setting out a proposed response to the technical consultation issued by the Ministry of Housing, Communities and Local Government seeking views on a review of local authorities’ relative needs and resources.  The consultation covered several topics relating to the review of the funding formulae, with proposed responses only to those areas of relevance to combined fire and rescue authorities.  The deadline for submission of responses was 21 February 2019.

RESOLVED that the proposed Consultation response as outlined in report DSFRA/19/7 be approved and submitted to the Ministry of Housing, Communities and Local Government.

Report of the Interim Chief Fire Officer and the Chief Fire Officer (DSFRA/19/8) attached.

The Authority considered a report of the Interim Chief Fire Officer and Chief Fire Officer (DSFRA/19/8) on a proposed revision to the Service Executive Board structure.  The report summarised previous reviews together with significant changes since the last of these (in 2017) prompting the current proposals.  These included:

·        The need to deliver the Change & Improvement Programme (Safer Together) to address changing community needs and a diminishing financial envelope, effectively matching resources to risk;

·        Associated with this, the need to ensure that the “people” strand of the programme was appropriately led, developed and implemented.

To address these issues, the report proposed, amongst other things:

·        the establishment of a Deputy Chief Fire Officer post with responsibility for implementation and delivery of Service plans along with the day-to day running of the Service in line with the agreed direction and vision.  This would afford the Chief Fire Officer time to progress important external factors and relationships of strategic importance to the Authority and which would shape the Service in the future;

·        the establishment of a Director of People and Organisational Development post to take the developmental lead on critical areas of change relating to the Safer Together “people” strand; and

·        the establishment of an Assistant Director (Deputy Assistant Chief Fire Officer) post to provide Principal Officer resilience and cover and support the Deputy Chief Fire Officer in the discharge of responsibilities linked to operational activities including attendance as required at the Strategic Co-ordinating Group (Multi-Agency Gold Command).

The report identified that a wider Service Delivery managerial review would result in minimum savings of £1.094m.  The investment in the revised senior management structure would not exceed £0.150m (including provision for any changes resulting from job evaluation).  Given this, the report proposed that £0.850m of the proposed savings in 2019-20 be allocated to bringing forward proposals to increase the level of front-line delivery activity identified in the Safer Together programme, thereby improving outcomes for communities.  The remaining £0.094m savings could be used as a revenue contribution to capital. 

Revised recommendations to report DSFRA/19/8 were circulated at the meeting.

RESOLVED that, as set out in the revise recommendations as circulated at the meeting:

(a).       that the Service Executive Board structure as set out at Appendix A to report DSFRA/19/8 be approved;

(b).       that, arising from (a) above:

(i)           the vacancy for the post of Deputy Chief Fire Officer be ring-fenced to the two existing substantive Assistant Chief Fire Officers, with the Chief Fire Officer’s Appraisals Panel delegated authority to determine the appointment and associated level of remuneration following the review referred to at paragraph 3.13 of report DSFRA/19/8;

(ii)          the vacancy for the post of Director of People and Organisational Development be advertised nationally, with the Chief Fire Officer’s Appraisals Panel delegated authority to determine the appointment;

(iii)        the temporary appointment to the post of Assistant Chief Fire Officer (Service Improvement), initially approved by the Authority at its meeting on 20 October 2017 (Minute DSFRA/33 refers), be continued pending the appointment and commencement of the Director  ...  view the full minutes text for item DSFRA/42

Report of the Director of Corporate Services (DSFRA/19/9) attached.

The Authority considered a report of the Director of Corporate Services (Clerk to the Authority) (DSFRA/19/9) to which was attached the proposed Pay Policy Statement to operate for the Authority for the forthcoming (2019-20) financial year. The Localism Act required such a statement, setting out the Authority’s policy towards a range of issues relating to the pay of its workforce (particularly senior staff and the lowest paid employees), to be approved prior to the commencement of each financial year and published, as a minimum, on the Authority’s website.

The report identified that the main difference between the proposed version and previous versions related to the application of nationally agreed cost of living pay awards and a minor revision to the controls on the re-employment of employees who had retired, reflecting the provisions of the latest iteration of the Fire and Rescue National Framework for England published by the Home Office in May 2018.

