Report of Chief Fire Officer and Assistant Director Resources/Treasurer

The Panel received a report from the Assistant Director Resources/Treasurer (ADR/T) which presented the Fire Authority’s draft Revenue Budget 2023/24, Capital Strategy 2023/24 – 2027/28 and Medium Term Finance Plan (MTFP) for 2023/24 – 2027/28 for initial consideration prior to its formal consideration by the Fire Authority at its meeting on 9 February 2023.  It was emphasised that the proposals put before the Panel were in draft form and that the final decision on both the budget and the precept would be taken by the Fire Authority at their meeting on 9 February 2023.

The Panel was informed that the Government had announced a one-year settlement in December 2022 for 2023/24, accompanied by a Finance Policy Statement which set out the principles on which the 2024/25 settlement would be based.  However, Members noted that there remained significant uncertainty over the Authority’s future funding for 2024/25 and beyond and therefore the Authority would be required to continue to consider its long-term financial sustainability when setting the budget for 2023/24 and agreeing its MTFP for the next five years.  The ADR/T informed the Panel that whilst the provisional Local Government Finance Settlement had delivered a better outcome than had been expected, it would still require the Authority to use reserves to balance its budget for 2023/24 and to make significant additional savings to balance its budget for 2024/25. 

It was highlighted that the increased council tax referendum threshold enabled Fire & Rescue Services to put in place a £5 increase in council tax for 2023/24 only, before reverting to 3%.  The Panel also heard that there were a number of key elements that were outstanding, including confirmation of fire specific grants and final information regarding business rates from billing authorities.  Members were informed that the budget proposals had been developed using modelling assumptions previously agreed by the Fire Authority and that two options were presented for 2023/24 base on a 2.99% council tax increase or a £5 council tax increase, with the budget gap reported as £1.645m for the 2.99% option, and £1.033m for the £5 option.  It was proposed that the use of one-off measures during 2023/24 would be used to allow time for the additional savings proposals to be consulted on, approved, and implemented by 1 April 2024.  The ADR/T emphasised that while the use of reserves was a legitimate approach to take with regards to balancing the budget, this was not financially sustainable and could not form part of an ongoing budget setting approach.

The Panel acknowledged the difficulty faced in balancing the budget and emphasised that any decisions taken regarding the recommendations would not be taken lightly. 

Members discussed the options presented in the report regarding the council tax increase of either 2.99% or £5, and the impact that this could have on which tranches of additional savings would be recommended to the Fire Authority.  Members deliberated the potential impact the increase in council tax could have on residents and were informed by the ADR/T that there were various schemes in place to support residents with lower incomes with payments.  These included local Council Tax Reduction Schemes, existing discounts such as single persons and empty homes, the Council Tax Support Fund and local hardship funds.  It was also highlighted that two additional staff were funded jointly by the precepting authorities to enable East Sussex Billing Authorities Revenues & Benefits team to support council tax payers.  Responding to a query as to whether the £5 increase was a regressive tax, the ADR/T explained that this £5 increase was based on a band D property rather than £5 on each band, which in the East Sussex area was equivalent to 5% across all bands.  With regards to the proposed tranches of additional savings, the Panel acknowledged that any of the proposals would be difficult but that savings would need to be found regardless of which option of council tax was recommended.  The Chairman summarised the decision as either opting for a £5 increase in council tax and tranches one to four, or a 2.99% increase in council tax and having to consider all six tranches of savings. 

The Panel noted the successful bid for Community Infrastructure Levy (CIL) funding from Lewes District Council, which would part fund the planned enhancements at Barcombe and Seaford Fire Stations.  The ADR/T confirmed that work was ongoing in applying for additional CIL grants.

After a lengthy discussion the Panel carefully considered the recommendations presented in the report.  When considering the recommendations with regards to increasing council tax levels, Councillor Taylor proposed that the £5 increase in council tax should be recommended to the Fire Authority.  This was seconded by Councillor Azad, and the Panel voted unanimously to take forward to the Fire Authority the option involving an increase in council tax of £5 and the additional savings in tranches 1-4.

RESOLVED – That the Panel:

1)     Noted that:

a)     the one year settlement as set out in the Local Government Finance Settlement (LGFS) was only provisional at this stage and may be subject to change;

b)     the East Sussex Business Rate Pool, of which the Authority was a member, had been approved as part of the LGFS, and any income would be transferred into Business Rates Pool Reserve;

c)     that the Home Office was still to announce the quantum and allocation of fire specific grants for 2023/24; and

d)     the final council tax and business rate bases and collection fund positions were still awaited and that the final budget proposals may change once this information was received.

2)     Recommended that the Fire Authority, subject to any changes as a result of recommendation 1, approved:

a)     an increase in council tax of £5 and thus approves:

i)       the budget proposals set out in this Report and the net budget requirement of £44.658m for 2023/24;

ii)      the council tax requirement of £31.093m; and

iii)    the council tax and precepts set out in Appendix F;

iv)    that the General Balance remains below the Authority’s policy minimum of 5% of the net revenue budget until 2025/26;

v)     the use of reserves as follows to fund the revenue budget in 2023/24:

·        £0.116m carry forward reserve

·        £0.440m sprinkler reserve

·        £0.080m financial stability reserve

·        £0.164m improvement & efficiency reserve

vi)    identified the savings proposals listed in tranches 1 to 4 should be taken forwards to meet the additional savings requirement of £1.014m in 2024/25, accepting that some proposals would be subject to public consultation.

b)     the capital programme for the next five years and the capital budget of £9.260m for 2022/23 including the plans to use CIL, capital receipts, revenue contributions and new borrowing to finance capital expenditure;

c)     the fees and charges set out in Appendix C; and

d)     that the Treasurer, in consultation with the Chairman and Chief Fire Officer, be authorised to make any adjustments to the presentation of the budget to reflect the final Local Government Finance Settlement.