Agenda item

To consider a report

The Assistant Chief Officer and Treasurer presented his report on the forecast year-end (31 March 2024) budget monitoring position as at 31 May 2023.

The Assistant Chief Officer and Treasurer reported that the Authority would receive an additional £460,000 above the budgeted amount in relation to Business Rates Section 31/Tariff top-up Payments, and an increase of £9,000 in Services Grant following the Government’s final confirmation for 2023/24 after the budget setting process had been concluded. The Service had also been awarded a Protection grant of £153,000 which was discussed earlier in the meeting.

The income from investments was £180,000 more than forecast as at the end of May and there was a forecast underspend in non-operational staffing as the result of vacancies. The current forecast underspend was approximately £700,000 and Members were being asked to agree an equal apportionment of the forecast underspend/final underspend between the Transformational Reserve and the Pay/Pensions reserve, noting that it was anticipated that pay increases above the levels currently budgeted for would be agreed for future years.

In response to a question, the Assistant Chief Officer confirmed that the year to date staffing figures were on track. These had not been reported on this occasion due to the time lag between the reporting period and the meeting date the report was being submitted for.

The Assistant Chief Officer explained how the Pay and Pensions Reserve had been used to fund the fire fighters pay award for the current financial year. As at 31 March 2023, this reserve stood at £1.126 million. £1 million had been used in the budget-setting process for 2023/24 so the balance was currently £126,000. The transformational earmarked reserve was also used to help in budget-setting over the medium term to prevent the need for rash savings and efficiencies.

The Chief Fire Officer explained that the constant financial challenges facing the public sector, including the unfunded pay awards, had been a factor in introducing a Lead Member role for Finance, Productivity and Efficiency.

In response to a question about the use of the Pay and Pensions reserve, the Assistant Chief Officer explained that the Service personnel were involved in two pension schemes: the fire fighters pension schemes for operational staff and the Local Government Pension Scheme for non-operational staff. The Local Government Pension Scheme was a funded scheme through which assets were invested. The fire fighters pensions schemes were unfunded schemes supported through the Home Office. It was a Member decision to move funds in and out of the Pay and Pensions reserve so these were not ring-fenced.

In response to a further question, the Assistant Chief Officer expressed the view that there were no capital or revenue schemes not already included in the funded Capital Programme which it would be more beneficial to the Service to fund at the expense of allocating the underspend to reserves to assist in future budget-setting.

It was proposed that items 1-5 be taken en bloc with item 6 being considered separately.

RESOLVED:

1. That the updates provided within this report be noted.

2. That the receipt of Business Rates income from central government in excess of budget be noted.

3. That the receipt of Services Grant from central government above the budget be noted.

4. That the unbudgeted Protection uplift Grant for 2023/24 be noted.

5. That the forecast increase in Investment income be noted.

6. That it be agreed to apportion equally the forecast underspend to the Transformation Reserve and Pay/Pensions Reserve.