The proposed Pay Policy Statement for 2019-20 had been considered by the Human Resources Management & Development Committee meeting on 10 December 2018 which had resolved to recommend its approval to the Authority (Minute HRMDC/16 refers).

It was noted that a revised Pay Policy Statement would be required to reflect changes to the Service Executive Board structure approved earlier by the Authority (Minute DSFRA/42 refers).  This would be submitted to a future meeting of the Authority for approval.

RESOLVEDthat, in accordance with the recommendation of the Human Resources Management & Development Committee, the Pay Policy Statement to operate for the 2019-20 financial year, as appended to report DSFRA/19/9, be approved.

(SEE ALSO MINUTES DSFRA/36(a) AND DSFRA/42 ABOVE).

RECOMMENDATION that, in accordance with Section 100A(4) of the Local Government Act 1972, the press and public 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 Paragraph 3 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.

RESOLVED that, in accordance with Section 100A(4) of the Local Government Act 1972, the press and public be excluded from the meeting for the following item of business on the grounds that it involves 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.

The Chair of the Committee, Councillor Coles, to MOVE the Restricted Minutes of the meeting of the Resources Committee held on 7 February 2019 (TO FOLLOW).

RECOMMENDATION that the Restricted Minutes be adopted in accordance with Standing Orders.

(An item taken in accordance with Section 100A(4) of the Local Government Act 1972 during which the press and public were excluded from the meeting).

(Councillors Saywell and Thomas each declared a personal, non-pecuniary interest in this matter by virtue of their being non-executive directors appointed by the Authority to the Board of Red One Ltd.  Neither Councillor took any part in the discussion and decision on this item).

The Chair of the Committee, Councillor Coles, MOVED the Restricted Minutes of the meeting of the Resources Committee held on 7 February 2019.  The restricted Minutes dealt with Red One Ltd. Financial Performance as at Quarter 3 of the current (2018-19) financial year.

RESOLVED that the Minutes be adopted in accordance with Standing Orders.

APPENDIX A TO THE MINUTES OF THE DEVON & SOMERSET FIRE & RESCUE AUTHORITY (BUDGET) MEETING 19 FEBRUARY 2019

STATEMENT OF THE ROBUSTNESS OF THE BUDGET ESTIMATES AND THE ADEQUACY OF THE DEVON AND SOMERSET FIRE AND RESCUE AUTHORITY LEVELS OF RESERVES

It is a legal requirement under Section 25 of the Local Government Act 2003 that the person appointed as the ‘Chief Finance Officer’ to the Authority reports on the robustness of the budget estimates and the adequacy of the level of reserves. The Act requires the Authority to have regard to the report in making its decisions.

THE ROBUSTNESS OF THE 2019-20 BUDGET

The net revenue budget requirement for 2019-20 has been assessed as £75.227m (Option B in report). In arriving at this figure a detailed assessment has been made of the risks associated with each of the budget headings and the adequacy in terms of supporting the goals and objectives of the authority as included in the Integrated Risk Management Plan and the Fire and Rescue Plan. It should be emphasised that these assessments are being made for a period up to the 31^st March 2020, in which time external factors, which are outside of the control of the authority, may arise which will cause additional expenditure to be incurred. The most significant example of this is the increase in employers pension costs following the GAD Valuation and the unknown funding shortfall as a result. For example, the majority of retained pay costs are dependent on the number of call outs during the year, which can be subject to volatility dependent on spate weather conditions. Other budgets, such as fuel are affected by market forces that often lead to fluctuations in price that are difficult to predict. Details of those budget heads that are most at risk from these uncertainties are included in Table 1 overleaf, along with details of the action taken to mitigate each of these identified risks.

Local government and the fire sector are entering a period of significant uncertainty over funding and cost pressures going forward. It is possible that further cuts of 5% in real terms may be made to fire funding which when combined with changes to the Business Rates Retention scheme and the Relative Needs Assessment Reviews could  ...  view the full minutes text for item DSFRA/45