Report of the Assistant Director Resources/Treasurer.

The Fire Authority considered the report of the Assistant Director Resources/Treasurer (ADR/T) which set out to roll forward the Fire Authority’s medium term service planning strategy and medium term financial plan for 2021/22 to 2024/25.  The ADR/T explained that financial planning was particularly difficult this year and had been made worse by COVID-19.  The Government had commenced a comprehensive spending review (CSR) covering a 3 year period from 2021/22.  The fire sector had made a strong submission to this, but an outcome was unlikely until later in the autumn with a provisional settlement in December, planning therefore was very difficult.

The ADR/T explained that COVID-19 was having a significant impact on both Council Tax and Business Rates, not only in terms of collection, but also base growth.  The report built on the existing Medium Term Finance Plan (MTFP) mid-case scenario and updated the assumptions that underpinned it where possible, highlighting emerging pressures and potential risks.  The revised MTFP indicated a revised funding gap of £1.659m in 2021/22 rising to £2.967m in 2024/25.  In addition it was recommended that the Authority plans for a scenario where the current one off pensions grant does not continue into 2021/22.  This would add a further £1.735m to the savings required in each year.

The ADR/T added that budget planning would need to take everything discussed into account.  If the state of the financial challenges ahead were as detailed in this report, efficiencies alone would not be enough, the Fire Authority and Officers would have to consider wider options for savings.  The IRMP, if approved, did present the authority with some further options, in that the original proposals could possibly be re-examined if the wider financial implications necessitated it. 

The ADR/T reminded the Fire Authority that there was also a financial risk attached to the Pension Grant.  The Firefighter pension schemes were subject to periodic review, the last revaluation involved a significant increase in employer’s rates in 2019/20.  The Home Office and Treasury agreed that the burden on fire services was significant and they agreed to grant fund all but £10m of the additional cost.  This grant had been extended for a further year, and was not in the base line funding as it was not certain that it would continue.

Members agreed that the current financial climate was creating probably the most uncertain future that the Fire Authority had faced.  They felt it very important that the Local Government Association and National Fire Chiefs Council be urged to continue to work with government to sort out the funding of pensions, it was not possible for fire authorities to carry on working on the basis of one off funding when it equated to such a large percentage of our spending capacity.

Members were worried most by the implications of the business rates and council tax system, as it is likely Covid-19 will have a dramatic impact on collection rates.  It was felt important that Fire Authorities needed to raise the issue of business rates with the Home Office, specifically whether they should be collected locally or centrally and especially the implications of essential services being funded by grants.  Members felt that the current uncertainty made financial planning very difficult.  There was some suggestion that reserves could be drawn down and that some consideration be given to raising Council Tax again next year.

The Fire Authority thanked Officers for all their hard work during very difficult times.  There was some concerns that previous correspondence with MPs and funding reviews did not seem to be producing any results.  There had been some claims by some local MPs that additional funding might be available and the Chairman proposed an additional recommendation regarding writing to MPs to lobby them on this matter.  This recommendation was seconded by the Vice Chairman and agreed by the Authority.

At the request of some Members it was agreed that a recorded vote would be taken on this item, including the new recommendation, with votes recorded as follows:

Recommendation 1

FOR: 11          (Cllrs Barnes, Dowling, Galley, Lambert, Osborne, Peltzer Dunn, Pragnell, Sheppard, Smith, Taylor and Tutt)

AGAINST: 0

ABSTAIN: 6     (Cllrs Evans, Grimshaw, Powell, Scott, Theobald and West)

Recommendations 2-4

FOR: 13          (Cllrs Barnes, Dowling, Galley, Lambert, Osborne, Peltzer Dunn, Powell, Pragnell, Sheppard, Smith, Taylor, Tutt and West)

AGAINST: 0

ABSTAIN: 4     (Cllrs Evans, Grimshaw, Scott and Theobald)

RESOLVED: That the Fire Authority agreed:

       i.          to approve the updated Medium Term Financial Plan for 2021/22 to 2024/25 and its underlying assumptions;

      ii.          the risks set out in section 4.6 of the report;

     iii.          considered their policy preferences for Council Tax, should the Government set the referendum threshold higher than the 2% currently included in the MTFP; and

    iv.          that given the ongoing uncertainty about the future core funding of the service the Chairman of the Fire Authority will again write to all local MPs to request their support in lobbying for additional and sustainable funding for 2021/22 and use the opportunity of the planned autumn MPs briefing to expand on the issues further.