Verbal update from Mark Hemming and CFO Ben Ansell, NFCC
Minutes:
The Chair invited CFO Ben Ansell (BA) and Mark Hemming (MH) from the National Fire Chiefs Council (NFCC), to update the Committee on current finance issues affecting the sector.
BA explained that pay was going to be a key issue moving forward, with every 1% increase for staff costing English Fire & Rescue Authorities (FRA) around £14m. The challenge for FRAs would be to build any increase into their base budgets. BA said it was vital that 4 key figures in the new Government – Home Secretary, Fire Minister, Chief Secretary to the Treasury and the Local Government Minister – were aware of the financial issues facing FRAs and efforts were ongoing to engage them. The importance of putting across a consistent message in lobbying was emphasised.
MH reported on the provisional results of two surveys recently carried out by the NFCC on reserves and non-pay inflation. Between March 2021 and 2022, reserves across English FRAs increased by around 5% but there was a great deal of variation between services. Non-pay inflation has been estimated to be around £41m for English FRAs but this was prior to the recent Government announcement of an energy cap for non-domestic customers. Work was currently taking place to estimate the impact of this cap, and the NFCC was having conversations with the Home Office on the potential impacts on staffing. 79% of services had rated both pay and non-pay inflation as a serious risk in their budget setting moving forward.
Members’ comments and questions:
· It was considered important to keep up lobbying pressure on Government over inflationary costs, particularly as the energy price cap was for just 6 months.
· Members agreed that a unified lobbying message was important albeit that county council services may have different requirements from precepting FRAs. It was suggested that individual CFOs pair up with their Chairs, or worked with near neighbours on specific local lobbying. BA agreed that this would be helpful but there needed to be clarity around exactly what was being asked for, especially on precept flexibility. It was agreed that LGA officers should work with the NFCC on a joint briefing for members to be able to use when lobbying.
· Spending one-off reserves to support services or pay awards was not considered to be a viable and sustainable approach to budgeting for FRAs. Were there any ‘outlier’ FRAs who were accumulating unnecessary amounts of reserves which the Government was latching onto to draw wider conclusions? BA said that it was authorities who had high amounts of non-earmarked reserves that the Government was focussing on. MH confirmed that around 40% of reserves nationally were earmarked for capital projects, however, mainly due to a reduction in activity around Covid, reserves were increasing. It was expected that levels would start to decrease in the coming years.
· It was stressed that any unfunded pay agreements would have to be paid for by cuts to staff and services and it was important for this point to continue to be made to Government.
· The point was made that many local residents were struggling to pay bills at the current time and so lobbying for powers to raise council tax further may not go down well with them. BA said that they were very aware of this and were trying to tread the fine line between having an adequately funded fire service which was affordable for local people. If services weren’t properly funded then residents would also suffer through reduced services or capacity to respond to emergencies.
· Members requested sight of the final survey results in report format once available. MH agreed to provide these to LGA officers for circulation to the Committee once they were finalised.
Decision:
Fire Services Management Committee noted the update.
Action:
LGA officers to produce finance lobbying briefing for members.