ESSEX FIRE AUTHORITY Essex County Fire & Rescue Service
Meeting of Essex Fire Authority
Service Wednesday, 11 Headquarters, 10:00 February 2015 Kelvedon Park,
Quorum: At least one third of the total membership (9), to include a representative from each of the three constituent Councils
Membership Councillor Anthony Hedley Chairman Councillor Barry Aspinell Councillor Alan Bayley Councillor Graham Butland Councillor Jenny Chandler Councillor Michael Danvers Councillor Andrew Erskine Councillor Carlo Guglielmi Councillor Ivan Henderson Councillor Ann Holland Vice-Chairman Councillor Paul Honeywood Councillor Michael Hoy Councillor John Jowers Councillor Tom Kelly Councillor Catherine Kent Councillor John Knapman Councillor Maggie McEwen Councillor James Moyies Councillor Ann Naylor Councillor Lady Patricia Newton Councillor Pierre Oxley Councillor Colin Seagers Councillor Anne Turrell Councillor Peter Wexham Councillor Andy Wood
For information about the meeting please ask for: Judith Dignum (Committee Services Manager, Essex County Council) 03330134579 / [email protected]
Page 1 of 132
Page 2 of 132 Essex Fire Authority and Committees Information
Meetings of the Authority and its committees are open to the press and public, although they can be excluded if confidential information is likely to be considered.
Meetings are held at Essex County Fire and Rescue Service Headquarters, Kelvedon Park, Rivenhall, Witham, CM8 3HB. A map can be found on the Essex County Fire and Rescue Service’s website (www.essex-fire.gov.uk); from the Home Page, click on ‘Contact Us’.
There is ramped access to the building for wheelchair users and people with mobility disabilities.
Please report to Reception when you arrive. The meeting rooms are located on the ground and first floors of the building and are accessible by lift where required.
If you have a need for documents in an alternative format, in alternative languages or in easy read please contact the Committee Services Manager (contact details on the front page) before the meeting takes place. If you have specific access requirements please inform the Committee Services Manager before the meeting takes place.
The agenda is also available on the Essex County Fire and Rescue Service website, (www.essex-fire.gov.uk). From the Home Page, click on ‘Essex Fire Authority’, then scroll down the page and select the relevant documents.
Page 3 of 132 Part 1 (During consideration of these items the meeting is likely to be open to the press and public)
Pages
1 Apologies for Absence
2 Declarations of Interest To note any declarations of interest to be made by Members in accordance with the Members' Code of Conduct
3 Minutes - Essex Fire Authority 7 - 16 To approve as a correct record the minutes of the Authority's meeting held on 3 December 2014.
4 Minutes - Policy and Strategy Committee 17 - 24 To receive the minutes of the meeting held on 14 January 2015.
5 Minutes - Audit, Governance and Review Committee 25 - 32 To receive the minutes of the meeting held on 21 January 2015.
6 Chairman's Announcements 33 - 34
7 Industrial Action Update To receive a presentation by officers.
8 Budget for 2015-16 35 - 68 To receive a report by the Finance Director and Treasurer (EFA/014/15).
9 Treasury Management Strategy 69 - 86 To receive a report by the Finance Director and Treasurer (EFA/015/15).
10 Pay Policy Statement 87 - 98 To receive a report by the Director of Human Resources and Organisational Development (EFA/016/15).
11 Charging 99 - 106 To receive a report by the Finance Director and Treasurer (EFA/017/15).
Page 4 of 132 12 Corporate Risk Register 107 - 118 To receive a report by the Finance Director and Treasurer (EFA/018/15).
13 Update – Volunteering Scheme within ECFRS To receive a presentation by the Volunteer Scheme Development Manager (on behalf of Assistant Chief Fire Officer, Safer and Resilient Communities).
14 ECFRS Workforce Report 2014 119 - 122 To receive a report by the Director of Human Resources and Organisational Development (EFA/019/15).
15 'Sprinkler’ Scheme 2014 Update 123 - 128 To receive a report by the Assistant Chief Fire Officer, Safer and Resilient Communities (EFA/020/15).
16 New Control Facility – Go Live 129 - 132 To receive a report by the Assistant Chief Fire Officer, Safer and Resilient Communities (EFA/021/15).
17 Date of Next Meeting To note that the next meeting of the Authority will take place on Wednesday 15 April 2015 at 10.00am.
