Hampshire Fire and Rescue Authority

Finance and General Purposes Committee Item 3

16 January 2002

Budget Monitoring 2001/02 (3)

Report of the Chief Fire Officer and Treasurer

Contacts: Paul Carey-Kent, Deputy Treasurer - 01962 847525

David Howells, Director of Corporate Services - 023 8064 4000

ext 203

1 Summary

1.1 Overall, the latest forecast outturns on both the cash limited expenditure and on expenditure outside of the cash limit are equal to the revised budget. There are a few variations but the overspendings are being matched by savings elsewhere.

1.2 The changes against the revised budget can be summarised as follows:

2 Revenue

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

Retained firefighters' holiday pay (-£30,000)

2.2 The saving relates to the holiday pay for the year 2000. A creditor was raised in the final accounts for 2000/01 for the estimated costs which under the arrangements operating were not due to be paid until 2001/02. The actual costs were less than the creditor raised.

Public utilities (+£30,000)

2.3 Closer examination of expenditure on gas indicates that the savings are less than were assumed in the revised budget.

Clothing and Uniforms (+£120,000) and Operational Equipment (-£120,000)

2.4 It became clear during this year that more spending was required on clothing and uniforms and also it was possible to make compensating savings on operational equipment. The extent of these extra requirements are now known and a virement for £120,000 is required. The main reasons for higher expenditure on clothing and uniforms include:

· increased condemation of personal protective equipment (PPE) following the introduction of more stringent regulations to ensure that all PPE is `fit for purpose';

· the need to fit `thumb-loops' to fire tunics to ensure an enhanced level of protection during particular firefighting techniques - particularly during training in the `fire behaviour unit';

· the need to replace older firefighting uniform and clothing that has been identified as having reached the end of its operational life under new replacement policies and procedures;

· higher than average numbers of wholetime and retained recruit firefighters requiring initial supply of clothing and uniform;

· issue of clothing (including some PPE) to increased number of support staff.

Corresponding reductions in the purchase of operational kit and equipment will help to offset this higher than anticipated expenditure.

Pensions (-£50,000)

2.5 The assumptions made in the revised budget for new retirements this year still look reasonable but there are savings of £50,000 in the budget provision for the payment of pensions this year.

External interest (+£48,000)

2.6 Interest (£32,000) on one loan was omitted from the calculation of the revised budget. The latest calculation of the cashflow position also indicates that external interest will be higher than originally estimated due to more short term borrowing than estimated. These can be offset against the saving on the pensions budget.

Other Pay Budgets

2.7 Other pay budgets are being carefully managed to stay within the budget.

Number of incidents

2.8 The number of incidents in the current year is continuing at a record level. By 31 December 2001 the number was 21,061 compared with 18,287 at the same time last year. As indicated in the report on the revised budget to the last meeting of the Committee this will most likely trigger the contingency arrangements agreed by the constituent authorities for increasing the cash limit where the number of incidents exceeds the budgeted numbers by more than 5% and when it causes an overspending on both the retained firefighters' pay budget and the total budget. In the revised budget £100,000 was provisionally allocated to the budget and a further £20,000 was held as a further reserve to help meet potentially higher costs. On the basis of spending to the end of December the latest forecast is £70,000 compared with the £100,000 provisionally included in the budget. However, there is continuous uncertainty on the number of incidents and costs in the remainder of the year and so no savings can be assumed at this time.

3 Capital

3.1 All payments are predicted to be in line with those presented as part of the revised budget to the Authority in December.

3.2 Capital receipts are however, now expected to be higher this year. The sale of Peninsular House (the site used as a temporary fire station whilst St. Mary's fire station was rebuilt) is now likely to be in the current financial year for approximately £500,000 (as opposed to the £415,000 in 2002/03 assumed). The effect of this is that less Basic Credit Approval will be required to be returned from Hampshire County Council in the current year and more next year.

3.3 An additional receipt will also be received before the end of the financial year and another next from the sale of surplus housing. There is a possibility that £130,000 will be required to buy a house in Winchester and the report on surplus housing elsewhere on this agenda deals with these issues.

4 Coding difficulties

4.1 At the last meeting of the Authority reference was made to coding difficulties on consumables following the introduction of the new financial system. The Authority requested that the position should be reported to this Committee.

4.2 It can be confirmed that at the beginning of the year there were difficulties but these problems were put right and the accounts were corrected.

4.3 More recently there have been further coding difficulties since the payrolls were transferred to the new financial system. There are being investigated and in the meantime allowances for the miscoding have been made in the figures reported in Appendix A.

4.4 It is to be expected that teething problems will occur when a major new financial system is implemented especially when introduced into an organisation the size of the County Council and the Fire Authority. The problems create work for finance staff but members can rest assured that the problems have not affected the ability to make reasonable predictions of the outturn position.

5 Conclusion

5.1 Despite these pressures, it is anticipated that total spending will be within the revised budget.

6 European Convention on Human Rights and The Human Rights Act 1998

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

Recommendation

1. That this budget monitoring report be noted.

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.

TITLE FILE

Fire Budget Monitoring 2001/02 pp33-33b

Fire Pensions 2001/02