Contact: Paul Carey-Kent, Deputy Treasurer, 01962 847525
David Howells, Director of Corporate Services, 02380 64400 ext 203

1. Summary

1.1 This report sets out for Members the latest budget predictions for the year. Overall a projected overspend of £250,000 has been identified on wholetime firefighters pay and allowances. This is after the additional £312,000 cost of the 2003 pay award which it is proposed to fund through a supplementary levy. However, the uncertainties of transitional funding and the impact of the retained firefighters pay settlement means it is difficult to predict the outcome accurately at this stage. It is also possible that the impact in 2003/04 of some of the areas which underspent in 2002/03 may offset some of these but further work (eg on interest and other income) is required to examine this. The creditor for the payment to the Office of the Deputy Prime Minister (ODPM) was set up in line with the agreement made ie. all pay deductions from striking employees to be paid over to the ODPM. However, should the Authority be successful in its claim to offset the increased costs this would reduce this liability.

2. Revenue

2.1 The latest position is given in Appendix A

Firefighters Pay Award

2.2 The firefighters pay award has now been settled. All firefighters will receive a backdated 4% to November 2002. This is what was assumed when the accounts for 2002/03 were closed and a creditor for this sum was set up. The pay award for November 2003 will be an average of 7% although the details of the retained award have yet to be received. The budget was set assuming 4%. The additional cost in 2003/04 is estimated at £312,000. Transitional funding and/or modernisation savings are the means of funding the difference, but given the uncertainties around those, the final accounts report proposes that a supplementary levy should be made to cover this, recognising that due to the underspend in 2002/03 this will have a neutral effect overall on constituent authorities.

Wholetime firefighters

2.3 The latest projected outturn for wholetime firefighters pay and allowances shows an overspend of £250,000, after allowing for the average 7% November 2003, pay award and equates to approximately 14 firefighters over establishment for the remainder of the year. This reflects the training of firefighters not yet required due to lower levels of retirement than anticipated. Consequently, no further firefighter recruitment will be needed this year. However, if there are more leavers or retirements on the year than estimated the overspend on this head could reduce (possibly having a detrimental effect on the pensions budget however).

Retained Firefighters

2.4 Operational activity is at a high level in the first two months (4,724 incidents compared with an annual estimate which equals 3,876 in 2 months) which is reflected in the payments due to date for retained firefighters pay and allowances, however it is too early to predict an accurate outturn at this stage. Further, the details and timing of the retained firefighters pay settlement is still awaited. The costs have been assumed at the 7% average in calculating the overall total of £312,000.

Other Variations

2.5 The projected outturn for supplies has been increased mainly to reflect an increase in usage of stationery, particularly paper for printers, in line with the 2002/03 outturn. Similarly, the premises projected outturn has been reduced as a result of lower water charges. The car allowance budget has been reduced reflecting the trend in fewer claims and vired to legal expenses to cover the increased costs of mitigating claims against the Authority.

3. Pensions

3.1 In the first 2½ months there have been just four age related retirements (three of which were assumed) compared with a budget of 33 (23 age related) in the whole year. There will also be higher employee contributions as a result of the 2003 pay award. However given the volatile nature of this budget it is too early to predict any variances on this budget head.

4. Capital

4.1 Appendix B details the latest costs of the approved capital programme.

Vehicles

4.2 Over the 4 years 2000/01 to 2003/04 the total estimated spend is £5,240,000 compared with a combined approved value of £5,260,000. Small underspends in 2001/02 and 2002/03 offset a small overspend in 2000/01 and an increase of £22,000 in 2003/04 to purchase some second-hand vehicles.

Command, Control and Communications System

4.3 This scheme is now projected to cost an additional £492,000, the reasons for which are set out in the Command, Control and Communications Project - Post Implementation Review report elsewhere on this agenda.

HOT Fire Scheme

4.4 This scheme has finally completed at £74,000 less than anticipated.

B&C Division HQ SCA Schemes

4.5 These projects are both progressing within budget. However the SCA approvals both expired in 2002/03 and therefore the ODPM will have to be approached to see if this approval can be carried forward as just £4,000 was spent in 2002/03 leaving an estimated £66,000 currently needing financing through the Authority's BCA allocation.

Breathing Apparatus Kit

4.6 The first phase of this order has now been placed.

HQ Development

4.7 As agreed at the last meeting, £25,000 has been added to the value of the starts programme for the professional fees to produce a feasibility scheme and project appraisal for the rationalisation and improvement of buildings at HQ site.

5. Recommendations

5.1 The virement details on Appendix A be approved.

5.2 The pressures on the budget and offsetting factors be noted and reported on further at the next meeting of this Committee.

5.3 The changes to capital starts detailed on Appendix B be approved.

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:

Published works.

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

TITLE FILE

Pp3.33(d) Budget monitoring 2003/04