Contact: Paul Carey-Kent, Deputy Treasurer 01962 847525;
[email protected]
David Howells, Director of Corporate Services 02380 626833 [email protected]

1 Introduction

1.1 This report sets out the latest budget predictions for the year. The previous budget monitoring report to Finance and General Purposes Committee on
21 October 2005 projected an underspend of £208,000. Since then there have been three main developments:

· additional spending pressures on modernisation of £290,000

· further underspendings have been identified, largely as a result of spending which it appears advantageous to defer, offset by other general spending pressures identified resulting in a net underspending of £210,000

· two significant issues have emerged which relate primarily to previous years and ought properly to accrue at the end of 2005/06. These total £434,000 and are dealt with by being financed from the Authority's general reserve. The forward budget proposes replenishing the reserve by a matching amount in 2006/07.

1.2 The overall effect is, therefore, a decrease in the underspend projected at the year end to £128,000 (0.2%). Of this, £100,000 is due to lower than expected spending on regional activities. The budget strategy as presented for 2006/07 assumes that this will be carry forward to next year.

1.3 The variations chargeable against the 2005/06 revenue budget may be summarised as follows:

	Authority	Modernisation	Other pressures	Overall position
		£'000	£'000	£'000
Cumulative underspend brought forward				-208
Workshops net surplus			-37	-37
Interest on loans			-84	-84
Reduced spend on regional issues		-100		-100
Reduced spending on CFRMIS project			-36	-36
Deferment of training spending			-140	-140
Job evaluation - back pay	HR C'tee	324		324
Shift Pattern Change Project - 2 FTE	HR C'tee required	29		29
Control -2FTE	HR C'tee Required	7		7
H&S Review - 1FTE	HR C'tee		20	20
Automatic Fire Detection Reduction strategy - 1 FTE	HR C'tee required	30		30
Contributions to capital	F&GP		69	69
Other variations			-2	-2
Total		290	-210	-128

Members may with to note that the proposals for some of the additional staffing are dependent on approval by the Human Resources Committee.

1 Revenue

1.1 The latest position is given in Appendix A.

Whole-time firefighters pay and allowances (£324,000)

1.2 The job evaluation of whole-time firefighters posts has been completed, but remains subject to any appeals. The latest estimated cost of back pay (to November 2003) is £180,000 with the annual on-going costs (including 2005/06) of £144,000.

Support staff pay (£86,000)

1.3 Increased costs have arisen from the employment of a `green book' administrator and a `grey book' officer for the Shift Pattern Change Project team at an additional staffing cost of £29,000 in 2005/06 and £65,000 in 2006/07.

1.4 Two additional control posts are proposed to provide temporary extra cover prior to the transfer to the Regional Control Centre at a cost of £7,000 in 2005/06 and £43,000 in a full year. Costs from 2006/07 will be met from increased whole-time firefighter turnover savings, and/or the likelihood that control staff turnover will increase as recruitment to the Regional Control Centre occurs.

1.5 As a result of a review of the Health and Safety function it is proposed to appoint an additional officer at an estimated cost of £20,000 in 2005/06 and £45,000 in a full year. A growth bid has been made for 2006/07.

1.6 To assist with progressing the automatic fire detection strategy a new post is proposed to help provide better monitoring information at an additional cost of £30,000 in 2005/06 and £100,000 in 2006/07.

Other Employee Expenses (-£130,000)

1.7 A budget of £100,000 was allocated for the performance management review (appraisal) system during the year. This will not be spent this year and could be carried forward to 2006/07.

1.8 A budget of £30,000 was allocated to the career development of control staff this year. This has not been needed to date.

1.9 In both these cases and the Community Fire Risk Management Information System (CFRMIS) project mentioned below, the possibility of carrying forward the underspend as provisions in 2006/07 will be considered in light of year end position and the forward budget strategy.

IT and Communications (-£46,000)

1.10 The feasibility work prior to the procurement of a new joint IT database for the Training and HR functions has been deferred to 2006/07. (£10,000).

1.11 The CFRMIS project team are currently projecting an underspending of £36,000.

Other Supplies and Services (-£100,000)

1.12 Regionalisation work is not progressing as previously planned. The rate of progress is expected to increase next year, and the 2006/07 budget has been prepared on the basis that this £100,000 will be carried forward.

Income (-£37,000)

1.13 More vehicles than budgeted for are expected to be fitted out by the end of the year. Although there have been some additional costs a net workshops trading account surplus of £37,000 is estimated.

Interest on Loans (-£84,000)

1.14 It is now unlikely that any new PWLB loans will be taken out to finance the capital programme in 2005/06 so resulting in lower interest payments.

Contributions to Capital (+£69,000)

1.15 At the last Asset Management Working Group revenue contributions to capital totalling £1,204,000 were identified to fund the 2005/06 vehicle programme, other additional vehicles funded by the ODPM, the USAR building works and the CFBT project. Unless additional funding from the ODPM is received an additional £69,000 is required to reach this total.

Matters arising relating to prior years

1.16 Two matters have arisen, the costs of which relate primarily to previous years:

· under new regulations retained firefighters will be able to join a new pension scheme with an employer's contribution of 14.5%. A decision on what is pensionable pay has not yet been made and also as to whether or not it can be backdated. Assuming this includes call outs, drill nights etc and a take up rate of 30%, the cost of the employer's contribution back dated to November 2003 is estimated at £250,000. The annual continuing costs estimated at £210,000 have been included in the 2006/07 draft budget An oral update on this position will be given at the meeting.

· the Government has announced that due to errors in past years' grant settlements, an adjustment (known as an amending report) will be made which removes £184,000 from the Authority. The on-going effects of these adjustments are included in the grant settlements announced for 2006/07 onwards.

These are significant unforeseeable items arising in the year although related largely to previous years' activity: as such they are appropriate to be financed by the general reserve as it would not be appropriate to expect corresponding savings to be identified. Consequently Members will have to decide whether - as recommended in the 2006/07 forward budget report - to replenish the level of reserves for 2006/07 by replacing this £434,000.

2 Pensions

2.1 In the first 9 months of the year there have been 19 retirements (17 age related and 2 ill health) compared with a budget of 31 for the year (21 age related and 10 ill health.

2.2 It is possible that an underspending of up to £300,000 could occur, however payments into the new pensions account relating to ill health retirements in 2005/06 will reduce this. Therefore, as this represents just three retirements, no adjustment has been made to this budget head.

3 Debt Write Off

3.1 Under Financial Regulations write-off of debts over £3,000 must be approved by this Committee. It is requested that £5,000 of higher education course fees owed by a former employee are written off as part of a Compromise Agreement

4 Capital

4.1 There is nothing further to report on capital against the updated position presented to the Authority last month.

5 Equality impact assessment

5.1 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).

Recommendations

1 That the latest budget monitoring position be noted and in particular the effect of financing the pension contributions and amending reports through the general reserve.

2 That approval be given to:

· making an additional revenue contribution to capital of £69,000 in accordance with the programme proposed by the Asset Management Working Group; and

· writing off of £5,000 of debt as set out in paragraph 4 of this report.

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 2005/06