Contacts: David Howells, Director of Corporate Services, 023 8064 4000 Ext 203
Paul Carey-Kent, Deputy Treasurer, 01962 847525

1 Summary

1.1 This report sets out for members the latest budget predictions for the year. On revenue, the forecast overspending has increased to £155,000 from £125,000 forecast in the previous monitoring report in July. In part this is caused by uncontrollable events and it is recommended that these (net £82,000) should be held against any potential savings on pensions. The balance of the overspending mostly results from a less favourable view on predicted income. No action is proposed now to cover this shortfall. Instead, it is proposed to wait until the revised budget estimates are known. On capital there are only minor changes to the position reported to the Committee in July.

2 Revenue

2.1 The latest position is given in Appendix A with details of the major variations set out below.

2.2 The budgets have been adjusted for the savings to the cash limited budgets and the increases to pensions and revenue contributions to capital approved by the Authority on 26 September. This means that £350,000 of savings are being made on the cash limited budgets in addition to the variations shown in the appendix.

2.3 Expenditure on pay is projected to be slightly under budget by £13,000. Within the figures, savings have been made to meet the costs of staffing issues reported to the Personnel Committee on 10 September 2001. These included the costs of transferring the control room personnel to "grey book" conditions of service (£30,000) and the costs of retained service counting for whole-time service (£60,000).

2.4 Savings of up to £210,000 have been identified on the Command, Control and Communications System maintenance contract. This was the growth allowed in the budget for the expected increase in the maintenance contract, but due to delays in completing the new communication system the full increase is unlikely to be paid this year.

2.5 The cost of insurance is projected to increase by a further £192,000 compared with the £100,000 overspending on new premiums reported in the previous monitoring report. All of these increases are uncontrollable as they are due to:

2.6 The current projections on income are less favourable than were forecast earlier in the year when the budget was adjusted to make the £350,000 of savings. At that time it was assumed that as income from fees and charges and sales had exceeded the budget in 2000/01 a balance of savings required of £72,000 could be achieved from extra income in 2001/02. There are no indications yet that extra income at this level will be achieved. So far, only £11,000 has been identified leaving a shortfall of £61,000. The figures will be more closely examined when the revised budget is calculated.

2.7 The two largest variations in the budget are uncontrollable. Higher insurance costs result from Independent going into provisional liquidation. Savings on the maintenance of the command and control system are not due to any deliberate action to make savings, but as the result of delays by the supplier. It is therefore suggested that these two, amounting to a net £82,000, should be held against any future savings on pensions.

2.8 Identifying savings now for the remainder of the overspendings (£73,000) is difficult because savings have already had to be made to contribute towards the overspendings in 2000/01. It is therefore suggested that any action necessary to make further savings be considered when the revised budget is reported in December, by which time a clearer view of income trends should be available.

3 Pensions

3.1 To date there have been 22 retirements (17 age related) in the first six months compared with a full year budget of 54 (34 age related), plus four included in the additional £275,000 brought forward from last year. However, given the volatile nature of this budget, it is still too early to predict any variances on this budget head.

4 Capital

4.1 Capital payments for the year are now expected to total £3.243 million. This compares with £3.577 million reported in July. The main reason for the reduction is slippage on the Command and Control Scheme of £200,000.

5 European Convention on Human Rights and the Human Rights Act 1998

5.1 The proposals within this report are compatible with the provisions of the European Convention on Human Rights and the Human Rights Act 1998.

Recommendations to the Fire Authority

1 That the increased insurance costs less the likely savings on the maintenance of the command and control system amounting to a net £82,000, be held against any future savings on pensions.

2 That a further assessment of the need to make additional savings, together with any action required as a result, be made when the revised budget is reported in December.

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Section 100 D - Local Government Act 1972 - background papers

The following documents disclose facts or matters on which this report, or an important part of it, is based and has been relied upon to a material extent in the preparation of this report.

NB the list excludes:

1. Published works.

2. Documents which disclose exempt or confidential information as defined in the Act.

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Fire Budget Monitoring 2001/02 pp 3.33c