Agenda item

To consider Item 7

The Lead Member for Finance and Assets, Information Security and IT introduced the report and advised Members these were the Executive recommendations to the Fire Authority at its meeting next week. There were three elements, the report and statement of the Chief Finance Officer to be noted, the Council tax precept of £79.46 for a band D equivalent property which was the equivalent of 4 pence per week, and the revenue budget and capital programme to be approved. There were some revised figures from the partner councils, and the Deputy Director of Finance and Assets would take Members through these.

The Deputy Director of Finance and Assets advised Members that as mentioned, the funding figures in the existing report were provisional figures and since then, the Authority had received the final settlement figures and the NNDR figures and therefore the tables in Appendix I and 2 had been revised. The first change was the expenditure budget had increased from £38.2M to £39.4M, an increase in the region of around £1.2M. This was due to the increase in employer pension contributions in the Firefighter Pension Scheme. To mitigate these additional costs, the Service had been provided with a Fire Pension Grant in the region of £1.1M. In future years, a reduction in this grant, similar to the pressure seen in previous pension grants, had been forecast.

The Settlement Funding Assessment (SFA) for 2024/25 had also been revised downwards from £10.5M to just over £10M, following receipts of updated NNDR figures earlier this week. For 2024/25 this reduction was offset with a one off grant of just under £600K, received as part of the Minimum Funding Guarantee. For future years, the SFA forecast had been updated to reflect this reduction in NNDR funding. Previous figures used were an estimate and more accurate figures were provided when billing authorities confirmed them and this was only after the 31 January, and why the figures were only revised earlier this week.

The previous pension grant line of £1.2M had now been merged into the SFA line on a flat cash basis as going forward, this grant would be included as part of the SFA funding stream. This brings the total SFA figures for 2024/25 to just under £11.3M. With the council tax surplus there was a slight increase from £94K to £101K, an increase in £7K.

With the services grant allocation there was a slight increase in funding of £3k and that had been revised upwards. Taking into account all these changes, the revenue contribution to capital budget in Appendix 1A and 1B for 2024/25 to 2028/29 had been revised in order to balance the budget. All usable reserves as at the end of 2028/29 were now forecast to be just under £8M, a reduction of £2M from the figures that were in the original paper.

The Deputy Director of Finance and Assets advised Members that with the revised Appendices 1 and 2, Appendix 1 was the revised budget and the only change to Appendix 2, was how the revenue contribution to reserves had reduced over the MTFP.

A Member asked if there was a recommended level as a percentage of the overall budget.

The Deputy Director of Finance and Assets advised that for the current year, the reserve balance was around 30% of the net budget requirement.

The Director of Finance and Assets advised there was not a recommended figure, last time there was a sector wide survey, the average was 43%, which was very high. Somewhere between 15% - 20% seems a comfortable level in terms of a good balance.

The Chairman asked when officers considered the USAR funding timetable would start.

The Director of Finance and Assets advised that there were on going discussions in the background all the time. It felt more positive now than it did this time last year. He was hoping the Authority would get some funding, but it may not be exactly the same.

 A Member asked that as USAR was interlinked with the day-to-day service, had officers started to do an assessment on the risk profile of the Service.

The Director of Finance and Assets advised that in terms of risk management, as the Authority was receiving funding this year, that funding was going into a USAR reserve which would give the Service flexibility. Worse case scenario, if the Service lost the grant, it would give it time to unpick some of the things mentioned. If the Service did get funding, it would allow money to be invested to ensure the USAR capability was the best it possibly could be.

A Member asked that looking at the figures, the services grant of £483M to the sector last year has now been reduced to £77M and this Service would get £33k of it, was that the correct understanding.

The Director of Finance and Assets advised that there was a huge reduction in the Services Grant this year. Officers had forecast it would go down 50%, but it had actually gone down 84%. Additional funding had been made available via the Minimum Funding Guarantee.

RESOLVED –

That the recommendations below be approved for submission to the Authority:

1.                  It is recommended that:

(a)               the report and Statement of the Chief Finance Officer (see section 8 of Annex A) be noted.

(b)               a Council Tax precept of £79.46 for a band D equivalent property (equal to an increase of approximately 4p per week) and the revenue budget as set out in Appendix 1 be approved.

(c)               the capital programme as set out in Appendix 2 be approved.