Archived decisions

COUNCIL MEETING, 20 FEBRUARY, 2003

REPORT OF THE

Hampshire Fire And Rescue Authority

BUDGET 2003/04

1. The Authority prepared a draft budget in December, 2002 of which the trades unions and the three constituent authorities (Hampshire County Council, Portsmouth City Council and Southampton City Council) were consulted. This was conducted on proposals that assumed a base budget increase of 4.7% together with options for new growth from a prioritised list drawn up by a cross-party working group. All three constituent authorities expressed a preference for the Authority to set its levy at a level to meet only a base budget increase with no allowance for new growth.

2. The Authority - at its meeting on 5 February, 2003 - having considered the views expressed during the consultation period, resolved to increase its budget by 5%. In doing so, the Authority was mindful of both the continuing pressures on the Fire and Rescue Service and the expectation of the constituent authorities that there could be additional costs arising from the need to carry out urgent repairs to Copnor Fire Station. The constituent authorities had previously indicated that they would prefer the cost to be taken into account in setting the 2003/04 budget rather than as additional levy during 2002/03. This 5% increase will fund only the most essential £135,000 worth of Chief Fire Officer's growth priorities. It means that about £0.9m worth of funding pressures identified by the Chief Fire Officer will need to be deferred and/or absorbed by taking action within current budgets.

3. The Authority has set this budget against a background of uncertainty of the level of settlement for firefighters' pay with effect from both November, 2002 and November, 2003. The budget is constructed on the assumption of two pay awards of 4% each, with any additional pay increase being covered by a combination of Government transitional funding and immediately realisable savings. The full year effect of each 1% of addition to pay for Firefighters is the equivalent of some 0.5% extra on the levy. As it is not realistic to expect the Authority to absorb the scale of potential increases which could result if a high increase did occur without adequate transitional support and achievable savings, the Authority advised that constituent authorities might be subject to further levy in order to make up any shortfall.

4. The Government is planning to make combined fire authorities "precepting" local authorities. Such financial independence could have significant consequences, in particular the need to build up adequate levels of reserves. The timing of the change remains unclear, as do the Government's proposals for ensuring that such reserves are established. This, too, could have an impact on constituent authorities if the relevant regulations require them to contribute from their own reserves.

M.F. CARTWRIGHT
Chairman

4IR460203