AT A MEETING of the HAMPSHIRE FIRE AND RESCUE AUTHORITY - FINANCE AND GENERAL PURPOSES COMMITTEE held at the Fire Brigade Headquarters, Eastleigh on Wednesday, 14 January 2004.

PRESENT:

Councillors: P.R.C. Hutcheson (Vice Chairman in the chair); Mrs E.S.M Barron; M.F. Cartwright; Mrs P.G.E. Holden-Brown; D.Horne; S.Letts; R.H. Price; R.Smith; Mrs M.D. Snaith; J.Stocks; M.J.Woodhall

68 APOLOGIES FOR ABSENCE

Apologies for absence were received from Councillors P.A. Heath and K. House.

69 DECLARATIONS OF INTEREST

There were no Declarations of Interest made by Members under this item.

70 MINUTES

The Minutes of the meeting held on 5 November 2003 were confirmed as a correct record and signed by the Chairman.

71 DEPUTATIONS

There were no deputations made under this item.

72 BUDGET MONITORING 2003/04 (3)

The Committee considered the report of the Treasurer and Chief Fire Officer (Item 5 in the Minute Book) on the monitoring of the budget for 2003/04.

The Committee were informed that pressures on the 2003/04 budget had been severe, leading to an increase of £1.427m in the projected total spending of the Authority (excluding Pensions) compared with the original budget. The main contributory factors were associated with national developments, especially in pay, which could not be quantified at the time of setting the budget and increases in the number of operational incidents. It was also noted that there had been additional staffing costs due to running at above the establishment level for fire-fighters.

The report set out four possible means to offset the additional spending. It was proposed that the underspend on pensions be used to offset overspends elsewhere for 2003/04. This would lead to a broadly balanced budget after taking account of the supplementary levy and the adjustment for operational incidents.

RESOLVED:

(i) That the report be noted.

(ii) That the proposal to offset any pensions underspend against other pressures be approved

73 UPDATED DRAFT BUDGET 2004/05

The Committee considered the report of the Treasurer and Chief Fire Officer (Item 6 in the Minute Book) on the updated draft budget for 2004/05. The Committee also received a detailed presentation from the Treasurer and Chief Fire Officer setting out possible budget options.

The Chief Fire Officer also updated the Committee on the consultation meeting that took place on 8 January 2004 with trade unions and with business and council tax payer groups. The consultation exercise had proved to be very useful and generally the consultees had shown clear appreciation of the budgetary pressures placed on the Authority.

In addition, the Committee were advised that the Government had announced that transitional funding would be available to fire authorities during 2004/05, with repayment expected in 2005/06 on the grounds that modernisation savings would then come on line.

In considering this item the Committee were mindful that the Government had reserve powers to cap Authorities who propose council taxes which they considered excessive. The Government had not set capping limits in advance, but was expecting council tax increases in general to be in "low single digits". Whilst noting this, members believed that the circumstances for combined fire authorities becoming precepting local authorities were exceptional, due mainly to notional pay awards and the need to establish reserves.

Following a full debate the Committee:

RESOLVED:

That it be a RECOMMENDATION to the Authority at its meeting on 11 February, 2004 that the preferred level of budget for 2004/05 be £59.7m representing a 16.4% budget increase, comprising the base budget plus unavoidable costs plus priority 1 proposals and priority 2 proposals but excluding funding vehicle purchase through borrowing rather than from revenue.

74 CAPPING POWERS : `ALTERNATIVE NOTIONAL' AMOUNTS FOR COMBINED FIRE AUTHORITIES

The Committee considered the report of the Chief Fire Officer and Treasurer (Item 7 in the Minute Book) on the Authority's proposed formal representation on `alternative notional amounts' proposed to be used by the Office of the Deputy Prime Minister (ODPM) as the basis for consideration of capping powers.

RESOLVED:

That a copy of the Committee report be sent as the Authority's formal representation on `alternative notional amounts' proposed to be used by the ODPM as the basis for consideration of capping powers.

75 TREASURY MANAGEMENT AND PRUDENTIAL CODE FOR CAPITAL FINANCE

The Committee considered the report of the Treasurer (Item 8 in the Minute Book) on various Treasury management issues and a prudential framework for capital finance

RESOLVED :

That it be a RECOMMENDATION to the Authority:

(i) to approve the Treasury Management Policy Statement as set out in Appendix 1 to the report.

(ii) to approve the policies set out in paragraph 10 of the report as the basis of the Authority's prudential framework for capital finance.

(iii) to approve the financial indicators set out in Appendix 3 to the report.

76 COUNCIL TAX ON SECOND HOMES

The Committee considered the report of the Treasurer (Item 9 in the Minute Book) outlining that under the Local Government Act 2003, local authorities were able to reduce the discount on the council tax, currently allowed to owners of second homes, from 50% to as low as 10%.

Under the Regulations the additional income in the Hampshire area would be shared between the billing authorities (the districts and unitary councils) and the major precepting authorities (the Police Authority, Hampshire Fire and Rescue Authority and Hampshire County Council) in proportion to their council taxes.

The majority of Members' supported the reduction of the discount on council tax, currently allowed to owners of second homes, however Councillor R. Smith asked that it be recorded in the minutes that he was opposed to the proposal.

RESOLVED:

That it be a RECOMMENDATION to the Authority:

(i) to support the development of the protocol as set out in paragraph 5.2 of the report

(ii) to participate in future meetings to determine how to accrue and use the potential additional income

(iii) to encourage all district councils and Southampton and Portsmouth City Councils to reduce the discounts for council tax and second homes from 50% to 10%

(iv) to determine its use of any additional income after the Billing Authorities have made their decisions, but encourage those decisions to be made for 1 April 2004, if possible

(v) to add to the Authority's own share of any additional income to reserves in 2004/05, but budget for it from 2005/06 onwards

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