Agenda item

Report of the Chief Fire Officer and Treasurer to the Fire Authority

The minute’s silence for Ukraine was observed by the Authority and those in attendance during this item.

 

Becky Smeathers, Head of Finance and Treasurer to the Authority, presented the report, the main purpose of which is to provide the Authority with the broader projected financial information of the Service for the next three years, to enable members to determine the level of council tax precept required by the Authority for the 2023/24 financial year to enable the Service to function effectively and provide a balanced budget, as is legally required under S25 of the Local Government Act 2003.

 

The following points were highlighted and members’ questions responded to:

 

a)  The Medium Term Financial Strategy report was presented to the Authority at its December meeting, when it tasked the Finance and Resources Committee with proposing options to ensure that a balanced budget could be achieved;

 

b)  Since the last report, further financial information has been provided, including anticipated slippage in the budget, the announcement of the Central Government funding provided a small additional increase of £17,000, an agreed grey book pay rise to 7% this year and 5% next year which results in increased costs by nearly £1 million. It is noted that the offer is yet to be accepted by the trades union membership. Council Tax income was as predicted, but business rates income had increased with growth and revaluation of businesses, providing an additional £430,000 of income, which is very welcome, particularly when a deficit was initially predicted. Holding vacant Firefighter posts until recruitment is possible has brought costs down by approximately £0.5 million;

 

c)  £1.126m budget support is set aside in Earmarked Reserves to support the deficit for this and future years;

 

d)  Inflation remains a concern but is predicted to start to drop during the next few months;

 

e)  There is uncertainty with regard to future years grant funding from Central Government which is still only provided on an annual basis;

 

f)  Three options were presented to the Finance and Resources Committee for Council Tax and are set out in the report and are summarised as follows:

 

i.  a zero increase/freeze in Council Tax would result in a deficit of £2.064m in 2023/24. This will rise to £3.717m in 2024/25 and increases further to £5.7m by 2026/27. This would put the Service in a severe financial position if chosen;

 

ii.  a 2.95% increase in Council Tax would still result in a significant deficit of £1.237m in 2023/24 rising to £2.014m in 2024/25 and to £2.4m in 2026/27, with insufficient reserves held in the Budget Pressure Support Reserve to cover even the first year’s deficit;

 

iii.  if Council Tax is increased by £5 in 2023/24, 2.95% for 2024/25 to 2025/26 and 1.95% for 2026/27, the estimated deficit position for 2023/24 would reduce to £404k, but based on current known information, this would increase to £1.1m in 2024/25 and £1.5m by 2026/27.

 

g)  Having fully considered the options, Finance and Resources Committee recommend to the Authority, that a £5 Council Tax increase is applied;

 

h)  Further recommendations include the approval of fees and charges for 2023/24, as set out in Appendix D to the report, and the approval of the payment of Members Allowances for 2023/24 in accordance with the approved scheme;

 

i)  The report also includes the statement of the Treasurer, as is required under Section 25 of the Local Government Act 2003, regarding the robustness of the estimates made for the purposes of calculations, and the adequacy of reserves.

 

The Chair thanked Becky Smeathers and the Finance Team for their work, acknowledging the great difficulty in setting a budget due to the wide range of unpredictable and unknown elements.

 

Authority members’ comments included the following:

 

j)  Cross-party support for accepting the recommendation of the Finance and Resources Committee to apply a £5 Council Tax increase is urged. It would be remiss to have lobbied Central Government so hard and then not apply the £5 increase;

 

k)  It is recognised that citizens are experiencing a difficult financial period, but the consultation has shown that citizens are willing to make a small further contribution to support front line Services;

 

l)  It is acknowledged that in the longer term, budgets will remain under significant pressure;

 

m)  It is not helpful that the Authority can only assume future funding settlements from Central Government whilst they are set on an annual basis. Multi-year settlements need to be known in advance, so lobbying for this needs to continue;

 

n)  having lost 5.26% of core spending power since 2011, this Authority is still the seventh worst affected Service in the country, whilst other services, such as Hampshire, Bedfordshire and Shropshire have all seen significant rises in core spending power, up to an additional 14.6%. This disparity needs to be addressed;