18 Urgent Business To consider any matter which in the opinion of the Chairman should be considered in public by reason of special circumstances (to be specified) as a matter of urgency.
Exempt Items (During consideration of these items the meeting is not likely to be open to the press and public)
To consider whether the press and public should be excluded from the meeting during consideration of an agenda item on the grounds that it involves the likely disclosure of exempt information as specified in Part I of Schedule 12A of the Local Government Act 1972 or it being confidential for the purposes of Section 100A(2) of that Act.
In each case, Members are asked to decide whether, in all the circumstances, the public interest in maintaining the exemption (and discussing the matter in private) outweighs the public interest in disclosing the information.
Page 5 of 132 19 Fitness Standards & Pensions - Response to FBU
Information relating to any consultations or negotiations, or contemplated consultations or negotiations in connection with any labour relations matters arising between the Authority or a Minister...
20 Essex Fire Authority – Cultural Review
Information relating to any individual; Information relating to any consultations or negotiations, or contemplated consultations or negotiations in connection with any labour relations matters arising between the Authority or a Minister...
21 Urgent Exempt Business To consider in private any other matter which in the opinion of the Chairman should be considered by reason of special circumstances (to be specified) as a matter of urgency.
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ESSEX FIRE AUTHORITY Essex County Fire & Rescue Service
ESSEX FIRE AUTHORITY MINUTES OF THE MEETING OF THE AUTHORITY HELD ON WEDNESDAY 3 DECEMBER 2014 AT 10:00 HOURS IN FF37/8 AT SERVICE HEADQUARTERS, KELVEDON PARK
Present:
Councillor B Aspinell Councillor A Bayley Councillor G Butland until 11.20 Councillor J Chandler Councillor M Danvers Councillor A Erskine Councillor C Guglielmi Councillor A M Hedley (Chairman) Councillor I Henderson Councillor A Holland (Vice Chairman ) Councillor P Honeywood Councillor T Kelly Councillor C Kent Councillor J Knapman Councillor M McEwen Councillor J Moyies Councillor C Seagers Councillor A Turrell Councillor A Wood
The following Officers were present in support throughout the meeting:
Deputy Chief Fire Officer, Adam Eckley Assistant Chief Fire Officer, Safer & Resilient Communities, Paul Hill Assistant Chief Fire Officer, Operations, Dave Bill Finance Director & Treasurer, Mike Clayton Director, Human Resources and Organisational Development, Lindsey Stafford-Scott Clerk and Monitoring Officer, Philip Thomson
Minute Secretary, Linda Boar
136. APOLOGIES FOR ABSENCE AND SUBSTITUTION NOTICES
Apologies were received from Councillors M Hoy, J Jowers, A Naylor, P Newton, P Oxley, P Wexham. Apologies were also received from the Chief Fire Officer and the Service Solicitor.
137. DECLARATIONS OF INTEREST
The Chairman advised that as well as an opportunity at the start of the meeting to declare any interests, Members are welcome to declare any interests as and when appropriate.
138. MINUTES
The Authority received the minutes of the meeting held on 3 September 2014.
Page 7 of 132 EFA Minutes 3 December 2014 Page 2 of 10
Resolution:
It was resolved that the minutes were confirmed and signed by the Chairman.
139. POLICY & STRATEGY COMMITTEE – MINUTES OF THE MEETING HELD ON 30 SEPTEMBER 2014
The Authority received the minutes of the meeting held on 30 September 2014.
Resolution:
It was resolved that the minutes were received by the Authority.
140. AUDIT, GOVERNANCE & REVIEW COMMITTEE – MINUTES OF THE MEETING HELD ON 8 OCTOBER 2014
The Authority received the minutes of the meeting held on 8 October 2014.
It was requested by Councillors Kent, Henderson and Danvers that an addition be made to the minutes within item minute number 117 to highlight the Acting Chief Fire Officer’s (A/CFO) previous connection to Kent Fire & Rescue Service in support of the Authority providing openness in relation to the independent advise received in relation to the matter concerning Pension Injury Payments. Councillor Knapman felt that there was no point in carrying out this change but it was agreed by the Chairman that the change be made with the comment that he hoped that Councillor Danvers was not suggesting any impropriety on behalf of the A/CFO.
