Agenda item

Fire Authority Service Planning processes for 2021/22 and beyond - Revenue Budget 2021/22 and Capital Asset Strategy 2021/22 to 2025/26

Report of the Chief Fire Officer and Assistant Director Resources/Treasurer

Minutes:

The Fire Authority considered the report of the Chief Fire Officer (CFO) and Assistant Director Resources / Treasurer (ADR/T) which presented Members with the Fire Authority’s Revenue Budget 2021/22, Capital Strategy 2021/22 – 2025/26 and Medium Term Finance Plan for 2021/22 – 2025/26 for approval. 

 

The ADR/T presented the report to Members, and informed them of an error in the figures presented at Appendix F(i), an updated version of this appendix would be provided.  The Authority’s budget proposals for 2021/22 and its five year Medium Term Finance Plan (MTFP) had been considered by the Policy & Resources (P&R) Panel on 21 January 2021.  Since that meeting the report had been updated to reflect the latest council tax and business rates information, collection fund positions and the best understanding of how the schemes to compensate authorities for the impact of Covid-19 on Collection Funds and council taxbase would operate.  The Local Government Finance Settlement (LGFS) had been finalised by Parliament on 10 February 2021 and had been better than forecast.

 

The key decision for the Authority was to set the level of council tax for 2021/22.  The P&R Panel recommended two options for consideration, either no increase (0%) or an increase of 1.99% (the referendum threshold for fire authorities was 2%).  A decision to freeze council tax, even for a single year would have a permanent impact on the Authority’s future income.  The loss of income resulting from a freeze in council tax for 2021/22 was estimated at £0.551m (2021/22) rising to £0.618m (2025/26).  Across the 5 year MTFP the total loss of income would be £2.9m.  This would increase the level of future savings required under the best case scenario to £0.9m (2025/26 base) and £5.3m (5 year total) and under the worse case scenario to £3.1m and £10.9m respectively (as detailed in the updated Appendix F(i)).

 

This decision was to be made when there remained significant uncertainties for funding after 2021/22 which the current Covid-19 pandemic had only exacerbated.  New legislation resulting from the Grenfell enquiry was likely to impose fresh demands on the Authority’s prevention services and there was no clarity on the extent to which Government would fund additional costs.

 

The Fire Authority, in line with the joint National Fire Chief Council (NFCC) / LGA Comprehensive Spending Review 2020 submission, had lobbied for a fair and sustainable medium term settlement for the fire service including additional local flexibility to increase council tax by 2% or £5 whichever was the greater, a position that would be difficult to maintain if the Authority did not take the increase in council tax available to it in 2021/22.

 

The Authority had acted prudently in establishing reserves and balances to meet its assessed risks and to provide one off funding for specific priorities.  The level of reserves held would significantly reduce over the life of the MTFP, from £18m to below £3m by 2022/23, bringing forward the need to borrow and reducing the level of financial flexibility the Authority had outside of its Revenue Budget.

 

Members were reminded that the Integrated Risk Management Plan (IRMP) consultation undertaken in summer 2020 had demonstrated that 80% of the public supported an increase in council tax for the fire service.

 

The ADR/T in his role as Treasurer confirmed to the Authority that he was satisfied that the budget was based on robust and transparent estimates.

 

The Chairman of the Policy & Resources Panel informed the Authority that initially he had been supportive of a precept freeze but, once presented with the details, had become concerned about the long term implications of such a gesture.  It had been helpful for the Authority to be presented with both options, but he would be supporting a 1.99% increase.

 

A lengthy discussion followed during which Members thanked officers for the comprehensive report and for providing them with both options.  Members were all agreed that this had been an exceptionally challenging year both for the public and for ESFRS.  They had all carefully considered both options and were sure that the potential long term risks to ESFRS of a precept freeze would be too high and therefore were unanimously supportive of a 1.99% precept rise. 

 

As was required a recorded vote was undertaken with the results as follows:

 

FOR             18 (Cllrs Barnes, Dowling, Evans, Galley, Hamilton, Lambert, O’Keefe, Osborne, Peltzer Dunn, Powell, Pragnell, Scott, Sheppard, Smith, Taylor, Theobald, Tutt, West, Lambert)

 

AGAINST     0

 

RESOLVED – The Fire Authority Agreed to approve:

 

1.         (a) an increase in council tax of 1.99% and thus approve:

(i)       the budget proposals set out in this Report and the net budget requirement of £40.704m for 2021/22;

(ii)      the council tax requirement of £28.303m; and

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

 

2.       The capital programme for the next five years and the capital budget of £6.105m for 2021/22 including the plans to use Community Infrastructure Levy, capital receipts, revenue contributions and new borrowing to finance capital expenditure;

 

3.       A one off contribution of £0.210m from the revenue budget to the General Reserves to return it to the policy minimum of 5% of the net revenue budget;

 

4.       The fees and charges set out in Appendix C; and

 

5.       That the Assistant Director Resources / Treasurer, in consultation with the Chief Fire Officer and the Chairman be authorised to make any adjustments to the presentation of the budget to reflect the Final Local Government Settlement.

Supporting documents: