Agenda item

Report of the Director of Finance, People and Estates (Treasurer) (RC/22/13) attached.

The Committee received for information a report of the Director of Finance, People & Estates (Treasurer) (RC/22/13) that provided the Committee with details of the first quarter performance (to June 2022) against the agreed financial targets for 2022-23.

The Director of Finance & Resourcing (Treasurer) advised that, at this stage in the financial year, it was projected that spending would be £1.259m more than the budget of £77.289m at £78.548m representing an overspend of 1.63% of total budget.  He added that it was relatively early in the financial year, however, and the Executive Board had implemented measures already to bridge this gap which included tightening spending against the agreed budget and seeking savings in the areas below including a review of how the crewing pool was resourced. 

The drivers for this forecast overspend were largely due (amongst others) to:

·       Wholetime pay - as a result of the additional 12 firefighter recruits who joined the Service in May 2022 where the training costs were not included - £0.185m;

·       On Call Pay – budget assumptions regarding pension costs, national insurance and holiday pay were incorrect - £0.859m;

·       Professional & technical support as a result of staffing costs for human resources associated with the Network Fire Services Partnership (NFSP) - £0.054m; and

·       Communications equipment - £0.286m - of which £0.118m was because of unfunded increases in Airwave (the national blue light radio scheme) and £0.156m relating to alerter transmitters slippage from 2021/22.

This was offset by underspends in the following areas (amongst others):

·       Training - £0.092m;

·       Transport, repair and maintenance costs - £0.160m;

·       Hydrants installation and maintenance - £0.054m.

The Committee noted that the Authority was within its prudential limits for external borrowing with the outstanding debt at £24.757 m forecast to reduce to £24.264m as at 31 March 2023.  The capital programme was progressing well although there was a forecast overspend of £0.094m largely due to timing differences.  The total debtor invoices outstanding at quarter 1 totalled £0.970m of which £0.4666m related to Red One Ltd.

The Committee asked about to the impact of the pension age discrimination remedy, noting that the full remedy would not be available until the requisite legislation was in place in October 2023.  The Treasurer advised that there were 37 staff eligible to retire, all of whom had individual circumstances influencing their decisions.  The Service was providing as much information as possible to each of these individuals to enable them to make an informed decision in terms of their retirement plans.  The Chief Fire Officer added that the Service was confident that it would start to see some movement on impending retirements as a result of the clarification provided to the individuals concerned.

The Treasurer drew attention to the £1.350m of additional costs that may arise as a result of future pay awards for both operational and non-operational staff.  It was noted that the National Fire Chiefs’ Council (NFCC) had written to Government seeking funding to cover the additional costs associated with an increased pay award.  In the event that additional funding was not forthcoming, the Authority would need to meet the budget deficit from Reserves.  The Chief Fire Officer added that there were other areas that could be explored to bridge the budget deficit such as reducing the revenue contribution to capital of £1.2m, examining all of the reserves to check they were still required or could be repurposed and all Estate options.

The Committee welcomed the action being taken by the Service to manage the budget deficit on the 2022-23 revenue budget.