Councillor Kent commented that following the meeting of this committee, she was expecting the results of the enquiry into the pensions issue be included as an agenda item for the full Authority to explore and not merely for the full Authority to endorse as a minute within this document currently under scrutiny. Councillor Knapman proposed that the meeting endorse the actions agreed by the Audit, Governance & Review committee as seen within the minutes currently under examination, this was seconded by Councillor Guglielmi.
Resolution:
It was resolved that the meeting endorsed the actions agreed by the Audit, Governance and Review Committee; and the minutes were received by the Authority.
141. POLICY & STRATEGY COMMITTEE – MINUTES OF THE MEETING HELD ON 5 NOVEMBER 2014
The Authority received the minutes of the meeting held on 5 November 2014.
Resolution:
It was resolved that the minutes were received by the Authority.
142. CHAIRMAN’S ANNOUNCEMENTS
The Chairman advised Members of recently attended events and incidents. These included;
1. FireBreak Pass Out Parades at: Clacton, 12 September Southend, 31 October Southend, 12 October Ingatestone Mother & Child, Southend, 24 October 21 November Page 8 of 132 EFA Minutes 3 December 2014 Page 3 of 10
2. Firebreak Squads at: Corringham, 24 October
3. Attended Open Days at: Great Dunmow, 30 August Dovercourt, 13 September Manningtree, 31 August Shoeburyness, 13 September Southend, 31 August Hawkwell, 3 October Grays, 7 September Dovercourt, 10 October
4. Attended sites during strike periods: Control Room, Hutton on 1 & 2 November Basildon fire station on 1 & 2 November Southend, Canvey Island, Grays, Brentwood, Chelmsford fire stations on 2 November
5. Meeting with MPs: John Baron, MP, Westminster 4 September Essex MPs, Westminster, 15 October Bernard Jenkin, MP at SHQ 13 November
6. SMB Business Day, SHQ, 9 October
7. Southend Fire Station 50th Anniversary, 11 October
8. Cold Cut Cobra Event, Wethersfield Training Centre, 20 October
9. BASFA Conference, SHQ, 23 October
10. Young Firefighters’ Pass Out Parade, Southend, 24 October
11. Ford Partnership Day, Chelmsford Fire Station, 27 October
12. Members Workshop, SHQ, 3 November
13. Kids Inspire, to present the cheque in the sum of £1,500 following the 2014 Chairman’s Charity Dinner, 4 November
14. Transforming Blue Light Services conference, London, 6 November
15. Westminster Briefing - Next Steps for Fire Service Reform, 12 November
16. Attended crews at Dunmow fire station, 13 November
17. Peter Holland, Chief Fire & Rescue Advisor at DCLG, 18 November
18. Children & Young People Now Awards 2014, London, 20 November
19. Chairman’s Charity Dinner will take place in 2015 on 20 March at Stockbrook Manor, Billericay
In addition the Chairman highlighted to Members the date of the next Charity Dinner as seen within this item at 19 above within the Chairman’s announcements and encouraged all Members to support this worthwhile event.
Page 9 of 132 EFA Minutes 3 December 2014 Page 4 of 10
143. STATEMENT OF ASSURANCE
The FD&T introduced report EFA/099/14 which he said was self-explanatory with a few minor changes from the document produced last year and invited questions from Members present.
Councillor Danvers questioned the level of consultation undertaken with community groups with the A/CFO stating that consultation is a well-known challenge for the Authority to overcome to develop and decide upon the Integrated Risk Management plan at all locations by June 2015. The decisions in relation to the aerial ladder platforms (ALP) are extant and the replacement of rescue tenders with a different type of capability without changing the fire fighting provision is hoped to be approved. A number of complaints against plans have been considered fully and any further changes following the Authority’s decision will be considered by consultation with all stakeholders. Councillor Knapman was content with the financial assurance within the report provided and which had been considered by the Audit Governance and Review committee and felt there was a need for the recommendations to be reflected in the Statement of Assurance which the FD&T agreed to include in an amended statement.
Councillor Henderson commented that any changes to service delivery should be within the proper framework and national guidelines and for the sake of good industrial relationships, consultation with the trade unions prior to undertaking any changes should be carried out. The A/CFO confirmed that full liaison is offered with the Fire Brigades Union (FBU) at all stages, indeed by sharing information with the FBU has resulted in the current local dispute with that union which the Authority finds itself today and that it would seem that the information shared was politically sensitive and premature.
