Contacts: Paul Carey-Kent, Deputy Treasurer, Tel 01962 847525
David Howells, Director of Corporate Services, Tel 023 8062 6835

1 Introduction

1.1 This report sets out for members the latest budget position. Assuming that Members support the proposed contribution to reserves, the budget is projected to underspend by £66,000.

1.2 Efficiency savings and the provision for inflation have been fully allocated. Any unavoidable spending pressures will have to be met from within existing resources or reduce the projected underspend.

2 Revenue

2.1 The latest position is given in Appendix A. Details of the main variances are as follows.

Wholetime firefighters pay and allowances

2.2 The wholetime firefighters' pay and allowances budget projected overspend has reduced mainly as a result of increasing the budget provision following confirmation of external grant funding for positions involved in the implementation of the FireControl and FireLink projects, Urban Search and Rescue team and the enhanced command support trainer. (The details are set out in appendix A - significant virements).

2.3 The budget is however still under significant pressure but through continuing to carefully monitor the budget and continuing to adjust recruitment it is hoped to bring this expenditure head within budget at the end of the financial year.

Retained firefighters pay and allowances (+£160,000, 2.6%)

2.4 As explained in the previous quarterly monitoring report this budget head is difficult to predict due to the number of variables that affect the claims made by retained firefighters. As well as attending operational incidents, retained firefighters are carrying out a number of relatively new activities such as co-responder schemes, home safety visits, Personal Development Review (PDR) interviews, incident command, animal rescue incidents and various project tasks.

2.5 Unbudgeted Continuous Personal Development (CPD) payments (£58,000) have been paid and Personal Development Review (PDR) reviews have been completed. (£40,000). These payments, together with the shortfall in funding for the additional retained firefighter pump at St Mary's Fire Station have put significant pressure on this budget head.

2.6 These pressures have highlighted another issue. The retained budget has traditionally been set to cover average spend, subject to an annual adjustment for the change in the number of incidents. Historically, there have always been retained firefighter vacancies and by budgeting at average spend reduced the likelihood of significant underspends. In more recent times, the new activities mentioned above, which were intended to be funded from expected retained vacancies, have added to the unbudgeted pressures. These factors combine to contribute to the forecast £160,000 overspend.

2.7 The total number of incidents to the end of October is 13,358 which is 17% below the assumed number of incidents in the budget. If this trend continues the savings from attending fewer incidents will help offset the cost of other duties, such as incident command, animal safety, fire safety visits and co-responder activities. Recruitment arrangements will continue to be followed and the budget will continue to be monitored closely.

2.8 On a more positive note, from December the co-responder scheme expanded from 6 stations to 14. The ambulance service is fully funding the schemes at the new stations this year and all stations next year. In addition the current scheme's performance is on target to achieve a one-off Local Public Services Agreement (LPSA) reward grant, 50% end of 2009/10 and 50% in 2010/11.

2.9 Also next year, the number of fire safety visits is planned to reduce considerably. Group managers will be given a budget for fire safety visits that they will manage locally and more effectively by targeting activity at the more vulnerable members of the public.

2.10 The enhanced command vehicle is expected to be received in the near future. Government grant finding will be used to train and crew the vehicle reducing pressure on the retained firefighters budget. All the above arrangements should ease the pressure and help keep retained firefighters pay within budget in the future.

Support staff pay (-£400,000, 4.0%)

2.11 Due to the delays in progressing the equal pay review it is now unlikely that the new pay grades for support staff will be implemented before the end of this financial year. As the current year's budget provision of £300,000 will not be spent if agreement is not reached it would be essential to add it to the equal pay reserve at the end of the year for spending in 2009/10.

2.12 The Control room have been managing their activities with two full time vacancies this year and have managed to cover a number of staff on maternity leave from existing resources. This has resulted in a projected underspend of £100,000.

Utilities, rents, rates, etc (+£120,000, 8.0%)

2.13 As reported in the previous quarterly monitoring report new electricity contracts for small sites increased prices by 80% from 1 October 2008 increasing costs by £120,000.

2.14 Electricity contracts are negotiated by Hampshire County Council under a joint procurement arrangement and tend to be let on an annual basis, as is the case for this year.

2.15 In the case of the current contract renewals, historically electricity prices have followed the trend of oil prices. The markets and the general economic situation indicated that the price of oil, and therefore electricity, which had been constantly climbing from March 08 to its highs in June and July, would start to fall. This proved to be the case and oil prices did start to drop in August. However, instead of continuing to follow the price of oil, the price of electricity began to rise and the expected drop did not occur until October, after which the contracts had to be renewed. Nevertheless, by checking with the market on a daily basis the County Council were able to secure prices before they hit their peak in late September. As for the renewals in September 2009, the County Council are already obtaining quotes to maximise the benefit of the relatively low cost of electricity at the moment and anticipate savings will be made then.

