DE FIRE
Fire & Rescue Service Headquarters Summergroves Way Kingston upon Hull HU4 7BB Telephone 01482 565333
To: Members of the Fire Authority Enquiries to: Gareth Naidoo Email: [email protected] Tel. Direct: (01482) 393206 Date: 5 March 2020
Dear Member
I hereby give you notice that a meeting of HUMBERSIDE FIRE AUTHORITY will be held on FRIDAY, 13 MARCH 2020 at 10.30AM at HUMBERSIDE FIRE & RESCUE SERVICE HEADQUARTERS, SUMMERGROVES WAY, KINGSTON UPON HULL, HU4 7BB.
The business to be transacted is set out below.
Please Note: There will be a Member Day on the rising of the meeting for Fire Authority and GAS Committee Members only.
Yours sincerely
Mathew Buckley Monitoring Officer & Secretary to Fire Authority
Enc.
UA G E N D A
Page Primary Action Business Number Lead Requested Secretary & 1. Apologies for absence - To record Monitoring Officer To declare and Secretary & 2. Declarations of Interest - withdraw if Monitoring Officer pecuniary 3. Minutes of meeting of the Authority (pages 1 - 17) Chairperson To approve held on 10 February 2020 Secretary & 4. Questions by Members - To receive Monitoring Officer Secretary & 5. Petitions and Deputations - To receive Monitoring Officer Chairperson and 6. Communications - Secretary & To receive Monitoring Officer
Page Primary Action Business Number Lead Requested
7. Draft Minutes of Governance, Audit Chairperson of and Scrutiny Committee - (pages 18 - 23) To receive Committee 21 February 2020 8. The Combined Fire and Rescue Authorities (Membership and Secretary & (pages 24 - 30) To receive Allowances) (Amendment) Monitoring Officer Regulations 2020 9. Treasury Management and Capital Expenditure Prudential Indicators, Executive Director of Treasury Management Policy (pages 31 - 67) Corporate Services & To approve Statement 2020/21 and Minimum S.151 Officer Revenue Provision (MRP) for 2020/21*1 Director of People and 10. Pay Policy Statement 2019/20*1 (pages 68 - 70) To approve Development Director of People and 11. Gender Pay Gap Report 2019 (pages 71 - 73) To receive Development Director of People and 12. Absence Management Update*1 (pages 74 - 77) To receive Development 13. Workforce Planning - Actions Post Director of People and (pages 78 - 82) To approve McCloud Pensions Judgement Development 14. Service Performance and Risk Director of Service Report - End of 3rd Quarter 2019/20 (pages 83 - 92) To receive Improvement (1 October - 31 December 2019)*1 15. Health, Safety and Environmental (pages 93 - Director of Service Report - 3rd Quarter 2019/20 To receive 102) Improvement (October - December 2019)*1 16. Operational Assurance Report - 3rd (pages 103 - Director of Service Quarter 2019/20 (October - To receive 115) Improvement December 2019)*1 17. The Service’s Response to Recent (pages 116 - Director of Service Flooding - October 2019 to To receive 124) Delivery February 2020 Director of Service 18. Service Improvement Plan (SIP) Verbal To receive Improvement
Under the Openness of Local Government Bodies Regulations 2014 members of the public may film, record, take photographs or use social networking during Authority and committee meetings that are open to the public. The Monitoring Officer/Secretary kindly requests advance warning from anyone wishing to film, record or take photographs during open meetings so that suitable provision can be made.
*1 - Paper previously before Governance, Audit and Scrutiny Committee or Pension Board *2 - Further details are accessible via an electronic link alongside the agenda papers on the Fire Authority’s website (www.humbersidefire.gov.uk/fire-authority/fire-authority-documents) Agenda Item No. 3 HUMBERSIDE FIRE AUTHORITY
10 FEBRUARY 2020
PRESENT:
Representing East Riding of Yorkshire Council:
Councillors Davison, Fox, Green, Jefferson and Smith
Representing Hull City Council:
Councillors Chambers, Dad, McMurray and Singh
Representing North East Lincolnshire Council:
Councillors Barfield, Shepherd and Swinburn
Representing North Lincolnshire Council:
Councillors Briggs (Chairperson), Grant, Sherwood and Waltham MBE
Officers of Humberside Fire & Rescue Service
Chris Blacksell - Chief Fire Officer & Chief Executive, Phil Shillito - Deputy Chief Fire Officer/Executive Director Service Delivery, Kevin Wilson - Executive Director of Corporate Services/Section 151 Officer, Paul McCourt - Director of Service Delivery, Steve Topham - Director of Service Delivery Support, Niall McKiniry - Director of Service Improvement, Miriam Heppell - Director of People and Development, Martin Knapp - Head of Joint Estates Service, Mathew Buckley - Monitoring Officer/Secretary and Gareth Naidoo - Committee Manager
Independent Co-opted Members of the Governance, Audit and Scrutiny Committee
Doug Chapman (presented Minute 7/20), Andrew Smith and Clive Vertigans were in attendance as observers.
External Auditor
Gavin Barker - Director - Public Services (Mazars) (presented Minute 9/20)
The meeting was held at the Humberside Fire and Rescue Service Headquarters.
The meeting commenced at 10.30am.
The Chairperson welcomed Councillor Rob Waltham MBE as a new Member of the Authority in place of former Councillor Holly Mumby-Croft who, following her election as MP at the Parliamentary election on 12 December 2019, had resigned as a Member of the Fire Authority.
1/20 APOLOGIES FOR ABSENCE - Apologies for absence were submitted from Councillors Bryan, Chadwick, James, Nicola, Randall and West, and from Keith Hunter - Police and Crime Commissioner.
2/20 DECLARATIONS OF INTEREST - There were no declarations.
3/20 MINUTES - Resolved - That the minutes of the meeting of the Authority held on 6 December 2019 be received as a correct record and signed by the Chairperson.
4/20 QUESTIONS BY MEMBERS - There were no questions.
1 Humberside Fire Authority 10 February 2020
5/20 PETITIONS AND DEPUTATIONS - No petitions or requests for a deputation had been received.
6/20 COMMUNICATIONS - The following communications were received:
(i) State of Fire and Rescue National Report - Members had already received a copy by email of the ‘State of Fire and Rescue: The Annual Assessment of Fire and Rescue Services in England 2019’. Based on the inspections carried out by HMICFRS between June 2018 and August 2019) Her Majesty’s Chief Inspector of Fire & Rescue Services had put forward 4 main recommendations. A future Members’ Day would take place to discuss the findings and recommendations of this report further.
(ii) Storm Ciara - The Service had been prepared since last Thursday for Storm Ciara’s arrival. The Service had received 184 calls, 176 of which were storm related incidents.
7/20 DRAFT MINUTES OF GOVERNANCE, AUDIT AND SCRUTINY (GAS) COMMITTEE - 24 JANUARY 2020 - Doug Chapman, Chairperson of the Governance, Audit and Scrutiny Committee, presented the draft minutes of the meeting of the Committee held on 24 January 2020, drawing Members’ attention to the following item:
(i) External Audit Progress Report (Minute 6/20 refers) - it was noted that additional charges were to be applied to the Audit Strategy Memorandum for the Authority’s consideration because of an increased workload for Mazars in relation pensions and property, plant and equipment; (ii) National FRS Occupational Health Performance Report (Minute 11/20 refers); (iii) Review of Anti-Fraud Related Policies (Minute 12/20 refers) - the Committee’s anti- fraud champions would be included in future reviews of relevant policies; (iv) GAS Committee Scrutiny Programme 2019/20 (Minute 14/20 refers) - a scrutiny training workshop would be held for the Committee Members on 30 March; (v) Visit to Beverley Fire Station (Minute 17/20 refers).
With regard to Minute 11/20 (National FRS Occupational Health Performance Report) a Member queried why the Service’s sickness absence record for Support Staff was so high. The Director of People and Development confirmed that a report would be brought to a future meeting of the Authority to analyse those figures further.
Resolved - That the draft minutes of the Governance, Audit and Scrutiny (GAS) Committee held on 24 January 2020 be received.
8/20 DRAFT MINUTES OF PENSION BOARD - 27 JANUARY 2020 - Councillor Shepherd, Chairperson of the Pension Board, presented the draft minutes of the meeting of the Board held on 27 January 2020.
Resolved - That the draft minutes of the Pension Board held on 27 January 2020 be received.
9/20 AUDIT STRATEGY MEMORANDUM (EXTERNAL AUDIT) - Gavin Barker - Director - Public Services (Mazars) submitted the Audit Strategy Memorandum for the Authority for the year ending 31 March 2020.
The external audit strategy for 2019/20 which was due to conclude in July 2020 identified no new significant risks. The current identified significant risks were: management override of controls; property, plant and equipment valuation; and defined benefit liability valuation. Management override of controls was a mandatory consideration for every audit as it represented the greatest risk for fraud in any organisation. No significant risks had been identified in relation to the value for money conclusion and Members were reassured that the Service’s financial reserves were appropriate and safe.
The Audit Strategy Memorandum had been revised since its submission to the Governance, Audit and Scrutiny Committee meeting of 24 January 2020 to reflect the application of additional
2 Humberside Fire Authority 10 February 2020 charges. The additional charges were being applied because of an increased workload for Mazars in relation to pensions and property, plant and equipment. This extra work had arisen due to changes to the associated regulations. Having previously absorbed those costs, Mazars was no longer able to absorb the increasing costs and therefore would be applying the additional charges to all Fire Authorities that it services.
The item had previously been considered by the Governance, Audit and Scrutiny Committee (Minute 6/20 refers).
Resolved - That the report be approved.
10/20 MANAGEMENT ACCOUNT 2019/20 - BASED ON PERIOD ENDING 31 DECEMBER 2019 - The Executive Director of Corporate Services/S.151 Officer submitted a report that highlighted the current financial position based on information to 31 December 2019.
The end of year projections were set out as below for the revenue budget, the capital programme and the pensions account. The summary estimated outturn position for the current financial year based on information to 31 December 2019 was as follows:
CATEGORY 2019/20 OUTTURN PROJECTION HFA Revenue Budget £27k overspend Capital Programme £2.98m expenditure against £6.608m allocation Pensions Account £12.692m deficit
The remaining reporting cycle (for period ending 28 February 2020) for the Management Accounts for 2019/20 would be reported to the meeting of the Authority on 24 April.
Members were assured that any significant in-year financial issues that arose between the reporting periods would be reported on an urgent basis as required.
Further details on all of areas were made available electronically alongside the agenda papers on the Authority’s website at www.humbersidefire.gov.uk/fire-authority.
The item had previously been considered by the Governance, Audit and Scrutiny Committee (Minute 8/20 refers).
Resolved - That the report be received.
11/20 2020/21 PRECEPT AND MEDIUM-TERM FINANCIAL PLAN 2020/21 TO 2023/24 - The Executive Director of Corporate Services/S.151 Officer submitted a report considered the Authority’s Budget for 2020/21 onwards and the setting of the precept for 2020/21.
The report requested approval by the Authority of the following:
The Council Tax Requirement for 2020/21; The Council Tax Base figure for 2020/21; and The basic amount of Council Tax for 2020/21.
The slight increase in funding from Government was anticipated, and whilst welcome, it had to be seen in the context of the reductions that the Authority had suffered since 2011. The Authority had worked very hard in anticipation of this austerity and by the close of 2019 had delivered efficiencies over the prior recent years of circa £11m.
The Authority’s Revenue Budget and Capital Programme (Appendices A and B of the report) had been updated in line with new information that become available since December 2019, such as: the Council Tax Base for 2020/21; Collection Fund surplus; and the Capital Programme which
3 Humberside Fire Authority 10 February 2020 was largely based on the Premises, IT and Vehicles reports for 2020/21 onwards approved on 6 December 2019 by the Authority.
The decision on the 2020/21 precept for the Authority had to be taken in the light of a number of significant factors:
(i) the Government had set a referendum threshold for 2020/21 of 2 percent for the Authority. Therefore, any increase at or above this level would require a Humberside area-wide referendum in support. Clearly, there would be a significant cost attached to any such referendum;
(ii) the Authority had frozen its precept in each of the years 2011/12, 2012/13, 2013/14, 2014/15 and 2015/16 as part of the Government scheme in operation in those years. The Authority increased its precept by 1.25 percent in 2016/17, 1.6 percent in 2017/18, 2.95 percent in 2018/19 and 2.95 percent in 2019/20;
(iii) the Authority had suffered a historic reduction in Government support since 2011. Much had been done in anticipation of this but the fact remained that the Authority had lost circa £11m of its funding from the Government over this period;
(iv) the additional income to the Authority from a 1.95 percent increase in the precept would be circa £0.450m. Without this funding the Service would be required to find additional efficiencies of a similar level over the medium-term to ensure a balanced financial position.
The Authority ran a public consultation (Appendix E of the report) from 13 January 2020 to 27 January 2020 on the Council Tax/Precept for 2020/21. For 2020/21 options of 0 percent and a 1.95 percent increase were put forward. Out of the 2003 responses received the overall outcome showed 84 percent in favour of the ‘1.95 percent increase’ and 16 percent in favour of ‘no increase’.
In broad terms the Medium-Term Financial Plan 2020/21 to 2023/24 was balanced subject to:
council tax increases of 1.95 percent in 2020/21 and 1.95 percent in 2021/22, 2022/23 and 2023/24; Pay awards of 2.5 percent each year of the plan.
The Authority’s reserves consisted of the General Reserve (£5.251m at 1 April 2019) and a number of Earmarked Reserves created to meet specific areas of future expenditure (£4.938m at 1 April 2019). As a result of good forward planning by the Authority, the reserves were in a sound position, but they did need to be seen in the context of the current and future significant reductions in Government funding and the major financial uncertainties that still lay ahead.
Members acknowledge the work of the Service in managing the Revenue Budget and Capital Programme.
Proposed by Councillor Green and seconded by Councillor Smith -
That the 2020/21 precept be approved at a 1.99 percent level higher than the 2019/20 level.
It was pleasing that the Service’s public consultation on the Council Tax/Precept for 2020/21 received its largest response to date. However, some Members felt that as the public had been consulted on a proposed 1.95 percent increase as opposed to a 1.99 percent increase it would be inappropriate to increase the precept further by 0.04 percent. The Service has historically only proposed a 1.95 percent increase in its public consultation rather than the maximum 1.99 percent before a referendum would be required, hence the reason the Service had only consulted on no increase or a 1.95 percent increase. When questioned how the further 0.04 percent increase could be utilised should a 1.99 percent increase be approved, the Service confirmed that such an increase would help manage the overspend for the next year and be put into business safety services (protection services).
4 Humberside Fire Authority 10 February 2020
Councillor Waltham proposed further that the additional money resulting from the 1.95 to 1.99 percent increase be ring fenced for business safety services [protection services]). As such this was incorporated into the original proposal.
Moved by Councillor Dad and seconded by Councillor Jefferson as an amendment -
That the 2020/21 precept be approved at a 1.95% level higher than the 2019/20 level.
Voting on the amendment was by way of a recorded vote as follows:
For - Councillors Barfield, Chambers, Dad, Davison, Jefferson and Swinburn
Against - Councillors Briggs, Fox, Grant, Green, McMurray, Shepherd, Sherwood, Singh, Smith and Waltham MBE
Abstentions - None
For - 6
Against - 10
Abstentions - 0
Amendment lost
Resolved - (a) That the 2020/21 precept be approved at a 1.99 percent level higher than the 2019/20 level (with additional money resulting from the 1.95 to 1.99 percent increase ring fenced for business safety services [protection services]), and
(b) that the revised versions of Appendices A (Revenue Budget), B (Capital Programme), C (Reserves) and D (Precept), as attached at Appendix 1 of these minutes, be approved.
Voting was by way of a recorded vote as follows:
For - Councillors Briggs, Fox, Grant, Green, McMurray, Shepherd, Sherwood, Singh, Smith and Waltham MBE
Against - Councillor Jefferson
Abstentions - Barfield, Chambers, Dad, Davison and Swinburn
For - 10
Against - 1
Abstentions - 5
12/20 FEES AND CHARGES 2020/21 - The Executive Director of Corporate Services/S.151 Officer submitted a report that set out the proposed revised charges for 2020/21.
In accordance with relevant Fire Service Acts, Fire Authorities had the discretion to charge for special services performed (where there was no immediate threat of fire) and for services relating to training, fire safety and administration. The total income for the Authority generated through these sources was circa £0.006m in 2018/19.
The revised charges proposed at Appendix A of the report reflected the following:
5 Humberside Fire Authority 10 February 2020
Staff related costs - charges were normally uplifted in line with the firefighters’ pay award. Given that the firefighters’ pay award for 2019 was 2 percent it was proposed that the charge was increased by 2 percent.
Non staff related costs - charges uplifted in line with the Consumer Price Index (CPI) at September 2019 which was 1.7 percent.
Fire Service Circular 17/2001 advised Fire Authorities on the charges they might levy when dealing with cases of pension sharing involving serving members of the Firefighters’ Pension Scheme or pensioners. The charges for 2020/21 will be increased in line with the local government pay award for 2019/20 of 2 percent. These charges are shown at Appendix B.
Resolved - That revised charges shown in the Appendices A and B of the report be approved with effect from 1 April 2020.
13/20 COMPOSITION OF HUMBERSIDE FIRE AUTHORITY - UPDATE - The Secretary/ Monitoring Officer submitted a verbal report updating on the composition of the Authority.
The composition of the HFA was set down by the Humberside Fire Services (Combination Scheme) Order 1995 (Part 9 of the Constitution). The Order provided that the Authority should not be more than 25 Members.
The Authority was currently composed of 22 Members were are appointed by East Riding of Yorkshire Council (8), Hull City Council (6), North Lincolnshire Council (4) and North East Lincolnshire Council (4). The number of nominations from each of the four constituent authorities was in proportion to the number of local government electors in each of the four constituent authorities’ areas.
Following publication of each constituent authorities’ electoral register, the number of local government electors in each of the four constituent authorities’ areas had been ascertained to check whether the percentage of each constituent authority’s electorate had affected the number of seats per local authority on the Fire Authority. As per the figures below, the number of seats per local authority remained unchanged:
Percentage Seats entitled Seats Local Authority Electorate of overall per local (rounded up) electorate Authority East Riding of Yorkshire 265,238 37.5% 8.3 8 Council Hull City Council 193,263 27.3% 6.0 6 North Lincolnshire Council 131,012 18.5% 4.1 4 North East Lincolnshire 117,611 16.6% 3.7 4 Council
Totals 707,124 100% 22.0 22
Resolved - That the update be received.
14/20 MEMBERS’ ALLOWANCES 2020/21 - The Secretary/Monitoring Officer and Executive Director of Corporate Services/S.151 Officer submitted a report proposed a Members’ Allowances Scheme for 2020/21.
The Local Authorities (Members’ Allowances) (England) Regulations 2003 made provision for Combined Fire Authorities to establish Member Allowances Schemes from May 2003. The Authority had frozen the basic and special responsibility allowances for Members since 2008/09.
Recognising that Members of the Joint Independent Audit Committee (JIAC) for Humberside Police and the Office of the Police and Crime Commissioner for Humberside were paid an attendance allowance based on the rates set by the Home Office for attendance at Appeals Tribunals, the Authority had agreed that the Independent Co-opted Members of the Governance, 6 Humberside Fire Authority 10 February 2020
Audit and Scrutiny (GAS) Committee were paid on a similar basis and that they received an annual allowance (paid monthly rather than an as attendance allowance) calculated on the same basis as that adopted for the JIAC.
The Authority was asked to consider and approve a Members’ Allowances Scheme for 2020/21, a proposal of which was set out at Appendix 2 of the report. The Authority was required to have regard to the recommendations made by any Independent Remuneration Panels in relation to any Authority that had an Independent Remuneration Panel that nominated Members to the Fire Authority. The relevant reports of the Members’ Allowances Panels for the four Unitary Authorities in Humberside were available for viewing as a supporting paper alongside the agenda on the Authority’s website.
Proposed by Councillor Waltham and seconded by Councillor Green, and
Resolved - (a) That the basic and special responsibility allowances for Members continues to be frozen, and
(b) that the Members’ Allowances Scheme for 2020/21 (as set out at Appendix 2 of the report) be approved.
15/20 HOWDEN FIRE STATION - UPDATE ON RE-DEVELOPMENT OPTIONS - The Director of Service Delivery Support and the Head of Joint Estates Service submitted a report that presented a detailed feasibility study on the proposed conversion of Howden Police Station to form a new Fire Station.
The existing fire station building at Howden, constructed in 1964, was considered no longer fit-for-purpose due to a combination of issues around privacy and dignity, space and asset condition. The station had a small communal muster bay and limited welfare facilities which did not adequately accommodate numbers and the needs of staff on station.
The report presented a detailed feasibility study on the proposed conversion of Howden Police Station to form a new Fire Station, including information on the potential design and construction of the new facility, and proposed layouts. To progress further, the report requested Members’ approval in order to facilitate a project plan, including site issues and land title. Early engagement with planners was now required to move the project forward and provide some comfort as to the local authority support for proposals. Approval for the preferred delivery approach would also be required from Humberside Police’s Chief Officer Group and the Police & Crime Commissioner.
The report also discussed the potential land swop linked with the development of the Bransholme CPU building.
Members felt that employees affected by the proposals at Howden Fire Station should formally consulted and their views taken into consideration. The Director of Service Delivery Support assured Members that employees had been informed of the proposed changes and kept up-to-date with the changes. Once the proposals had been firmed up then formal consultation would commence.
Resolved - (a) That Scheme 1 be approved and progressed with detailed cost estimates and pre-application discussions with Local Authority Planners and employees affected by the proposals;
(b) that the proposal to enter into full discussions with Humberside Police and the Police & Crime Commissioner regarding a land swap of the Bransholme CPU in exchange for Howden Police Station be approved, and
(c) that the rental or purchase of the vacant police station be approved in principle should the ‘land swap’ (b) not be progressed.
7 Humberside Fire Authority 10 February 2020
16/20 BRANSHOLME FIRE STATION - COMMUNITY PROTECTION UNIT (CPU) ‘BLUE LIGHT’ COLLABORATION - The Director of Service Delivery Support and the Head of Joint Estates Service submitted a report that proposed the disposal or rental of the surplus Bransholme CPU Building and site.
At its meeting of 8 December 2017 the Fire Authority approved the inclusion of a budget allocation ‘Co-location Fund’ within the Capital Programme 2018/19 onwards (vehicles, estates and ICT) with the objective of progressing co-location schemes with other blue-light services as an element of the broader collaboration agenda.
In line with this, the Joint Estates Service (JES) had undertaken a preliminary review of all of the Service’s premises, with a view to identifying potential sites for collaboration with blue-light partners. This had already identified potential schemes at Pocklington and Driffield Fire Stations.
Following the relocation of Service staff from the admin building adjacent to Bransholme Fire Station site (old District Headquarters), the building was made vacant (although was currently being used by the Learning Centre staff from Calvert Lane while refurbishment work was carried out).
Initial feasibility work involving the respective Local Policing and Ambulance services suggested that with some remodelling and refurbishment, the building could provide suitable accommodation for both parties. However, a decision on whether to progress this co-location scheme was now required from the Authority as landlord of the building. As such, the report detailed the potential considerations, costs and benefits associated with the project and outlined the work required to the building and associated area of site, in order to create a suitable operational base for both the Police and Ambulance Services. This would be presented alongside any considerations necessary to ensure the co-location of the ‘blue light’ services did not adversely impact the operations of the existing full time Fire Station.
Whilst the proposal would provide an opportunity for closer working between the three emergency services in line with the wide collaborative agenda, it would also realise financial efficiencies for the public purse.
Alternative options were to retain the building on site and mothball for an undetermined future use, or to dispose of the CPU building and consolidate the remainder of the Fire Station site. Based upon a recent valuation, the sale of the CPU Building and external parking area would provide a capital receipt of approximately £165,000.
Resolved - (a) That the disposal or rental of the surplus Bransholme CPU Building and site be approved;
(b) that Option 2 be approved as the preferred option, subject to agreement by Humberside Police and the Police & Crime Commissioner;
(c) that the principle of a land swap under Option 2 be approved, dependent on a successful outcome to the Howden Police Station feasibility, and
(d) that the Service proceed with Option 3 to dispose of the site on the open market if no arrangement can be agreed with Humberside Police or Yorkshire Ambulance Service under Options 2 or 1.
17/20 SERVICE IMPROVEMENT PLAN (SIP) - The Director of Service Improvement submitted a PowerPoint presentation updating Members on progress being made against the Service Improvement Plan (SIP).
Of the 17 areas identified for improvement by Her Majesty’s Inspectorate of Constabulary and Fire & Rescue Services (HMICFRS), some were relatively simple to address and others, such as those relating to organisational culture, would require more time and effort.
The Service now had a new HMICFRS Liaison Lead, Davinder Johal who covered Humberside, Merseyside and Durham FRS. Inspection dates from HMICFRS had now been
8 Humberside Fire Authority 10 February 2020 received with Discovery Week due to commence w/c 8 February 2021 and the Inspection proper due to commence week w/c 1 March 2021.
The Service would be considering the national report, ‘State of Fire and Rescue: The Annual Assessment of Fire and Rescue Services in England 2019’ which was the first report of its kind that had assessed the 45 Fire and Rescue Services in England. The report, which made four specific recommendations did not take into consideration the outcome of the Grenfell Towers inquiry.
Resolved - That the update be received.
18/20 EXCLUSION OF THE PRESS/PUBLIC - Resolved - That the press and public be excluded from the meeting for consideration of the following item on the grounds that it involves the likely disclosure of exempt information as defined in paragraph 3 of Part 1 of Schedule 12A of the Local Government Act 1972.
