Agenda item

Report of the Director of Finance, People & Estates (RC/22/17) attached.

The Committee received for information a report of the Director of Finance, People & Estates (Treasurer) (RC/22/17) that provided the Committee with details of the second quarter performance (to September 2022) against the agreed financial targets for 2022-23.

The Director of Finance, People & Estates (Treasurer) advised that, at this stage in the financial year, it was projected that spending would be £2.442m more than the budget of £77.289m at £79.371m, representing an overspend of 3.16% of total budget.  He added that this overspend was lower than anticipated due to the measures implemented by the Executive Board already which included tightening spending against the agreed budget and seeking savings wherever possible. 

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

·       Wholetime pay - as a result of the anticipated pay award for Grey Book staff form 1 July 2022 with 2% budgeted and 5% expected - £0.896m;

·       On Call Pay – budget assumptions regarding pension costs, national insurance and holiday pay were understated combined with the impact of a pay award at 5% - £1.876m;

·       Professional & technical staff pay – there had been savings generated due to the action taken by Executive Board to freeze vacancies resulting in an underspend of £0.167m initially but this position had moved to a forecast overspend due to the impact of the Green Book pay award - £0.154m;

·       Energy costs – overspend of £0.335m;

·       Communications equipment - £0.257m - of which £0.118m was because of unfunded increases in Airwave (the national blue light radio scheme) and £0.095m relating to alerter transmitters slippage from 2021/22.

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

·       Training - £0.273m;

·       Transport, repair and maintenance costs - £0.265m;

·       Equipment and furniture - £0.442m.

The Committee noted that it would be asked to consider how it was going to bridge the gap to ensure a balanced budget at the end of the 2022-23 financial year.  This was likely to include a recommendation to use the budget smoothing reserve (£0.674m) and pausing the in-year contribution to capital (£1.200m), together with the repurposing of other ring fenced reserves (£0.568m) if the gap was not closed further in the meantime.

The Treasurer advised that the Authority was within its prudential limits for external borrowing with the outstanding debt at £24.711m forecast to reduce to £24.264m as at 31 March 2023.  The capital programme was progressing well although there was a forecast overspend of £0.092m largely due to timing differences.  The total debtor invoices outstanding at quarter 2 totalled £0.801m of which £0.464m related to Red One Ltd.

The Committee expressed concern at the impact of the £0.118m unfunded increases in Airwave (the national blue light radio scheme) costs (9.5% increase when budgeted for 1.47%) and the associated reduction in Firelink grant which was being phased out over 5 years starting in 2022-23.  It was suggested that Government should be lobbied on the reduction in grant whereupon:

Councillor Sellis MOVED (seconded by Councillor Peart):

          “that the Chair of the Fire Services Management Committee of the           Local Government Association be requested to lobby the Government           on the reduction in grant for Airwave costs”.

Upon a vote, this was CARRIED unanimously.

Attention was drawn to the point that there may be a need to increase the number of counselling sessions paid for by the Service which was currently limited to 6 in order to encourage an early return to work for staff with mental health issues.  The Treasurer replied that 6 sessions had been agreed with the Occupational Health provider as the number in which it was reasonably expected that such issues could be resolved.  The Service could request extensions in individual cases but urged caution on extending this as a blanket approach.  The Chief Fire Officer added that this was an issue for the People Committee to consider and he indicated he would refer the matter accordingly.

Reference was also made to the position on the cap on increases in Council Tax in 2023-34 announced in the recent mini Budget.  The Chief Fire Officer reported that it was understood that the cap had been increased to 3% for the 2023-24 budget but this would only amount to approximately £0.500m of extra funding for the Fire & Rescue Authority which was insufficient to bridge the expected budget deficit.  He added that, with pay increases circa 5% expected in future years, action was being taken to lobby local Members of Parliament for the flexibility to increase the council tax beyond 3%.  The Treasurer added that this was critical when combined with the high levels of inflation and associated price increases on energy and vehicle leasing costs currently being experienced.

The Committee welcomed the action being taken by the Service to manage the budget deficit on the 2022-23 revenue budget and expressed thanks to everyone involved.

RESOLVED

(a)        that the Chair of the Fire Services Management Committee of      the Local Government Association be requested to lobby the      Government on the reduction in grant for Airwave costs;

(b)       Subject to (a) above, the report be noted.