Calculation of the base budget

1 Summary of changes in the base budget

 

£000

%

Original budget 2006/07

59,560

 

Add full year costs of inflation to November 2006

-94

-0.2

Add growth items allowed in the base budget:

   
 

Net cost of increments

23

0.1

 

Asset management costs

437

0.8

 

Full year effect of previous years' growth

48

0.1

 

Provision for inflation from November 2006 to outturn 2007/08

1,388

2.3

 

Retained incidents

16

-

 

HFRA firefighter pension costs

133

0.2

 

Net reduction in leasing costs

-91

-0.2

   

61,420

3.1

2 Full year cost of inflation to November 2006 prices

2.1 The original budget has been increased by the actual costs of inflation to November 2006. Total inflation is a reduction of £94,000 for pay and prices. The reason for this is that the 2006 pay award for firefighters was lower than that provided for in the 2006/07 budget.

3 Increments

3.1 These are the gross costs of increments less savings on turnover. The net cost for firefighters is nil and for support staff is £23,000.

4 Asset management and interest receivable costs

4.1 This reflects the change in the level of revenue contributions which is mainly attributable to vehicles of £760,000 (an increase of £120,000 over the original budget), an estimated increase of £189,000 on PWLB interest, an increase of £146,000 on MRP less an estimated increase of £18,000 on interest receivable.

5 Full year effect of previous years growth

5.1 These increase the budget by £48,000. This increase is mainly the result of the agreed £150,000 being added to the 2007/08 budget for regionalisation costs, the full year effect of the retained stations admin support of £56,000 offset by the £184,000 increase in general balance for 2006/07.

6 Retained pay - number of incidents

6.1 The budget is currently based on 24,743 incidents. This was calculated using the agreed formula which takes the average of the last five years excluding the highest and lowest years to avoid any distortion of exceptional years.

6.2 The formula has been reviewed for 2007/08 and the average number of incidents increases to 24,898 which in turn increases the retained pay budget by £16,000.

7 Provision for future inflation

7.1 The provision for inflation from November 2006 to March 2008 has been calculated based on 2.3% for firefighters and for support staff, 3.6% for pension payments that the Authority is still liable for and 2.5% for all other costs. An increase in local government employer's pension contributions from 275% to 295% of employees' contributions has also been provided for.

8 HFRA firefighters pension costs

8.1 The pension costs for which the Authority is liable for are estimated to increase by £133,000 in 2007/08. This is mainly due to the ill-health payments which the Authority has to pay into the pension account which are payable in three annual instalments. The financial year 2007/08 will bear the cost of 1/3 of any such retirements in both 2006/07 and 2007/08. A similar increase is projected for 2008/09 when the costs should level out as they will reflect three "1/3rds".

9 Reduction in leasing costs

9.1 This is the reduction in costs in the year of the operational leasing charges falling out as leases expire offset by the additional revenue costs of finance leases taken out.