In making its decision the Authority confirmed that having regard to all the circumstances it was satisfied that the public interest in maintaining the exemption outweighed the public interest in disclosing the information.
19/20 EAST HULL FIRE STATION CLOSEDOWN - UPDATE - The Director of Service Delivery Support and the Head of Joint Estates Service submitted a report that updated on the latest position in disposing of the East Hull Fire Station which was surplus to requirements.
Resolved - That the update be received.
Meeting closed at 11.58am.
9
Appendix 1
10 Appendix 1
11 Appendix 1
12 Appendix 1
13 Appendix 1
14 Appendix 1
15 Appendix A
16 Appendix A
17 Agenda Item No. 7
HUMBERSIDE FIRE AUTHORITY
GOVERNANCE, AUDIT AND SCRUTINY COMMITTEE
21 FEBRUARY 2020
PRESENT: Independent Co-opted Members Mr D Chapman (Chairperson), Mr M Allingham Mrs P Jackson, Mr A Smith, Mrs M Thomlinson and Mr C Vertigans
Councillor Briggs, Councillor Green, and Phil Shillito - Deputy Chief Fire Officer/Executive Director Service Delivery attended as observers.
Miriam Heppell - Director of People and Development, Paul McCourt - Director of Service Delivery, Niall McKiniry - Director of Service Improvement, Steve Topham - Director of Service Delivery Support, Simon Rhodes - Head of Corporate Assurance, Martyn Ransom - Head of Finance, Steve Duffield - Public Safety (Central Support), Mathew Buckley - Monitoring Officer/Secretary, Samm Campbell - Committee Manager, David Robinson - Internal Audit (TIAA), Gavin Barker - External Audit (Mazars) and Ross Woodley - External Audit (Mazars) were also present.
The meeting was held at the Humberside Fire and Rescue Service Headquarters, Kingston upon Hull. Meeting commenced at 10.00 a.m.
PROCEDURAL
18/20 APOLOGIES FOR ABSENCE - Apologies for absence were received from Mr J Doyle.
19/20 DECLARATIONS OF INTEREST - There were no declarations of interest.
20/20 MINUTES - Resolved - That the minutes of the meeting of the Committee held on 24 January 2020 be confirmed as a correct record.
21/20 MATTERS ARISING FROM THE MINUTES, OTHER THAN ON THE AGENDA - There were no matters arising from the minutes.
GOVERNANCE
22/20 UPDATE: MATTERS ARISING/FEEDBACK FROM FIRE AUTHORITY - The Monitoring Officer/Secretary provided a verbal update summarising the consideration given by the Authority at its meeting on 10 February 2020 to the draft minutes of the meeting of the Committee held on 24 January 2020 and also provided feedback on other items considered by the Fire Authority at its meeting of 10 February 2020.
Resolved - That the update be received.
PERFORMANCE, RISK AND PROGRAMME MANAGEMENT
23/20 PERFORMANCE AND RISK REPORT (THIRD QUARTER 2019/20) - The Director of Service Improvement submitted a report summarising the Service’s performance and risk for the third quarter of 2019/20.
Service Delivery Performance Accidental Dwelling Fires 5.6% below three-year average. Other Accidental Fires (exc. 16.1% above three-year average. Vehicles) Deliberate Primary Fires 0.6% below three-year average.
18 Governance, Audit and Scrutiny Committee 21 February 2020
Deliberate Secondary Fires 3.0% below three-year average. Automatic Fire Alarms 11.0% below three-year average. Fatalities 1 fatality (aspirational target 0) Injuries 18 injuries (aspirational target 0) Response Performance First engine response 6.86% better than target Second engine response 9.12% better than target
The Service had been performing well in comparison to the three-year rolling- average data. While the ‘other accidental fires (excluding vehicles)’ category was worse than the three-year average, the 16.1 percent rise represented only 13 incidents across Humberside. The number of primary and secondary deliberate fires had reduced, as had unwanted (automatic) fire alarms. There had been one fire-related fatality during the reporting period, which had been preceded by 500 days with no fatalities and was subject to an ongoing and complex investigation.
The East Coast and Hertfordshire Control Room (ECHCR) had commenced operations in Humberside, Norfolk and Lincolnshire in January 2020. This was the culmination of a £7.2m Government investment and months of work; it was one of the most advanced control room systems in the country. Since the ECHCR had become active, it had successfully coordinated responses to two storms affecting its whole area of service, while other control rooms had struggled. The new technology associated with ECHCR had been used to successfully identify risks and to distribute resources in a coordinated way across the whole region.
The Ark Flood Preparation and Response Centre project (ARK) remained a priority for the Fire Authority. While the project’s main local advocate had lost their Parliamentary seat during December 2020’s General Election, a former member of the Fire Authority had been elected to that Parliamentary seat. The Government was due to publish its first budget in March 2020 and it the necessary funding would be allocated.
The Rota and Availability System had been implemented, allowing operational staff to manage their own availability and the Service to aggregate this information to populate rotas. This system replaced a labour-intensive process involving the manual maintenance of spreadsheets. The implementation of this system was in line with recommendations in Her Majesty’s Inspectorate of Constabulary and Fire & Rescue Services’ (HMICFRS) first annual State of Fire and Rescue report.
Resolved - That the report be received.
24/20 ABSENCE MANAGEMENT REPORT (THIRD QUARTER 2019/20) - The Director of People and Development presented a report summarising absence management data for the third quarter of 2019/20.
3rd Quarter 3rd Quarter 3rd Target attendance Quarter 2017/18 2018/19 2019/20 Full Time 95.72% 96.06% 95.46% 95% Control Room 90.19% 95.86% 89.42% 95% Fire Staff 92.73% 96.52% 94.79% 95%
19 Governance, Audit and Scrutiny Committee 21 February 2020
There had been a significant increase in the rate of absence among control room staff. However, this relatively small team had continued to be affected by a small number of long-term absences. Mental ill health had continued to be the most frequently cited reason for absence and the number of musculoskeletal issues had increased. The recently appointed Head of Occupational Health had been developing physiotherapy and psychotherapy provision for staff. Reasons for absence were summarised as follows:
CLG Category Long Term Short Term Grand Total – days lost days lost days lost Cancer 111.68 0.00 111.68 Cardiovascular Other 412.34 11.66 424.00 Dermatological 0.00 31.44 31.44 Endocrine 112.00 7.00 119.00 Gastro Intestinal 18.00 279.86 297.86 Mental Health 1356.76 102.59 1459.35 Anxiety/Depression Mental Health Other 15.54 12.42 27.96 Musculo Skeletal Back 513.75 149.95 663.70 Musculo Skeletal Knee 556.24 114.00 670.24 Musculo Skeletal Lower Limb 761.45 106.18 867.63 Musculo Skeletal Neck 0.00 10.99 10.99 Musculo Skeletal Other 25.27 28.97 54.24 Musculo Skeletal Shoulders 177.64 4.00 181.64 Musculo Skeletal Upper Limb 263.23 50.30 313.53 Neurological 168.00 54.91 222.91 Other 50.68 124.99 175.67 Reproductive 0.00 8.82 8.82 Respiratory Other 0.00 274.30 274.30 Senses Hearing 18.00 9.68 27.68 Senses Vision 0.00 6.8 6.8 Grand Total 4560.58 1406.86 5967.44
The Case Review Board (Minute 6090 refers) continued to provide an effective tool to manage absence through a fair and consistent process. The Board would continue to operate until the number of days lost to ill-health absence stabilised. However, the Service faced a number of challenges with regard to absence management.
Resolved - That the report be received.
25/20 TREASURY MANAGEMENT AND CAPITAL EXPENDITURE STRATEGY 2020/21 - The Head of Finance presented a report summarising the Treasury Management and Capital Expenditure Strategy 2020/21.
The report set out the prudential indicators for treasury management and capital expenditure for the 2020/21 financial year. In accordance with its constitution, the Fire Authority would consider the associated Policy Statement for approval at the meeting due to be held on 13 March 2020. The Service intended to maintain its low-risk approach to investment and to stabilise and reduce its debts. However, the proportion of debt in relation to the Service’s budget was average for a public sector organisation. The Service’s reserves were healthy and, in the light of the withdrawal of Government capital funding for fire and rescue services, meant that the Service was not forced to borrow.
20 Governance, Audit and Scrutiny Committee 21 February 2020
Resolved - That the report be received.
26/20 PAY POLICY STATEMENT 2019/20 - The Director of People and Development presented the draft Pay Policy Statement for 2019/20.
In accordance with Section 40 of the Localism ACT 2011, the draft Pay Policy Statement set out the pay arrangements for the Strategic Management Team (SLT), along with the minimum and median salaries for the whole Service.
A Member queried the section of the Statement relating to redundancy and reemployment. The Director of People and Development explained that the Service had to follow the provisions agreed in each individual’s pension scheme and that redundancy related to posts within the organisational structure, and not individual people. In response to another query, the Director of People and Development informed the Committee that, while members of SLT was provided a motor vehicle for the performance of their duties, they were not for private use and, if any employee was using an emergency services vehicle, they would need to register with the Control Room as being available on-call.
Resolved - That the draft Pay Policy Statement be received.
27/20 HMICFRS INSPECTION UPDATE - The Director of Service Improvement provided the Committee with a verbal update in relation to Her Majesty’s Inspectorate of Constabulary and Fire and Rescue Service’s (HMICFRS).
The dates for the Service’s next inspection had been set (Minute 13/20 refers) and the Service continued to speak monthly with the HMICFRS’ new liaison officer, Davinder Johal.
Resolved - That the update be received.
SCRUTINY PROGRAMME
28/20 BUSINESS SAFETY RISK-BASED INSPECTION PROGRAMME - The Director of Service Delivery Support and the Public Safety (Central Support) manager presented a report in response to the Committee’s Scrutiny Programme 2019/20 in relation to the item, Business Safety Risk-Based Inspection Programme.
The item had been selected by the Committee for scrutiny following the publication of the report of HMICFRS’ first inspection of the Service in 2019. On a national level, business safety had also been a significant focus in HMICFRS’ first annual State of Fire and Rescue report, which urged a level of national standardisation. Fire and rescue services were expecting a new Fire Safety Act to replace the existing one (2005).
The Business Safety Risk-Based Inspection Programme (RBIP) was part of the Public Safety Service Redesign Programme (SRP), an implementation review of which was due to be reported in April 2020. During the SRP process, public safety, and business safety in particular, had been influenced by two significant events: the tragic Grenfell Tower fire and the introduction of an inspection regime. While the SRP would formally conclude at the end of March 2020, the RBIP would continue to develop as the its impact on business safety became clear.
Previously, under broad, national guidance, the RBIP had not adequately accounted for relevant details when it was used to classify premises in relation to emergency cover. The four Fire Service Emergency Cover (FSEC) categories grouped premises as follows:
A. Sleeping unfamiliar (places where people do not typically reside).
21 Governance, Audit and Scrutiny Committee 21 February 2020
B. Sleeping Familiar (e.g. residential homes). C. Public unfamiliar (e.g. shops). D. Workplace familiar (e.g. factories and offices).
Under this system of categorisation, relevant details and risk factors were not adequately accounted for. For example, a hotel would be a category ‘A’ premises, regardless of whether the hotel was newly constructed, converted from an existing premises or under new management. The new approach to the RBIP used only two categories:
B. More complex in nature, typically including sleeping risks associated with categories ‘A’ and ‘B’ according to FSEC. The ‘B’ in this new RBIP classification system indicates that they require the attention of a business safety inspector because the premises require a level of competence commensurate with the potential complexities and associated risk to life in the event of a fire. C. Less Complex and, often, smaller premises. The ‘C' indicates that standard crews possess the necessary level of expertise to conduct targeted engagement visits, following which any issues identified would be referred to business safety inspectors for further consideration.
Firefighters would not become trained business safety inspectors, but they were able to engage with business owners and determine whether fire safety was a sufficiently significant feature of their planning and risk assessment. Further to the new system of categorisation, the Service’s new RBIP was intelligence-led. The Service had begun to take account of an abundance of supporting information when it assessed risk. For example, the Care Quality Commission (CQC) reports represented a useful source of information as they commented extensively on many aspects of all health and social care facilities including quality of management. For other types of business premises, there were other useful reports including food hygiene inspection reports and Ofsted reports. The new RBIP also accounted for hybrid premises, including flats above business premises.
The National Fire Chiefs Council (NFCC) had begun to explore whether it would be appropriate to develop a national RBIP, which could be used by fire and rescue services, at least as a basis. HFRS had presented to the NFCC in relation to this.
Unwanted fire signals had decreased following the Service’s consultation in relation to non-attendance and associated charges in the event of an unwanted fire signal. An Unwanted Fire Signals Position Statement was approved by the Fire Authority on 15 March 2019. The consultation itself seemed to have had a significant, positive effect on businesses, as the number of unwanted fire signals had been on a sustained downward trend since summer 2019 despite the fact that the typical peak for unwanted fire signals had, historically, been between September and December. These changes had not led to any significant risk. The working hours recovered by adopting a policy of non-attendance at unwanted firs signals had been used to train firefighters to be able to spend time working proactively to improve fire safety in business and domestic premises.
In the scope for the Business Safety Risk-Based Inspection Programme item, the Committee asked how the Service would ensure it possessed the capacity and skills necessary to make the Programme a success. Nationally, business safety had been an area of service targeted for savings as budgets had reduced. While the Service had retained more business safety inspectors than other services, it had lost six in 2018/19. This represented a significant proportion of a team comprising only 10 inspectors and three managers. Since then, the Service had designed an internal competency framework which increased the level of competence and qualification among inspectors. The Service had also developed out-of-hours capacity for business safety inspections and had trained firefighters to undertake business safety visits.
22 Governance, Audit and Scrutiny Committee 21 February 2020
One aspect of the new RBIP that was yet to be resolved was the process of allocating priority scores to different premises. A question to be answered, for example, was how a premises with a CQC rating could be compared to one without.
There were a number of ways to help business premises which had been categorised as ‘Committee’ according to the Service’s new RBIP and it was important that crews’ level of competence was maintained. The Grenfell Tower Inquiry Phase 1 report criticised a lack of knowledge concerning construction materials and the Service had been training staff to give them the skills and knowledge to make the best use of the time and resources available. The Committee queried whether this training was accredited. The training was not yet accredited due to the cost and the lack of flexibility while the Service trained a workforce which worked in shifts.
Resolved - (a) That the Service’s work to improve its Business Safety Risk Based Inspection Programme and its presentation to the National Fire Chief’s Council be commended;
(b) that Members take assurance from the Service’s proactive response and subsequent improvements to the delivery of Business Safety, the Risk Based Inspection Programme and unwanted fire signals, and
(c) that Members note the continuing work in delivering change across public safety and the post-implementation review of the Public Safety Service Redesign Programme.
29/20 GAS COMMITTEE SCRUTINY PROGRAMME 2019/20 - The Committee Manager submitted a report summarising the Committee’s Scrutiny Programme for 2019/20.
Resolved - that a work programming session be held in June 2020 to determine the topics for the Scrutiny Programme for 2020/21.
Meeting closed at 11.30 am.
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STATUTORY INSTRUMENTS
2020 No. 168 FIRE AND RESCUE SERVICES, ENGLAND
The Combined Fire and Rescue Authorities (Membership and Allowances) (Amendment) Regulations 2020
Made - - - - 21st February 2020 Laid before Parliament 26th February 2020 Coming into force - - 18th March 2020
The Secretary of State makes the following Regulations in exercise of the powers conferred by sections 18 and 190(1) of the Local Government and Housing Act 1989(1), sections 100 and 105(2) (b) of the Local Government Act 2000(2) (“the 2000 Act”) and sections 2(6), 3, 4(4) and 60(2) of the Fire and Rescue Services Act 2004(3) (“the 2004 Act”). In accordance with sections 2(6) and 4(5) of the 2004 Act, the Secretary of State has consulted the authorities which appeared to the Secretary of State likely to be affected by Part 2 of these Regulations and such other persons as the Secretary of State considered appropriate. In accordance with sections 2(8)(b) and 4(6) of the 2004 Act, the Secretary of State has caused an inquiry to be held in relation to the variation of the scheme set out in the Schedule to the Dorset and Wiltshire Fire and Rescue Authority (Combination Scheme) Order 2015(4) and the variation of the Cleveland Fire Services Combination Scheme(5). The other authorities which are affected by a variation made by Part 2 of these Regulations have agreed to the relevant variation. In accordance with section 100(5) of the 2000 Act, the Secretary of State has consulted such representatives of local government and such other persons as the Secretary of State considered appropriate about Part 3 of these Regulations.
(1) 1989 c. 42. Section 18 has been amended by the Police and Magistrates’ Court Act 1994 (c. 29), Schedule 4, paragraph 37, the Education Act 1996 (c. 56), Schedule 37, paragraph 97, and by the Local Government Act 2000 (c. 22), section 99. (2) 2000 c. 22. (3) 2004 c. 21. Sections 2 and 4 have been amended by the Local Government and Public Involvement in Health Act 2007 (c. 28), Schedule 1, paragraph 22, the Local Democracy, Economic Development and Construction Act 2009 (c. 20), Schedule 7, Part 4, and the Deregulation Act 2015 (c. 20), Schedule 22, paragraph 16. Section 3 has been amended by the Policing and Crime Act 2017 (c. 3), section 7. Section 60 has been amended by the Localism Act 2011 (c. 20), section 9. (4) S.I. 2015/435, as amended by S.I. 2017/1165. (5) The Scheme is set out in the Schedule to the Cleveland Fire Services (Combination Scheme) Order 1995 (S.I. 1995/3131); to which there are amendments not relevant to these Regulations.
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PART 1 Introductory
Citation and commencement 1. These Regulations may be cited as the Combined Fire and Rescue Authorities (Membership and Allowances) (Amendment) Regulations 2020 and come into force on 18th March 2020.
Interpretation 2. In these Regulations, “the Dorset and Wiltshire Fire and Rescue Authority Combination Scheme” means the scheme set out in the Schedule to the Dorset and Wiltshire Fire and Rescue Authority (Combination Scheme) Order 2015.
PART 2 Appointment of police and crime commissioner to combined fire and rescue authority
Variation of the Avon Fire Services Combination Scheme 3. The Avon Fire Services Combination Scheme(6) is varied in accordance with Schedule 1.
Variation of the Cleveland Fire Services Combination Scheme 4. The Cleveland Fire Services Combination Scheme is varied in accordance with Schedule 2.
Variation of the Humberside Fire Services Combination Scheme 5. The Humberside Fire Services Combination Scheme(7) is varied in accordance with Schedule 3.
Variation of the Leicestershire Fire Services Combination Scheme 6. The Leicestershire Fire Services Combination Scheme(8) is varied in accordance with Schedule 4.
Variation of the Bedfordshire Fire Services Combination Scheme 7. The Bedfordshire Fire Services Combination Scheme(9) is varied in accordance with Schedule 5.
(6) The Scheme is set out in the Schedule to the Avon Fire Services (Combination Scheme) Order 1995 (S.I. 1995/3127); to which there are amendments not relevant to these Regulations. (7) The Scheme is set out in the Schedule to the Humberside Fire Services (Combination Scheme) Order 1995 (S.I. 1995/3132); to which there are amendments not relevant to these Regulations. (8) The Scheme is set out in the Schedule to the Leicestershire Fire Services (Combination Scheme) Order 1996 (S.I. 1996/2912); to which there are amendments not relevant to these Regulations. (9) The Scheme is set out in the Schedule to the Bedfordshire Fire Services (Combination Scheme) Order 1996 (S.I. 1996/2918); to which there are amendments not relevant to these Regulations. 2
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Variation of the Derbyshire Fire Services Combination Scheme 8. The Derbyshire Fire Services Combination Scheme(10) is varied in accordance with Schedule 6.
Variation of the Durham Fire Services Combination Scheme 9. The Durham Fire Services Combination Scheme(11) is varied in accordance with Schedule 7.
Variation of the East Sussex Fire Services Combination Scheme 10. The East Sussex Fire Services Combination Scheme(12) is varied in accordance with Schedule 8.
Variation of the Buckinghamshire Fire Services Combination Scheme 11. The Buckinghamshire Fire Services Combination Scheme(13) is varied in accordance with Schedule 9.
Variation of the Berkshire Fire Services Combination Scheme 12. The Berkshire Fire Services Combination Scheme(14) is varied in accordance with Schedule 10.
Variation of the Cambridgeshire Fire Services Combination Scheme 13. The Cambridgeshire Fire Services Combination Scheme(15) is varied in accordance with Schedule 11.
Variation of the Cheshire Fire Services Combination Scheme 14. The Cheshire Fire Services Combination Scheme(16) is varied in accordance with Schedule 12.
Variation of the Hereford and Worcester Fire Services Combination Scheme 15. The Hereford and Worcester Fire Services Combination Scheme(17) is varied in accordance with Schedule 13.
(10) The Scheme is set out in the Schedule to the Derbyshire Fire Services (Combination Scheme) Order 1996 (S.I. 1996/2919); to which there are amendments not relevant to these Regulations. (11) The Scheme is set out in the Schedule to the Durham Fire Services (Combination Scheme) Order 1996 (S.I. 1996/2921); to which there are amendments not relevant to these Regulations. (12) The Scheme is set out in the Schedule to the East Sussex Fire Services (Combination Scheme) Order 1996 (S.I. 1996/2922); to which there are amendments not relevant to these Regulations. (13) The Scheme is set out in the Schedule to the Buckinghamshire Fire Services (Combination Scheme) Order 1996 (S.I. 1996/2924); to which there are amendments not relevant to these Regulations. (14) The Scheme is set out in the Schedule to the Berkshire Fire Services (Combination Scheme) Order 1997 (S.I. 1997/2695); to which there are amendments not relevant to these Regulations. (15) The Scheme is set out in the Schedule to the Cambridgeshire Fire Services (Combination Scheme) Order 1997 (S.I. 1997/2696); to which there are amendments not relevant to these Regulations. (16) The Scheme is set out in the Schedule to the Cheshire Fire Services (Combination Scheme) Order 1997 (S.I. 1997/2697); to which there are amendments not relevant to these Regulations. (17) The Scheme is set out in the Schedule to the Hereford and Worcester Fire Services (Combination Scheme) Order 1997 (S.I. 1997/2700); to which there are amendments not relevant to these Regulations. 3
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Variation of the Kent Fire Services Combination Scheme 16. The Kent Fire Services Combination Scheme(18) is varied in accordance with Schedule 14.
Variation of the Shropshire Fire Services Combination Scheme 17. The Shropshire Fire Services Combination Scheme(19) is varied in accordance with Schedule 15.
Variation of the Lancashire Fire Services Combination Scheme 18. The Lancashire Fire Services Combination Scheme(20) is varied in accordance with Schedule 16.
Variation of the Nottinghamshire Fire Services Combination Scheme 19. The Nottinghamshire Fire Services Combination Scheme(21) is varied in accordance with Schedule 17.
Variation of the Devon and Somerset Fire and Rescue Authority Combination Scheme 20. The Devon and Somerset Fire and Rescue Authority Combination Scheme(22) is varied in accordance with Schedule 18.
Variation of the Dorset and Wiltshire Fire and Rescue Authority Combination Scheme 21. The Dorset and Wiltshire Fire and Rescue Authority Combination Scheme is varied in accordance with Schedule 19.
PART 3 Allowances payable to members of a combined fire and rescue authority
Amendment of the Local Authorities (Members’ Allowance) (England) Regulations 2003 22. In regulation 4 of the Local Authorities (Members’ Allowances) (England) Regulations 2003(23), after paragraph (1), insert— “(1A) But a fire and rescue authority may not make any provision in such a scheme for the payment of any allowance to a PCC member of the authority. (1B) For the purposes of paragraph (1A)— “fire and rescue authority” means an authority of a description in regulation 3(1)(e);
(18) The Scheme is set out in the Schedule to the Kent Fire Services (Combination Scheme) Order 1997 (S.I. 1997/2701); to which there are amendments not relevant to these Regulations. (19) The Scheme is set out in the Schedule to the Shropshire Fire Services (Combination Scheme) Order 1997 (S.I. 1997/2702); to which there are amendments not relevant to these Regulations. (20) The Scheme is set out in the Schedule to the Lancashire Fire Services (Combination Scheme) Order 1997 (S.I. 1997/2760); to which there are amendments not relevant to these Regulations. (21) The Scheme is set out in the Schedule to the Nottinghamshire Fire Services (Combination Scheme) Order 1997 (S.I. 1997/2761); to which there are amendments not relevant to these Regulations. (22) The Scheme is set out in the Schedule to the Devon and Somerset Fire and Rescue Authority (Combination Scheme) Order 2006 (S.I. 2006/2790). (23) S.I. 2003/1021, as amended by S.I. 2004/3168. There are other amending instruments but none is relevant. 4
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“PCC member”, in relation to a fire and rescue authority, means a police and crime commissioner who is appointed, in that capacity, as a member of that authority.”
