Information

Attendees:

PFCC Stephen Mold (SM)

Paul Fell (PF)

Helen King (HK)

Louise Sheridan (LS)

CFO Darren Dovey (DD)

ACO Paul Bullen (PB)

ACFO Shaun Hallam (SH)

ACFO Robin Porter (RP)

Nick Alexander (NA)

SM welcomed everyone to the meeting

• The minutes from the previous meeting were approved.
• Relevant updates on any outstanding actions were provided and the Action Log updated

The Commissioner requests a presentation of final budget proposals for Northamptonshire Fire and Rescue Service for 2022/2023 to include the treasury management and reserves strategies.

• Helen King advised the Commissioner that a huge amount of work had been completed by Nick Alexander, CFO Darren Dovey and the Fire team to get to this point.
• HK invited Nick to talk through the changes and the work undertaken since December’s report to the newly revised 3-year balanced budget being presented at this meeting.
• Nick advised that the Fire Finance Settlement for 2022/23, released on 16^th December has provided the opportunity for Services in the lower quartile with the flexibility to ask for a one off £5 increase in the Precept.
• This equates to 7.91% increase on the 2021/22 value. The MTFP was previously modelled using a 1.99% assumption. The additional flexibility provides an extra £943k.
• Furthermore, the settlement includes some one off grant (£372K) and higher than expected inflationary increases in RSG.
• In order to fund inflationary pressures and required growth linked to previously approved plans or business cases, further work has been undertaken to identify any further savings over the medium term.
• A further review of the capital budget has identified some cost reductions and re-phasing of projects, but the values are still high and deliverability remains a factor
• Close management of the Fire capital programme will continue during the year as these are the most volatile costs and susceptible to affect the MTFP.
• Nick will work with HK to highlight and mitigate any fluctuations.
• In terms of cashable savings. £350k has been identified and incorporated into the 2022/23 budgets.
• These are all considered achievable and have contributed to a three-year balanced budget.
• It was noted that projected savings from the Operational review had been reinstated as proposed by the Chief Fire Officer and at a level of £250K rather than £400K. The review is scheduled for 2023/24.
• Accepting that it will take time to implement, the Commissioner was keen to understand who would be leading the project, review a project plan and when it would start.
• It was agreed that the Chief Fire Officer would provide this information shortly and discuss this in their scheduled 1-2-1 later today.
• This is flagged as an amber risk as it carries a significant saving. Critical that this piece of work is done.

Action – CFO Dovey to agree a timeframe and lead for the Operational Review (Home Office/HMIC June 2020)