Councillor Kent put the point that she felt that the consultations were perhaps just a ‘tick box exercise’ and that the decisions of the Authority were already made. She emphaised that meaningful consultation means listening to all stakeholders and taking on board what they have to say. The Chairman stated that the resulting outcome to the consultation around the ALPs resulted in where they are based today. The A/CFO explained that Service managers are continually working within the negotiation framework which is agreed with the Authority and the FBU and that the plans for the Control staff at Kelvedon Park is being shaped by the consultation process. The A/CFO went on to express the frustration of Service managers particularly sighting the time when an independent arbitrator was engaged over a period of two days and both parties were still unable to reach an agreement saying that sometimes parties must expect that consultation and negotiation will not always end in agreement but if the changes can be demonstrated as being effective, Service managers need to implement.
Resolution:
It was resolved that Members;
1. Reviewed the Statement of Assurance; and 2. Authorised the Chairman to sign the Statement on behalf of the Authority with the changes suggested.
144. MEMBERSHIP OF ESSEX FIRE AUTHORITY
The Clerk introduced report EFA/100/14.
Resolution:
It was resolved that Members noted the paper and appointed Members to committees, sub- committees and external bodies as set out.
Page 10 of 132 EFA Minutes 3 December 2014 Page 5 of 10
145. ATTENDANCE AT CONFERENCES
The Clerk introduced report EFA/101/14 with the Chairman highlighting that should any Member consider there is a conference that would benefit the Authority this should be brought to his notice. The Chairman also highlighted that modest hotels are to be used in order to keep costs as low as possible.
Resolved:
It was resolved that Members;
1. Approved that the Chairman, or his nominated substitute and the Chief Fire Officer, or his nominated substitute attend the LGA Annual Fire Conference;
2. Approve that the Lead Member of the opposition party/ies, or their nominated substitutes attend the LGA Annual Fire Conference;
3. Approve that the Lead Member of the Risk Management Committee attend the ALARM National Education forum for Risk Management Conference 2015; and
4. Approve that authority be delegated to the Chief Fire Officer in consultation with the Chairman of Essex Fire Authority, to approve the attendance by Members at conference, seminar or any other activity, on those occasions where it has not been the subject of a specific report to the Authority or one of its committees.
146. OPERATIONAL INCIDENTS REPORT AND INCIDENTS OF NOTABLE INTEREST
The Assistant Chief Fire Officer (ACFO) Operations introduced report EFA/102/14 highlighting that all detail is contained with the paper provided and offered to take any questions arising.
The Chairman highlighted that following the meeting of the Essex County Council (ECC) he shared with Members the costs as known of the Thoby Lane incident, even now full costs cannot be reported because information from various agencies is unknown. Councillor Aspinell advised Members that he met at Brentwood all bodies involved with the Thoby Lane incident and a document is being prepared to be presented to the local Member of Parliament which should instigate changes to the laws surrounding recycling sites; Councillor Aspinell undertook to keep Members informed of any developments of this work.
The number of false alarm calls attended was raised as a concern with Service managers advising that work is continuous to reduce these numbers with the help of technology. A discussion ensued on the attendance at false alarm calls when life is at risk and hospitals were sighted as being high on the agenda for this work. ACFO, Safer & Resilient Communities (S&RC) stated that work recently undertaken with Southend hospital has seen that establishment’s false alarm calls disappear entirely.
Councillor Moyies raised the matter of flooding incidents which have increased this year and asked if the Service is properly equipped for the increase in this type of incident. ACFO Operations assured Members that the Service was prepared with specialist Personal Protective Equipment and training along with the availability of boats in coastal areas. Also highlighted by the ACFO was the work undertaken with partners, particularly ECC and volunteers who were working in areas known to flood to clear ditches and culverts to enable the excessive water to drain as it should. The A/CFO added that not only is the Service prepared but it is able to draw upon a strong national capability.
Councillor Danvers spoke about the issue of waste being burnt at sites other than registered sites and sighted problems in relation to this riskPage in the 11 carriage of 132 of waste. EFA Minutes 3 December 2014 Page 6 of 10
Councillor Butland spoke about the false alarm call figures and wondered if there was any idea of what resources these calls cost the Authority. The ACFO Operations stated that as seen within the paper false alarms take up 50% of operational costs and again assured Members that work is on-going to reduce these calls and therefore costs. Comment was made that blue light vehicle movements do attract risks themselves and for this reason alone false alarms need to be reduced in addition to the staff deployed to false alarm calls being unable to attend a genuine emergency.
Resolution:
It was resolved that Members noted the content of the paper.
147. LOTTERY FUNDING IN RELATION TO THE ELECTRONIC APP BEING PRODUCED – PRESENTATION
The Assistant Chief Fire Officer Safer & Resilient Communities introduced the Funding, Marketing, Museum and Partnerships Manager who was prepared to present to Members the presentation recorded as EFA/103/14. The presentation covered areas such as: partnership work, stakeholders, schools, volunteers, social media, renovations, history, funding including heritage lottery funding, electronic application, public relations, premises, oral history. The presentation was appreciated by Members present.
Resolution:
It was resolved that Members noted the content of the presentation.
148. ESSEX FIRE & RESCUE SERVICE AND ESSEX COUNTY COUNCIL FLOOD & WATER MANAGEMENT ALLIANCE
The Assistant Chief Fire Officer Safer & Resilient Communities presented his report EFA/104/14 highlighting that the work outlined in the report represents a new relationship with ECC; in the past there has not been a single organisation or Authority who responded to incidents of flooding and this work will fill that need.
Councillor Guglielmi shared the incredible experience he had when he attended a recent exercise and real life simulation and how this broadened his awareness and knowledge of what occurred during this type of incident, experiencing how these emergencies are tackled and how the Emergency Planning officers worked so well. The Chairman echoed these comments highlighting the high level of good practice within the partnership and volunteering working arrangement.
Councillor Seagers talked about the Rochford District Council Flood Forums which include participation with all major agencies but was hampered by the fact that ECC have fairly limited budgets available for enforcement.
Resolution:
It was resolved that Members noted the content of the report and recognised that officers are providing a good service to the communities of Essex.
149. PARISH SAFETY VOLUNTEERS
The Assistant Chief Fire Officer Safer & Resilient Communities presented his report EFA/105/14.
Councillor Guglielmi asked how this project is communicated to Parish Councils because in his experience there is a misunderstanding of roles with the ACFO S&RC responding that there are Page 12 of 132 EFA Minutes 3 December 2014 Page 7 of 10 various community groups to reach and the Service is aware of the communications issues adding that there is some additional funding available for this area of work.
Councillor Aspinell talked about the partnership work underway in the Brentwood area which would be included in this type of project and the ACFO S&RC assured Members that the Service is willing to expand this work to all areas of need in the county.
Councillor Henderson expressed concern for the workloads of Parish Clerks and Councillors and also whether volunteers working on the Authority’s business would be covered for damage, etc. under insurance. The ACFO S&RC advised Members that officers were aware of the heavy workloads of individuals working for Parish Councils and would not want to overburden anyone but wanted Members to consider this project is to identify households at risk in sometimes rural localities and the alternative not to progress with this project would be to put vulnerable households at risk. Much of the work will be carried out by volunteers on behalf of the Authority and would not impact greatly on Parish representatives. All volunteers will undergo full training and be issued with all the necessary equipment. Once the project has been launched monitoring will take place and Service managers will work to alleviate any issues which occur. With regard to insurance cover confirmation that the Authority’s insurance will cover any eventuality of any volunteer working on the Authority’s behalf.
Councillor Danvers considered this work to be very comprehensive but wondered about districts where there were not any Parish Councils; the ACFO S&RC assured Members that all communities in Essex would be afforded the same level of support regardless of them living in rural or urban areas highlighting that urban areas are already well served with staff offering community safety support but that rural areas, which is where this scheme is aimed at serving the most, is harder to reach because of distances to travel and lower numbers of population.
Councillor Knapman acknowledged that this scheme is in its infancy and further feedback will be received as time passes.
Councillor Moyies, stated that it was good to engage with people and particularly with the use of volunteers but felt uneasy that when uniforms are issued his thoughts are with vulnerable people being approached by unscrupulous individuals with the aim of gaining entry to commit crime. In addition he felt uneasy that expenses were being paid to volunteers and wondered as to their motives. The ACFO S&RC assured Members that volunteers undergo checks, reiterating that this work is magnificent and worthwhile.
Councillor Butland left the meeting at this point.
Councillor Guglielmi acknowledged the high level of work which emergency planning offices do within Parishes already and highlighted links that are already forged in these areas. The Chairman suggested that those Members with Parish Councils in their districts provide details of champions in their areas. Furthermore the The ACFO S&RC highlighted the work currently being undertaken by the Essex Resilience Forum with Parish Councils.
Councillor McEwen has had experience of this work and is pleased to see it being expanded and wondered how volunteers are supported with the ACFO S&RC explaining the collaborative arrangements which are planned and how with the successful Fire & Rescue Service brand this work is expected to succeed.
Councillor Kent had various concerns which had already been raised by Member colleagues but particularly spoke about the issue of employed staff carrying out home fire safety visits (HFSV) and would this scheme affect their job security? The ACFO S&RC spoke about the good work currently underway in the Thurrock area and confirmed that the employed HFSV technicians’ employment would not be affected by the introduction of this scheme. Page 13 of 132 EFA Minutes 3 December 2014 Page 8 of 10
Resolution:
It was resolved that Members noted the content of the report.
150. RETAINED DUTY SYSTEM REVIEW - UPDATE
The Director, Human Resources and Organisational Development (D,HR&OD) presented her report EFA/106/14 highlighting some changes to the plans due to the current dispute with the FBU but the overall project is moving forward.
Councillor Guglielmi reiterated disappointment that the FBU continues to claim their negative view point with the D,HR&OD agreeing and adding that the team has increased its strength and an action plan will be drawn up to confirm progress. The main drive will be recruitment of Retained Duty System (RDS) personnel which could be an issue but the D,HR&OD is pleased with the work so far. The Chairman commented that recruitment and retention of RDS staff has always been a difficult area and he has had communication with the Fire Minister in relation to this matter in the past offering the notion that tax incentives could be offered to employers who allow their staff to become involved as a retained fire fighter.
Councillor Danvers raised concerns in relation to issues raised by the FBU within the local dispute which unilaterally changes the RDS role but which is bound by employment law and the need therefore to negotiate. LSS provided some background detail on this matter saying that no decisions had yet been made, a range of different contract options have been explored and meetings have taken place with a number of RDS personnel.
Councillor Knapman highlighted that the FBU’s actions appear to have been criticised at every meeting of the Authority and since Members do not have direct communication with the union Members were seeing a one-sided view point. The Councillor went on to say that he has supported unions in the past but at this time he has a negative image of the FBU as reported by Service managers and wonders how such totally rational behaviour of Service managers attracts such attacks from the FBU and he would welcome the opportunity of hearing their reasoning. The D,HR&OD reiterated the early consultation process that the FBU has been included within and the many meetings which Service managers have invited the FBU to attend but she said she cannot answer for the FBU as to how they act. The Director advised Members of the recent engagement with the Consultation Institute who were invited to look at the way in which Service managers and the FBU interact with their response being that Service managers adopt best practice in their methods of engagement. The Chairman has met with FBU executive and was disappointed to hear on local radio that they said that he had refused to meet with him.
Resolution:
It was resolved that Members noted the content of the report.
151. REPORT TO CONSTITUENT AUTHORITIES
The Clerk presented the Service Solicitor’s report, EFA/107/14. The purpose of the report was to invite Members to determine which items should be included in the report to be prepared for circulation to the constituent authorities.
Page 14 of 132 EFA Minutes 3 December 2014 Page 9 of 10
Resolution:
It was resolved that Members Agreed that the following items comprise the report to the constituent authorities:
1. Operational Incidents Report and Incidents of Notable Interest 2. Essex Fire & Rescue Service and Essex County Council flood & Water Management Alliance 3. Parish Safety Volunteers
152. EXCLUSION OF THE PUBLIC
That the public (including the press) be excluded from the meeting during consideration of minutes 21 and 22 on the grounds that they involved the likely disclosure of exempt information as specified in Part 1 of Schedule 12A of the Local Government Act 1972.
All present agreed of the exclusion of the public at this point but Councillor Turrell questioned why the FBU representatives needed to leave the meeting room. The Clerk explained that they are members of the public and during this part of the meeting members of the public are not permitted to stay and that only Members of the Authority and if they wished their advisors only can be present. Councillor Aspinell further questioned this decision with the Clerk reiterating his point.