Kit Malthouse Minister of State 21st February 2020 Home Office
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SCHEDULE 3 Article 5
Variation of the Humberside Fire Services Combination Scheme 1. In paragraph 2 of the Humberside Fire Services Combination Scheme— (a) omit “and” at the end of the definition of “constituent authority”, and (b) at the end of the definition of “the fire brigade”, insert “; and” and as follows— ““relevant police and crime commissioner” means a police and crime commissioner— (a) whose area is the same as, or contains all of, the combined area, or (b) all or part of whose area falls within the combined area”. 2. For paragraph 11 of that Scheme substitute—
“11.—(1) Subject to sub-paragraph (2), the Authority is to consist of not more than 25 members. (2) If the minimum number of members resulting from the operation of paragraphs 12 and 12A would be greater than 25, the Authority is to consist of that number of members. (3) The members of the Authority are to be appointed in accordance with this Part.”. 3. In paragraph 12 of that Scheme— (a) the existing paragraph becomes sub-paragraph (1), and (b) after that sub-paragraph, insert— “(2) Each representative appointed by a constituent authority under sub- paragraph (1) must be appointed from its own members.”. 4. After that paragraph, insert—
“12A.—(1) The Authority may appoint a relevant police and crime commissioner to be a member of the Authority. (2) But the Authority may only make such an appointment in response to a request from the commissioner. (3) If the Authority receives a request from a relevant police and crime commissioner, it must— (a) consider the request, (b) give reasons for its decision to agree to or refuse the request, and (c) publish those reasons in such manner as it thinks appropriate.
12B.—(1) Sub-paragraph (2) applies where a relevant police and crime commissioner— (a) is appointed as a member of the Authority, and (b) arranges, under section 18 of the Police Reform and Social Responsibility Act 2011, for another person to attend a meeting of the Authority on the commissioner’s behalf. (2) Where this sub-paragraph applies, the person attending the meeting on behalf of the commissioner may speak at that meeting but— (a) may not vote, and (b) is not to be treated as a member of the Authority for any purpose.”.
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5. In paragraph 13 of that Scheme, after “the Authority”, insert “appointed by a constituent authority”. 6. After that paragraph, insert—
“13A.—(1) A relevant police and crime commissioner appointed as a member of the Authority under paragraph 12A— (a) comes into office on the date of that appointment, and (b) continues to be a member of the Authority until the commissioner’s term of office comes to an end in accordance with section 50(7)(b) of the Police Reform and Social Responsibility Act 2011 (“the 2011 Act”). (2) But if a vacancy arises in the office of the relevant police and crime commissioner (see section 59 of the 2011 Act) before the end of that term, the commissioner ceases to be a member of the Authority on the date on which the vacancy in the office is regarded under section 59(1) of the 2011 Act as occurring. (3) This paragraph is subject to paragraphs 14 and 15(2). ”. 7. In paragraph 16 of that Scheme— (a) in sub-paragraph (1), after “member of the Authority”, in the first place it appears, insert “appointed by a constituent authority”, and (b) in sub-paragraph (2), after “member of the Authority”, in the first place it appears, insert “appointed by a constituent authority”. 8. In paragraph 20(1) of that Scheme for “to 106” substitute “, 102(1) to (5), 103, 104, 106”.
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Agenda Item No. 8
Agenda Item No. 9 Humberside Fire Authority Report by the Executive Director of Agenda Item No. 13 March 2020 Corporate Services & S.151 Officer 12
TREASURY MANAGEMENT AND CAPITAL EXPENDITURE Agenda Item No. 12 PRUDENTIAL INDICATORS, TREASURY MANAGEMENT POLICY STATEMENT 2020/21 AND MINIMUM REVENUE PROVISION (MRP) FOR 2020/21
SUMMARY
1. This report sets out the Prudential Indicators for Treasury Management and Capital and the Treasury Management Policy Statement proposed for adoption for the financial year 2020/21. The Authority’s Constitution requires that the Policy Statement is approved by the full Fire Authority and this responsibility cannot be delegated.
2. This report also outlines the recommended policy to be adopted in respect of creating the Minimum Revenue Provision (MRP) for 2020/21, in line with the statutory requirements set out in The Local Authorities (Capital Finance and Accounting) (England) (Amendment) Regulations 2008.
RECOMMENDATIONS
3. That Members approve the Treasury Management Strategy Statement for 2020/21 onwards (Appendix 1).
BACKGROUND
4. Treasury Management, as defined by the Chartered Institute of Public Finance and Accountancy (CIPFA) Code of Practice 2017 is:
‘The management of the organisation’s investments and cash-flows, its banking and money market and capital market transactions; the effective control of the risks associated with those activities; and the pursuit of optimum performance consistent with those risks’.
5. An updated version of the Code was published in December 2017; this strategy statement has been prepared in accordance with the requirements of the new Code.
TREASURY MANAGEMENT AND PRUDENTIAL INDICATORS
6. The Local Government Act 2003 and supporting regulations require the Authority to ‘have regard to’ the CIPFA Prudential Code and the CIPFA Treasury Management Code of Practice to set, on an annual basis, a range of Prudential and Treasury Indicators for the next three years to ensure that its capital investment plans are affordable, prudent and sustainable. This report details the proposed indicators relating to the Authority’s Treasury Management activities, capital expenditure and external debt for 2020/21 for Members’ consideration and approval.
7. The suggested strategy for 2020/21 in respect of the following aspects of the treasury management function is based upon the S.151 Officer’s views on interest rates, supplemented with leading market forecasts provided by the Authority’s treasury management advisors and support from the treasury management team within Hull City Council. The strategy covers:
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limits in force which will limit the treasury risk and activities of the Authority; the Treasury Management and Prudential Indicators; the current treasury position; prospects for interest rates; the borrowing requirement and strategy; policy on borrowing in advance of need; debt rescheduling; the investment strategy; creditworthiness policy; the MRP strategy; policy on use of external service providers
8. The 2003 Act, revised Investment Guidance issued 2010 and the updated CIPFA Code also require that Members give consideration to the Authority’s Annual Investment Strategy, setting out how investments will be managed and the priorities for security and liquidity of those investments as well as the Annual Borrowing Strategy; these have also been incorporated into this report.
9. In addition, it is a statutory requirement under Section 33 of the Local Government Finance Act 1992, for the Authority to produce a balanced budget. In particular, Section 32 requires a local authority to calculate its budget requirement for each financial year to include the revenue costs that flow from capital decisions. This therefore means, that increases in capital expenditure must be limited to a level whereby increases in charges to revenue from:
a. increased interest charges from additional borrowing and;
b. increased running costs from new capital projects
are limited to a level that is affordable within the projected income of the Authority.
STRATEGIC PLAN COMPATIBILITY
10. Treasury Management is an integral part of the financial management of the Authority with Prudential Indicators providing a framework for the Authority to monitor key elements of its financial position. Utilising approved Borrowing and Investment Strategies, the Executive Director of Corporate Services/S.151 Officer will seek to minimise borrowing costs and maximise investment income whilst adopting a prudent approach to the Authority’s exposure to market risks, especially given the current economic situation.
FINANCIAL/RESOURCES/VALUE FOR MONEY IMPLICATIONS
11. The approach outlined within the report is aimed at achieving effective and efficient management of the Authority’s financial resources and reflects a prudent approach to the management of financial risk for the Authority.
LEGAL IMPLICATIONS
12. The Authority must comply with the requirements of the CIPFA Code of Practice on Treasury Management 2017 and the Local Authorities (Capital Finance and Accounting) (England) (Amendment) Regulations 2017. This report ensures such compliance.
EQUALITY IMPACT ASSESSMENT/HR IMPLICATIONS
13. No direct issues arising from this report.
32 CORPORATE RISK MANAGEMENT IMPLICATIONS
14. The formulation and application of a prudent Treasury Management Policy and MRP provision ensures that the Authority effectively manages financial risks such as exposure to interest rate changes and liquidity risk whilst minimising borrowing costs and maximising investment income. It further ensures that sufficient levels of resource are set aside for the repayment of debt. Effective treasury management is key to making the best use of the Authority’s financial resources and thus the successful delivery of its Strategic Plan.
HEALTH AND SAFETY IMPLICATIONS
15. No direct issues arising.
COMMUNICATIONS ACTIONS ARISING
16. No direct issues arising.
DETAILS OF CONSULTATION AND/OR COLLABORATION
17. No direct issues arising.
BACKGROUND PAPERS AVAILABLE FOR ACCESS
18. 2020/21 Budget and Precept and Medium-Term Financial Plan 2020/21 to 2023/24 – Report to Fire Authority 10 February 2020 Treasury Management Mid-year Update Report 2019/20 – Report to Fire Authority December 2019 CIPFA Prudential Code (Revised 2011) and November 2012 and 2017 update The Local Authorities (Capital Finance and Accounting) (England) (Amendment) Regulations 2008 and 2017.
K WILSON
Officer Contact: Kevin Wilson 01482 567183 Executive Director of Corporate Services & S.151 Officer
Humberside Fire & Rescue Service Summergroves Way Kingston upon Hull
KW/JP 28 February 2020
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Appendix 1
Treasury Management Strategy Statement Minimum Revenue Provision Policy Statement and Annual Investment Strategy Humberside Fire Authority 2020/21
34 2 INTRODUCTION
Background The Authority is required to operate a balanced budget, which broadly means that cash raised during the year will meet cash expenditure. Part of the treasury management operation is to ensure that this cash flow is adequately planned, with cash being available when it is needed. Surplus monies are invested in low risk counterparties or instruments commensurate with the Authority’s low risk appetite, providing adequate liquidity initially before considering investment return.
The second main function of the treasury management service is the funding of the Authority’s capital plans. These capital plans provide a guide to the borrowing need of the Authority, essentially the longer-term cash flow planning, to ensure that the Authority can meet its capital spending obligations. This management of longer-term cash may involve arranging long or short- term loans, or using longer-term cash flow surpluses. On occasion, when it is prudent and economic, any debt previously drawn may be restructured to meet a risk or cost objectives.
CIPFA defines treasury management as:
“The management of the local authority’s borrowing, investments and cash flows, its banking, money market and capital market transactions; the effective control of the risks associated with those activities; and the pursuit of optimum performance consistent with those risks.”
Reporting requirements The Authority is currently required to receive and approve, as a minimum, three main reports each year, which incorporate a variety of policies, estimates and actuals.
Prudential and treasury indicators and treasury strategy (this report) - The first and most important report covers:
the capital plans (including prudential indicators); a minimum revenue provision (MRP) policy (how residual capital expenditure is charged to revenue over time); the treasury management strategy (how the investments and borrowings are to be organised) including treasury indicators; and an investment strategy (the parameters on how investments are to be managed).
A mid-year treasury management report – This will update members with the progress of the capital position, amending prudential indicators as necessary, and whether any policies require revision.
An annual treasury report – This provides details of a selection of actual prudential and treasury indicators and actual treasury operations compared to the estimates within the strategy.
Scrutiny The above reports are required to be adequately scrutinised before being recommended to the Authority. This role is undertaken by the Governance, Audit and Scrutiny Committee.
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Capital Strategy In December 2017, CIPFA issued revised Prudential and Treasury Management Codes. As from 2019-20, all local authorities will be required to prepare an additional report, a Capital Strategy report, which is intended to provide the following:-
a high-level overview of how capital expenditure, capital financing and treasury management activity contribute to the provision of services; an overview of how the associated risk is managed; the implications for future financial sustainability.
The aim of this report is to ensure that all members on the Authority fully understand the overall strategy, governance procedures and risk appetite. The Capital Strategy is set out at Appendix 8 of this report.
Treasury Management Strategy for 2020/21 The strategy for 2020/21 covers two main areas:
Capital issues the capital plans and the prudential indicators; the minimum revenue provision (MRP) policy.
Treasury management issues the current treasury position; treasury indicators which limit the treasury risk and activities of the Authority; prospects for interest rates; the borrowing strategy; policy on borrowing in advance of need; debt rescheduling; the investment strategy; creditworthiness policy; and the policy on use of external service providers.
These elements cover the requirements of the Local Government Act 2003, the CIPFA Prudential Code, CLG MRP Guidance, the CIPFA Treasury Management Code and CLG Investment Guidance.
The CIPFA Code requires the responsible officer to ensure that Members with responsibility for treasury management receive adequate training in treasury management. This especially applies to Members responsible for scrutiny. Training will be arranged as required.
36 4 Treasury management consultants The Authority uses Link Asset Services, Treasury solutions as its external treasury management advisors.
The Authority recognises that responsibility for treasury management decisions remains with the organisation at all times and will ensure that undue reliance is not placed upon our external service providers.
It also recognises that there is value in employing external providers of treasury management services in order to acquire access to specialist skills and resources. The Authority will ensure that the terms of their appointment and the methods by which their value will be assessed are properly agreed and documented, and subjected to regular review.
37 5 THE CAPITAL PRUDENTIAL INDICATORS 2020/21 – 2023/24
The Authority’s capital expenditure plans are the key driver of treasury management activity. The output of the capital expenditure plans is reflected in the prudential indicators, which are designed to assist Members’ overview and confirm capital expenditure plans.
Capital expenditure – Indicator 1
This prudential indicator is a summary of the Authority’s capital expenditure plans, both those agreed previously, and those forming part of this budget cycle. Members are asked to approve the capital expenditure forecasts:
Capital expenditure 2019/20 2020/21 2021/22 2022/23 2023/24 £m Estimate Estimate Estimate Estimate Estimate Total 2.980 5.755 3.612 1.422 3.502
Other long-term liabilities. The above financing need excludes other long-term liabilities, such as PFI and leasing arrangements, which already include borrowing instruments.
The table below summarises the above capital expenditure plans and how these plans are being financed by capital or revenue resources. Any shortfall of resources results in a funding borrowing need.
Financing of capital 2019/20 2020/21 2021/22 2022/23 2023/24 expenditure £m Estimate Estimate Estimate Estimate Estimate Capital receipts - - - - - Capital grants - - - - - Capital reserves - 0.500 0.500 0.422 0.500 Revenue 0.600 0.600 1.000 1.000 1.000 Net financing need 2.380 4.655 2.112 - 2.002 for the year
The Authority’s borrowing need (the Capital Financing Requirement) – Indicator 2
The second prudential indicator is the Authority’s Capital Financing Requirement (CFR). The CFR is simply the total historic outstanding capital expenditure which has not yet been paid for from either revenue or capital resources. It is essentially a measure of the Authority’s indebtedness and so its underlying borrowing need. Any capital expenditure above, which has not immediately been paid for, will increase the CFR.
The CFR does not increase indefinitely, as the minimum revenue provision (MRP) is a statutory annual revenue charge which broadly reduces the indebtedness in line with each assets life, and so charges the economic consumption of capital assets as they are used.
The CFR includes any other long-term liabilities (e.g. PFI schemes, finance leases). Whilst these increase the CFR, and therefore the Authority’s borrowing requirement, these types of scheme include a borrowing facility by the PFI, PPP lease provider and so the Authority is not required to separately borrow for these schemes. The Authority had £0.979m of such schemes within the CFR as at 31st March 2019.
38 6 The Authority is asked to approve the CFR projections below:
£m 2019/20 2020/21 2021/22 2022/23 2023/24 Estimate Estimate Estimate Estimate Estimate Capital Financing Requirement Underlying CFR 17.035 20.390 21.071 19.516 19.846 Other LT Liabilities* 0.966 0.951 0.936 0.919 0.900 Total CFR 18.001 21.341 22.007 20.435 20.746 CFR as a % of BR 41.31% 47.15% 47.45% 42.91% 42.43% Movement in CFR 1.171 3.340 0.666 (1.572) 0.311
Movement in CFR represented by Net financing need 2.380 4.655 2.112 - 2.002 for the year (above) Less MRP/VRP and (1.209) (1.315) (1.446) (1.572) (1.691) other financing movements Movement in CFR 1.171 3.340 0.666 (1.572) 0.311
This table shows CFR being maintained at circa 44% of our Budget Requirement (BR) over the period 2020/21 to 2023/24.
*IFRS16 Leases comes into effect from 2020/21. The impact of this is yet to be established and will be reviewed throughout the year.
Core funds and expected investment balances – Indicator 3
The application of resources (capital receipts, reserves etc.) to either finance capital expenditure or other budget decisions to support the revenue budget will have an ongoing impact on investments unless resources are supplemented each year from new sources (asset sales etc.). Detailed below are estimates of the year-end balances for each resource and anticipated day-to-day cash flow balances.
Year End Resources 2019/20 2020/21 2021/22 2022/23 2023/24 £m Estimate Estimate Estimate Estimate Estimate Fund balances / 10.149 10.111 8.439 7.866 7.300 reserves Capital receipts 0.030 0.030 0.230 0.030 0.030 Total core funds 10.179 10.141 8.469 7.896 7.330 Working capital* (2.500) (2.500) (2.500) (2.500) (2.500) (Under)/over borrowing (3.505) (5.493) (6.003) (4.347) (4.676) Expected investments 4.174 2.148 0.166 1.049 0.154
*Working capital balances shown are estimated year-end; these may be higher mid-year
39 7 TREASURY MANAGEMENT PRUDENTIAL INDICATORS 2020/21 – 2023/24
The capital expenditure plans set out in this section provide details of the service activity of the Authority. The treasury management function ensures that the Authority’s cash is organised in accordance with the relevant professional codes, so that sufficient cash is available to meet this service activity and the Authority’s capital strategy. This will involve both the organisation of the cash flow and, where capital plans require, the organisation of appropriate borrowing facilities. The strategy covers the relevant treasury / prudential indicators, the current and projected debt positions and the annual investment strategy.
Current portfolio position
The Authority’s estimated treasury portfolio position at 31 March 2020, with forward projections are summarised below. The table shows the actual external debt (the treasury management operations), against the underlying capital borrowing need (the Capital Financing Requirement - CFR), highlighting any over or under borrowing.
£m 2019/20 2020/21 2021/22 2022/23 2023/24 Estimate Estimate Estimate Estimate Estimate External Debt Debt at 1 April 14.574 13.530 14.896 15.069 15.169 Expected change in (1.044) 1.366 0.173 0.100 - Debt Other long-term 0.979 0.966 0.951 0.936 0.919 liabilities (OLTL) Expected change in (0.013) (0.014) (0.016) (0.017) (0.018) OLTL Actual gross debt at 14.496 15.848 16.004 16.088 16.070 31 March The Capital Financing 18.001 21.341 22.007 20.435 20.746 Requirement Under / (over) 3.505 5.493 6.003 4.347 4.676 borrowing
Within the prudential indicators there are a number of key indicators to ensure that the Authority operates its activities within well-defined limits. One of these is that the Authority needs to ensure that its gross debt does not, except in the short term, exceed the total of the CFR in the preceding year plus the estimates of any additional CFR for 2020/21 and the following two financial years. This allows some flexibility for limited early borrowing for future years, but ensures that borrowing is not undertaken for revenue or speculative purposes.
The Executive Director of Corporate Services & S.151 Officer reports that the Authority complied with this prudential indicator in the current year and does not envisage difficulties for the future. This view takes into account current commitments, existing plans, and the proposals in this budget report.
40 8 Treasury Indicators: limits to borrowing activity
The operational boundary – Indicator 4
This is the limit beyond which external debt is not normally expected to exceed. In most cases, this would be a similar figure to the CFR, but may be lower or higher depending on the levels of actual debt and the ability to fund under-borrowing by other cash resources.
Operational boundary 2020/21 2021/22 2022/23 2023/24 £m Estimate Estimate Estimate Estimate Debt 21.600 21.600 21.600 21.600 Other long term liabilities 3.500 3.500 3.500 3.500 Total 25.100 25.100 25.100 25.100
The authorised limit for external debt – Indicator 5
A further key prudential indicator represents a control on the maximum level of borrowing. This represents a limit beyond which external debt is prohibited, and this limit needs to be set or revised by the Authority. It reflects the level of external debt which, while not desired, could be afforded in the short term, but is not sustainable in the longer term.
1. This is the statutory limit determined under section 3 (1) of the Local Government Act 2003. The Government retains an option to control either the total of all authorities’ plans, or those of a specific authority, although this power has not yet been exercised.
2. The Authority is asked to approve the following authorised limit:
Authorised limit £m 2020/21 2021/22 2022/23 2023/24 Estimate Estimate Estimate Estimate Debt 27.600 27.600 27.600 27.600 Other long term liabilities 3.500 3.500 3.500 3.500 Total 31.100 31.100 31.100 31.100
Prospects for interest rates
The Authority has appointed Link Asset Services as its treasury advisor and part of their service is to assist the Authority to formulate a view on interest rates. The following table gives our central view.
Link Asset Services Interest Rate View Dec-19 Mar-20 Jun-20 Sep-20 Dec-20 Mar-21 Jun-21 Sep-21 Dec-21 Mar-22 Jun-22 Sep-22 Dec-22 Mar-23 Bank Rate View 0.75 0.75 0.75 0.75 0.75 1.00 1.00 1.00 1.00 1.00 1.25 1.25 1.25 1.25 3 Month LIBID 0.70 0.70 0.70 0.80 0.90 1.00 1.00 1.00 1.10 1.20 1.30 1.30 1.30 1.30 6 Month LIBID 0.80 0.80 0.80 0.90 1.00 1.10 1.10 1.20 1.30 1.40 1.50 1.50 1.50 1.50 12 Month LIBID 1.00 1.00 1.00 1.10 1.20 1.30 1.30 1.40 1.50 1.60 1.70 1.70 1.70 1.70 5yr PWLB Rate 2.30 2.40 2.40 2.50 2.50 2.60 2.70 2.80 2.90 2.90 3.00 3.10 3.20 3.20 10yr PWLB Rate 2.60 2.70 2.70 2.70 2.80 2.90 3.00 3.10 3.20 3.20 3.30 3.30 3.40 3.50 25yr PWLB Rate 3.20 3.30 3.40 3.40 3.50 3.60 3.70 3.70 3.80 3.90 4.00 4.00 4.10 4.10 50yr PWLB Rate 3.10 3.20 3.30 3.30 3.40 3.50 3.60 3.60 3.70 3.80 3.90 3.90 4.00 4.00
The above forecasts have been based on an assumption that there is an agreed deal on Brexit, including agreement on the terms of trade between the UK and EU, at some point in time. The result of the general election has removed much uncertainty around this major assumption. However, it does not remove uncertainty around whether agreement can be
41 9 reached with the EU on a trade deal within the short time to December 2020, as the prime minister has pledged.
It has been little surprise that the Monetary Policy Committee (MPC) has left Bank Rate unchanged at 0.75% so far in 2019 due to the ongoing uncertainty over Brexit and the outcome of the general election. In its meeting on 7 November, the MPC became more dovish due to increased concerns over the outlook for the domestic economy if Brexit uncertainties were to become more entrenched, and for weak global economic growth: if those uncertainties were to materialise, then the MPC were likely to cut Bank Rate. However, if they were both to dissipate, then rates would need to rise at a “gradual pace and to a limited extent”. Brexit uncertainty has had a dampening effect on UK GDP growth in 2019, especially around mid-year. There is still some residual risk that the MPC could cut Bank Rate as the UK economy is still likely to only grow weakly in 2020 due to continuing uncertainty over whether there could effectively be a no deal Brexit in December 2020 if agreement on a trade deal is not reached with the EU. Until that major uncertainty is removed, or the period for agreeing a deal is extended, it is unlikely that the MPC would raise Bank Rate.
Bond yields / PWLB rates. There has been much speculation during 2019 that the bond market has gone into a bubble, as evidenced by high bond prices and remarkably low yields. However, given the context that there have been heightened expectations that the US was heading for a recession in 2020, and a general background of a downturn in world economic growth, together with inflation generally at low levels in most countries and expected to remain subdued, conditions are ripe for low bond yields. While inflation targeting by the major central banks has been successful over the last thirty years in lowering inflation expectations, the real equilibrium rate for central rates has fallen considerably due to the high level of borrowing by consumers: this means that central banks do not need to raise rates as much now to have a major impact on consumer spending, inflation, etc. This has pulled down the overall level of interest rates and bond yields in financial markets over the last thirty years. We have therefore seen over the last year, many bond yields up to ten years in the Eurozone actually turn negative. In addition, there has, at times, been an inversion of bond yields in the US whereby ten-year yields have fallen below shorter-term yields. In the past, this has been a precursor of a recession. The other side of this coin is that bond prices are elevated, as investors would be expected to be moving out of riskier assets i.e. shares, in anticipation of a downturn in corporate earnings and so selling out of equities. However, stock markets are also currently at high levels as some investors have focused on chasing returns in the context of dismal ultra-low interest rates on cash deposits.
During the first half of 2019-20 to 30 September, gilt yields plunged and caused a near halving of longer term PWLB rates to completely unprecedented historic low levels. (See paragraph 3.7 for comments on the increase in the PWLB rates margin over gilt yields of 100bps introduced on 9.10.19.) There is though, an expectation that financial markets have gone too far in their fears about the degree of the downturn in US and world growth. If, as expected, the US only suffers a mild downturn in growth, bond markets in the US are likely to sell off and that would be expected to put upward pressure on bond yields, not only in the US, but also in the UK due to a correlation between US treasuries and UK gilts; at various times this correlation has been strong but at other times weak. However, forecasting the timing of this, and how strong the correlation is likely to be, is very difficult to forecast with any degree of confidence. Changes in UK Bank Rate will also impact on gilt yields.
One potential danger that may be lurking in investor minds is that Japan has become mired in a twenty-year bog of failing to get economic growth and inflation up off the floor, despite a combination of massive monetary and fiscal stimulus by both the central bank and government. Investors could be fretting that this condition might become contagious to other western economies.
42 10 The overall longer run future trend is for gilt yields, and consequently PWLB rates, to rise, albeit gently. From time to time, gilt yields, and therefore PWLB rates, can be subject to exceptional levels of volatility due to geo-political, sovereign debt crisis, emerging market developments and sharp changes in investor sentiment. Such volatility could occur at any time during the forecast period.
