Report of the Assistant Director Resources/Treasurer

The Fire Authority received the Report of the Chief Fire Officer (CFO) and the Assistant Director Resource/Treasurer (ADR/T) presenting the Fire Authority’s Revenue Budget 2020/21, Capital Strategy 2020/21–2024/25 and Medium Term Finance Plan for 2020/21–2024/25 for approval.

The ADR/T explained to Members that the Report presented a broadly positive picture.  It included figures as anticipated from the Local Government Finance Settlement, this had been due for finalising by Government on 12 February 2020, but its hearing in Parliament had been delayed due to other urgent business.  This delay did not stop Members agreeing the budget on the basis of the figures contained within the Report.  The ADR/T explained that the updated recommendations and Appendices, which had been circulated to Members, were based on confirmed figures from the other precepting authorities.

The ADR/T confirmed that this Report presented a balanced budget for the forthcoming year and that there was a net budget increase of 1.2%, which comprised various pressures and new commitments of £0.863m and savings of £0.396m.with the core funding remaining roughly constant to the previous year.  The proposed 1.99% increase to Council Tax along with a growth in the council taxbase of 0.63% would provide ESFRS with an additional income of £716,000.

There remained significant uncertainty for fire funding beyond this financial year.  For 2021/22 and beyond there were significant risks as a result of proposals to change the Business Rates Retention regime, the Fairer Funding Review and a Comprehensive Spending Review (CSR) following the outcome of the recent Parliamentary Election.  This uncertainty meant that the Medium Term Finance Plan forecasted overall central support in three scenarios providing best case, mid case and worse case savings relating to Settlement Funding Assessment.  Officers would continue to focus on driving efficiencies through various activities set out in the Efficiency Strategy, although a key element would be the outcomes of the work on the Operational Response Review and Integrated Risk Management Plan.

The Capital Asset Strategy reflected that there had been further revisions to the fleet strategy as the Authority reviewed its fleet requirements and a re-profiling of the delivery of the Estates strategy, phasing the programme over eight years rather than six reflecting more reasonable timescales. 

The ADR/T concluded that in his role as Treasurer to the Fire Authority he was satisfied that the budget was both robust and transparent and that the allocation of resources within it were necessary and appropriate.

Members asked for a better description of the “best case” and “worse case” scenarios that had been outlined.  The ADR/T explained that these were modelled on funding scenarios that had been discussed with the Home Office, based on a reduction of the Settlement Funding Assessment (SFA).  The “best case” was based on a cash flat comprehensive spending review outcome, which assumed that the SFA was maintained at the current level.  The “worse case” modelled for a reduction 7.5% annual decrease in SFA.  The national conversations with the Home Office were interrupted by the Parliamentary Election in December 2019, but the NFCC were funding a post to co-ordinate its submission to the CSR.  Given this uncertainty it remained important that ESFRS continued to look at the ability to make savings as well as driving further efficiencies that could assist in achieving financial sustainability once the outcome of CSR was known.

Members were reminded that they as an Authority had made a commitment to drive efficiencies and to seek to avoid reductions in service.  There was further clarification that the hope was that there would be no need to make any reductions, but that as previously mentioned due to there being no detail on future funding it was not possible to discuss this in any informed way yet. 

Members queried the light touch of the equality impact assessment (EQIA) that had been provided with the Report.  The ADR/T explained that for the purposes of setting the budget, the EQIA was sufficient and had been conducted in accordance with our policy requirements.  For this year’s budget, it was deemed that the impact of the proposals on those with protected characteristics would be neutral or positive.  When it was clear what the outcomes of the CSR and the size of any potential funding gap known then a fuller EQIA would be undertaken on any resulting proposals to balance the budget.  The CFO added that consideration of Equality at ESFRS was front and centre of all work and decisions, the Service was already at the top when it came to equity of pay for men and women, it was not only a matter of statutory compliance, but also a moral one.

The Authority agreed that it felt 1.99% to be a reasonable rise in the Council Tax precept and one which they felt would be affordable to most people.  Members explained that they were often told by their constituents that they were prepared to pay for a good delivery of service and that the Fire Service was widely supported.

There were some concerns from members regarding the reduction in general balances to 5% and whether the risk assessment for this was robust.  The ADR/T confirmed that the risk assessment had been robust and that it and the affordability made it appropriate to move to 5%.  Members were reminded that the National FRS Framework operated a “comply or explain” approach where general balances exceeded 5%. 

RESOLVED – That the Fire Authority approved:

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

                                 i.            the budget proposals set out in this Report and the net budget requirement of £39.737m for 2020/21;

                                ii.            the council tax requirement of £27.931m; and

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

b)                 the capital programme for the next five years, the capital budget of £5.992m for 2020/21 and the plans to use capital grant, capital receipts and revenue contributions to finance capital expenditure;

c)                 the change 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.