Agenda item

Report of the Director of Finance & Corporate Services (Treasurer) (RC/23/13) attached.

The Committee received for information a report of the Director of Finance & Corporate Services (Treasurer) (RC/23/13) that provided the Committee with details of the first quarter performance (to June 2023) against the agreed financial targets for 2023-24.

The Director of Finance & Corporate Services (Treasurer) advised that, at this stage in the financial year, it was projected that spending would be £0.053m less than the budget of £85.411m at £85.360m representing an underspend of 0.1% of total budget.  He drew attention to the point that the reserve of £2.8m to cover pay awards was included within these figures albeit that only £1.173m of this reserve was forecast to be utilised to close the budget gap as a result of better than expected in year financial performance.  The Executive Board continued to bear down on costs across the Service as it was reflecting a much larger budgetary gap to be bridged in 2025-26 and 2026-27 as outlined within the Medium Term Financial Plan (MTFP) and needed to keep this in sight.

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

·       Wholetime pay – £0.520m or 1.4% of budget - driven by vacancies primarily.  The Service had a window of retirements coming shortly so was holding vacancies in light of the knowledge that it would be looking at the workforce in due course. 

·       Professional and Technical staff spend - £0.220k underspend or 1.3% of budget – the Service continued to hold vacancies and maintain spending control.  A complete review of zero hours contracts had also undertaken to ensure everything was fit for purpose and the Service was getting Value for Money;

·       Transport cots - £0.096k underspend – largely due to the drop in fuel costs;

·       Travel and subsistence - £0.139m or 8.6% of budget due largely to savings on vehicle rental costs and slippage on delivery and also pursuing the environmental agenda with new, electric vehicles.  Line 13.  Telematics also added to vehicles so seeing a change in driver behaviour as well which made vehicles more efficient;

·       Support services contracts - £0.139m or 12.7% of budget – due to a new contract achieving better value for money and closer management of the provision; and

·       Investment income - £0.807m or 153.7% of budget – due to increased interest rates seeing a much higher rate of return being achieved.

The Committee asked about potential spikes in pension costs in future years and how the Service was going to deal with this.  The Treasurer confirmed that events had moved forward and Government had addressed historical issues surrounding pension detriment.  The Service had paused processing immediate detriment claims pending the receipt of appropriate advice but this had resumed now with guidance from the Treasury in place.  Fewer staff than anticipated had applied for retirement in 2023-24 with under 10 requests to date.  Anecdotal evidence suggested that the recent Grey Book pay awards may have impacted upon such decisions but once the year end was reached, it was thought that staff would come forward with applications for retirement.  The Chief Fire Officer indicated that much work was being undertaken to predict this through workforce planning but it was felt that any spikes may be seen in 2026-27 now.  The Service was looking at high potential schemes and career pathways not only for operational but non-operational staff as well.  The Treasurer added that the Service was also looking at the apprenticeship programme as well so Professional and Technical staff could see a route in for career progression.

In terms of Capital, it was noted that there would be a thorough review of the Capital Programme undertaken in the next 2 months.  There was slippage of £1.7m due timing differences largely on Camels Head rebuild. 

The Treasurer made refence to the reporting of the MTFP in line with the recommendation made by the external auditor for transparency.  There was a gap in 2024-25 of around £3m but the Executive Board had set a target of £4m to find to address this next year.  Reference was made to the need for additional grant funding and the Committee asked for a crib sheet setting out the picture on rurality as it was considered this was not recognised within the funding received from Government and needed to be addressed via lobbying as appropriate.

The Treasurer referred to the point that Government was going to gradually reduce the Revenue Support Grant funding for Airwave so this was an extra cost that Servies had to bear.  The Committee commented that it seemed the only way to raise revenue was to increase Council Tax every year in future although fire and rescue services had not seen the same level of increase as other blue light emergency services.  It was considered that there was now a strong argument for this to be achieved as it would be difficult to maintain services in future without the requisite level of funding in place.