In addition, PWLB rates are subject to ad hoc decisions by H.M. Treasury to change the margin over gilt yields charged in PWLB rates: such changes could be up or down. It is not clear that if gilt yields were to rise back up again by over 100bps within the next year or so, whether H M Treasury would remove the extra 100 bps margin implemented on 9.10.19. Economic and interest rate forecasting remains difficult with so many influences weighing on UK gilt yields and PWLB rates. The above forecasts, (and MPC decisions), will be liable to further amendment depending on how economic data and developments in financial markets transpire over the next year. Geopolitical developments, especially in the EU, could also have a major impact. Forecasts for average investment earnings beyond the three-year time horizon will be heavily dependent on economic and political developments.
Investment and borrowing rates
Investment returns are likely to remain low during 2020/21 with little increase in the following two years. However, if major progress was made with an agreed Brexit, then there is upside potential for earnings.
Borrowing interest rates were on a major falling trend during the first half of 2019-20 but then jumped up by 100 bps on 9.10.19. The policy of avoiding new borrowing by running down spare cash balances has served local authorities well over the last few years. However, the unexpected increase of 100 bps in PWLB rates requires a major rethink of local authority treasury management strategy and risk management. Now that the gap between longer term borrowing rates and investment rates has materially widened, and in the long term Bank Rate is not expected to rise above 2.5%.
While this Authority may not be able to avoid borrowing to finance new capital expenditure or to replace maturing debt there will be a cost to carry, (the difference between higher borrowing costs and lower investments returns), to any new short or medium-term borrowing that causes a temporary increase in cash balances as this position will, most likely, incur a revenue cost.
Borrowing strategy The Authority is currently maintaining an under-borrowed position. This means that the capital borrowing need (the Capital Financing Requirement), has not been fully funded with loan debt as cash supporting the Authority’s reserves, balances and cash flow has been used as a temporary measure. This strategy is prudent as investment returns are low and counterparty risk is still an issue that needs to be considered.
Against this background and the risks within the economic forecast, caution will be adopted with the 2020/21 treasury operations. The Executive Director of Corporate Services & S.151 Officer will monitor interest rates in financial markets and adopt a pragmatic approach to changing circumstances:
if it was felt that there was a significant risk of a sharp FALL in long and short term rates, (e.g. due to a marked increase of risks around relapse into recession or of risks of deflation), then long term borrowings will be postponed, and potential rescheduling from fixed rate funding into short term borrowing will be considered.
43 11
if it was felt that there was a significant risk of a much sharper RISE in long and short term rates than that currently forecast, perhaps arising from an acceleration in the rate of increase in central rates in the USA and UK, an increase in world economic activity, or a sudden increase in inflation risks, then the portfolio position will be re-appraised. Most likely, fixed rate funding will be drawn whilst interest rates are lower than they are projected to be in the next few years.
Any decisions will be reported to the Authority at the next available opportunity.
Policy on borrowing in advance of need
The Authority will not borrow more than or in advance of its needs purely in order to profit from the investment of the extra sums borrowed. Any decision to borrow in advance will be within forward approved Capital Financing Requirement estimates, and will be considered carefully to ensure that value for money can be demonstrated and that the Authority can ensure the security of such funds.
Risks associated with any borrowing in advance activity will be subject to prior appraisal and subsequent reporting through the mid-year or annual reporting mechanism.
Debt rescheduling
Rescheduling of current borrowing in our debt portfolio is unlikely to occur as the 100 bps increase in PWLB rates only applied to new borrowing rates and not to premature debt repayment rates.
All rescheduling will be reported to the Authority, at the earliest meeting following its action.
New financial institutions as a source of borrowing and / or types of borrowing
Following the decision by the PWLB on 9 October 2019 to increase their margin over gilt yields by 100 bps to 180 basis points on loans lent to local authorities, consideration will also need to be given to sourcing funding at cheaper rates from the following:
Local authorities (primarily shorter dated maturities) Financial institutions (primarily insurance companies and pension funds but also some banks, out of spot or forward dates) Municipal Bonds Agency (no issuance at present but there is potential)
The degree which any of these options proves cheaper than PWLB Certainty Rate is still evolving at the time of writing but our advisors will keep us informed.
Approved Sources of Long and Short Term Borrowing
On Balance Sheet Fixed Variable
PWLB Municipal bond agency Local authorities Banks Pension funds Insurance companies
Market (long-term) Market (temporary)
44 12 Market (LOBOs) Stock issues
Local temporary Local Bonds Local authority bills Overdraft Negotiable Bonds
Internal (capital receipts & revenue balances) Commercial Paper Medium Term Notes Finance leases
45 13 ANNUAL INVESTMENT STRATEGY
Investment policy – management of risk
The MHCLG and CIPFA have extended the meaning of ‘investments’ to include both financial and non-financial investments. This report deals solely with financial investments, (as managed by the treasury management team). Non-financial investments, essentially the purchase of income yielding assets, are covered in the Capital Strategy, (a separate report).
The Authority’s investment policy has regard to the following: - MHCLG’s Guidance on Local Government Investments (“the Guidance”) CIPFA Treasury Management in Public Services Code of Practice and Cross Sectoral Guidance Notes 2017 (“the Code”) CIPFA Treasury Management Guidance Notes 2018 The Authority’s investment priorities will be security first, portfolio liquidity second and then yield, (return).
The above guidance from the MHCLG and CIPFA place a high priority on the management of risk. This authority has adopted a prudent approach to managing risk and defines its risk appetite by the following means: -
1. Minimum acceptable credit criteria are applied in order to generate a list of highly creditworthy counterparties. This also enables diversification and thus avoidance of concentration risk. The key ratings used to monitor counterparties are the short term and long-term ratings.
2. Other information: ratings will not be the sole determinant of the quality of an institution; it is important to continually assess and monitor the financial sector on both a micro and macro basis and in relation to the economic and political environments in which institutions operate. The assessment will also take account of information that reflects the opinion of the markets. To achieve this consideration the Authority will engage with its advisors to maintain a monitor on market pricing such as “credit default swaps” and overlay that information on top of the credit ratings.
3. Other information sources used will include the financial press, share price and other such information pertaining to the banking sector in order to establish the most robust scrutiny process on the suitability of potential investment counterparties.
4. This authority has defined the list of types of investment instruments that the treasury management team are authorised to use. There are two lists in appendix 4 under the categories of ‘specified’ and ‘non-specified’ investments.
Specified investments are those with a high level of credit quality and subject to a maturity limit of one year. Non-specified investments are those with less high credit quality, may be for periods in excess of one year, and/or are more complex instruments which require greater consideration by members and officers before being authorised for use.
5. Non-specified investments limit. The Authority has determined that it will limit the maximum total exposure to non-specified investments as being 10% of the total investment portfolio.
6. Lending limits, (amounts and maturity), for each counterparty will be set through applying the matrix table in the creditworthiness policy.
46 14
7. Transaction limits are set for each type of investment in the creditworthiness policy.
8. This authority will set a limit for the amount of its investments which are invested for longer than 365 days.
9. Investments will only be placed with counterparties from countries with a specified minimum sovereign rating.
10. This authority has engaged external consultants, to provide expert advice on how to optimise an appropriate balance of security, liquidity and yield, given the risk appetite of this authority in the context of the expected level of cash balances and need for liquidity throughout the year.
11. All investments will be denominated in sterling.
Creditworthiness policy
The primary principle governing the Authority’s investment criteria is the security of its investments, although the yield or return on the investment is also a key consideration. After this main principle, the Authority will ensure that:
It maintains a policy covering both the categories of investment types it will invest in, criteria for choosing investment counterparties with adequate security, and monitoring their security. This is set out in the specified and non-specified investment sections below; and
It has sufficient liquidity in its investments. For this purpose it will set out procedures for determining the maximum periods for which funds may prudently be committed. These procedures also apply to the Authority’s prudential indicators covering the maximum principal sums invested.
The Executive Director of Corporate Services & S.151 Officer will maintain a counterparty list in compliance with the following criteria and will revise the criteria and submit them to Authority for approval as necessary. These criteria are separate to that which determines which types of investment instrument are either specified or non-specified as it provides an overall pool of counterparties considered high quality which the Authority may use, rather than defining what types of investment instruments are to be used.
Credit rating information is supplied by Link Asset Services, our treasury advisors, on all active counterparties that comply with the criteria below. Any counterparty failing to meet the criteria would be omitted from the counterparty (dealing) list. Any rating changes, rating Watches (notification of a likely change), rating Outlooks (notification of the longer-term bias outside the central rating view) are provided to officers almost immediately after they occur and this information is considered before dealing. For instance, a negative rating Watch applying to counterparty at the minimum Authority criteria will be suspended from use, with all others being reviewed in light of market conditions.
The criteria for providing a pool of high quality investment counterparties (both specified and non-specified investments) is:
Banks 1 - good credit quality – the Authority will only use banks which: i. are UK banks; and/or ii. are non-UK and domiciled in a country which has a minimum sovereign Long Term rating of AA-
47 15 and have, as a minimum, the following Fitch, Moody’s and Standard & Poor’s credit ratings (where rated): i. Short Term – F1;
Banks 2 – Part nationalised UK bank – Royal Bank of Scotland. This bank can be included provided it continues to be part nationalised or it meets the ratings in Banks 1 above;
Building societies - The Authority will use all societies which: i. Meet the ratings for banks outlined above;
Money Market Funds – £1m limit (each). Subject to £3m maximum;
Local authorities, Police and Fire and Crime Commissioners - £2m limit (each);
Debt Management Office (DMO) - £no limit.
Use of additional information other than credit ratings. Additional requirements under the Code require the Authority to supplement credit rating information. Whilst the above criteria relies primarily on the application of credit ratings to provide a pool of appropriate counterparties for officers to use, additional operational market information will be applied before making any specific investment decision from the agreed pool of counterparties. This additional market information (for example Credit Default Swaps, negative rating Watches/Outlooks) will be applied to compare the relative security of differing investment counterparties.
Time and monetary limits applying to investments. The time and monetary limits for institutions on the Authority’s counterparty list are as follows (these will cover both specified and non-specified investments): Fitch Long-term Money Transaction Time Rating Limit Limit Limit (or equivalent) Individual Banks 1&2 higher F1+ £3m £3m 364 days quality Individual Banks 1&2 medium F1 £2m £2m 364 days Quality Individual UK Building societies F1+ £3m £3m 364 days Individual UK Building societies F1 £2m £2m 364 days Local authorities/Police, Fire and £2m £2m 364 days Crime Commissioners Money Market Funds AAA £1m (each) £1m (each) liquid
The proposed criteria for specified and non-specified investments are shown in the appendices for approval.
Country and sector limits
Due care will be taken to consider the country, group and sector exposure of the Authority’s investments.
The Authority has determined that it will only use approved counterparties from countries with a minimum sovereign credit rating of AA- from Fitch. The list of countries that qualify using this credit
48 16 criteria as at the date of this report are shown in the appendices. This list will be added to, or deducted from, by officers should ratings change in accordance with this policy. In addition: limits in place above will apply to a group of companies; sector limits will be monitored regularly for appropriateness.
Investment strategy
In-house funds. Investments will be made with reference to the core balance and cash flow requirements and the outlook for short-term interest rates (i.e. rates for investments up to 12 months).
Investment returns expectations. On the assumption that the UK and EU agree a Brexit deal including the terms of trade by the end of 2020 or soon after, then Bank Rate is forecast to increase only slowly over the next few years to reach 1.00% by quarter 1 2023. Bank Rate forecasts for financial year ends (March) are:
Q1 2021 0.75% Q1 2022 1.00% Q1 2023 1.25%
The suggested budgeted investment earnings rates for returns on investments placed for periods up to about three months during each financial year are as follows: Now 2019/20 0.75% 2020/21 0.75% 2021/22 1.00% 2022/23 1.25% 2023/24 1.50% 2024/25 1.75% Later years 2.25%
The overall balance of risks to economic growth in the UK is probably to the downside due to the weight of all the uncertainties over Brexit, as well as a softening global economic picture.
For its cash flow generated balances, the Authority will seek to utilise its business reserve instant access and notice accounts, money market funds and short-dated deposits (overnight to 100 days) in order to benefit from the compounding of interest.
Investment risk benchmarking
This Authority will use an investment benchmark to assess the investment performance of its investment portfolio of 3 month LIBID uncompounded.
End of year investment report
At the end of the financial year, the Authority will report on its investment activity as part of its Annual Treasury Report.
Day to day Treasury Management
Kingston Upon Hull City Council manage the Authority’s treasury management functions under the terms of a service level agreement in accordance with the approved Annual Treasury Management Strategy.
49 17 APPENDICES
1. Prudential and treasury indicators and MRP statement
2. Interest rate forecasts
3. Economic background
4. Treasury management practice 1 – credit and counterparty risk management
5. Approved countries for investments
6. Treasury management scheme of delegation
7. The treasury management role of the section 151 officer
8. Capital Strategy
50 Appendix 1 18 THE CAPITAL PRUDENTIAL AND TREASURY INDICATORS 2020/21 – 2023/24 AND MRP STATEMENT
The Authority’s capital expenditure plans are the key driver of treasury management activity. The output of the capital expenditure plans is reflected in the prudential indicators, which are designed to assist Members’ overview and confirm capital expenditure plans.
Capital expenditure
Capital expenditure 2019/20 2020/21 2021/22 2022/23 2023/24 £m Estimate Estimate Estimate Estimate Estimate Total 2.980 5.755 3.612 1.422 3.502
Minimum revenue provision (MRP) policy statement
The Authority is required to pay off an element of the accumulated General Fund capital spend each year (the CFR) through a revenue charge (the minimum revenue provision - MRP), although it is also allowed to undertake additional voluntary payments if required (voluntary revenue provision - VRP).
CLG regulations have been issued which require the Authority to approve an MRP Statement in advance of each year. A variety of options are provided to authorities, so long as there is a prudent provision. The Authority is recommended to approve the following MRP Statement:
For capital expenditure incurred before 1 April 2008 or which in the future will be Supported Capital Expenditure, the MRP policy will be:
Existing practice - MRP will follow the existing practice outlined in former CLG regulations (option 1);
Based on CFR – MRP will be based on the CFR (option 2).
These options provide for an approximate 4% reduction in the borrowing need (CFR) each year.
From 1 April 2008 for all unsupported borrowing (including PFI and finance leases) the MRP policy will be:
Asset life method – MRP will be based on the estimated life of the assets, in accordance with the regulations (this option must be applied for any expenditure capitalised under a Capitalisation Direction) (option 3a);
Depreciation method – MRP will follow standard depreciation accounting procedures (option 4).
These options provide for a reduction in the borrowing need over approximately the asset’s life.
As a result of guidance that was recently issued a review will be undertaken during 2020/21 to assess the impact of the Authority adopting the annuity method (option 3b).
The annuity method is now widely used as it makes provision for an annual charge to revenue that takes account of the time value of money (whereby £100 in 10 years time is less of a burden than paying £100 now). The charges produced by the annuity method result in a consistent charge over the life of the asset taking into account the real value of the annual charges when they fall due. The method also reflects the fact that assets deteriorate and deterioration is slower in the early years and accelerates towards the latter end of the life of the assets. This approach conforms to the
51 19 MHCLG requirement to make a prudent provision over a period which is broadly commensurate with the period that the capital expenditure provides benefit. The annuity calculation method results in lower MRP payments in the early years but higher payment in later years but has the advantage of linking MRP to the flow of benefits from an asset where these are expected to be in later years.
The proposal if adopted will be subject to external audit as part of the annual accounts process.
Repayments included in annual PFI or finance leases are applied as MRP.
The Authority has historically made Voluntary Revenue Provisions (VRP) of £772k.
Affordability prudential indicators
The previous sections cover the overall capital and control of borrowing prudential indicators, but within this framework prudential indicators are required to assess the affordability of the capital investment plans. These provide an indication of the impact of the capital investment plans on the Authority’s overall finances. The Authority is asked to approve the following indicators:
Ratio of financing costs to net revenue stream – Indicator 6 This indicator identifies the trend in the cost of capital (borrowing and other long-term obligation costs net of investment income) against the net revenue stream.
% 2019/20 2020/21 2021/22 2022/23 2023/24 Estimate Estimate Estimate Estimate Estimate Ratios 5.61% 5.56% 6.56% 6.66% 6.65%
The estimates of financing costs include current commitments and the proposals in this budget report.
Maturity structure of borrowing Maturity structure of borrowing. These gross limits are set to reduce the Authority’s exposure to large fixed rate sums falling due for refinancing, and are required for upper and lower limits.
The Authority is asked to approve the following treasury indicators and limits:
Maturity structure of fixed interest rate borrowing 2020/21 – Indicator 7 Lower Upper Under 12 months 0 15% 12 months to 2 years 0 15% 2 years to 5 years 0 30% 5 years to 10 years 0 60% 10 years and above 0 80%
52 Appendix 2 2
Interest Rate Forecasts 2020 – 2023
PWLB rates and forecast shown below have taken into account the 20 basis point certainty rate reduction effective as of the 1st November 2012.
Link Asset Services Interest Rate View Mar-20 Jun-20 Sep-20 Dec-20 Mar-21 Jun-21 Sep-21 Dec-21 Mar-22 Jun-22 Sep-22 Dec-22 Mar-23 Bank Rate View 0.750.750.750.751.001.001.001.001.001.251.251.251.25 3 Month LIBID 0.700.700.800.901.001.001.001.101.201.301.301.301.30 6 Month LIBID 0.800.800.901.001.101.101.201.301.401.501.501.501.50 12 Month LIBID 1.001.001.101.201.301.301.401.501.601.701.701.701.70 5yr PWLB Rate 2.402.402.502.502.602.702.802.902.903.003.103.203.20 10yr PWLB Rate 2.702.702.702.802.903.003.103.203.203.303.303.403.50 25yr PWLB Rate 3.303.403.403.503.603.703.703.803.904.004.004.104.10 50yr PWLB Rate 3.203.303.303.403.503.603.603.703.803.903.904.004.00 Bank Rate Link Asset Services 0.75% 0.75% 0.75% 0.75% 1.00% 1.00% 1.00% 1.00% 1.00% 1.25% 1.25% 1.25% 1.25% Capital Economics 0.75% 0.75% 0.75% 0.75% 0.75% 1.00% 1.00% 1.00%----- 5yr PWLB Rate Link Asset Services 2.40% 2.40% 2.50% 2.50% 2.60% 2.70% 2.80% 2.90% 2.90% 3.00% 3.10% 3.20% 3.20% Capital Economics 2.40% 2.50% 2.50% 2.60% 2.60% 2.80% 2.80% 2.90%----- 10yr PWLB Rate Link Asset Services 2.70% 2.70% 2.70% 2.80% 2.90% 3.00% 3.10% 3.20% 3.20% 3.30% 3.30% 3.40% 3.50% Capital Economics 2.70% 2.70% 2.80% 2.80% 2.90% 3.00% 3.00% 3.10%----- 25yr PWLB Rate Link Asset Services 3.30% 3.40% 3.40% 3.50% 3.60% 3.70% 3.70% 3.80% 3.90% 4.00% 4.00% 4.10% 4.10% Capital Economics 3.10% 3.10% 3.20% 3.20% 3.20% 3.30% 3.30% 3.40%----- 50yr PWLB Rate Link Asset Services 3.20% 3.30% 3.30% 3.40% 3.50% 3.60% 3.60% 3.70% 3.80% 3.90% 3.90% 4.00% 4.00% Capital Economics 3.10% 3.10% 3.20% 3.20% 3.30% 3.40% 3.40% 3.50%-----
53 Appendix 3 21
ECONOMIC BACKGROUND UK. Brexit. 2019 has been a year of upheaval on the political front as Theresa May resigned as Prime Minister to be replaced by Boris Johnson on a platform of the UK leaving the EU on 31 October 2019, with or without a deal. However, MPs blocked leaving on that date and the EU agreed an extension to 31 January 2020. In late October, MPs approved an outline of a Brexit deal to enable the UK to leave the EU on 31 January. Now that the Conservative Government has gained a large overall majority in the general election on 12 December, this outline deal will be passed by Parliament by that date. However, there will still be much uncertainty as the detail of a trade deal will need to be negotiated by the current end of the transition period in December 2020, which the Prime Minister has pledged he will not extend. This could prove to be an unrealistically short timetable for such major negotiations that leaves open two possibilities; one, the need for an extension of negotiations, probably two years, or, a no deal Brexit in December 2020.
GDP growth has taken a hit from Brexit uncertainty during 2019; quarter three 2019 surprised on the upside by coming in at +0.4% q/q, +1.1% y/y. However, the peak of Brexit uncertainty during the final quarter appears to have suppressed quarterly growth to probably around zero. The economy is likely to tread water in 2020, with tepid growth around about 1% until there is more certainty after the trade deal deadline is passed.
While the Bank of England went through the routine of producing another quarterly Inflation Report, (now renamed the Monetary Policy Report), on 7 November, it is very questionable how much all the writing and numbers were worth when faced with the uncertainties of where the UK will be after the general election. The Bank made a change in their Brexit assumptions to now include a deal being eventually passed. Possibly the biggest message that was worth taking note of from the Monetary Policy Report, was an increase in concerns among MPC members around weak global economic growth and the potential for Brexit uncertainties to become entrenched and so delay UK economic recovery. Consequently, the MPC voted 7-2 to maintain Bank Rate at 0.75% but two members were sufficiently concerned to vote for an immediate Bank Rate cut to 0.5%. The MPC warned that if global growth does not pick up or Brexit uncertainties intensify, then a rate cut was now more likely. Conversely, if risks do recede, then a more rapid recovery of growth will require gradual and limited rate rises. The speed of recovery will depend on the extent to which uncertainty dissipates over the final terms for trade between the UK and EU and by how much global growth rates pick up. The Bank revised its inflation forecasts down – to 1.25% in 2019, 1.5% in 2020, and 2.0% in 2021; hence, the MPC views inflation as causing little concern in the near future.
The MPC meeting of 19 December repeated the previous month’s vote of 7-2 to keep Bank Rate on hold. Their key view was that there was currently ‘no evidence about the extent to which policy uncertainties among companies and households had declined’ i.e. they were going to sit on their hands and see how the economy goes in the next few months. The two members who voted for a cut were concerned that the labour market was faltering. On the other hand, there was a clear warning in the minutes that the MPC were concerned that “domestic unit labour costs have continued to grow at rates above those consistent with meeting the inflation target in the medium term”.
If economic growth were to weaken considerably, the MPC has relatively little room to make a big impact with Bank Rate still only at 0.75%. It would therefore, probably suggest that it would be up to the Chancellor to provide help to support growth by way of a fiscal boost by e.g. tax cuts, increases in the annual expenditure budgets of government departments and services and expenditure on infrastructure projects, to boost the economy. The Government has already made moves in this direction and it made significant promises in its election manifesto to increase government spending by up to £20bn p.a., (this would add about 1% to GDP growth rates), by investing primarily in infrastructure. This is likely to be announced in
54 22 the next Budget, probably in February 2020. The Chancellor has also amended the fiscal rules in November to allow for an increase in government expenditure.
As for inflation itself, CPI has been hovering around the Bank of England’s target of 2% during 2019, but fell again in both October and November to a three-year low of 1.5%. It is likely to remain close to or under 2% over the next two years and so, it does not pose any immediate concern to the MPC at the current time. However, if there was a hard or no deal Brexit, inflation could rise towards 4%, primarily because of imported inflation on the back of a weakening pound.
With regard to the labour market, growth in numbers employed has been quite resilient through 2019 until the three months to September where it fell by 58,000. However, there was an encouraging pick up again in the three months to October to growth of 24,000, which showed that the labour market was not about to head into a major downturn. The unemployment rate held steady at a 44-year low of 3.8% on the Independent Labour Organisation measure in October. Wage inflation has been steadily falling from a high point of 3.9% in July to 3.5% in October (3-month average regular pay, excluding bonuses). This meant that in real terms, (i.e. wage rates higher than CPI inflation), earnings grew by about 2.0%. As the UK economy is very much services sector driven, an increase in household spending power is likely to feed through into providing some support to the overall rate of economic growth in the coming months. The other message from the fall in wage growth is that employers are beginning to find it easier to hire suitable staff, indicating that supply pressure in the labour market is easing.
USA. President Trump’s massive easing of fiscal policy in 2018 fuelled a temporary boost in consumption in that year which generated an upturn in the rate of growth to a robust 2.9% y/y. Growth in 2019 has been falling after a strong start in quarter 1 at 3.1%, (annualised rate), to 2.0% in quarter 2 and then 2.1% in quarter 3. The economy looks likely to have maintained a growth rate similar to quarter 3 into quarter 4; fears of a recession have largely dissipated. The strong growth in employment numbers during 2018 has weakened during 2019, indicating that the economy had been cooling, while inflationary pressures were also weakening. However, CPI inflation rose from 1.8% to 2.1% in November, a one year high, but this was singularly caused by a rise in gasoline prices.
The Fed finished its series of increases in rates to 2.25 – 2.50% in December 2018. In July 2019, it cut rates by 0.25% as a ‘midterm adjustment’ but flagged up that this was not intended to be seen as the start of a series of cuts to ward off a downturn in growth. It also ended its programme of quantitative tightening in August, (reducing its holdings of treasuries etc.). It then cut rates by 0.25% again in September and by another 0.25% in its October meeting to 1.50 – 1.75%.. At its September meeting it also said it was going to start buying Treasuries again, although this was not to be seen as a resumption of quantitative easing but rather an exercise to relieve liquidity pressures in the repo market. Despite those protestations, this still means that the Fed is again expanding its balance sheet holdings of government debt. In the first month, it will buy $60bn, whereas it had been reducing its balance sheet by $50bn per month during 2019. As it will be buying only short-term (under 12 months) Treasury bills, it is technically correct that this is not quantitative easing (which is purchase of long term debt). The Fed left rates unchanged in December. However, the accompanying statement was more optimistic about the future course of the economy so this would indicate that further cuts are unlikely.
