Agenda item

Report of the Head of Finance (Treasurer) (RC/24/18) attached.

The Committee considered a report of the Head of Finance (Treasurer) (RC/24/18) setting out the second quarter performance against agreed financial targets for the current financial year.  The report provided a forecast of spending against the 2024-25 revenue and capital budget along with explanations for any major variations.

The following was highlighted to the Committee:

• There was a current forecast underspend of £2.251m against the 2024/25 financial year (net of the £1m proposed transfer to reserves set out in table 3 of this report) representing 2.4% of total budget;
• Pay Awards: Since the report had been published pay awards for 2024/25 had been confirmed at less than anticipated resulting in a £0.8m saving against the Revenue budget.  The Committee expressed concern for colleagues whose existing government funded In-Work benefits could be detrimentally impacted by receipt of a lump sum pay award and was pleased that the Service was investigating possibilities for mitigating against this;
• Equipment and furniture underspend: A contract between three Fire Service partners had been agreed against the Network Fire Services Project resulting in a saving of £0.5m;
• Hot Villa Development: A £0.5m saving had been redirected towards developing the Hot Villa to a high standard without the need to use reserves.  Plans were also progressing towards creation of a new state of the art training facility, for specialist training, and hub training sites where training could be delivered locally; and
• Investment income: Early receipt of a £20m government grant to cover anticipated cash flow issues associated with the On-Call Firefighters Pension Scheme remedy had been invested until needed resulting in an over-recovery of £0.273m.

The Treasurer referred to the proposed budget transfers set out at Table 3 of the report, and resulting from the underspend highlighted above, which he commended to the Authority for approval.

The report further highlighted:

·       there had been no breaches of prudential indicators for this reporting period; and

·       The Service was comfortable with the current level of outstanding debt of £0.017m.

The Treasurer provided an update on the Medium Term Financial Plan (MTFP) which had been adjusted since publication of this report due to National Insurance (NI) increases announced in the Government’s Autumn Budget.  Budget meetings with all Service Departments had taken place to review future spending needs which, combined with the increases in NI, had resulted in a forecast budget deficit of £4.4m for 2025-26.  As a result, the Service Leadership Team had agreed the following;

·       A vacancy margin of £1.7m for whole time colleagues, £0.500m for On Call Colleagues (increase from £0.250), and £1.0m for Professional and Technical staff (increase from £0.295m); and

·       An increase in the target for Treasury Management interest returns by £0.200m to £1.2m.

The revised forecast deficit for 2025-26 was £2.0m.  The grant settlement announcement by Government was not expected until 19 December 2024 at which point further assessment of any budgetary deficit could be undertaken.

RESOLVED:

(a).      That the Devon & Somerset Fire & Rescue Authority be recommended to approve the budget transfers shown in Table 3 of report RC/24/18 and reproduced below for ease of reference;

(b).      That the monitoring position in relation to projected spending against the 2024-25 revenue and capital budgets be noted;

(c).       That the performance against the 2024-25 financial targets be noted.