Report of the Assistant Director Resources/Treasurer

The Panel received a report from the Assistant Director Resources/Treasurer (ADR/T) on the findings of the month 8 monitoring undertaken on the Revenue and Capital Budget 2020/21 and Capital Programme 2020/21 to 2024/25.

The ADR/T introduced the report, highlighting that a net Revenue underspend of £496,000 had been identified.  This was a favourable variation of £601,000 from the position presented in the last report to the Panel and was largely a result of underspend across the budget including the impact of Covid-19 in areas such as fuel, travel and subsistence, Member expenses and training.  In-year pressures had been managed through the use of contingency and underspend.  Ongoing pressures had been identified and fed into the 2021/22 budget setting process.  With regard to the Capital Programme, there had been a significant level of slippage primarily due to Covid-19 but also as projects had been paused pending the outcome of the Integrated Risk Management Plan (IRMP) and challenges which had arisen in partner dependent projects.  Full details of both the Revenue and Capital budget monitoring were set out in the report.

The ADR/T explained that additional spend incurred as a result of the pandemic was currently forecast to be covered by government grants totalling £770k, savings made in areas such as travel and subsistence and a bid to the government income loss scheme.  However, the Service was now beginning to see the impact of the second peak and there was a risk that spend against Covid-19 would exceed the grants and savings.  The Authority continued to monitor the situation and provide government returns on the spend impacts. 

The Panel asked about carbon reduction and sustainability policy development and whether the budget underspend could be utilised to make progress in this area, especially given the opportunity that continued remote working may present in terms of both financial and environmental benefits.  The Chief Fire Officer (CFO) commented that sustainability was due to be discussed at next Members’ seminar and that provision had been made in the Capital Programme for renewables.  Work was also being undertaken to develop a responsible procurement policy and in fleet and engineering opportunities in terms of electric vehicles and emission reduction were being explored.  Additional resources had been secured via the University of Brighton to assist in establishing the Service’s carbon footprint and the key opportunities to impact on this. 

Members queried whether the current grant allocations were sufficient.  The ADR/T responded that the government had extended the pensions grant and committed to baselining it into the funding settlement as part of the next Comprehensive Spending Review which was welcomed, however, this did not cover all potential pension risks.  Sector-wide one-off grant funding to cover the initial impact of the Building Safety Review had been received but further budgetary pressures were expected as a result of forthcoming building safety legislation requirements for which there had been no further grant or baseline funding.  Representations were being made to Government on this these matters.

The Panel asked for a further explanation of the forecast loss of Treasury Management income as set out in paragraph 2.9 of the report.  The ADR/T explained that as the Bank of England base interest rate had been reduced, the return from investments had been less than expected.  Although the loss of income could not be included in the income loss grant scheme, the figures were being reporting to the NFCC (National Fire Chiefs Council) and Home Office.

The Panel noted that the Service continued to monitor and report spend against the government Covid grants on a monthly basis.  Funding had been received in tranches 1 and 2 but nothing in subsequent grant allocation rounds.  It was now reaching the point whereby the grant funds had been spent or committed to future spend and any additional costs would have an impact on the Revenue budget.  Areas which may result in additional expenditure included the provision of lateral flow testing and vaccinations as fire service staff were not classified as key workers under the current vaccination plans.  The ADR/T added that there were mechanisms by which a bid could be made to the Home Office for additional funds but not before spend had reached £77k over the grant funding allocation.

Members asked for a further explanation of the Section 31 grant.  The ADR/T explained that there were two aspects to the grant in relation to Business Rates - compensation for the loss of income due to the government decision to reduce the impact of the normal inflation increase and the capping of the multiplier and compensation for loss of Business Rate income due to the additional relief given to businesses to mitigate against the impact of the pandemic.  The ADR/T added the additional Section 31 grant (about that budgeted for 2020/21) would be moved to reserves and released in 2021/22 to off-set anticipated reduction in collection income.  This approach was consistent with local authorities.

The Panel congratulated officers on the successful bid for Community Infrastructure Levy funding for enhancements to Barcombe and Seaford stations. 

RESOLVED: That Panel noted:

(i)            the risks to Revenue Budget and the projected underspend;

(ii)           the risks to the Capital Programme and the projected in year underspends;

(iii)          the reduced net forecast drawdown from reserves;

(iv)         the monitoring of savings taken in 2020/21 including those savings at risk, and

(v)          the current year investments and borrowing;

(vi)         the transfer to contingency of £10,000 saving relating to Member expenses and conferences, due to Covid-19;

(vii)        the disposal of the ARP based at Eastbourne as agreed in the IRMP.