A report of the Clerk and Treasurer was submitted which provided an insight to the likely financial position of SYFR.  The report was presented ahead of the Government’s Spending Review and financial settlement for stand-alone Fire and Rescue Authorities which should be known by December 2022.  The proposed 2023/24 Annual Revenue Budget and Council Tax Setting report was due to be considered at the Authority meeting scheduled to be held on 20 February 2023.

Members were referred to the work that has been progressing on reviewing the financial planning assumptions in the Medium Term Financial Plan (MTFP) for the period through to 2026, alongside the Fire Spending Review Proposal, since the last budget report that had been presented to the Authority in February 2022.

The current MTFP that had been agreed by the Authority, had been cautiously optimistic and anticipated some financial pressures.  The country was facing extremely difficult economic times.  A survey had been undertaken to determine the financial impacts across the English fire and rescue services which was estimated to be c£145m pressures as a result of the agreed pay awards and the significant increases in utility and fuel costs; this did not include the current pay negotiations in terms of firefighter pay.

In response to question raised by Councillor Ayris, S Loach commented that the Government had announced that the local government finance settlement would be announced on 21 December 2022.  Following which, S Slater and himself would work on the figures during the Christmas period and into the New Year.  Members would be updated as soon as possible. 

Following a query raised by Councillor Sansome, S Slater referred to the scenario planning that was undertaken by the Service, which provided an idea of the gap and severity of the work involved.  It was still unknown whether a 3 year settlement would be made this year.  The Service’s largest challenges were inflation, utilities and pay awards.  A Member session on the budget setting process would be held as usual.  The base budget from the previous year would be utilised and Members would continue to be provided with the quarterly reports.

CFO Kirby commented that the funding scenarios were very wide.  He considered that it was frustrating that the fire and rescue services had to operate within the uncertain financial picture, which made it difficult for future planning.  Councillor Damms and himself had co-written to the Ministers at the Home Office and the Central Government’s Department for Levelling Up Housing and Communities, with the Chief Secretaries to the Treasury having been copied into the letter, to raise some of the funding challenges across SYFR and the wider fire sector to request for Government funding which matched inflation together with the potential for precept flexibility moving forwards.  The Service’s workforce investment plan was modest in comparison to previous years, due to the likely financial challenges that could be faced in future years.

RESOLVED – That Members:-

i)          Accepted the updated MTFP for the financial years 2023/24 to 2025/26 noting the contents of the report, and in particular the likely implications of the different funding scenarios for the operational service and future financial position.

ii)         Endorsed the proposed approach for managing reserves as set out in Section C to the Report.

iii)        Noted the up to date approved capital investment programme spending and financing projections 2023/24 to 2025/26 (Section D).

iv)       Agreed to consider new, additional capital investment schemes for approval into the current capital programme as part of the 2022/23 Budget and Council Tax Setting Report (Section D).

v)         Noted the known financial risks, uncertainties and events that will need careful consideration and management in the run up to and when setting the 2023/24 Budget and Council Tax (Section E) and beyond this date.