Contacts: Paul Carey-Kent, Deputy Treasurer, 01962 847525;
David Howells, Director of Corporate Services 023 8062 6833

1 Introduction

1.1 Members will recall that an underspending of £625,000 was predicted in the first monitoring report for the year based on spending to 20 June, and it was agreed that the potential underspend should be recycled as necessary into modernisation initiatives. This report sets out for members the latest budget predictions for the year. There has been little change in the underlying position: an underspend of £601,000 would be predicted, but of that £393,000 is planned to be spent on initiatives linked to the modernisation agenda, leaving a net predicted underspend of £208,000 against the original budget. The variations since the last monitoring report may be summarised as follows:

	Authorisation	Modern- isation	Other pressures	Overall position
		£'000	£'000	£'000
Q1 Underspend brought forward				-625
Increase in turnover savings			-100	-100
Edexcel - back pay	HR 20/4/05	100		100
Senior Management Review	HR 8/9/05	70		70
Equality and Diversity team	HR 9/2/05		60	60
Admin support for retained station	HR for approval	17		17
Regradings	HR for approval		41	41
Project Manager (CFRMIS)	HR for approval	17		17
Career guidance re control	HR for approval	30		30
Business rates - revaluation savings			-25	-25
Home Fire safety checks	CO delegated	30		30
HR/Training data base	CO delegated	10		10
External consultants - various	CO delegated	119		119
Reduction in interest receivable			50	50
Other variations			-2	-2
Total		393	24	-208

1 Revenue

1.1 The latest position is given in Appendix A.

Wholetime firefighters pay and allowances (£52,000)

2.2 There has been further turnover among wholetime firefighters, further increasing underspendings by £100,000 from the previously reported £600,000 to £700,000. These savings have been offset by additional expenditure of £152,000 for back pay following the Edexcel verification of competent firefighter rate of pay (£100,000 which is a requirement of the grey book job evaluation project and additional allowances agreed following the Senior Management Review £52,000 in 2005/06, full year effect of £62,000, which also includes the corporate allowances not previously covered specifically), both of which are aimed at increasing the Authority's capacity to manage its resources more effectively.

Support staff pay (£150,000)

2.3 Increased costs have arisen from the establishment of the new Equality and Diversity team (£60,000 in 2005/06, full year effect of £120,000, approved by the Authority in February on the basis that cost would be absorbed within the budget).

1.4 It is proposed to seek approval by the Human Resources Committee to provide additional administration support at retained stations (£17,000 in 2005/06, full year cost £176,000) to ease the administrative burden currently undertaken by retained firefighters. This is based on a roll out to three stations this year and to seven or eight stations next year. Approval will also be sought for a project manager for the Community Fire Risk Management Information System (CFRMIS) for a 50 week period (£17,000 in 2005/06, £16,000 in 2006/07).

1.5 As a result of changes in systems and implementing new ways of working; several teams have been reorganised and staff have taken on new responsibilities resulting in a number of regradings (£41,000 in 2005/06, cost in full year £50,000).

1.6 Additional allowances (£18,000 in 2005/06, full year effect £20,000 in 2006/07) have been agreed following the Senior Management Review referred to in paragraph 2.2.

Other employee expenses (£30,000)

1.7 Provision has been made to provide career guidance for the 38 control operators to support them in the run up to establishment of the regional control room. This may now need further review following the location announcement.

Premises costs (-£25,000)

1.8 A successful challenge to the property valuation for business rate purposes for Eastleigh Fire Station has resulted in savings of £25,000 in this year and ongoing savings of £10,000 in future years.

1.9 Remedial repairs have begun at Basingstoke Fire Station. The costs are estimated at £50,000 but will be met from within the existing provision for repairs and maintenance.

Operational and IT equipment (£40,000)

1.10 A total of £100,000 has been allocated to Home Fire Safety Checks (HFSCs) for purchase of smoke detectors, £70,000 of which had originally been earmarked for lightweight fire tunics (shown as virements on the attached appendix). A further £10,000 will be spent on a feasibility study for an HR/training database to support the Integrated Personal Development System (IPDS) as part of the Authority's e-government strategy.