Investor confidence has been badly rattled by the progressive ramping up of increases in tariffs President Trump has made on Chinese imports and China has responded with increases in tariffs on American imports. This trade war is seen as depressing US, Chinese and world growth. In the EU, it is also particularly impacting Germany as exports of goods
55 23 and services are equivalent to 46% of total GDP. It will also impact developing countries dependent on exporting commodities to China. However, in November / December, progress has been made on agreeing a phase one deal between the US and China to roll back some of the tariffs; this gives some hope of resolving this dispute.
EUROZONE. Growth has been slowing from +1.8 % during 2018 to around half of that in 2019. Growth was +0.4% q/q (+1.2% y/y) in quarter 1, +0.2% q/q (+1.2% y/y) in quarter 2 and then +0.2% q/q, +1.1% in quarter 3; there appears to be little upside potential in the near future. German GDP growth has been struggling to stay in positive territory in 2019 and fell by -0.1% in quarter 2; industrial production was down 4% y/y in June with car production down 10% y/y. Germany would be particularly vulnerable to a no deal Brexit depressing exports further and if President Trump imposes tariffs on EU produced cars.
The European Central Bank (ECB) ended its programme of quantitative easing purchases of debt in December 2018, which then meant that the central banks in the US, UK and EU had all ended the phase of post financial crisis expansion of liquidity supporting world financial markets by quantitative easing purchases of debt. However, the downturn in EZ growth in the second half of 2018 and into 2019, together with inflation falling well under the upper limit of its target range of 0 to 2%, (but it aims to keep it near to 2%), has prompted the ECB to take new measures to stimulate growth. At its March meeting it said that it expected to leave interest rates at their present levels “at least through the end of 2019”, but that was of little help to boosting growth in the near term. Consequently, it announced a third round of TLTROs; this provides banks with cheap borrowing every three months from September 2019 until March 2021 that means that, although they will have only a two-year maturity, the Bank was making funds available until 2023, two years later than under its previous policy. As with the last round, the new TLTROs will include an incentive to encourage bank lending, and they will be capped at 30% of a bank’s eligible loans. However, since then, the downturn in EZ and world growth has gathered momentum; at its meeting on 12 September it cut its deposit rate further into negative territory, from -0.4% to -0.5%, and announced a resumption of quantitative easing purchases of debt for an unlimited period. At its October meeting it said these purchases would start in November at €20bn per month - a relatively small amount compared to the previous buying programme. It also increased the maturity of the third round of TLTROs from two to three years. However, it is doubtful whether this loosening of monetary policy will have much impact on growth and, unsurprisingly, the ECB stated that governments would need to help stimulate growth by ‘growth friendly’ fiscal policy.
There were no policy changes in the December meeting, which was chaired for the first time by the new President of the ECB, Christine Lagarde. However, the outlook continued to be down beat about the economy; this makes it likely there will be further monetary policy stimulus to come in 2020. She did also announce a thorough review of how the ECB conducts monetary policy, including the price stability target. This review is likely to take all of 2020.
On the political front, Austria, Spain and Italy have been in the throes of forming coalition governments with some unlikely combinations of parties i.e. this raises questions around their likely endurance. The latest results of German state elections has put further pressure on the frail German CDU/SDP coalition government and on the current leadership of the CDU. The results of the Spanish general election in November have not helped the prospects of forming a stable coalition.
CHINA. Economic growth has been weakening over successive years, despite repeated rounds of central bank stimulus; medium term risks are increasing. Major progress still needs to be made to eliminate excess industrial capacity and the stock of unsold property, and to address the level of non-performing loans in the banking and shadow banking systems. In
56 24 addition, there still needs to be a greater switch from investment in industrial capacity, property construction and infrastructure to consumer goods production.
JAPAN - has been struggling to stimulate consistent significant GDP growth and to get inflation up to its target of 2%, despite huge monetary and fiscal stimulus. It is also making little progress on fundamental reform of the economy.
WORLD GROWTH. Until recent years, world growth has been boosted by increasing globalisation i.e. countries specialising in producing goods and commodities in which they have an economic advantage and which they then trade with the rest of the world. This has boosted worldwide productivity and growth, and, by lowering costs, has also depressed inflation. However, the rise of China as an economic superpower over the last thirty years, which now accounts for nearly 20% of total world GDP, has unbalanced the world economy. The Chinese government has targeted achieving major world positions in specific key sectors and products, especially high tech areas and production of rare earth minerals used in high tech products. It is achieving this by massive financial support, (i.e. subsidies), to state owned firms, government directions to other firms, technology theft, restrictions on market access by foreign firms and informal targets for the domestic market share of Chinese producers in the selected sectors. This is regarded as being unfair competition that is putting western firms at an unfair disadvantage or even putting some out of business. It is also regarded with suspicion on the political front as China is an authoritarian country that is not averse to using economic and military power for political advantage. The current trade war between the US and China therefore needs to be seen against that backdrop. It is, therefore, likely that we are heading into a period where there will be a reversal of world globalisation and a decoupling of western countries from dependence on China to supply products. This is likely to produce a backdrop in the coming years of weak global growth and so weak inflation. Central banks are, therefore, likely to come under more pressure to support growth by looser monetary policy measures and this will militate against central banks increasing interest rates.
The trade war between the US and China is a major concern to financial markets due to the synchronised general weakening of growth in the major economies of the world, compounded by fears that there could even be a recession looming up in the US, though this is probably overblown. These concerns resulted in government bond yields in the developed world falling significantly during 2019. If there were a major worldwide downturn in growth, central banks in most of the major economies will have limited ammunition available, in terms of monetary policy measures, when rates are already very low in most countries, (apart from the US). There are also concerns about how much distortion of financial markets has already occurred with the current levels of quantitative easing purchases of debt by central banks and the use of negative central bank rates in some countries. The latest PMI survey statistics of economic health for the US, UK, EU and China have all been predicting a downturn in growth; this confirms investor sentiment that the outlook for growth during the year ahead is weak.
INTEREST RATE FORECASTS The interest rate forecasts provided by Link Asset Services in paragraph 3.3 are predicated on an assumption of an agreement being reached on Brexit between the UK and the EU. On this basis, while GDP growth is likely to be subdued in 2019 and 2020 due to all the uncertainties around Brexit depressing consumer and business confidence, an agreement on the detailed terms of a trade deal is likely to lead to a boost to the rate of growth in subsequent years. This could, in turn, increase inflationary pressures in the economy and so cause the Bank of England to resume a series of gentle increases in Bank Rate. Just how fast, and how far, those increases will occur and rise to, will be data dependent. The forecasts in this report assume a modest recovery in the rate and timing of stronger growth and in the corresponding response by the Bank in raising rates.
57 25
In the event of an orderly non-agreement exit in December 2020, it is likely that the Bank of England would take action to cut Bank Rate from 0.75% in order to help economic growth deal with the adverse effects of this situation. This is also likely to cause short to medium term gilt yields to fall. If there were a disorderly Brexit, then any cut in Bank Rate would be likely to last for a longer period and also depress short and medium gilt yields correspondingly. Quantitative easing could also be restarted by the Bank of England. It is also possible that the government could act to protect economic growth by implementing fiscal stimulus.
The balance of risks to the UK The overall balance of risks to economic growth in the UK is probably even, but dependent on a successful outcome of negotiations on a trade deal. The balance of risks to increases in Bank Rate and shorter term PWLB rates are broadly similarly to the downside. In the event that a Brexit deal was agreed with the EU and approved by Parliament, the balance of risks to economic growth and to increases in Bank Rate is likely to change to the upside.
One risk that is both an upside and downside risk, is that all central banks are now working in very different economic conditions than before the 2008 financial crash as there has been a major increase in consumer and other debt due to the exceptionally low levels of borrowing rates that have prevailed since 2008. This means that the neutral rate of interest in an economy, (i.e. the rate that is neither expansionary nor deflationary), is difficult to determine definitively in this new environment, although central banks have made statements that they expect it to be much lower than before 2008. Central banks could therefore either over or under do increases in central interest rates.
Downside risks to current forecasts for UK gilt yields and PWLB rates currently include: Brexit – if it were to cause significant economic disruption and a major downturn in the rate of growth. Bank of England takes action too quickly, or too far, over the next three years to raise Bank Rate and causes UK economic growth, and increases in inflation, to be weaker than we currently anticipate. A resurgence of the Eurozone sovereign debt crisis. In 2018, Italy was a major concern due to having a populist coalition government which made a lot of anti- austerity and anti-EU noise. However, in September 2019 there was a major change in the coalition governing Italy which has brought to power a much more EU friendly government; this has eased the pressure on Italian bonds. Only time will tell whether this new coalition based on an unlikely alliance of two very different parties will endure. Weak capitalisation of some European banks, particularly Italian banks. German minority government. In the German general election of September 2017, Angela Merkel’s CDU party was left in a vulnerable minority position dependent on the fractious support of the SPD party, as a result of the rise in popularity of the anti- immigration AfD party. The CDU has done badly in recent state elections but the SPD has done particularly badly and this has raised a major question mark over continuing to support the CDU. Angela Merkel has stepped down from being the CDU party leader but she intends to remain as Chancellor until 2021. Other minority EU governments. Austria, Finland, Sweden, Spain, Portugal, Netherlands and Belgium also have vulnerable minority governments dependent on coalitions which could prove fragile.
58 26
Austria, the Czech Republic, Poland and Hungary now form a strongly anti- immigration bloc within the EU. There has also been rising anti-immigration sentiment in Germany and France. In October 2019, the IMF issued a report on the World Economic Outlook which flagged up a synchronised slowdown in world growth. However, it also flagged up that there was potential for a rerun of the 2008 financial crisis, but his time centred on the huge debt binge accumulated by corporations during the decade of low interest rates. This now means that there are corporates who would be unable to cover basic interest costs on some $19trn of corporate debt in major western economies, if world growth was to dip further than just a minor cooling. This debt is mainly held by the shadow banking sector i.e. pension funds, insurers, hedge funds, asset managers etc., who, when there is $15trn of corporate and government debt now yielding negative interest rates, have been searching for higher returns in riskier assets. Much of this debt is only marginally above investment grade so any rating downgrade could force some holders into a fire sale, which would then depress prices further and so set off a spiral down. The IMF’s answer is to suggest imposing higher capital charges on lending to corporates and for central banks to regulate the investment operations of the shadow banking sector. In October 2019, the deputy Governor of the Bank of England also flagged up the dangers of banks and the shadow banking sector lending to corporates, especially highly leveraged corporates, which had risen back up to near pre-2008 levels. Geopolitical risks, for example in North Korea, but also in Europe and the Middle East, which could lead to increasing safe haven flows.
Upside risks to current forecasts for UK gilt yields and PWLB rates Brexit – if agreement was reached all round that removed all threats of economic and political disruption between the EU and the UK. The Bank of England is too slow in its pace and strength of increases in Bank Rate and, therefore, allows inflationary pressures to build up too strongly within the UK economy, which then necessitates a later rapid series of increases in Bank Rate faster than we currently expect. UK inflation, whether domestically generated or imported, returning to sustained significantly higher levels causing an increase in the inflation premium inherent to gilt yields.
59 27 Appendix 4
TREASURY MANAGEMENT PRACTICE – CREDIT AND COUNTERPARTY RISK MANAGEMENT
SPECIFIED INVESTMENTS: (All such investments will be sterling denominated, with maturities up to maximum of 1 year, meeting the minimum ‘high’ rating criteria where applicable)
Minimum ‘High’ Credit Use Criteria
Debt Management Agency Deposit Facility -- In-house
Term deposits – local authorities -- In-house
Term deposits – banks and building societies F1 In-house
Term deposits with nationalised banks and banks and building societies
Max % of Max. Minimum Credit Use total maturity Criteria investments period
UK sovereign rating or UK part nationalised banks Short-term F1, In-house 50% 364 days Sovereign rating AA-
Banks part nationalised by high Sovereign rating or credit rated (sovereign rating) Short-term F1, In-house 50% 364 days countries – non UK Sovereign rating AA-
Collective Investment Schemes structured as Open Ended Investment Companies (OEICs): -
1. Money Market Funds AAA rated In-house
Accounting treatment of investments. The accounting treatment may differ from the underlying cash transactions arising from investment decisions made by this Authority. To ensure that the Authority is protected from any adverse revenue impact, which may arise from these differences, we will review the accounting implications of new transactions before they are undertaken.
60 28
NON-SPECIFIED INVESTMENTS: The Authority will not make investments longer than 1 year
TREASURY MANAGEMENT PRACTICE (TMP1) – CREDIT AND COUNTERPARTY RISK MANAGEMENT
The MHCLG issued Investment Guidance in 2018, and this forms the structure of the Authority’s policy below. These guidelines do not apply to either trust funds or pension funds which operate under a different regulatory regime.
The key intention of the Guidance is to maintain the current requirement for authorities to invest prudently, and that priority is given to security and liquidity before yield. In order to facilitate this objective the guidance requires this Authority to have regard to the CIPFA publication Treasury Management in the Public Services: Code of Practice and Cross-Sectoral Guidance Notes. This Authority adopted the Code on 15/02/2010 and will apply its principles to all investment activity. In accordance with the Code, the Executive Director of Corporate Services and S.151 Officer has produced its treasury management practices (TMPs). This part, TMP 1(1), covering investment counterparty policy requires approval each year.
Annual investment strategy - The key requirements of both the Code and the investment guidance are to set an annual investment strategy, as part of its annual treasury strategy for the following year, covering the identification and approval of following:
The strategy guidelines for choosing and placing investments, particularly non-specified investments; The principles to be used to determine the maximum periods for which funds can be committed; Specified investments that the Authority will use. These are high security (i.e. high credit rating, although this is defined by the Authority, and no guidelines are given), and high liquidity investments in sterling and with a maturity of no more than a year; Non-specified investments, clarifying the greater risk implications, identifying the general types of investment that may be used and a limit to the overall amount of various categories that can be held at any time.
The investment policy proposed for the Authority is:
Strategy guidelines – The main strategy guidelines are contained in the body of the treasury strategy statement.
Specified investments – These investments are sterling investments of not more than one-year maturity. These are considered low risk assets where the possibility of loss of principal or investment income is small. These would include sterling investments which would not be defined as capital expenditure with: 1. The UK Government (such as the Debt Management Account deposit facility, UK treasury bills or a gilt with less than one year to maturity). 2. Supranational bonds of less than one year’s duration. 3. A local authority, housing association, parish council or community council. 4. Pooled investment vehicles (such as money market funds) that have been awarded a high credit rating by a credit rating agency. For category 4 this covers pooled investment vehicles, such as money market funds, rated AAA by Standard and Poor’s, Moody’s and / or Fitch rating agencies. 5. A body that is considered of a high credit quality (such as a bank or building society For category 5 this covers bodies with a minimum Short Term rating of F1 (or the equivalent) as rated by Standard and Poor’s, Moody’s and / or Fitch rating agencies .
61 29
Within these bodies, and in accordance with the Code, the Authority has set additional criteria to set the time and amount of monies which will be invested in these bodies.
Non-specified investments –are any other type of investment (i.e. not defined as specified above). The Authority will not use these types of investments.
The monitoring of investment counterparties - The credit rating of counterparties will be monitored regularly. The Authority receives credit rating information (changes, rating watches and rating outlooks) from Link Asset Services as and when ratings change, and counterparties are checked promptly. On occasion ratings may be downgraded when an investment has already been made. The criteria used are such that a minor downgrading should not affect the full receipt of the principal and interest. Any counterparty failing to meet the criteria will be removed from the list immediately by the Executive Director of Corporate Services & S.151 Officer, and if required new counterparties which meet the criteria will be added to the list.
62 30 Appendix 5
This list is based on those countries which have sovereign ratings of AA- or higher, (we show the lowest rating from Fitch, Moody’s and S&P) and also, (except - at the time of writing - for Hong Kong, Norway and Luxembourg), have banks operating in sterling markets which have credit ratings of green or above in the Link Asset Services credit worthiness service.
Based on lowest available rating
AAA Australia Canada Denmark Germany Luxembourg Netherlands Norway Singapore Sweden Switzerland
AA+ Finland U.S.A.
AA Abu Dhabi (UAE) Hong Kong France U.K.
AA- Belgium Qatar
63 31 Appendix 6
TREASURY MANAGEMENT SCHEME OF DELEGATION
Fire Authority
receiving and reviewing reports on treasury management policies, practices and activities;
approval of annual strategy;
approval of/amendments to the organisation’s adopted clauses, treasury management policy statement and treasury management practices;
budget consideration and approval;
approval of the division of responsibilities;
receiving and reviewing regular monitoring reports and acting on recommendations;
approving the selection of external service providers and agreeing terms of appointment;
reviewing the treasury management policy and procedures and making recommendations to the responsible body.
64 Appendix 7 32
THE TREASURY MANAGEMENT ROLE OF THE SECTION 151 OFFICER
The S151 (responsible) officer
recommending clauses, treasury management policy/practices for approval, reviewing the same regularly, and monitoring compliance;
submitting regular treasury management policy reports;
submitting budgets and budget variations;
receiving and reviewing management information reports;
reviewing the performance of the treasury management function;
ensuring the adequacy of treasury management resources and skills, and the effective division of responsibilities within the treasury management function;
ensuring the adequacy of internal audit, and liaising with external audit;
recommending the appointment of external service providers;
preparation of a capital strategy to include capital expenditure, capital financing, non-financial investments and treasury management, with a long term timeframe;
ensuring that the capital strategy is prudent, sustainable, affordable and prudent in the long term and provides value for money;
ensuring that due diligence has been carried out on all treasury and non-financial investments and is in accordance with the risk appetite of the authority;
ensure that the authority has appropriate legal powers to undertake expenditure on non- financial assets and their financing;
ensuring the proportionality of all investments so that the authority does not undertake a level of investing which exposes the authority to an excessive level of risk compared to its financial resources;
ensuring that an adequate governance process is in place for the approval, monitoring and ongoing risk management of all non-financial investments and long term liabilities;
provision to members of a schedule of all non-treasury investments including material investments in subsidiaries, joint ventures, loans and financial guarantees;
ensuring that members are adequately informed and understand the risk exposures taken on by an authority;
ensuring that the authority has adequate expertise, either in house or externally provided, to carry out the above;
creation of Treasury Management Practices which specifically deal with how non treasury investments will be carried out and managed, to include the following:-
o Risk management (TMP1 and schedules), including investment and risk management criteria for any material non-treasury investment portfolios;
65 Appendix 8 33
CAPITAL STRATEGY
1. Introduction
1.1 There is a new requirement on local authorities (including fire services) to prepare a capital strategy each year, which sets out our approach to capital expenditure and financing at a high level. The requirement to prepare a strategy arises from Government concerns about a small number of authorities borrowing substantial sums (relative to their budget) to invest in commercial property, often outside the area of the authority concerned.
1.2 There is also a new requirement on local authorities to prepare an investment strategy, which specifies our approach to making investments other than day to day treasury management investments (the latter is included in our treasury management strategy, as in previous years). Given that HFA makes no such investments, a strategy has not been prepared.
1.3 This Appendix sets out the proposed capital strategy for approval.
2. Capital Expenditure
2.1 The Authority’s capital expenditure plans are approved by the HFA, as part of the budget report each year.
2.2 The capital programme is usually restricted to:-
(a) Investment in operational buildings – e.g. fire stations and administrative offices;
(b) Renewal of operational fleet;
(c) New and replacement firefighting equipment;
(d) Investment in ICT.
2.3 The Authority’s Constitution sets out the delegations to the Chief Fire Officer & Chief Executive on the delivery of the capital programme.
2.4 Capital expenditure on buildings, where funded from the capital programme, is principally directed to maintaining the fitness of the operational estate. Major property investments are considered as part of the overall estates strategy and are approved annually at the December HFA meeting.
2.5 Expenditure on the renewal of the operational fleet is directed by the replacement programme approved by the HFA. This is considered and approved each year at the December HFA meeting.
2.6 Capital expenditure on firefighting equipment ensures equipment is replaced when it has reached the end of its useful life or has become technologically obsolescent. It also enables the Service to invest in new technology.
2.7 Capital expenditure on ICT is determined by the ICT replacement programme which is approved annually at the December HFA meeting.
2.8 Monitoring of capital expenditure is carried out by the Strategic Leadership Team; Governance, Audit and Scrutiny Committee and the HFA. Reports are presented on four occasions during the year and at outturn.
2.9 HFA does not capitalise expenditure, except where it can do so in compliance with proper practices: it does not apply for directions to capitalise revenue expenditure.
66 34
2.10 Past and forecast capital expenditure is:-
End of: £000 19/20 2,980 20/21 5,755 21/22 3,612 22/23 1,422 23/24 3,502
3. Financing of Capital Expenditure
3.1 HFA funds capital expenditure from the revenue budget, capital receipts and prudential borrowing.
3.2 Prudential borrowing is used to fund capital expenditure, within the limits prescribed within the Annual Treasury Management Strategy Statement. This is reviewed annually for affordability.
3.3 HFA measures its capital financial requirement, which shows our underlying need to borrow for a capital purpose. This is shown in the table below:-
End of: Underlying CFR Other LTL Total CFR £000 £000 £000 20/21 20,390 951 21,341 21/22 21,071 936 22,007 22/23 19,516 919 20,435 23/24 19,846 900 20,746
3.4 Projections of actual debt are part of the treasury management indicators in the Annual Treasury Management Strategy Statement.
4. Debt Repayment
4.1 HFA makes charges to the budget each year to repay debt incurred for previous years’ capital spending. This is known as “Minimum Revenue Provision” (MRP). The general principle is that HFA seeks to repay debt over the period for which taxpayers enjoy the benefit of the spending it financed. MRP is calculated as:
a) 4% of the CFR at the end of the preceding financial year; and b) Based on the useful asset life using the following formula:
A-B C Where: A is the amount of capital expenditure in respect of the asset financed by borrowing or credit arrangements. B is the total provision made before the current financial year in respect of that expenditure C is the inclusive number of financial years from the current year to that in which the estimated useful life of the asset expires.
5. Commercial Activity
5.1 Government guidance now requires us to specify our policy towards non-financial investments.
5.2 HFA makes no such investments.
67 Agenda Item No. 10 HUMBERSIDE FIRE AUTHORITY PAY POLICY STATEMENT 2019/20
INTRODUCTION 1. This Statement has been produced with due regard to the Guidance issued by the Secretary of State under Section 40 of the Localism Act 2011. 2. This Statement extends to all members of the Strategic Leadership Team (SLT) whether or not they meet the definition of a ‘Chief Officer’ as set out in the Act. 3. SLT comprises the Chief Fire Officer/Chief Executive, the Deputy Chief Fire Officer/Executive Director of Service Delivery, Executive Director of Corporate Services/S.151 Officer and four Directors. 4. All SLT members are employed by the Authority and not retained under a contract for services. REMUNERATION OF: CHIEF FIRE OFFICER AND CHIEF EXECUTIVE (CFO) DEPUTY CHIEF FIRE OFFICER/EXECUTIVE DIRECTOR OF SERVICE DELIVERY (DCFO) DIRECTORS (x 3 OPERATIONAL) 5. The CFO, DCFO and the three operational Directors are employed under contracts of employment on the terms and conditions as set out in the National Joint Council for Brigade Manager of Local Authority Fire and Rescue Services Constitution and Scheme of Conditions of Employment (Gold Book), as supplemented by the Authority’s local terms and conditions as amended from time to time. 6. The process for determining the pay of the CFO is set out in the Gold Book as follows: The NJC will publish annually recommended minimum levels of salary applicable to chief fire officers/chief executives employed by local authority fire and rescue authorities. There is a two-track approach for determining levels of pay for Brigade Manager roles. At national level, the NJC shall review annually the level of pay increase applicable to all those covered by this agreement. In doing so, the NJC will consider affordability, other relevant pay deals and the rate of inflation at the appropriate date. Any increase agreed by the NJC will be communicated to fire authorities by circular. All other decisions about the level of pay and remuneration to be awarded to individual Brigade Manager roles will be taken by the local Fire and Rescue Authority, who will annually review these salary levels. 7. The CFO’s salary, agreed from 1 January 2019 is £146,616. 8. The DCO’s salary is determined by Humberside Fire Authority as 85% of the CFO’s salary and is £124,625 from 1 January 2019. 9. The operational Directors’ salary is determined by Humberside Fire Authority as 55% of the CFO’s salary and is £80,639 from 1 January 2019. 10. Each officer is provided with a motor vehicle for the performance of their duties. 11. No bonuses are paid. 12. Appropriate professional fees and subscriptions are paid. 13. There is no performance related pay scheme
68 14. A restricted range of legitimate and evidenced expenses may be claimed. Wherever possible, the Service will centrally procure travel and accommodation, e.g. rail tickets and hotel accommodation, to achieve best value. REMUNERATION OF:- EXECUTIVE DIRECTOR OF CORPORATE SERVICES/S151 OFFICER DIRECTOR (NON-OPERATIONAL) 15. The Executive Director of Corporate Services/S151 Officer and the non-operational Director are employed under a contract of employment on the terms and conditions set out in National Joint Council for Local Government Services National Agreement as supplemented by the Authority’s local terms and conditions as amended from time to time. 16. The Executive Director of Corporate Services /S151 Officer’s salary for the post is determined by Humberside Fire Authority as 70% of the CFO’s salary and is £102,631 from 1 January 2019. 17. The non-operational Director’s salary is determined by Humberside Fire Authority as 48% of the CFO’s salary and is £70,376 from 1 January 2019. 18. No bonuses are paid. 19. Appropriate professional fees and subscriptions are paid. 20. There is no performance related pay scheme. 21. A restricted range of legitimate and evidenced expenses may be claimed. Wherever possible, the Service will centrally procure travel and accommodation, e.g. rail tickets and hotel accommodation, to achieve best value. REMUNERATION OF ALL OTHER EMPLOYEES 22. All other employees are paid in accordance with nationally agreed rates under relevant national schemes of conditions of service and the Authority’s grading structures. 23. For the purposes of this Policy Statement, “lowest-paid” employees are defined by reference to the lowest graded posts on the support staff salary pay scale as these are the posts with the lowest level of remuneration. The lowest-paid post attracts a starting salary of £17,364. The CFO is paid 8.44 times more than the lowest paid employee. 24. The median average pay in the Service is £31,144. The CFO is paid 4.7 times more than the median average pay. TERMINATION PAYMENTS 25. In cases of redundancy, payment is calculated based on actual weeks’ pay for employees in positions where the Local Government Pension Scheme applies and, for employees in positions where the Firefighters / New Firefighters Pension Schemes apply, subject to necessary changes in those schemes to enable payment on this basis. There are discretionary payments on early retirement available to posts to which the Local Government Pension Scheme applies which the Authority would consider on a case by case basis based on its policy regarding such payments as at 1 April 2014. RE-EMPLOYMENT FOLLOWING TERMINATION 26. There is no prohibition on employees who have left employment and are in receipt of pension, redundancy/early retirement payments from being re-employed subsequently in response to a public recruitment advertisement.
69 27. In the case of an employee who is a member of the Local Government Pension Scheme and who is re-employed to a position to which that Scheme applies, the pension scheme rules provide discretion to the administering authority regarding abatement of pension. As the relevant administering authority, the East Riding Pension Fund has decided that, where the re-employment starts after 31st March 2007, there will be no abatement of the retirement pension. 28. In the case of an employee who is a member of the Firefighters Pension Scheme or New Firefighters Pension Scheme and who is re-employed by the Authority to a position to which these schemes apply, the Authority exercises its discretion within the schemes to abate the retirement pension. Abatement is not applied in any other circumstances. REVIEW 29. This Statement will be reviewed annually by the Fire Authority and at other times if necessary. PUBLICATION 30. This Statement will be published on the Humberside Fire and Rescue Service website (www.humbersidefire.gov.uk).
70
Agenda Item No. 11 Humberside Fire Authority Report by the Director of People and 13 March 2020 Development
GENDER PAY GAP REPORT 2019
SUMMARY
1. This paper details the gender pay gap reporting information and supportive narrative for HFRS to meet its legislative obligations for this year’s Gender Pay Gap reporting process.
RECOMMENDATIONS
2. HFA Members are asked to take note of the content of the report and approve it for submission to Government as HFRS compliance for gender pay gap reporting for 2019.
REPORT DETAIL
Introduction
3. Gender pay reporting legislation requires employers with 250 or more employees to publish gender pay gap data annually. The deadline for publication is 30 March 2020 for Public Sector Organisations (for data as of 31 March 2019). Organisations must publish on their public-facing websites and report to the Government.
3.1 The gender pay gap reporting measures are:
mean gender pay gap in hourly pay median gender pay gap in hourly pay mean bonus gender pay gap median bonus gender pay gap proportion of males and females receiving a bonus payment proportion of males and females in each pay quartile 3.2 The tables below detail the required data in relation to the required criteria described in paragraph 3.2. The information provided accounts for any employee paid full remuneration as at 31 March 2019.
Gender Profile:
Work Group Number of Staff 2019 % Control 31 Female 27 87% Male 4 13% Support Staff 222 Female 137 62% Male 85 38% Operational Staff 826 Female 45 5% Male 781 95% Total 1079
3.3 This profile clearly demonstrates that there is a still a higher proportion of men overall employed in the Service than women. Women remain better represented in Support and Control roles.
71
Gender Pay Gap
3.4 In relation to the reporting criteria for the Gender Pay Gap 2018 these calculations are detailed on the table below: -
Female Male Gender Pay Gap The mean hourly rate £12.19 £14.64 16.75% The median hourly rate £10.70 £13.98 23.43% The mean bonus £0 £0 0% The median bonus £0 £0 0%
3.5 In relation to the reporting criteria for the Gender Pay Gap 2019 these calculations are detailed on the table below: -
Female Male Gender Pay Gap The mean hourly rate £12.67 £14.93 15.13% The median hourly rate £10.92 £14.27 23.47% The mean bonus £0 £0 0% The median bonus £0 £0 0%
3.6 The data demonstrates a decrease in the Pay Gap for 2019.
3.7 For Firefighter and Control roles, terms and conditions are nationally negotiated, using role maps and have nationally agreed pay scales. Support roles are determined locally for pay and terms and conditions using an accredited job evaluation scheme, based on the Local Government Scheme. It is important to note, therefore, that staff in different types of roles are employed on different terms and conditions and therefore cannot be compared as like for like.
Quartiles for 2018
Quartile Female (%) Male (%) Lower (0%-25%) 44 56 Lower Middle (25%-50%) 12 88 Upper Middle (50%-75%) 5 95 Upper (75%-100%) 12 88
Quartiles for 2019
Quartile Female (%) Male (%) Lower (0%-25%) 42 58 Lower Middle (25%-50%) 12 88 Upper Middle (50%-75%) 11 89 Upper (75%-100%) 12 88
3.8 There is an increase of women in the upper middle quartile which includes firefighter roles.
3.9 The Service has continued to work hard to address factors of attraction, recruitment and progression for women.
STRATEGIC PLAN COMPATIBILITY
4. This paper supports two of the HFRS Strategic Plan 2018-21 objectives: Value Our People by strengthening our ability to provide an excellent service by diversifying our staff, promoting inclusion and creating a fair and equal place; and Managing the Service by ensuring equality and inclusion is part of everything we do.
72 FINANCIAL/RESOURCES/VALUE FOR MONEY IMPLICATIONS
5. None arising directly
LEGAL IMPLICATIONS
6. The report ensures HFRS meets its legal duty to report on its Gender Pay Gap
EQUALITY IMPACT ASSESSMENT/HR IMPLICATIONS
7. The Service will continue to work hard to address factors of attraction, recruitment and progression for women in the Service
CORPORATE RISK MANAGEMENT IMPLICATIONS
8. Approval and publication of this report will meet legal requirements and support good governance and compliance
HEALTH AND SAFETY IMPLICATIONS
9. None arising directly
COMMUNICATION ACTIONS ARISING
10. A more accessible version of this report will be published alongside this report.
DETAILS OF CONSULTATION AND/OR COLLABORATION
11. This report has been to SLT.
BACKGROUND PAPERS AVAILABLE FOR ACCESS
12. None
RECOMMENDATIONS RESTATED
13. HFA are asked to take note of the content of the report and approve it for submission to Government as HFRS compliance for gender pay gap reporting for 2019.
Miriam Heppell
Officer Contact: Director of People and Development
Humberside Fire & Rescue Service Summergroves Way Kingston upon Hull
73
Agenda Item No. 12 Humberside Fire Authority Report by the Director of People 13 March 2020 and Development
ABSENCE MANAGEMENT UPDATE
SUMMARY
1. This report provides an update to Members with regard to absence management for the period 1 April 2019 to 31 December 2019. In keeping with the previous approach, absence remains a key area of focus for the Service.
RECOMMENDATIONS
2. That Members note the content of the report and take assurance that absence is being managed fairly, consistently and appropriately in the Service and necessary follow up actions are taken to address short and long term absence issues.
ABSENCE MANAGEMENT REPORTING
3. Table 1 below shows the performance during this period against target by staff group with 1 staff group being significantly below target and 1 area of focus above target due to long-term absence in that area.
4. Whilst the level of absence in control is a concern, this is due to small amount of staff having long term absence issues which we are progressively working through. As there are only 29 staff on the Control establishment, long term absence can quickly skew the figures disproportionately. The new Head of Occupational Health has now commenced and is already providing additional support to that area.
5. It is however important to note that during this quarter, 95.46% Full Time Firefighters and 94.79% of Fire Staff achieved full attendance.
Table 1
3rd Quarter 3rd Quarter 3rd Quarter Target attendance 2017/18 2018/19 2019/20 Full time 95.72% 96.06% 95.46% 95% Control 90.19% 95.86% 89.42% 95% Fire Staff 92.73% 96.52% 94.79% 95%
6. Reasons for absence for all staff groups during the period once again, sees mental health conditions are the top reason for absence. This may be related to the significant work undertaken by the Service in raising awareness of mental health and encouraging staff to be open about the impact of mental ill health on individuals. Staff may well be more prepared to declare that their ill health is related to mental conditions, rather than mask with other conditions due to stigma.
7. The Service continues to support staff experiencing mental health conditions with initiatives such as the Blue Light Champions, Critical Incident Support and publicising potential internal and external routes where staff may seek support. It is also anticipated that the training and ongoing promotion of the zero tolerance to bullying campaign may also help to identify and address situations, which are leading to mental health issues in the Service.
8. Table 2 shows the comparison of long-term and short-term absence against medical condition and shows that mental ill health continues to account for the highest levels
74 of long-term absence. As referred to in para 6 above, work continues to address this issue.
9. Table 2 also shows current long-term absences of a life-threatening nature relating to cancer and cardiovascular issues. Added to which, a number of staff are suffering from back, knee and lower limb musculoskeletal conditions which are often inherent in an aging workforce, undertaking work of a physically demanding nature. All of these issues are being managed and supported as appropriate to each individual case.
Table 2
CLG Category Long Term Short Term Grand Total – days lost days lost days lost Cancer 111.68 0.00 111.68 Cardiovascular Other 412.34 11.66 424.00 Dermatological 0.00 31.44 31.44 Endocrine 112.00 7.00 119.00 Gastro Intestinal 18.00 279.86 297.86 Mental Health 1356.76 102.59 1459.35 Anxiety/Depression Mental Health Other 15.54 12.42 27.96 Musculo Skeletal Back 513.75 149.95 663.70 Musculo Skeletal Knee 556.24 114.00 670.24 Musculo Skeletal Lower Limb 761.45 106.18 867.63 Musculo Skeletal Neck 0.00 10.99 10.99 Musculo Skeletal Other 25.27 28.97 54.24 Musculo Skeletal Shoulders 177.64 4.00 181.64 Musculo Skeletal Upper Limb 263.23 50.30 313.53 Neurological 168.00 54.91 222.91 Other 50.68 124.99 175.67 Reproductive 0.00 8.82 8.82 Respiratory Other 0.00 274.30 274.30 Senses Hearing 18.00 9.68 27.68 Senses Vision 0.00 6.8 6.8 Grand Total 4560.58 1406.86 5967.44
CASE REVIEW BOARD
10. The Case Review Board continues to show progress in encouraging consistent management of absence and empowering managers to both seek support and manage their own local absence issues more appropriately and effectively.
11. Managers are further supported in developing their absence management skills by HR Service Partners who provide assistance and coaching as necessary. This dual approach continues to provide consistency in managing absence cases and ensuring all parties are appropriately supported.
12. Occupational Health services, internal support for maintaining operational fitness and counselling services are all utilised according to individual need. This integrated approach seeks to make best use of all available health resources, support staff during periods of ill health and support their return to work (where possible) in the most effective way.
13. The Head of Occupational Health and Wellbeing is in the process of revising and consulting on a range of health and fitness related policies that will support the management of staff health issues. The absence management policy is also due for review in the coming months.
75
COMPARISON WITH THE SAME PERIOD LAST YEAR
14. Whilst there are concerns about the increase in long term absence, this is being addressed. Long term absence tends to be cyclical and is often complex to manage. At the point in the year with which we are comparing this data, a number of previous long-term absentees had recently exited the Service on ill health grounds, thus improving the overall absence figures at that time. As referred to in para 9, we are now supporting several further staff through long term health issues; 77% of the absence issues during this period have been long term in nature.
15. High levels of activity and focus continue to be placed on the management of absence. Recent developments with the zero tolerance to bullying campaign and mental health support mechanisms aim to address the mental health issues within the organisation. Similarly, the biannual fitness testing process, which ran again in September 2019 aims to identify and support all operational staff with general fitness and muscular skeletal issues.
16. Support Staff sickness absence totalled 1,175.43 duty days lost during 19-20 compared with 719.39 days lost in 18-19, an increase of 456.04 duty days, which is a rise of 62.39%. This is evident in 4 key absence categories as shown in table 3 below. This is of serious concern and will be investigated further. All of these categories can attribute to disproportionate stress, from blood pressure issues to poor posture. Whilst significant attention has been given to mental health issues in the workplace, the evidence would suggest that these efforts need to be developed further and their success evaluated.
Table 3
Category Total absence Total absence Increase in Increase % 2018/19 2019/20 days Cancer 53 111.68 58.68 110.72%
Cardiovascular 93.4 240.34 146.94 157.32% other
Mental Health – 238.99 567.13 337.14 141.07% anxiety and depression
Musculo 35 140 105 300% Skeletal shoulders
STRATEGIC PLAN COMPATIBILITY
17. Effective management of sickness absence is a key enabler towards achieving all of our Strategic Objectives and supports the Value Our People workstream.
FINANCIAL/RESOURCES/VALUE FOR MONEY IMPLICATIONS
18. Management of sickness absence and the retention of personnel through effective attendance have a positive impact on both the finances of the Service and the resources available for deployment.
LEGAL IMPLICATIONS
19. The fair management of absence with a consistent approach to the management of cases and the use of reasonable adjustments to support staff back into the workplace
76 decreases the risk of Employment Tribunals being brought against the Authority and the loss of these cases when they happen.
EQUALITY IMPACT ASSESSMENT/HR IMPLICATIONS
20. The fair management of absence cases supports the delivery of equality of opportunity and ensures that staff suffering from ill health are treated equally regardless of gender, disability and other protected characteristics.
21. The introduction of new ways of consistently managing absence represents the use of HR best practice across the Service.
CORPORATE RISK MANAGEMENT IMPLICATIONS
22. Appropriate management of absence reduces the risk of related corporate issues being raised.
HEALTH AND SAFETY IMPLICATIONS
23. Appropriate management of absence reduces the risk of negative health and safety implications.
COMMUNICATION ACTIONS ARISING
24. Managers are being regularly communicated with in relation to absence through a coaching approach by the HR Service Partners and regular meetings with the Director of HR and the DCFO.
DETAILS OF CONSULTATION
25. None directly arising.
BACKGROUND PAPERS AVAILABLE FOR ACCESS
26. None.
RECOMMENDATIONS RESTATED
27. That Members note the content of the report and take assurance that absence is being managed fairly, consistently and appropriately in the Service and that actions taken are having a positive impact on absence management figures.
M HEPPELL
Officer Contact: Miriam Heppell 01482 567454 Director of People and Development
Humberside Fire & Rescue Service Summergroves Way Kingston upon Hull
MH 3 March 2020
77
Agenda Item No. 13 Humberside Fire Authority Report by the Director of People and Friday 13 March 2020 Development
WORKFORCE PLANNING - ACTIONS POST McCLOUD PENSIONS JUDGEMENT
SUMMARY
1. In 2018 a new Workforce Planning Framework was introduced. This laid out the mechanisms for developing and refreshing a robust and effective Workforce Planning system and process.
2. The Workforce Plan has been developed as a live, working document that will evolve over time. It is reviewed quarterly and on an on-going basis, with an annual refresh of the document itself
3. In September 2019 Humberside Fire and Rescue Service added potential loss of staff due to earlier than expected retirement to the risk register, as a result of the national Employment Tribunal ruling in the McCloud case. At the same time this risk was added further workforce profiling was undertaken to determine the impact a change to pension legislation would have on staffing levels and experience.
4. At the December 2019 Meeting, Members endorsed the principle of re-engagement of some operational staff to support efficient workforce planning and mitigate that risk. That was following a report that a significant anticipated attrition rate was expected due to retirements of staff, at all levels and across all staff groups, over the period covered by the Workforce Plan and that this was likely to be significantly increased, and brought forward in timeframe, by the outcomes of the national Employment Tribunal (ET) on 18 December 2019. Members will be aware that we have brought in 92 new firefighters into the organisation since 2017 already and if we don’t utilise re- engagement of some staff to better manage the replacement of retiring firefighters it would mean that by 2021 over 35% of full time firefighters would have less than four years’ experience. Whilst there is no definitive suitable timescale as firefighters will gain experience dependent on exposure to incidents, and all those staff will be completely safe and skilled operationally, it would be more difficult to ensure that we have a good balance of experience as well as skills on each fire engine. In individual Breathing Apparatus teams, for example, those levels would mean that often both Members of the team will have less than four years in and therefore had less time to gradually build up the experience which would make the team as effective as it possibly can be.
5. This report aims to provide members with a more detailed picture of the numbers of operational staff that could retire between now and April 2021, and the impact that this may have on how we can effectively deliver our services, as well as to lay out the recommendations for re-engagement during that period.
RECOMMENDATIONS
6. a) Members are requested to note the Workforce Planning and Re-engagement Update and take assurance from the ongoing development work to mitigate any concerns arising from workforce turnover and loss of skills and experience.
b) Members are requested to approve the Strategic Leadership Team (SLT) plans to temporarily re-engage operational staff between now and April 2021, up to the maximum level shown for each role below Group Manager (GM)
78 7. The table below shows the numbers of staff in each operational group who could retire before April 2021 and the maximum numbers of re-engagements that SLT are considering to those roles during 2020/21. That number relates to the numbers of additional staff up to GM level that can now retire during that period, following the outcome of the national ET ruling, and were not therefore previously planned to be replaced through normal succession planning. Any decision on an offer of re- engagement to operational staff above the level of Group Manager, is a matter for the Authority, and therefore is not included in recommendations from SLT.
Role Number who could retire Maximum number of re- (before April 2021) engagements SLT are considering during 2020/21 (Full Time Equivalent – FTE) Firefighter 23 16 Crew Manager 5 0 Watch Manager 14 8 Station Manager 6 2 Group Manager 0 0 Director 0 0 Deputy Chief Fire Officer 1 0 Chief Fire Officer 0 0
With no re-engagement the figures above would mean that if we filled all of the posts with recruit firefighters we would have 18% of firefighters with significantly less than one year in and 35% with less than four years in.
REPORT DETAIL
8. At the December 2019 meetings, Members considered the issues arising from the data highlighted in the current Workforce Planning cycle, which had raised concern about a likely loss of skills and experience in the Operational areas of the Service across a number of roles. Members agreed that as a result of the McCloud National Employment Tribunal outcome, this position was likely to become more pronounced in a shorter timeframe than had previously been envisaged.
9. Members endorsed the re-engagement of retired staff on fixed term contracts for Group Managers and below, at the meeting on 6 December 2019. That will assist the Service in maintaining an even establishment position across the year, and a reduction in overall spend whilst maintaining the same number of operational staff on fire engines and in managerial positions.
10. The savings are potentially significant as based on previous years we would be able to save up to £50k a month at peak times immediately following recruitment, in salaries alone. There are also significant additional costs related to training, support services, equipment, PPE etc.
11. Since then, more analysis has been undertaken on the likely impact of workforce turnover up to the beginning of April 2021, given that this is the timeframe for which there is some certainty on funding, and after which it is more difficult to have an accurate financial plan to inform longer term decision making on the issue.
12. The following table shows the numbers of operational staff who could retire up to April 2021 prior to the Remedy Hearing, compared with those who will now be able to following that decision, subject to the subsequent legislation relating to the ET which is likely to be published later on in the year. It is worthy of note that the increase in predicted retirements due to the Employment Tribunal ruling is also predicted to continue throughout 2021/2 and 2022/3.
79 Role Original Retirements Revised Retirements Firefighter 15 23 Crew Manager 5 5 Watch Manager 8 14 Station Manager 4 6 Group Manager 0 0 Director 0 0 Deputy Chief Fire Officer 1 1 Chief Fire Officer 0 0
13. In relation to the more senior roles, specifically Station Manager during 2020/21, there is a clear case for retention of incident command skills, whilst development of other staff can be progressed and to enable these skills to be passed on. The length of time that they would be re-engaged for would be based on a reasonable time to replace their skills and experience through talent management but would not exceed two years in any circumstances.
14. It is proposed that for operational roles below Director, the reengagement of a proportion of the numbers of those who could retire between now and April 2021 is approved, up to the maximum level stated in the table at paragraph 7. If approved, a formal process would be undertaken to invite those who have already retired to apply to be reengaged through a competitive process, following which a skills assessment will take place to ensure successful candidates are up to date with their competency. Firefighters who are re-engaged would be given temporary contracts with end dates determined by the Service on an individual basis to enable contracts to all finish at a time when a new batch of recruits will be ready to take over on stations. Contracts would be monitored to be used on an ongoing basis to even out the recruitment profile. The contracts would not be fixed to a specific Watch or Station and therefore will provide great flexibility to manage absences for reasons such as sickness. It is likely that Firefighters particularly may be re-engaged on part time contracts, which will again increase flexibility.
15. The re-engagement numbers being considered are calculated based on the difference between those expected to retire prior to the outcome of the ET and those expected to retire post that outcome (a total of 16 posts). They are also designed to allow the Service to choose only to re-engage staff at a lower level if there are people with suitable skills willing to be promoted to fill the additional managerial roles. These are considered to be the maximum number required in that period, but it is felt it is highly unlikely that number will actually be re-engaged. Actual numbers re-engaged will be reported through the Workforce Plan.
RECRUITMENT PIPELINE
16. It is planned that the Service will undertake a “recruitment pipeline” approach to the provision of new recruit firefighters, to further support the evening out of the Recruitment profile and the management of the Establishment of wholetime Firefighters. This will involve running regular, cyclical recruitment campaigns and informing successful candidates that once a training course is planned, they will be informed and invited to join the Service at that point. This will ensure that we can develop a ‘pipeline’ of recruits to ensure that diversity is increased, but that we only need to recruit when we have the appropriate number of vacancies with which to most ideally run a recruit course. As described previously to the Authority there are likely to be significant financial benefits of using this approach.
17. The intention is to review the use of re-engaged operational staff during 2020/21 with view to utilise the approach as a long term solution to smooth out the crewing profile and ensure we always have enough operational staff employed at any one time, rather than dropping below establishment in the run up to wholetime recruit courses which has happened in the past. It will also have the added benefit that we won’t be
80 over establishment immediately following a recruit course, and therefore will provide significant financial savings. At the point of bringing in those Firefighters who are on the recruitment pipeline the temporary contracts of those firefighters who had been re-engaged will be terminated. This will ensure that over the long term we still recruit the same numbers of new firefighters which will refresh the organisation and assist us with ensuring we are representative of the communities we serve.
ROLES ABOVE GROUP MANAGER
18. Currently, in roles above Group Manager, the Service is in the position where the Deputy Chief Fire Officer could retire at any time. The Fire National Framework, that the Authority must have regard to, provides thresholds as to whether retired staff can be re-engaged in those roles. The Authority would need to agree that those thresholds had been met or have a compelling justification to depart from that guidance if it wanted to offer re-engagement in the future.
19. Members will be aware that the Authority has had legal advice that suggests that following that section of the Framework could create a risk to the Authority of a successful claim of age discrimination and that issue has been raised with previous Ministers and the Home Office. However, this paper does not recommend any action related to roles above Group manager.
STRATEGIC PLAN COMPATIBILITY
20. The development of an effective Workforce Plan better enables the Service to have the accurate information to meet all its strategic objectives, but particularly Value Our People, Respond Effectively, Support Delivery and Making our Communities Safer.
FINANCIAL/RESOURCES/VALUE FOR MONEY IMPLICATIONS
21. The effective establishment control and detailed understanding of our biggest asset; our Workforce, is essential in the effective management of our financial resources, ensuring value for money for local communities. There will be significant financial savings using this approach, and it will still ensure crewing levels on fire engines are maintained. Those savings would be up to £50k a month at peak times immediately following recruitment, in salaries alone. There are also significant savings related to training, support services, equipment, PPE etc.
LEGAL IMPLICATIONS
22. Effective workforce planning gives a better understanding of the workforce position, which better enables the Service to manage its legal obligations; in this context, with particular regard to our Public Sector Equality Duty and employment legislation. We will also be better equipped to ensure we meet our statutory obligations to the communities we serve in providing a safe and effective Fire and Rescue Service.
EQUALITY IMPACT ASSESSMENT/HR IMPLICATIONS
23. The development of the Workforce Plan has given us a more detailed understanding of our workforce position and enables us to better understand the negative implications of not being broadly representative of the communities we serve and will provide a basis on which to continue to develop our plans to encourage more women to join the Service.
24. The HR Service Partners will continue to work alongside our managers to develop and refresh the Plan regularly.
CORPORATE RISK MANAGEMENT IMPLICATIONS
81 25. The lack of effective workforce planning can present significant corporate risks if we do not have the right staff in the right place with the right skills at the right time. The development of this Plan presents mitigation to that risk.
HEALTH AND SAFETY IMPLICATIONS
26. None arising directly.
COMMUNICATION ACTIONS ARISING
27. Any decision made on this issue by the Authority would need to be clearly and effectively communicated to the Workforce.
DETAILS OF CONSULTATION AND/OR COLLABORATION
28. Formal Consultation is not necessary in this case.
BACKGROUND PAPERS AVAILABLE FOR ACCESS
29. Humberside Fire and Rescue Service Workforce Plan 2019 – 2023.
RECOMMENDATIONS RESTATED
30. a) Members are requested to note the Workforce Planning and Re-engagement Update and take assurance form the ongoing development work to mitigate any concerns arising from workforce turnover and loss of skills and experience.
b) Members are requested to approve the Strategic Leadership Team (SLT) plans to temporary re-engage operational staff between now and April 2021, up to the maximum level shown for each role below Group Manager (GM)
MIRIAM HEPPELL
Officer Contact: Miriam Heppell 01482 567454 Director of Human Resources
Humberside Fire & Rescue Service Summergroves Way Kingston upon Hull
MH/JP 5 March 2020
82
Agenda Item No. 14 Humberside Fire Authority Report by the Director of Service 13 March 2020 Improvement
SERVICE PERFORMANCE AND RISK REPORT End of the 3rd QUARTER 2019/20 1 October - 31 December 2019
SUMMARY
1. This report provides information relating to the Service’s Performance and Risk Framework. Report Highlight Summary Table Service Delivery Performance Accidental Dwelling Fires 5.6% below 3 year average. Other Accidental Fires (exc. 16.1% above 3 year average. Vehicles) Deliberate Primary Fires 0.6% below 3 year average. Deliberate Secondary Fires 3.0% below 3 year average. Automatic Fire Alarms 11.0% below 3 year average. Fatalities 1 fatality (aspirational target 0) Injuries 18 injuries (aspirational target 0) Response Performance First engine response 6.86% better than target Second engine response 9.12% better than target Projects Update Summary of progress for Strategic Projects is provided at Para 9 Infrastructure, ICT, Collaboration within the body of this Report. Strategic Risks Level Reduction in external financial Inflationary increase in grant of 1.6% support confirmed on 20 December 2019 alongside Critical 2% cap on precept increases for 2020/21. East Coast and Hertfordshire Humberside now gone live and now supporting Critical Control Room Project (ECHCR). Norfolk and Lincolnshire during Q4 of 19/20.
Risk reduced to high. Effects and impact of withdrawal agreement due to have taken place Impact of Brexit High on 31st January 2020 remain uncertain and we continue to work with LRF. Loss of staff following pension Workforce plans being reflected to mitigate Critical remedy any impact of the outcome. Complaints Quarter 3 Detail Driving related 1 Upheld 0 Not Upheld Conduct of employees 1 Upheld 0 Not Upheld Performance of employees 1 Upheld 1 Not Upheld Damage to property whilst responding 0 Upheld 0 Not Upheld to incidents Other 0 Upheld 0 Not Upheld Current and Previous Quarter for comparison Current Quarter Previous Quarter Totals 3 Upheld 1 Not Upheld 3 Upheld 1 Not Upheld Compliments and Messages of Thanks
34 compliments and messages of thanks were received and posted on our Website: Compliments and Messages of Thanks
83
RECOMMENDATIONS
2. That Members consider the report’s detail and take assurance from the Service’s proactive approach to performance and risk management.
BACKGROUND
3. Regular performance and risk reviews are undertaken internally to jointly review any issues at Strategic Leadership Team (SLT), and Project level. SLT provide the oversight of Projects and therefore there are two levels of risk register; one for Strategic Risks and separate registers for individual projects.
4. The ownership of performance and risk is detailed below:-
Strategic Leadership Team Strategic Objectives Strategic Risk Register
Directors Director Workstream Objectives Directorate Risk Register
Heads of Function Function Workstream Objectives Directorate Risk Register
Project Owners Project risks and performance against project milestones
5. The Strategic Leadership Team in conjunction with the Tactical Leadership Team, Head of Corporate Assurance and GAS Committee provides an internal scrutiny function for Strategic Risks and Service Performance Indicators.
6. All performance and risk information is managed through automated systems which enable managers at all levels to have access to information which is as up to date as possible, and in many instances is live information.
7. The Strategic Risk Register is publicly accessible via the Service website Our- performance. Members can also view the Action Plans relating to any performance or identified risks electronically at meetings through the Corporate Information Portal.
PERFORMANCE ISSUES OF NOTE
8. A summary of all key performance can be seen at Appendix 1. The following performance issues of note have arisen during this reporting period.
a) Accidental Dwelling Fires (ADFs)
The number of accidental fires to the end of Quarter 3 is 5.6% below the 3-year average. In Quarter 3 last year they were 13.7% above the 3-year average. Those incidents rated as high severity during Quarter 3 is low but has increased since Quarter 2 as can be seen in Appendix 2. This increase will be monitored as we move into Quarter 4.
Intervention Activity Examples
Partner agencies are being given refresher training in how to identify and refer people who are vulnerable from fire.
Address lists to focus Safe and Well visits have been created for East Marsh area of Grimsby based on the fatality fire risk profile.
84
We have used press releases relating to accidental dwelling fires in line with the NFCC Campaign Calendar.
b) Other Accidental Fires (excluding vehicles)
Other Accidental Fires are 16.1% above the 3-year average. For reference, this equates to only a collective 13 incidents above target in the year to date. At Quarter 3 last year they were 44.6% above the 3-year average.
c) Deliberate Primary Fires
Deliberate Primary Fires are 0.6% below the 3-year average. At Quarter 3 last year they were 4.6% below the 3-year average.
Intervention Activity Examples
In Hull, Arson signs and leaflets are used in areas surrounding an incident to notify nearby residents and how to anonymously report intelligence to HFRS.
In the East Riding, early intervention teams including staff from Police, HFRS, PCC and Council ASB Team are working with first time offenders in Bridlington to reduce re-offending. The success of the model is being expanded to Goole.
Across the Service area, information is gathered from the scene of a Deliberate Vehicle fire to support Humberside Police with Operation Yellowfin.
d) Deliberate Secondary Fires
Deliberate secondary fires are 3.0% below the 3-year average. At Quarter 3 last year they were 13.5% above the 3-year average.
Intervention Activity Examples
In North East Lincolnshire, our teams work with Council Environmental teams to ensure hotspots are cleared following incidents to prevent further calls to the Service.
As part of Operation Topaz in the run up to Bonfire night, advocates delivered joint presentations with Humberside Police to primary and secondary schools to reduce ASB and Arson.
K9 Fire Investigations interaction has now been given to years 5 and 6 in 22 Hull Primary school. This work has received very positive feedback and will continue during 2020.
Central Station in Hull are working on a number of disruptive initiatives including “Wise up” with Kingston Youth Club, Street Scene on Spring Bank and Hard to House homeless campaign. All work is looking to reduce ASB and potential for deliberate fire setting. e) Automatic Fire Alarm False Alarm Calls (AFA)
The number of false alarms in commercial premises is 11% below the 3-year average.
The continued downward trend, during what is usually our peak period, is pleasing and is testament to the application of the new Unwanted Fire Signals policy. We expect this reduction to continue throughout the rest of the year.
85
STRATEGIC PROJECTS
9. Notable developments in Strategic Projects:
a) East Coast and Hertfordshire Control Room Project
Humberside went live 26 November 2019, meaning the two larger services are now live on one system. HFRS will move to support user acceptance tests for Norfolk and Lincolnshire commencing 20 January 2020, with an expectation of go live of 4 February 2020 for Norfolk and 18 February 2020 for Lincolnshire. Since go live, HFRS have continued to work through a number of transition issues including MDTs, system performance and memory issues.
b) The Ark Flood Preparation and Response Centre
Following the General Election, the main local advocate Nik Dakin MP was not re-elected in Scunthorpe however, Holly Mumby-Croft MP was elected to this seat and is an ex- Fire Authority member. A detailed briefing on the ARK project has been prepared for Holly with a view to gaining support within Central Government and progressing funding. Other local MPs have already been engaged and Andrew Percy MP recently wrote to the Chancellor on this subject. The focus of the Project Team will be around Central Government support and releasing funding. Project Board and Strategic Board meetings have taken place in January with a view to focusing attention on these areas. Preliminary planning surveys are being or have been undertaken by Patrick Parsons. The Deed of Variation relating to Intellectual Property has been signed by Patrick Parsons and Humberside Fire and Rescue Service. Project Team members also met with Aviva in January with a view to securing £100k funding through their Community Arm.
c) Rota and Availability System
The introduction of a new Corporate Availability System will allow the Service to manage individual’s availability and aggregate these details to populate rotas. Fire engine availability details need to flow into the CAPITA provided Command and Control System and details of incidents extracted for pay purposes, to generate efficiencies in what is currently a labour intensive process. The contract for the chosen system (Fire Service Rota) has been awarded and a trial is already underway way with some On-Call Stations with a view to roll-out across the Service this year.
STRATEGIC PLAN COMPATIBILITY
10. This report supports the delivery of all of our Strategic Objectives in the most effective and efficient way and is a key part of the underpinning Governance Framework.
FINANCIAL/RESOURCES/VALUE FOR MONEY IMPLICATIONS
11. Any area of improvement in performance without an increase in resources adds value for money and the proactive management of risks is important to ensure financial stability.
LEGAL IMPLICATIONS
12. None arising directly.
EQUALITY IMPACT ASSESSMENT/HR IMPLICATIONS
13. None arising.
86 PERFORMANCE AND RISK MANAGEMENT IMPLICATIONS
14. This report details the information for Members to provide assurance as to the proactive management of performance and risk by the Service. This report has previously been before the Governance Audit and Scrutiny Committee.
HEALTH AND SAFETY IMPLICATIONS
15. Performance against the second engine response standard directly contributes to the Health and Safety of operational crews.
COMMUNICATION ACTIONS ARISING
16. None arising.
DETAILS OF CONSULTATION AND/OR COLLABORATION
17. None applicable.
BACKGROUND PAPERS AVAILABLE FOR ACCESS
18. None.
RECOMMENDATIONS RESTATED
19. That Members consider the report’s detail and take assurance from the Service’s proactive approach to performance and risk management.
NMCKINIRY
Officer Contact: GM Simon Rhodes 01482 567479 Head of Corporate Assurance
Humberside Fire & Rescue Service Summergroves Way Kingston upon Hull
SR 4 March 2020
87
Appendix 1
Service Performance and Risk Report – 3rd Quarter 2019-20 1 April 2019 – 31st December 2019
Service Performance Indicators SPI 2.2 – Total Deliberate Primary Fires – 0.6% below SPI 1 – Total Fatalities – 1 Fatality SPI 1.1 – Total Casualties – 18 Casualties three-year average
SPI 2.3a – Total Accidental Dwelling Fires – 5.6% below SPI 2.3c – Total Other Accidental Fires (exc Vehicles) 16.1% SPI 2.4 – Total Deliberate Secondary Fires – 3% below three-year average above three-year average three-year average SPI 2.5 – Total Number of Automatic Fire Alarms – 11% below
three-year average How are we doing?
SPI 1 – Total Fatalities There has been 1 fatality in the third quarter of 2019-20 compared to 1 in the same period of 2018-19
SPI 1.1 – Total Casualties There have been 18 casualties in the third quarter of 2019-20 compared to 21 in the same period of 2018-19
88
Service Performance Indicators SPI 2 – Standard of First Appliance in Attendance is met SPI 2.1 – Standard of Second Appliance in Attendance is met Actual – 96.86% Objective – 90% Actual – 89.12% Objective – 80% Average First Appliance attendance times for the Service 3rd Quarter - Average 1st appliance attendance time – Dwellings 3rd Quarter - Average 1st appliance attendance time – RTC’s Actual – 6 Minutes 08 Seconds Actual – 8 Minutes 36 Seconds
Average Second Appliance attendance times for the Service 3rd Quarter - Average 2nd appliance attendance time – Dwellings 3rd Quarter - Average 2nd appliance attendance time – RTC’s Actual – 8 Minutes 28 Seconds Actual – 11 Minutes 07 Seconds
Rescues Between 1st April 2019 and 31st December 2019, the Service rescued 754 people in incidents across the Service area. This table shows the number of people rescued and the type of incident, for the end of the 3rd quarter period October 2019 to December 2019. RTCs 56 Other (e.g. assisting other agencies and suicides) 17 Effecting Entry/Exit (to children, elderly and medical cases) 61 Removal of objects from people / people from objects 30 Other Rescue/Release of Persons (e.g. from height, in machinery) 32 Rescue or Evacuation from water 10 Primary Fires 16 Other Transport Incidents (e.g. children locked in vehicles) 9 Lift Release (to children/elderly and medical cases) 7 Medical Incident – First Responder 13 Flooding 1 Total number of rescues 252
Medical Intervention
This table details the 3rd quarter activity for First Responder incidents and Falls Team incidents attended, across the Service area.
Period – 01/04/2019 – Period – 01/10/2019 –
31/12/2019 31/12/2019
*Falls Incidents 663 237
Emergency First Responder calls 1545 545 attended
*Please note that Falls Teams often attend Emergency First Responder Incidents also.
89 Appendix 2 Accidental Dwelling Fires The charts below show the severity level for Accidental Dwelling Fire incidents over the last three years and for this year to the end of quarter three. The number of incidents in quarter three was lower this year compared to last year in the East Riding and North Lincolnshire but was higher in North East Lincolnshire and the same number as the previous year was recorded in Hull. The trend in the East Riding and North Lincolnshire has been mainly downward over the last five quarters. Conversely, the trend in Hull over this period has been mainly upward. Note: The charts show the number of accidental dwelling fires within each severity category for each quarter of 2016/17, 2017/18, 2018/19 and 2019/20 to Q3.
Total Accidental Dwelling Fires Compared to Severity in Hull 100% 0 0 0 0 50 2 1 1 2 1 2 2 3 3 3 3 90% 45
80% 40 18 19 14 19 70% 21 21 35 23 27 25 20 20 19 18 60% 27 19 30 50% 25
40% 20
30% 15 19 25 21 20 20% 17 11 10 13 12 14 10 11 10 10 10 10% 5 5
0% 0 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 16/17 17/18 18/19 19/20
Low Medium High Total ADFs
90 Total Accidental Dwelling Fires Compared to Severity in the East Riding of Yorkshire 100% 0 0 0 40 1 1 1 1 1 1 1 2 2 3 3 2 90% 35 80% 14 7 30 70% 12 17 14 16 20 13 16 19 24 13 15 60% 12 16 25 50% 20
40% 15 30% 18 9 16 10 20% 12 11 10 12 10 7 12 10 9 8 9 9 10% 5 0% 0 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 16/17 17/18 18/19 19/20
Low Medium High Total ADFs
Total Accidental Dwelling Fires Compared to Severity in North East Lincolnshire 100% 0 0 0 0 0 0 0 0 1 35 1 1 1 2 1 2 90% 30 80% 7 70% 25 18 13 16 17 14 15 60% 11 14 14 19 10 23 20 12 15 50% 15 40%
30% 9 10 20% 6 8 6 6 7 6 6 5 10% 4 5 6 4 2 2 3 0% 0 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 16/17 17/18 18/19 19/20
Low Medium High Total ADFs
91 Total Accidental Dwelling Fires Compared to Severity in North Lincolnshire 100% 0 0 0 0 0 0 25 1 1 1 1 1 1 1 1 90% 3 80% 20 11 7 7 9 70% 7 6 9 7 6 60% 9 9 6 10 11 15 50% 12 40% 10 30% 8 8 10 9 5 7 6 20% 4 5 5 4 4 5 10% 3 2 0% 0 0 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 16/17 17/18 18/19 19/20
Low Medium High Total ADFs
92
Agenda Item No. 15 Humberside Fire Authority Report by the Director of Service 13 March 2020 Improvement
HEALTH, SAFETY AND ENVIRONMENTAL QUARTERLY REPORT 3rd QUARTER 2019/20
October – December 2019
SUMMARY
1. This is the 3rd Quarter 2019/20 report on Health, Safety and Environment. Appendix 1 provides a summary of the statistical data.
2. During the reporting period there were 13 incidents recorded (Figs 1 & 2) that resulted in some form of personal injury compared to 24 for the same period last year. This is a considerable decrease of almost 46%. It is also well below the three-year rolling average of 19 for quarter three (Fig. 3).
3. Exceptionally, this is also the lowest ever number of reported injuries or ill-health for quarter three since electronic systems were first used to record them in 2007. Furthermore, there were no injuries warranting reporting to the Health and Safety Executive under RIDDOR 2013 (Fig. 5). This has not been achieved since the third quarter of 2016 – 2017, three years ago.
RECOMMENDATIONS
4. That Members take assurance from the Service’s proactive management of Health, Safety and Environmental outcomes.
BACKGROUND
5. The majority of the reported injuries, nine or 69%, were incurred by firefighters, split between five Fulltime and four On-Call members of staff (Fig. 1). This is representative of our employment profile and the more hazardous nature of the activities carried out by operational staff.
6. As can be seen from the three-year rolling average (Fig 3), the longer-term accident trend is falling. Routine activities and fire make up the top two highest number of the total number of injuries with four and three reported respectively (Fig. 2). Encouragingly, all activity areas have reduced in comparison with last year’s quarter three with the exception of RTC which has risen from zero to one.
7. There were no significant injuries caused by work-related activities that resulted in sickness absence during the quarter. The majority of injuries sustained, just over 38%, were as a result of a result of a slip, trip or fall on the same level. Two of these occurred during physical training (one to a member of the public attending a “Fit Mums” club outside Goole fire station), two during routine activities and one whilst approaching a fire engine to respond to an incident.
8. The most potentially serious accident was a firefighter falling from a short extension ladder whilst attending a building fire. However, this individual’s fall, (from a height of less than two meters) was cushioned by a colleague, thus limiting the force of the fall and subsequent injuries. The final injury report arising from fire activities was an individual who reported they had sustained a skin reaction due to contact with vegetable oil.
93 9. During this quarter, there have been no RIDDOR reportable accidents. This is the first time this has happened since quarter three of 2016 -17. The Service strives to reduce both accidents and subsequent RIDDOR events to an aspirational target of zero.
10. Although near miss reports (Fig 6) have decreased by just over 35% in comparison with the same quarter for last year; they remain more than three times higher than the number of reported accidents. This is indicative of a positive safety culture within HFRS with the emphasis on reporting events that have the potential to cause injury before they actually do. As an area constantly promoted by the H, S and E team, near misses are treated with an equal degree of seriousness as accidents; as such, being investigated accordingly to identify proactive control measures. Ongoing training and quality assurance within this area seeks to ensure near miss reports are appropriate and meet the necessary criteria for submission and analysis.
11. The H, S & E team continue to undertake research in several areas reflecting the Services proactive approach. These are detailed in the snapshot provided at Appendix 1.
12. Details of the Service’s Health, Safety and Environmental outcomes for this Quarter 2019/20 are contained in Appendix 1.
STRATEGIC PLAN COMPATIBILITY
13. The monitoring of Health, Safety and Environmental information is a key part of the Strategic Plan to:
Maintain a positive health and safety environment, compliant with legislation and provide operational assurance. Implement measures to ensure environmental sustainability.
FINANCIAL/RESOURCES/VALUE FOR MONEY IMPLICATIONS
14. None.
LEGAL IMPLICATIONS
15. None.
EQUALITY IMPACT ASSESSMENT/HR IMPLICATIONS
16. None.
CORPORATE RISK MANAGEMENT IMPLICATIONS
17. None.
HEALTH AND SAFETY IMPLICATIONS
18. This report provides the opportunity for an additional level of scrutiny of Health and Safety information.
COMMUNICATION ACTIONS ARISING
19. None.
94 DETAILS OF CONSULTATION AND/OR COLLABORATION
20. None.
BACKGROUND PAPERS AVAILABLE FOR ACCESS
21. Health and Safety Policy Statement.
RECOMMENDATIONS RESTATED
22. That Members take assurance from the Service’s proactive management of Health, Safety and Environmental outcomes.
N McKINIRY
Officer Contact: Niall McKiniry 01482 567166 Director of Service Improvement
Humberside Fire & Rescue Service Summergroves Way Kingston upon Hull
NM 2020
95
Appendix 1 3rd Quarter (October – December 2019) H, S, & E Performance Snapshot
Accidents Categorised by Role
57 Total 13 24
30 Full-time Firefighter 5 12
12 On-call Firefighter 4 8
9 Year to Date Non-operational Staff 3 4 Oct - Dec 2019
5 Oct - Dec 2018 Non-employee 1 0
Flexi-duty System 0 0
1 Control Staff 0 0
0 10 20 30 40 50 60
Figure 1
The chart above shows the role of those involved in accidents, for this period (October – December 2019) alongside a comparison for the same quarter from the previous year and a year to date total. The total number of reported accidents for the quarter (13) is almost 46% lower than the previous year (24). Five of the six categories show a reduction with only one increasing by a single report. Exceptionally, this number of reported accidents for a quarter three is the lowest ever recorded since 2007 when electronic systems where first brought into use. Page 1 of 7 96 3rd Quarter (October – December 2019) H, S, & E Performance Snapshot
Accidents Categorised by Activity
57 Total 13 24
16 Routine Activities 4 8
6 Fire 3 5
18 YTD Training 2 7 Oct - Dec 2019 Oct - Dec 2018 8 Physical Training 2 2
7 Special Service 1 2
2 RTC 1 0
0 10 20 30 40 50 60
Figure 2
The chart above relates to the activities undertaken at the time of the recorded accident. Reported injuries or ill-health during routine activities are the most frequent which is identical to last year’s third quarter. All activity areas have decreased in comparison to last year with the exception of RTC which shows an increase of one.
Page 2 of 7 97 3rd Quarter (October – December 2019) H, S, & E Performance Snapshot
Average of Q3 Accidents for the Past Three Years
30
25 24
20 20 19
15
13 10
5
0 Q3 2017 Q3 2018 Q3 2019
Accidents Reported 3 Year Rolling Average
Figure 3
Encouragingly, reported accidents (13) are more than 27% below the three-year rolling average (19) and at the lowest level for the previous three years’ quarter three data. This indicates consistent and long-term health and safety performance improvement.
Page 3 of 7 98 3rd Quarter (October – December 2019) H, S, & E Performance Snapshot
Cause of Injury due to Accident
10 Slipped, tripped or fell on the same level 5 4 2 Other kind of incident 2 3 7 Hit something fixed or stationary 2 1 1 Fell from a height 1 1 Contact with moving machinery 1 7 Injured while handling, lifting or carrying 1 8 6 Exposed to, or in contact with, a harmful substance 1 2 7 Exposed to fire or heat 0 YTD 1 Oct - Dec 2019 Injured by an animal 0 1 Oct - Dec 2018 Breathing Apparatus set malfunction or wearer distress 0 7 Musculoskeletal 0 7 RTC 0 2 3 Cut on / by sharp object 0 2 Trapped by something collapsing 0 1 Contact with electricity or an electrical discharge 0 1 4 Hit by a moving, flying or falling object 0 1
0 2 4 6 8 10 12 Figure 4 Page 4 of 7 99 3rd Quarter (October – December 2019) H, S, & E Performance Snapshot
Figure 4, on the previous page shows the cause of accidents for this quarter compared against the same period from the previous year. The most common cause of injuries are “slipped, tripped or fell on the same level”. Although this is unusual for HFRS it is consistent with national accident statistics as the most common cause of workplace injuries.
Reporting of Injuries, Diseases and Dangerous Occurrences Regulations 2013 (RIDDOR)
9 YTD Reportable events 0 Oct -Dec 2019 3 Oct - Dec 2018
0 1 2 3 4 5 6 7 8 9 10
Figure 5
During this quarter there have been no accidents reportable under RIDDOR 2013. Once again, this is exceptional performance as the last period where there were no RIDDOR reported injuries or sickness was three years ago (quarter three 2016 – 2017).
Page 5 of 7 100 3rd Quarter (October – December 2019) H, S, & E Performance Snapshot
Near Miss Reporting
101 YTD Near miss 37 Oct -Dec 2019 Oct - Dec 2018 57
0 20 40 60 80 100 120
Figure 6
Near miss reports are encouraged to proactively identify potentially harmful events before any injury is realised. Although they have decreased by just over 35% in comparison to the same period last year, there have still been more than three times the amount of near miss reports (37) than accidents (13) for this quarter. This is indicative of a positive workplace safety and reporting culture.
Page 6 of 7 101 3rd Quarter (October – December 2019) H, S, & E Performance Snapshot
Forward Look Key current areas being addressed are: Progression and development of the Joint Health and Safety Service (JHSS) in collaboration with Humberside Police. Attendance at Implementation and Force Health and Safety Board meetings enables Strategic influence to affect positive change. Review and alignment of policies and strategy with Humberside Police. The new policy and guidance covering immediate fireground cleaning to reduce the risk of firefighter exposure to contaminants caused by products of combustion is in draft and will be going through the formal consultation process in January. Linked to this significant piece of work are the following: o Issue of station dirty kit storage bunkers began in December 2019 o Disposal wipes have been procured and are in Stores awaiting issue with an accompanying guidance package. o Continuation of the Contamination Working Group. o Official recognition of HFRS’s pledge to the IOSH “No time to Lose” campaign to reduce occupational cancers. In reaction to the death and significant injury of two firefighters at different training incidents from different Services across the UK, a joint local promotional campaign with the Fire Brigades Union was run to reinforce the need for effective risk assessment of training sites prior to any intended activity. The “Refill” campaign is underway with three Fulltime and three On-Call stations trialling reusable thermos bottles as an environmentally sustainable alternative to plastic disposable water bottles. Senior Executive health and safety training for both HFRS and HP combined is programmed for the 14th February. Launch of HFRS new environmental plan is scheduled for February. Development of new bespoke Managing Safely refresher course for all staff at supervisory or middle management level.
Page 7 of 7 102
Agenda Item No. 16 Humberside Fire Authority Report by the Director of Service 13 March 2020 Improvement
OPERATIONAL ASSURANCE REPORT - 3rd QUARTER 2019/20
October – December 2019
SUMMARY
1. This is the 3rd Quarter 2019/20 report on Operational Assurance (OA). Appendix 1 provides a summary of the statistical data.
2. The quality of information gathered from all types of debriefs has improved significantly through increased education and awareness of assessors. This has enabled a much greater understanding of the importance of capturing learning in order to continually improve firefighter safety.