2.16 As part of the environmental impact review, action is being taken to help establishments to minimise their utility consumption which should help to offset the current price increases. The pattern of expenditure to date does not suggest the impact of the environmental review will be significant this year so it is felt prudent to report a projected overspend for electricity bills at this stage to reflect the increase in prices.

Transport expenditure (-£52,000, -2.7%)

2.17 The projected expenditure for vehicle fuel is estimated to reduce by approximately £50,000 following the fall in the price of diesel in recent months.

IT and communications (+£53,000, +1.9%)

2.18 A new Workforce Management Information System is being developed to provide sound performance management information and reports to support all managers and assist decision making.

2.19 The requirements to be met are in the functional areas of Training and Events, Shift and Rota Planning, and Health and Safety. The business case states that the new system would achieve administrative savings with considerable non-financial benefits in operational availability through improved tasking, better skills and sickness management.

2.20 The workforce management information system (WMIS) is estimated to cost £391,000. The project is progressing well and payments are now expected to be £200,000 in 2008/09, £161,000 in 2009/10 and £31,000 in 2010/11. Funding has been identified from within existing resources but a shortfall of £73,000 has been identified in the current year.

Other supplies (-£66,000, -2.9%)

2.21 Due to carrying out some projects and consultations using in-house staff it has been possible to reduce expenditure on consultants fees by £30,000. It is also possible to confirm further savings of £35,000 in the maintenance and purchase of hydrants, as mentioned in the second quarter budget monitoring report.

Unallocated inflation contingency (-£67,000, -100%)

2.22 The remaining £67,000 unallocated inflation provision has now been used to partly offset the additional electricity costs.

Interest and statutory debt repayment (-£323,000)

2.23 Further work has been undertaken on these budget heads. Due to a combination of less long term borrowing being taken out, a more favourable cashflow than anticipated and the recent drop in the base rate the projected expenditure on these budget heads has dropped significantly. This is offset by an increase in the statutory provision for debt repayment due to the finance leases that will have been taken out by the end of the financial year.

Cash balance

2.24 The balance of money borrowed from/invested with the County Council has so far this year varied on a daily basis from borrowing £5.5m to lending nearly £1m. The average balance has been between £2 and £3m borrowed from the County Council.

3 Modernisation Reserve

3.1 The balance on the modernisation reserve currently stands at £362,000. There are no proposed changes to the projects (estimated at £73,000) previously agreed to be funded as set out in the table below:

3.2 At present the projected outturn would require no contribution from the reserve. This leaves the contribution of £341,000 as planned in the original budget with a year-end balance of £703,000 in the reserve.

Capital Payments Reserve

3.3 As the saving on interest is fortuitous, it is recommended that, given the pressure and reliance on capital receipts in the capital programme for 2009/10 - 2011/12, that £250,000 of the underspendings on these budget heads be added to the capital payments reserve at the end of the financial year.

4 Cashable Efficiency Gains

4.1 The Government's Comprehensive Spending Review (CSR07) requires the Authority to identify cashable efficiency gains of £1,055,000 in each of the next three years. Efficiency gains implemented to date and reflected in the latest budget are as follows:

4.2 The total cashable efficiency gains identified to date total £2,242,000, of which £2,2242,000 has been reinvested leaving a zero balance. Reinvestments to date are:

5 Capital

5.1 There is just one change to the updated programme reported to the Authority last month.

5.2 An addition to the current Compartment Fire Behaviour Training (CFBT) facilities is planned. It is in the form of a `villa complex' which will provide multi level/multi scenario real fire training. There have been a number of Fire Service fatalities and severe injuries that have occurred directly or indirectly as a result of inadequate understanding of fire behaviour within compartments in multi-level buildings, and of the appropriate fire fighting tactics and precautions to be taken.

5.3 Historically firefighters have been trained in the use of breathing apparatus in a breathing apparatus chamber with cosmetic smoke (which is still done initially for new trainees). However these resources are limited and can lead to teaching poor techniques in unrealistic conditions. We have now moved forward and enhance the initial training by teaching compartment fire fighting techniques in CFBT training areas using real fires.

5.4 Current CFBT training facilities are extremely limited and can only provide real fire training on a single level and in a single compartment. The purchase of the 'Villa' will enable us to train our firefighters and incident commanders how to safely deal with fires in multi-level buildings in a realistic and safe training environment and will also enable us to deliver initial and continuation training in tactical ventilation techniques.

5.5 The funding for the scheme has been budgeted for in the training revenue budgets and can therefore be vired to increase revenue contributions to capital. It is recommended that Members support this addition to the 2008/09 capital programme.

6 Equality impact assessment

6.1 An impact assessment has been made on the proposals in the paper and shown that they are not discriminatory. 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).

7 Conclusions

7.1 The revenue budget is still under significant pressure this year. The projected underspend will help meet unexpected spending pressures..

Recommendations

1 That the latest budget position be noted and in particular the proposed contribution to the capital payments reserve.

2 That it be recommended to the Authority that the 2008/09 capital programme be increased to include the FBT villa complex at a value of £100,000 to be financed by revenue contributions from training budgets.

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.

none