Other supplies (+£120,000)

1.11 External consultants have been hired for a variety of projects in support of IRMP objectives, including reviews of: Service Level Agreements with Hampshire County Council (£25,000), partnership arrangements (£25,000), business continuity planning (£10,000), the job evaluation (as part of Middle and Senior Management Reviews) (£49,000) and Investors in People (IIP) (£10,000).

Urban Search and Rescue Team

1.12 £612,000 has been received from the Office of the Deputy Prime Minister (ODPM) to provide an Urban Search and Rescue Team. The grant income, together with unused grant from previous years (£180,000) has been allocated to fund the new team consisting of wholetime firefighters, retained firefighters and administration support. As the team is not at full establishment it is proposed to use the balance of the grants (£281,000) to fund the provision of office accommodation and vehicle garaging, which the ODPM will not fund specifically. Full details will be reported to the Asset Management Working Group and the Authority in due course. For budget monitoring purposes, this is assumed to be cost neutral, ie whatever is received will be spent in this area.

2 Pensions

2.1 In the first six months there have been 14 retirements (12 age related and 2 ill-health). This compares with the budget of 31 retirements (21 age related and 10 ill-health) for the whole year.

2.2 Currently it is predicted that overall the budget could underspend by £200,000. However, given that this equates to just three average retirement lump sums, it is felt to be too early in the financial year to offer this up for virement to another budget head

Capital

2.3 The only variation to report on is the Headquarters project. The tender has now been awarded and although the start date is now December 2005 the completion date is still anticipated to be the same. The overall cost of the scheme is still within budget, but approximately £880,000 of the payments will now be made during 2006/07 rather than 2005/06. There is a meeting of the Asset Management Working Group on the morning of this meeting and a verbal update will be given to this meeting.

2.4 The details of the Urban Search and Rescue capital works have not been finalised and as with the general Headquarters project. An update on progress will be provided to the Asset Management Working Group and/or Authority in due course.

2.5 The changes throughout this report will not have a significant impact on the approved prudential indicators.

3 Reporting efficiencies

3.1 As Members will be aware from the oral update given at the Authority's last meeting the ODPM has issued a paper on setting efficiency savings targets of 5% for FRAs over the period to 2007/08. As agreed at that meeting a response has been sent to the ODPM which stated that whilst the Authority agrees with the principles behind achieving the efficiencies required, it did not agree that there should be a combined target for all fire and rescue authorities with different authorities potentially contributing differentially. It was suggested that each authority should have an individual target, keeping accountabilities clear and the process as simple as possible.

3.2 All the efficiency savings must be "cashable" - defined as changes that maintain the same or better level of service provision while reducing the resources needed to deliver that same service. There must be a direct auditable financial saving or benefit, with money released so that the Authority can then make a positive choice, if it so wishes, to reduce Council Tax, spend elsewhere or recycle within a service to deliver better results.

3.3 These are examples of efficiency savings which have been achieved, or are planned to be delivered, in the Authority's IRMP or financial plan:

· Budget allocation to Group Managers to fund Partnership Initiatives

· Improved procurement

· Revenue funding of vehicles

· Risk based cover eg saving on capital investment of the Popley Community Centre project

· Shift and crewing system reviews

· Sickness management

· Reduced ill-health retirement

· Regional collaboration

· Review of insurance cover

· Co-responder scheme

Some of these relate directly to the modernisation agenda, and clearly the Authority will be looking to ensure that quantifiable savings are achieved to at least offset the more readily evident costs of modernisation.

4 Equality impact assessment

4.1 An impact assessment has been made on the proposals in the paper and shown that they are not discriminating they are considered compatible with the provisions of the European Convention on Human Rights, the Human Rights Act 1998 and the Race Relations (Amendment Act 2000).

Recommendation

1 That the latest budget position be noted.

Section 100 D - Local Government Act 1972 - background documents

The following documents discuss facts or matters on which this report, or an important part of it, is based and have 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.

Fire Budget Monitoring pp 3.33(d)