Agenda item

To consider Item 8

The Deputy Director of Finance and Assets advised Members that the report in Appendix A set out the Authority’s revenue and capital spending position as at 31 July 2022, together with the projected outturn position for the financial year. The budget of £33,480m compared to the forecast outturn of £33,763m gave a forecast year end overspend of £0.283m. Furthermore, the level of funding was showing a favourable variance of £0.418m which had resulted in an overall net underspend of £0.134m against the expenditure budget. Since the production of this report, there had been subsequent events that had resulted in the most recent forecast underspend increase to £847k, an increase of £713k.

The Deputy Director of Finance and Assets advised Members that the key events that had resulted in the increase in underspend were the announcement of the energy price cap for non-domestic customers had reduced the forecast spend for the year on gas and electricity by £400k. Previously forecasting utilities to cost in the region of £1.2m prior to the energy price cap being announced. The price cap was only for six months and was likely to stay in place for vulnerable industries beyond this point. There had also been a sharp increase in investment returns from the treasury activities. At the start of the financial year, projected returns were £30k with the base rate being under 1%. The recent increased in the Bank of England base rate had increased the forecast income from treasury management investments to £250k. The remainder of the increase was predominantly due to higher operational leavers than originally forecast, as well as some new support staff vacancies.

The Chairman updated Members where the Service was in terms of the pay award. The budget forecast a 2% pay award, but 2% had been rejected by the Fire Brigades Union (FBU). A revised pay award offer was made this week by the NJC Employers of 5%. The Chairman advised that this Authority could afford 5% this year, but it would create some real challenges for the future if there was no additional funding or precept flexibility. The Home Office had indicated that it couldn’t provide additional funding. The revised offer of 5% had been rejected by the FBU who were seeking further consultation with their members.

The Acting Chief Fire Officer advised Members that the FBU were looking to have a ten-day consultation period with their members, followed by a two week ballot process (online ballot) to see if it would be acceptable to the membership or not. Looking at the original timeline for industrial action (five weeks), this would increase it by another four weeks.

A Member asked what the Service had paid for its energy provision in the previous financial year.

The Deputy Director of Finance and Assets advised that last year it was in the region of £300-£350k. The Authority had budgeted for just over £500k, and actual costs were going to be over £700k this year. Moving forward as part of the MTFP process, the budget would be set at around £1.3m for next year, as costs were not expected to come down anytime soon.

A Member asked if there was an issue getting red fleet as deadlines kept slipping. Was the Authority contracted at the original price or could prices increase.

The Deputy Director of Finance and Assets advised that currently the Authority was contracted at the original price, but it had already been warned by some suppliers that there was a risk of significant price increases.

RESOLVED –

1.                  That the provisional outturn forecast for the Authority as of 31 July 2022 be noted.

It being proposed and seconded:

2.                  That the updates to the provisional outturn forecast be noted.