• There was a discussion on about an assumption of reduced costs for overtime and bank costs given the 12 additional firefighters – establishment will be over at the first point of the year and enable some savings in this area. It is an estimate and further work will be required to monitor what impact being over establishment has..
• CFO Dovey explained that forecasts were originally based on the recruitment of 18 additional firefighters. 12 of whom would be new recruits who would go straight to training school and 6 who would come across as transferees from other services or from our own On-call stations.
• or from Methodology hasn’t changed other than reduction of 18 recruits down to 12 in April.
• Whilst the 6 transferees have not been scheduled for recruitment in April as part of the revised budget, if leavers are more than expected due to the impact of immediate detriment and other factors, then the S151 Officer and Chief Fire Officer are jointly of the view that additional leavers could be replaced by transferees where appropriate.
• There was a discussion about the likelihood of more that six firefighters retiring and the Chief Fire Officer having the flexibility to manage this throughout the year.
• Nick Alexander confirmed this is monitored via the Chief Officer Team at the Establishment Board.
• There is a direct correlation between those who may potentially retire and the impact of immediate detriment for which decisions need to be made and the potential staffing levels. More retirees = potentially more ID cost impact (depending on the ID decisions which need to be made) but would result in additional vacancies which could be filled by transferees.
• Chief Fire Officer Dovey updated the Commissioner on the impact of Covid on staffing levels and overtime.
• It is hoped that the situation will be less challenging this year. However, it was noted that there will be no additional funding this year for covid related staff shortages. If we have another winter where cases increase and minimum cover is impacted, there will be no option but to revert to overtime.
• HK advised that by March 2022, the COVID Grant funding will be fully exhausted and covid and cover pressures would now fall n the service. This needs to be monitored.
• There was a discussion about the revenue budget requirements.
• A table summarising the baseline cost position, with savings and reserves was reviewed.
• It was noted that the operating budget has increased from £26,209m in 2021/22 to £27,899m in 2022/23.
• It was further noted that since the transfer of governance in 2019 is around £5m. This is a very significant increase (20%) on the original £22.5m budget that transferred from the County Council.
• The Commissioner commented that this was a significant increase and commended the work of everyone involved in helping to achieve this. Ultimately NRFS is able to provide a better service and the public of Northamptonshire are safer as a result.
• This is really good work. HK and NA will summarise the key variances/change between budgets since 2018/19. However, this is caveated with the fact that the budgets are now prepared on a zero based budget approach whereas budgets in 18/19 did not always reflect the right pressures on the right lines nor reflect costs and income across financial years in line with the matching concept as required by financial principles and standards. Given this baseline, the figures will not be directly comparable as a large number of changes will reflect financial restatement.
• There was a discussion about projected savings from the Estates Enabling Services business case and an increase in procurement savings to £30k. Nick confirmed he has high confidence in Leanne’s team to achieve this.
• Nick confirmed that he is also confident on the £14k savings from the review of the business rates.
• The S151 and Chief Fire Officer have agreed the service will establish an Operationally led ongoing savings programme of £50k for 2022/23 (increasing in future years). This is achievable in 2022/23 as cash flow reserves are healthier and Nick is pushing for an increase in Treasury investment receipts.
• Should further grant funding for the Capital programme be forthcoming from the Home Office, it was agreed that we would need to fund short life assets to maximise the benefit of reduced costs on the revenue budget.
• The Commissioner was mindful that we have seen some pressure on pump availability and response times and would like to consider staffing costs in this light and whether transferees are required.
• Helen King agreed and confirmed that we have the flexibility and comfort in a number of areas, including contingency to take evidence-based decisions in this regard and that the Establishment Board will inform these.
• Given the significant financial support to date. If Capital funding is forthcoming, there will now be a reducing opportunity to get money from Home Office and the next focus will be to ensure that pensions for Fire and Police changes in the future are properly funded.
• Have good oversight of establishment and this is the biggest cost.
• DD advised that the other area to consider investment in the future would be additional recruitment in Protection/Prevention.
• A number of Building safety changes come into effect in 2022 (Building Safety Bill and Fire Safety Act 2021) which will put pressure on the Inspection teams.
• In addition, changes announced this week around cladding will require thousands of extra buildings to be inspected.
• Don’t yet know the impact of this but any building over 11 metres (4 floors) will now need to be added to the Inspection register.
• Every service will need to grow their Protection teams as a result.
• There was a discussion about Capital receipts and S106 receipts.
• HK confirmed that the Joint Finance Team have technical expertise which is used to ensure that funding and receipt sis applied to capital programme in the most financially advantageous manner to ensure the revenue costs of capital are as low as possible. However, it is essential that capital receipts from building sales are taken forward in a timely manner in line with plans. Otherwise, both revenue and capital costs are uncured unnecessarily and which could be avoided if plans are followed.
• New S106 officer is now in post but due to the timescales involved in S106 arrangements in the short-term, receipts will be constrained by securing funds agreed by the County Council have negotiated for the next 2 years because of way set up. The new S106 post is securing the transfer of these funds to Fire (and thus helping the cashflow) and contributing to secure future proposals for future developments. It is important to note that drawdown of such funds is well into the future and based on houses built.
• Mid to long is where she will drive increased benefit.
• The Commissioner confirmed her contribution in Years 4 and 5 of the MTFP will be particularly welcome.
• There was a discussion on ensuring local authorities are held to account for the appropriate collection rates
• HK confirmed that rates are quite good and we have the collection information from the North but are waiting for the collection information from the West.
• Returning to the Capital Programme, The Chief Fire Officer advised that there is still some work to do around education to ensure staff understand that the more you add to the capital budget the less revenue there is, it is not a target to achieve, and savings in one area of the capital programme can offset areas where costs do increase.
• Nick Alexander agreed particularly as we are currently living with higher levels of inflation. Even more important that adapt quickly and that requirements are based on current and future needs.
• Surplus of items is low, and people and trades are in short supply.
• There was a discussion about pension contributions. There are projected increases in year 3 and it is still not known if government funding will be available to offset these.
• There was a discussion about Moulton MLC. The Commissioner reiterated his desire to ensure effective and timely disposal in line with plans Savings in the medium term are only possible if we reduce unnecessary costs on unoccupied buildings (save on rates etc).
• There was a discussion on potential repairs to fire/drill towers and that for deliverability it is likely these will need to be prioritised above some of the other estate requirements in Fire.
• Paul Bullen advised that he is expecting a brief from Kate Perris later today.
• He will keep Helen King briefed on the cost of any potential repairs.
• There was a discussion about the one off £372k special grant from the Home Office. which is intended to cover the real term cost of living increase which reduces the pressure on other areas of the MTFP. As such, it is essential that it is built into the grant as ongoing, as the pressures are ongoing and the response to the provisional settlement includes that representation.
• In conclusion, the Commissioner commended the work that had gone into balancing the budget for the next 3 years and all the lobbying that had taken place to get the £5 Precept flexibility.
• An increase of £5m in 3 years is a phenomenal achievement.
• Chief Fire Officer Dovey said it would be useful to have a breakdown of what the extra £5m has provided.
• HK confirmed she has commenced this work and this will be done but it will be after the precept priorities have been concluded, with the caveat that when the £22.6m was transferred from the County Council, not all the budgets were in the right place and a huge amount of work has been undertaken to correct this.

Action – HK and NA to undertake the comparison of funding changes between governance transfer and now. This can happen after the conclusion of the precept process when the budget and precept have been finally set.

• The Commissioner endorsed the 2022/2023 budget presented.

Assurance Statement:

Both the Commissioner and Chief Finance Officer recognised the significant work that had been undertaken to get to the current position on the budget.

The Commissioner further acknowledged the amount of work that had taken place with government departments to build secure additional funding and thanked everyone involved.

The Commissioner was satisfied that the Fire Service had been able to provide a proposed three-year balanced budget, subject to the assumptions outlined within the proposal.

The Commissioner reiterated that it was essential that the Fire service delivered robustly against the proposed savings plan. This was required to achieve a balanced budget and to create the ability to reinvest in other areas.

The Commissioner asked that the Chief Fire Officer appoint a senior officer to lead the operational review and also provide the indicative timescales for this work. This is an important piece of transformational work and as such, should be prioritised accordingly.

The Commissioner formally approved the proposed budget.

• No further business was raised