Agenda item

Consideration was given to a report of the Chief Fire Officer and Chief Executive which sought Members’ approval for the Authority’s budget for 2019-20, the Authority’s precept, as required by law, for 2019-20 and its Medium Term Financial Plan (MTFP) for 2019 to 2022. 

The Authority was required to approve its budget and set the Council Tax precept for the financial year commencing 1^st April 2019.  The Authority was required to take into account Government funding, precept regulations and organisational demands.  This requirement was supported by the production of a MTFP with the annual budget forming the first year of the MTFP.  The creation and maintenance of the MTFP was fundamental in promoting good financial planning and delivery of value for money.  The MTFP was detailed at Appendix 1 to the report.

Members had considered the Authority’s financial information at their Planning Day on 11^th January 2019 where Members had the opportunity to challenge the assumptions and proposals being put forward by officers as part of the draft budget and MTFP.  

The 2019-20 budget proposals were based on the final year of the Government’s four year settlement.  Going forward funding was uncertain and subject to the proposed spending review in 2019.  Savings had been identified as a result of thorough reviews of budgets with the intention to protect front-line services and ensure continuity of service delivery. Table 3 and 4 of the report showed the proposed level of precepts for each local authority and the individual amount levied per council tax band based on the three proposed budget options.

Based on the three options the budget requirement would be the following:-

a)    2.99% proposal: £43.461m;

b)    1.99% proposal: £43.177m; or

c)    0% proposal: £42.615m.

It was reported that the Authority was required to set a budget by 14th February 2019 each year, and to issue a precept to the billing authorities before 1st March each year.

Members were reminded that at the Authority meeting on 14^th February 2018, the Authority agreed to retain a Wholetime fire appliance in Crewe.  This was funded from reserves in 2018-19 and had been included in the base budget from 2019-20 and was shown as the commitment within Table 1 of the report of £450k.  In addition, funding (within the one-off items) had been included in the proposed budget for the second fire appliance at Ellesmere Port whilst the review, commissioned by Members at the Authority meeting in February 2018, was being undertaken.

It was reported that within the growth proposals there were a number of initiatives to provide firefighters with appropriate equipment to support their fitness and wellbeing e.g. a Mental Health and Wellbeing Advisor was proposed for a 12-month trial. Members welcomed the appointment of a Mental Health and Wellbeing Advisor, and the Chair put on record his thanks to the Staff Engagement Forum for the suggestion and welcomed further suggestions to improve staff wellbeing in the future.

In order to produce a balanced budget as required under statute, assuming the proposed increases in expenditure were approved, savings would be required as the level of funding from the Government and council tax precept, was not sufficient to meet expenditure. A full list of the proposed savings for 2019-20 was detailed in Appendix 2c of the report. The main savings were described in paragraphs 18 to 25 of the report.

Section 25 of the Local Government Act 2003 also placed a requirement on chief finance officers to formally report on the adequacy of the reserves.  A Reserves Strategy 2019-24 was detailed at Appendix 4 of the report. It was reported that one of the key elements of the Reserves Strategy was to use the earmarked Capital and Integrated Risk Management Plan Reserves to support capital expenditure. The Capital Strategy for 2019-24 indicated that expenditure of over £30m was planned to take place between April 2019 and March 2022 with approximately £20m being financed from reserves. The resulting balances on reserves were detailed in Annex A to Appendix 4.

Members raised a series of questions and comments relating to the Reserves Strategy. In response, the Treasurer advised that the Fire and Rescue National Framework required that a Reserves Strategy should explain how the “level of general reserve has been set” and should include “justification for holding a general reserve larger than 5% of budget”.  As part of the Reserves Strategy approved in February 2018 the level of the General Reserve for Cheshire Fire Authority would be maintained at around £2.2m, approximately equivalent to 5% of budget and it was proposed that this approach would be maintained across the medium term. The Strategy would be kept under review as capital spending was incurred and the level of reserves would be adjusted to reflect the actual spend at the end of each financial year.

Members had a discussion on the draft 2019-20 Budget and Council Tax Precept and due to financial uncertainties supported the Council Tax precept increase of 2.99% for 2019-20 as set out in Table 3 of the report.

The Chair advised that at the request of the Fire Authority he had written to the Minister of State for Policing and the Fire Service, Nick Hurd MP on 10^th December 2018 to raise concerns regarding the reduction in central funding provided to Cheshire Fire Authority and the potential impact on the provision of fire and rescue services this could have if funding reductions continued. A response had been received from the Minister dated 31^st January 2019 that would be circulated accordingly.

The Chair advised that he would write again to the Minister on behalf of the Fire Authority to request that the fire and rescue services funding was properly reflected in the Spending Review. Members suggested that local MPs should also be lobbied.

On being put to the vote Members decided to increase the Council Tax precept by 2.99% with 20 votes in favour and 1 abstention.

RESOLVED: That

[1]       the Medium Term Financial Plan, as set out in Appendix 1 of the report be approved;

[2]       the Budget Requirement as set out in Table 1, paragraph 9 of the report, be agreed, noting the base budget and inflation figures and agreeing the Commitments, Growth and one-off items contained in Appendices 2a and 2b of the report;

[3]       the Funding Elements as set out in Table 1, paragraph 9 of the report, and Identified Savings as set out in Appendix 2c be noted;

[4]       A Council Tax increase of 2.99% for 2019-20 be agreed  and the Council Tax precepts as set out in Table 3 of the report be approved;

[5]       the proposed capital programme for 2019-20 as set out in Table 2 of the report be approved;

[6]       the Capital Strategy as set out in Appendix 3 of the report be approved;

[7]       the Reserves Strategy as set out in Appendix 4 of the report be approved;

[8]       the Statement of Robustness of Estimates as set out in Appendix 5 of the report be noted; and

[9]       the Financial Health Targets as detailed in paragraph 27 of the report be adopted.