Report of the Assistant Director Resources / Treasurer

The Panel received a report from the ADR/T which presented the Fire Authority’s draft Revenue Budget 2020/21, Capital Strategy 2020/21 – 2024/25 and Medium Term Finance Plan for 2020/21 – 2024/25 for initial consideration prior to its formal consideration by the Fire Authority at its meeting on 13 February 2020.

The ADR/T introduced the report highlighting that the Local Government Finance Settlement was only provisional at this stage and may be subject to change.  The final council tax and business rate bases and the Collection Fund positions were also still awaited and although the Home Office had confirmed that its 2020/21 budget included a continuation of the funding for the one off fire pensions grants, this was yet to receive formal approval. 

The report presented a balanced budget for 2020/21 based on a proposed council tax increase of 1.99%.  The ADR/T added that the sector had lobbied the Government to allow a principle of 2% or £5 whichever is the greater, however, this had not been successful and the 2% threshold would apply.  The Budget reflected pressures and savings in the region of £400k which had been identified through the Star Chamber process.  The Business Rates Retention Pilot was due to end in 2020/21, however, the Authority had been part of a successful bid to re-establish the East Sussex Business Rates Pool.  A reduction in the minimum reserves, down to 5% in line with national fire framework, was recommended. 

The Panel noted the significant financial uncertainty after 2020/21 with the Comprehensive Spending Review expected to resume in spring 2020, the fairer funding review and the future of the business rates system to be determined.  The report presented a range of scenarios post 2020/21.  Members commented on the unsatisfactory position that the Fire Authority was facing with uncertainty over long term funding and expressed caution over becoming dependent on council tax and business rates which carried risk.  The ADR/T commented that lobbying was continuing through the National Fire Chiefs Council and at a political level through the Local Government Association Fire Services Management Committee.

The Panel asked for further clarification over the 1.99% proposed council tax increase, given the reference to made to a 1.4% change in table 3 on page 46 of the report.  The ADR/T explained that the 1.4% represented the proposed increase in the net revenue expenditure which was funded by core grant, business rates and council tax.  A 1.99% increase in council tax was required for a balanced budget as presented in the report, taking into consideration the interaction between the three main funding streams.  The improvement and efficiency reserve was currently fully committed and the presented budget allowed for it to be replenished.  If the Members wished to propose a lower council tax increase, options to reduce the proposed budget would need to be explored, including the proposed contribution to the Improvement and Efficiency reserve.  The Panel supported the 1.99% proposed council tax increase and stressed importance of ensuring that budget proposals were clearly communicated to the public.

RESOLVED: That the Panel:

1.    Notes that:

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

(b)  the proposed increase in council tax of 1.99% is based on the threshold proposed in the Provisional LGFS;

(c)  the East Sussex Business Rate Pool, of which the Authority is a member, has been approved as part of the LGFS, and that any income will be transferred into the Business Rates Pool Reserve (formerly the Safer Business Training Reserve);

(d)  the final council tax and business rate bases and the collection fund positions are still awaited and that final budget proposals may change once this information is received; and

(e)  this report will be amended to reflect the financial impact of the Authority’s decision on Project 21 before it is taken to the Fire Authority on 13 February 2020.

2.    Recommends that the Fire Authority approves:

(a)  an increase in council tax of 1.99% and thus approves:

(i)     the budget proposals set out in this Report and the net budget requirement of £39.587m for 2020/21;

(ii)    the council tax requirement of £28.033m; and

(iii)   the council tax and precepts as set out in Appendix F.

(b)  the capital programme for the next five years and the capital budget of £5.932m for 2020/21 and the plans to use capital grant, capital receipts and revenue contributions to finance capital expenditure;

(c)  the reduction in the minimum level of General Reserves to 5% of the net revenue budget;

(d)  the fees and charges set out in Appendix C; and

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