 

o)  There is currently £1.45 million inflationary pressure on the Fire Sector, but with no further help or support from Central Government, which places the burden of funding on citizens through Council Tax. Members are urged to agree the £5 increase and to continue lobbying for improved funding. The Service requires an uplift in the settlement or other funding from Central Government to balance next year’s budget deficit of £1.3 million;

 

p)  The all-party, Trades Union and CFO lobbying of Central Government is appreciated, but needs to continue with regard to adequate funding;

 

q)  Unless additional funding is made available, in future years, the Service will need to make cuts as there are no other routes available if the funding model doesn’t change. All members of the Authority are needed to lobby for a funding model change, for the benefit of residents;

 

r)  Central Government funding is gathered by taxing citizens, so citizens are contributing by either method;

 

s)  Gathering of national taxation is fairer than relying on local taxation, which hits residents harder. Regardless of which political party is in Government, Central Government needs to be properly funding the Fire Service as there aren’t any additional funding streams available unless a new funding model is introduced;

 

t)  It’s difficult to ask people to pay more when they can’t see what they are getting. However, as a result of this funding decision, members can assure citizens that the Fire Service cover across Nottinghamshire will be fairer as a result, including in Ashfield where Service cover options will be explored;

 

u)  Thanks are given to Becky and the Finance Team for their hard work whilst in a difficult position;

 

v)  All members of the Authority, regardless of political party, can justify to residents that the increase is being applied as a result of support from the consultation of citizens;

 

w)  Further lobbying is supported, but the Authority needs to provide robust evidence that it has done everything it can with regard to efficiencies, prior to approaching Central Government for further funding;

 

x)  The Authority has already had to make some very hard decisions to achieve £9.6 million efficiency savings over the past few years and can proudly make that case to Central Government. The active unified support of all Nottinghamshire and Nottingham City Members of Parliament, regardless of political party, is needed in lobbying Central Government to achieve appropriate funding for the Service;

 

y)  Whilst the £5 increase is supported, this is an unenviable decision and it is recognised that many citizens, particularly those on lower income, including those working, will feel a more significant impact from the rise of any bills or taxes, not only in the current financial climate, but as a general fact. The issue of reduced funding is ongoing year after year. Our residents deserve better; 

 

z)  Whilst agreeing with the recommendation, the actual increase in the contribution to the Fire Service through Council Tax per property is generally less than a cup of coffee or a pint of ale for most citizens and still presents excellent value for money to citizens, for the service provided. This is a fair deal for citizens and any cuts would reduce the quality of service. It’s unlikely that if citizens were asked directly, that they would want a reduction in the Service and to reduce the safety of our staff, who put their lives on the line in their role every single day;

 

aa)  The sensible approach of the Fire Brigades Union in negotiation for a deal needs to be acknowledged, as does their realisation that there is not an infinite amount of funding to draw on;

 

bb)  Next year’s budget now needs to be considered urgently, including looking forward beyond that, even if future settlement totals have to be assumed. Unless the funding model is changed, there are undoubtedly still very difficult times ahead. We need to defend the people who work for us, and our citizens;

 

cc)  The work and dedication of the Chair and CFO in meeting with individually, and lobbying each Member of Parliament in the County, needs to be acknowledged in achieving the current outcome, but continued lobbying will be necessary;

 

dd)  The 80% of respondents to the consultation agreeing to a one-off £5 increase in Council Tax validates the increase.

 

The Chair thanked everyone in the room for their work, engagement and contributions.

 

Resolved:

 

1)  unanimously to agree the recommendation of the Finance and Resources Committee to the Fire Authority that there be a £5 Council Tax increase;

 

2)  unanimously to approve the 2023/24 precept level to be notified to the Billing Authorities based on the information set out in Section 2 and Appendix C as required by statute;

 

3)  approve the fees and charges for 2023/24, as set out in Appendix D to the report;

 

4)  approve the payment of Members Allowances for 2023/24 in accordance with the approved scheme.