3. Each assessment undertaken is broken down into three key areas; safety critical, areas of concern and exceptional practice. Safety critical reporting reduced by 66% (9 to 3) and area of concern reporting reduced by 74% (103 to 26). Exceptional practice returns also fell with a 44% reduction in reporting (203 to 114). The reduction in safety critical and areas of concern along with a large number of exceptional practices would indicate that we are performing well operationally as an organisation. However, we must also consider that not all safety critical and areas of concern are reported, and that people are more likely to report when they have performed well than when they have potentially put themselves or others in danger. We must continue to highlight to our personnel that OA is a process that exists to promote learning and to improve firefighter safety. It is not designed to place them under heavy scrutiny or blame.
4. Appliance CCTV was utilised four times throughout this quarter and has shown elements of good practice, however, it has also raised some issues with certain procedures. Despite this, the majority of incidents have been managed in accordance with the principles of National Operational Guidance and HFRS standard operating procedures. A number of positive practices have been identified and support ongoing work in promoting best practice throughout the operational assurance of incidents.
5. The Drivers’ PPE thematic review concluded in the last quarter and the results were outlined in the previous quarterly report. The full thematic review has now been published and can be viewed by all personnel on our portal page. We are currently reviewing our plans for the next thematic review and we will soon decide on which subject area we plan to assess.
6. As we strive to continually improve OA, therefore, firefighter safety, we plan to visit watches and stations in order to promote the OA process. The drivers PPE review results will be part of the agenda for these visits as we look to operational staff to ensure that procedures are being adhered to. We plan to carry out these visits over both the final quarter of this year and the 1st of next year.
7. NOL have now launched their new platform for operational learning in the form of information notes. These differ from the action notes in that they are published for our information only and do not necessarily warrant an action from us as an organization. However, we have considered all that we have received, and some have been posted to PDRPro and others have been looked at in terms of procedural changes for the Service. We will continue to disseminate these to operational crews accordingly to
103 increase awareness of the relevant hazards and risks. We also intend to publish the learning action log shortly; this will present every piece of learning that we receive and what action we have taken based on the information we have obtained. This will be available to all personnel.
RECOMMENDATIONS
8. That Members take assurance from the Service’s proactive management of Operational Assurance outcomes.
BACKGROUND
9. For further details on the 2nd quarters operational assurance assessment data please see the snapshot report at Appendix 1.
STRATEGIC PLAN COMPATIBILITY
10. The monitoring of operational assurance information is a key part of the Strategic Plan; Maintain a positive health and safety environment, compliant with legislation and provide operational assurance. We must also capture and share organisational learning as part of the strategic plan as well as ensuring firefighter competency is maintained (operational preparedness) and that we continue to work seamlessly with other emergency services (through multi-agency debriefs).
FINANCIAL/RESOURCES/VALUE FOR MONEY IMPLICATIONS
11. None.
LEGAL IMPLICATIONS
12. None.
EQUALITY IMPACT ASSESSMENT/HR IMPLICATIONS
13. None.
CORPORATE RISK MANAGEMENT IMPLICATIONS
14. None.
HEALTH AND SAFETY IMPLICATIONS
15. This report provides the opportunity for an additional level of scrutiny of Health and Safety information.
COMMUNICATION ACTIONS ARISING
16. None.
DETAILS OF CONSULTATION AND/OR COLLABORATION
17. None.
BACKGROUND PAPERS AVAILABLE FOR ACCESS
104
18. Operational Assurance policy.
RECOMMENDATIONS RESTATED
19. That Members take assurance from the Service’s proactive management of Operational Assurance outcomes.
N McKINIRY
Officer Contact: Niall McKiniry 01482 567166 Director of Service Improvement
Humberside Fire & Rescue Service Summergroves Way Kingston upon Hull
NM 2020
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Appendix 1 3rd Quarter (October – December 2019) Operational Assurance Performance
Operationally Assured Activities
409 Total Assessments 107 133
323 Incidents 91 128
86 Exercises 16 5 Year To Date
10 Oct - Dec 2019 CCTV 4 3 Oct - Dec 2018 Figure 1 246 Hot Debriefs 92 109
3 Tactical Debriefs 0 1
0 50 100 150 200 250 300 350 400 450
The chart above shows the number of incidents and debriefs that have been assured, for this period (October - December 2019) alongside a comparison for the same quarter from the previous year as well as the total for each category for the year to date. The total number of activities assured have decreased by 19.5% compared to last year’s quarter. There has been a growth in exercises assured from last year’s figures, from 5 to 16. CCTV on fire appliances has been utilised to monitor activities over this period and has shown areas of concern as well as some positive practices. The decrease in hot debriefs is a matter that we are looking to rectify. A hot debrief should be carried out after every single incident and exercise, therefore, there should be no disparity between the number of Operational Assurance assessments and hot debriefs. In most cases the hot debrief is taking place but the assessor is failing to report this on the return due to a lack of understanding of how to complete the Operational Assurance assessment. This is an area we will drive an improvement in as we visit stations and watches in the new year to provide educational information for operational personnel.
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Breakdown of Key Areas
14 Safety Critical Concerns (SCC) 3 9
138 Year To Date Areas Of Concern (AOC) 26 Oct - Dec 2019 103 Oct - Dec 2018
Figure 2 688 Exceptional Practices (EP) 114 203
0 100 200 300 400 500 600 700 800
Assurance activities are broken down into three areas; safety critical concerns, areas of concern and exceptional practice. The number of safety critical concerns identified, and areas of concern reported have decreased. However, exceptional practices reporting has decreased by 44% from 203 to 114. Once again, the vast majority of reports of areas of concern and exceptional practices have been highlighted through Service Control. The diminution in safety critical and areas of concern along with a large number of exceptional practices would indicate that we are performing well operationally as an organisation. However, we must also consider that not all safety critical and areas of concern are reported, and that people are more likely to report when they have performed well than when they have potentially put themselves or others in danger. We must continue to highlight to our personnel that operational assurance is a process that exists to promote learning and to improve firefighter safety. It is not designed to place them under heavy scrutiny or blame.
Page 2 of 10 107 3rd Quarter (October – December 2019) Operational Assurance Performance
Further Breakdown of Key Areas
0 Working at Heights 1 0
1 Hazmat 0 0
2 RTC 4 0 Exceptional Practices
12 Areas of Concern Firefighting 2 Saftey Critical Concerns 0 Figure 3 19 Incident Management 12 3
80 Control 7 0
0 10 20 30 40 50 60 70 80 90
The safety critical concerns during this quarter pertained to a BA team being committed into a domestic garage where the occupier failed to make fire service personnel aware that there were 2 large cylinders inside despite the incident commander asking relevant questions around this subject area. The further two Safety Critical Concern returns, although reported as an SCC were better suited to the Area of Concern category. One such return stated that at an incident, both the Crew Manager and Watch Manager believed themselves to be in charge simultaneously (this was
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rectified very quickly). The second referred to some confusion over the aerial mobilisation procedure at Bridlington and has since been resolved. More education is required on what qualifies as an SCC, AOC and EP and again, this will be covered during the visits to stations and watches.
Internal Learning
Operational Assurance Assessment Learning I. Spring Bank Flooding – This incident informed us that the contact number for Humber Emergency Planning Service was not easily accessible for Service Control Staff. We located the number by liaising with our Resilience Direct representative and relayed the information to all Service Control watches via email. This proved to be well timed as over the next few days our Service Area experienced severe flooding. II. Overhead Bridge, A63, Welton – This incident proved that the RSU dignity screens are largely ineffective and need to be replaced with something more substantial as they were unable to hold themselves up in light winds. III. Keadby Flooding – This incident provided us with the operational assurance return which cited that more mobile lighting would’ve been hugely beneficial for this type of incident as the crews often found themselves working in darkness. Emergency preparedness are currently reviewing our mobile lighting and looking to provide more to our operational crews.
External Learning
Grenfell Tower – Phase 1 of the Grenfell Tower report was released during this quarter. We immediately took action to read through it and take particular note of the recommendations. We formulated the recommendations into the learning action log and a group was set up to decide which sections each one should be allocated to. A temporary Area Manager post has also been created with their role being to oversee the Grenfell Tower learning implementation.
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NOL Info Notes
In total we received 4 NOL info notes in this quarter. These pertained to:
I. A fire fatality due to the use of home-made Lichtenberg Machines. II. Information and footage of a paper mill explosion. III. Information that thieves have begun burning holes in uPVC doors in order to gain entry and the obvious fire risk involved. IV. Information about a multi-agency incident where there was confusion over recognition of life extinct.
We have already issued notices on PDRPro regarding the use of Lichtenberg machines and the paper mill explosion and information on the remaining two will be published shortly.
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Posted Learning Notifications
The Operational Assurance Team have captured learning outcomes and communicated appropriate actions where necessary through notifications on the PDRPro competence recording system. This method provides an accountable record of understanding which every individual must confirm. The following examples highlighted the following areas;
I. Ruston Parva Case Study – This was a case study of an incident that occurred within our service. It involved an appliance being called to a car fire in a field which would then explode on their arrival. The police suspected that the two large cylinders found in the wreckage of the car were used to commit cash point robberies. This was published to promote the safety of our operational crews to ensure that they are aware that such practices are taking place and could put them at risk. This is something that we are looking to spread nationally through NOL so that other services are prepared for such occurrences. II. OSRA – This was published as a result of the tragic incidents that took place during off-site training activities in both Mid and West Wales and Staffordshire Fire and Rescue, one of which causing life-changing injuries and the other sadly resulting in the death of a firefighter. In order to promote firefighter safety, we posted this notification to reiterate that there should be a specific and sufficient risk assessment in place for any off-site training that is set to occur. By doing this we can mitigate the risks involved and introduce control measures that dramatically reduce the risk of injuries. III. Manitou Mobilisation – This notice was posted as a result of a number of OA returns that pertained to the lack of availability of the Service Manitou. Crews were reassured that at an incident they can utilise on-site staff and their vehicles to assist in operations as long as a sufficient risk assessment has taken place and has been recorded on the ARA. In the meantime, Emergency Preparedness have been tasked with ensuring that in future we have enough resilience for the Service Manitou so that it is always available.
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IV. IEC Update – This was published on behalf of the training section, in conjunction with the lead IEC instructors. It covered a variety of new training techniques that had been recently taught to station IEC instructors who had been asked to disseminate this information to their watches and stations. V. Psychoactive Drugs in Prisons and Bail Hostels – This was posted in order to increase awareness of the dangers of dealing with people who are under the influence of psychoactive drugs when we attend prison or bail hostel incidents.
CCTV Footage Reports
Appliance CCTV was utilised four times throughout this quarter and has shown elements of good practice, however, it has also raised some issues with certain procedures. During the viewing of one particular incident a firefighter who was moving a length of hose walked backwards into the road and into moving traffic where a vehicle had to swerve (at low speed) to avoid him. This is an area that there has been particular focus on previously. We are currently looking at providing hi-vis rescue jackets for Service personnel who are working in roadways at incidents which will obviously make them more visible. However, our personnel still need to aware of the major hazards involved with working on an active roadway at all times and this is something that will be reiterated to them. One incident also showed an officer walking around within the risk area without their helmet on.
CCTV footage has also highlighted a number of positive practices. These include the use of 45mm hose as a safety jet at RTC’s (we have previously seen a spate of personnel deeming that a hose reel is sufficient) good stabilisation of vehicles using Rescue Support Unit (RSU) equipment, quick and safe extrication of time critical casualties, and good hazard perception of emergency response drivers when en route to an incident. It was also encouraging to see that in all four cases that were reviewed, appliance drivers donned appropriate Personal Protective Equipment (PPE) as soon as reasonably practicable, a vast contrast to footage we have seen in previous quarters. This can be accredited to our recent poster campaign
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encouraging drivers to put on appropriate PPE as soon as reasonably practicable at operational incidents as well as the thematic review that studied this particular area.
In the near future, the Operational Assurance section will be visiting the watches and stations that have been subject to a CCTV review and discussing the potential improvements and good practices to promote self-evaluation in order to increase firefighter safety and encourage the learning process. The use of CCTV footage continues to be an incredibly useful tool for the Operational Assurance team, allowing us to get an accurate view of how we are performing at incidents as a service. It is also very helpful as a visual aid when feeding back to the crews involved in the footage reviews.
Thematic Review
The Drivers’ PPE thematic review concluded in the last quarter and the results were outlined in the previous quarterly report. The full thematic review has now been published and can be viewed by all personnel on our Portal page. We are currently reviewing our plans for the next thematic review and we will soon decide on which subject area we plan to assess.
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Forward Look
A plan has been put together to visit all stations and watches in the new year along with Health and Safety. We will be providing crews with an update on what Operational Assurance (OA) is and does and how to best utilise it as well as embedding the need for near misses to be reported in order to improve firefighter safety. During these visits we will also reiterate the new thematic review (once a subject area is in place) and the need to complete an OA assessment for station exercises.
We have created criteria for the peer assessment of exercises with a view to trial and implement in the new year. The idea is not only to assess the quality of the exercise but to also assess the standard of the Operational Assurance assessment carried out by the Station or Watch Manager. We can then provide feedback to the personnel involved. Hopefully, this will improve the standard of OA assessment returns which, in turn, will maximise the learning opportunities from operational exercises.
NOL info notes are now in full effect and we have received a fair number in this quarter. We have considered all that we have received, and some have been posted to PDRPro and others have been considered by us as an organisation. All NOL info notes we have reviewed can also now be found in the action log on our portal page. These information notes provide us with data surrounding operational concerns that are of a less urgent nature than the action notes. Nevertheless, we will continue to disseminate these to operational crews accordingly to increase the awareness of the relevant hazards and risks. We will also be publishing the learning action log shortly, which will present every piece of learning that we receive and what action we have taken based on the information we have obtained. This will be available to all personnel.
Introduction of the new thematic review will be taking place shortly. Page 9 of 10 114 3rd Quarter (October – December 2019) Operational Assurance Performance
Officer Contact: Niall McKiniry 01482 567166 Director of Service Improvement Humberside Fire and Rescue Service, Summergroves Way, Kingston upon Hull.
Page 10 of 10 115 Agenda Item No. 17 Humberside Fire Authority Report by the Director of Service 13 March 2020 Delivery
THE SERVICE'S RESPONSE TO RECENT FLOODING OCTOBER 2019 TO FEBRUARY 2020
SUMMARY
1. This report summarises the HFRS response to flooding incidents from October 2019 until February 2020. Starting with the statutory duties and powers of the Authority, the report describes the assessment of risk from three flooding types in the Humberside region.
2. It outlines the volume of flooding incidents attended by HFRS within the region and the support provided to other localities as a contribution to National Resilience Capabilities. This activity is also identified as being in addition to the number of ‘business as usual’ calls for emergency response naturally regarded as normal daily activity.
3. Also outlined is a precis of the Services response to the flooding major incident declared at Snaith, East Cowick and the River Aire lower catchment area. An overview of the national lessons learned from the widescale flooding in 2007 and a brief commentary upon the East Coast Tidal surge of 2013.
4. The report concludes with a look forward and recommendations for Members to note the activity undertaken by the Service, and the importance of the long-term development and retention of training and knowledge relating to the prevention, protection and responding to flooding incidents.
RECOMMENDATIONS
5. That Members note the volume of flooding incidents attended by the Service from quarter 3, 2019/20 until 29th February 2020.
6. That Members note that investment in local facilities for the development and retention of flood related knowledge can support Service Delivery for HFRS in future prevention, protection and response operations relating to flooding.
REPORT DETAIL
7. Members will be aware that Humberside Fire and Rescue Service regularly attends emergency calls relating to reports of flooding.
8. These calls are categorised under Special Service incidents and reside outside of the main statutory duties of the Fire and Rescue Services Act 2004. But reside within the powers to respond under part 2, section 11 of the act ‘to other eventualities’ described in summary as an event or situation likely to cause death, injury, illness or harm to the environment.
9. The Service also has an implied duty to assess, plan and advise for flooding emergencies and related incidents under the Civil Contingencies Act 2004, Part 1, Section 2, (with the meaning of an emergency defined in section 1).
116 10. It should be noted that the implied duty is regarded as a multi-agency co-operation approach, generally discharged through the Services involvement in the Humber Local Resilience Forum (Humber LRF).
11. The Humber LRF is not a statutory body and does not have powers to direct its members; however, it is a statutory process as defined within the Civil Contingencies Act 2004.
12. HFRS is a Category 1 responder (core responder) within the Humber LRF membership.
13. The Humber LRF is required to produce and review a Community Risk Register (CRR). The current version is the 2018-2021 edition and is publicly available to download from its website.
14. The Humber CRR identifies both Threats and Hazards as categories of risk. The following table is extracted from the Humber CCR 2018-21 and identifies the assessment of risk presented by natural hazards such as flooding.
117 15. There are typically 3 types of flooding:
o Coastal - caused by extreme sea levels, which arise as combinations of four main factors: waves, astronomical tides, storm surges and relative mean sea level.
o Fluvial - when excessive rainfall over an extended period of time causes a river to exceed its capacity. It can also be caused by heavy snow melt and ice jams.
o Surface Water - when the volume of rainwater falling does not drain away through the existing drainage systems, or soak into the ground, but lies on or flows over the ground instead (sometimes referred to as pluvial flooding).
16. The Humberside region has all three types of flooding within the high and very high- risk categories.
17. In the Humber CCR table, risk H19 Coastal (tidal) flooding alongside risk H21 Fluvial (river) flooding are present in the very high-risk category.
18. Also, that risk H22 Surface Water (rain/) flooding is categorised as a high-risk entry.
19. The very high, and high-risk categories are defined below:
20. The chart below identifies the number of flooding incidents by month that the Service has attended from October 2019 until February 2020.
Flooding Incident Totals 350
300
250
200
150
100
50
0 Oct-19 Nov-19 Dec-19 Jan-20 Feb-20 Grand Total
21. It can be seen from in the above chart that the region suffered from a significant volume of flooding incidents particularly in November 2019.
118 22. In November, significant volumes of incidents grew from heavy rainfall across the region, saturating ground and leading to surface water flooding from drainage systems and natural springs.
23. Kingston Upon Hull, East Riding, North and North East Lincolnshire were all affected simultaneously, with conditions developing very close to becoming a declared major incident by HFRS, due to the volume of concurrent incidents.
24. In the same month, a major incident was declared by South Yorkshire Fire and Rescue Service around the village of Fishlake. HFRS provided National Resilience support through the contribution of High-Volume Pumps (HVP’s) to SYFRS to help bring the incident under control, and the deployment of Tactical Advisors Specialists to support the response.
25. In February 2020 Storms Ciara and Dennis fell on already saturated ground, predominantly in the North and West Yorkshire localities bordering the Humber region.
26. The subsequent swelling of rivers was followed by downstream fluvial flooding in the Humberside region. The resulting 42 separate incidents culminated in the declaration of a major incident for the East Riding localities of Snaith, East Cowick and the surrounding Lower Aire catchment area.
27. The image below was captured by HFRS drone operators and shows the Lower Aire catchment area near to Snaith looking eastwards to Drax Power Station, where an estimate 15 million cubic metres of water over topped the riverbanks, affecting local communities and infrastructure.
119 28. HFRS called upon National Resilience assets and multi-agency support to assist in the response phase of the incident. The National Resilience capability supported HFRS’s HVP resources to a total of 5 pumps. At the time of writing this report (3rd March 2020) this support is still ongoing.
29. It is also worth noting that during flooding incidents, the Service remains providing a capability and responds all business as usual incidents (BAU - Road Traffic Collisions, Primary and Secondary fires, Emergency Medical Responses etc) within the response standards set by Humberside Fire Authority.
No BAU of Incidents Grand Month/Year 10/19 11/19 12/19 01/20 02/20 Total Totals 1000 1116 969 928 898 4911
30. At times of storm related flooding activity volumes of BAU can generally increase by up to 25%, fluctuating with time of day, daylight conditions and the exposure of the general public.
31. In February 2020 and during Storms Ciara, Dennis and Jorge, the Service also responded to 898 incidents that were not classified as flooding and are considered business as usual. This was in addition to the major incident at Snaith and East Cowick, and the 42 related flooding incidents.
32. In order to provide for BAU incidents and reduce fatigue, staff were rotated in and out of major incident from the base of operations located at Snaith and East Cowick, and command centre operations located at Clough Road Police Station in Hull.
33. To support staff, recall to duty systems were deployed, permanent Operational (Bronze) command teams were established and 39 multi-agency Tactical Co- ordination Groups (TCG) were attended on a 24-hour basis by senior officers.
34. 19 multi-agency Strategic Co-ordination Groups (SCG) were held at six hourly intervals during periods of peak response activity.
35. The above figures are accurate at the time of writing this report. HFRS is still resourcing the above and is also considering an application into the Government Bellwin scheme of emergency financial assistance to local authorities.
120 Learning the Lessons from Flooding in 2007
36. Following the major and widescale flooding in 2007, of where the communities of Humberside and specifically Kingston Upon Hull were particularly badly affected. Sir Michael Pitt was charged with delivering a report titled “Learning lessons from the 2007 floods”.
37. In his report delivered in June 2008, the ‘Pitt Review’ identified 92 recommendations within 17 key recommendations. The key highlights for Fire & Rescue Services in his recommendations are as follows:
“… the risk of flooding continues to escalate; making the events that shattered so many communities last year (2007) an ever-increasing threat”
Adopting a long-term approach to flood risk management, with priority given to adaptation and mitigation Establishing a national capability for flood rescue Providing better information, awareness and advice Preparation of emergency flood kits by the public A wider brief for the Environment Agency, taking a national overview of all flood risk A ‘step change in the quality of flood warnings’ with the Environment Agency and the Met Office working to improve forecasting, modelling and warning systems
38. A number of responses, progress reports and legislative changes have been made since the Pitt Review:
The Government response to the Pitt Review was published in December 2008 accepting all of the Report’s recommendations and undertaking to implement them. In 2008, the Government published Future Water, The Government’s water strategy for England. The Flood and Water Management Act was introduced in April 2010. The National Flood Emergency Framework was published in July 2010. The National Flood and Coastal Erosion Risk Management Strategy for England was published in July 2011. The first UK Climate Change Risk Assessment was published in January 2012. A final progress report was published on 27 January 2012
39. No further statute responsibility was provided to the Fire and Rescue Service although some funding was provided by DEFRA to establish tactical flood response capabilities.
40. In 2013, South Ferriby, riverside areas of North Lincolnshire, parts of Kingston Upon Hull, Immingham, Hessle and low-lying East Riding coastal towns were subject to a 5.4 to 5.2 metre east coast tidal surge following storms combining in the North Sea.
41. A coastal flooding event that narrowly missed inundating the towns of Grimsby and Cleethorpes and requiring large scale evacuation of vulnerable communities.
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42. The Humber LRF CCR identified hazards related to the three types of flooding, coastal, fluvial and surface water flooding as very high and high risks. Once estimated to be 50-year events, have happened with increased numbers and frequency within the previous 10-15 years. Current climate predictions suggest that this experience is unlikely to decrease.
43. Such events have significant emotional and economic impact upon communities that agencies must consider in their planning, training and delivery provision.
44. In response to the increase in frequency and severity of flooding incidents, HFRS is working in partnership with the University of Hull leading a development project to deliver the UK’s first National Flood Resilience Centre. An artist’s impression can be seen the graphic below.
Conclusion
45. The apparent increase in both frequency and scale of flooding incidents highlights the need for a well-funded, trained and equipped Fire and Rescue Service serving the communities of Humberside.
122 46. It is important that opportunities for HFRS responders, local authorities and partner agencies to learn about the hydraulic effects of large bodies of water moving through our landscape are taken.
47. The development and retention of important strategic, tactical and technical knowledge relating to flooding will assist future fire service and public service delivery. Benefitting future generations of Humberside communities as we seek to prevent, protect and respond against large scale climate related incidents.
48. The view, adopted by HFRS, is in keeping with the Pitt Review recommendation:
“Adopting a long-term approach to flood risk management, with priority given to adaptation and mitigation.”
STRATEGIC PLAN COMPATIBILITY
49. The work reported here supports the workstreams of Responding Effectively and Making our Community Safer.
FINANCIAL/RESOURCES/VALUE FOR MONEY IMPLICATIONS
50. None arising directly
LEGAL IMPLICATIONS
51. This report identifies how the Service has met its obligations and used its powers under the Civil Contingencies Act 2004 and the Fire and Rescue Services Act 2004.
EQUALITY IMPACT ASSESSMENT/HR IMPLICATIONS
52. None arising directly
CORPORATE RISK MANAGEMENT IMPLICATIONS
53. None arising directly
HEALTH AND SAFETY IMPLICATIONS
54. None arising directly
COMMUNICATION ACTIONS ARISING
55. None arising directly
DETAILS OF CONSULTATION AND/OR COLLABORATION
56. Not applicable
BACKGROUND PAPERS AVAILABLE FOR ACCESS
57. Learning lessons from the 2007 floods, Sir Michael Pitt ,2008 Fire and Rescue Services Act 2004 Civil Contingencies Act 2004
RECOMMENDATIONS RESTATED
58. That Members note the volume of flooding incidents attended by the Service from quarter 3, 2019/20 until 29th February 2020.
123 59. That Members note that investment in local facilities for the development and retention of flood related knowledge can support Service Delivery for HFRS in future prevention, protection and response operations relating to flooding.
PAUL McCOURT
Officer Contact: Paul McCourt 07983 440245 Director of Service Delivery
Humberside Fire & Rescue Service Summergroves Way Kingston upon Hull
PMc/MS 5 March 2020
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