153. POLICY & STRATEGY EXTRAORDINARY COMMITTEE – MINUTES OF THE MEETING HELD ON 10 OCTOBER 2014
Councillor Moyies highlighted two corrections to the minutes: replacing the word compliancy with the word complacency and change the sentence in the same paragraph so that it reads ‘With regard to the matter of increasing the number of female fire fighters he feels that this should not be for the sake of gender balance but to employ people with the correct skills’ both items on page four.
The Authority received the minutes of the meeting held on 10 October 2014.
154. ESSEX FIRE AUTHORITY EXTRAORDINARY MEETING – MINUTES OF THE MEETING HELD ON 3 NOVEMBER 2014
Councillor Kent highlighted page seven of the minutes and Councillor Bayley’s emphasis that unions must be consulted with prior to commissioning the investigation [into bullying and harassment allegations], and wondered if unions had so been involved in the terms of reference in this regard? Furthermore the Councillor added that she would not want to see the Service spend a large sum of money if the majority of the workforce would not comply with the questioning of the investigators. The Chairman stated that the terms of reference for this investigation is for the Authority to agree and he encouraged all Members to engage in this matter. Councillor Aspinell reiterated that the terms of reference for this investigation was for the Authority to decide upon.
Resolution:
It was resolved that the minutes of the Essex Fire Authority Extraordinary meeting held on 3 November 2014 were confirmed and signed by the Chairman.
The Chairman asked the Clerk to clarify the current position in relation to commissioning the investigation which he did by advising that three curriculum vitae are received and being considered and a date for Lead Members to meet to consider the shortlist will be arranged. It is hoped that once the investigator is engaged this matter can be moved forward swiftly.
Councillor Danvers wanted further detail on the time scale and approximate costs involved with the Clerk answering that it is hoped that thePage initial 15 stepof 132 in this process will take place before the EFA Minutes 3 December 2014 Page 10 of 10
Christmas break. With regard to costs this is unknown at present and will be dependent upon who is engaged to carry out this work.
155. ANY OTHER PART 1 BUSINESS.
The Chairman was not notified of any other business from Members or Officers.
(Meeting Closed at 11.45 hours)
Signed………….………………………………………………..
Chairman, 11 February 2015
Page 16 of 132
ESSEX FIRE AUTHORITY Essex County Fire & Rescue Service
MINUTES OF A MEETING OF THE ESSEX FIRE AUTHORITY POLICY & STRATEGY COMMITTEE HELD ON WEDNESDAY 14 JANUARY 2015 AT 10:00AM
Present:
Councillor A Hedley Chairman Councillor J Chandler Councillor A Holland Councillor J Jowers Councillor C Kent Councillor A Naylor Councillor Lady P Newton Councillor P Oxley
The following Officers were present in support throughout the meeting:
Adam Eckley Acting Chief Fire Officer Mike Clayton Finance Director and Treasurer Lindsey Stafford-Scott Director of Human Resources and Organisational Development Roy Carter Service Solicitor Dave Bill Assistant Chief Fire Officer - Operations Paul Hill Assistant Chief Fire Officer - Safer & Resilient Communities Shirley Jarlett Deputy Clerk and Monitoring Officer Glenn McGuiness Deputy Finance Director Christine Connor Head of Corporate Communications and Media Linda Boar Secretary to the Committee Judith Dignum Secretary to the Committee
Apologies for absence were received from Councillors J Moyies and A Turrell.
1. Opening Remarks
The Chairman informed the Committee that the new control room had gone live at 8am that morning (one day earlier than scheduled) and was operating effectively, with three appliances having already been deployed successfully.
At the invitation of the Chairman, the Acting Chief Fire Officer updated the Committee on the resilience arrangements during the industrial action planned for
Page 17 of 132 Minutes: Policy & Strategy Committee 14 January 2015 Page 2 of 7
the next three days. The Chairman advised that he would be liaising closely with the Acting Chief Fire Officer and the Assistant Chief Fire Officers and would keep Members updated.
2. Declarations of Interest
The Chairman reminded Members that they should declare any interests at this point or during consideration of the appropriate agenda item.
3. Minutes
The minutes of the meeting held on 5 November 2014 were agreed as a correct record and signed by the Chairman, subject to the addition of the following sentence at the end of paragraph 5 of minute 61 (Acceptance of Partial Performance):
“She added that, although no progress had been made, that did not mean the Authority should stop working and liaising with the FBU.”
4. Budget Review – November 2014
The Committee considered report EFA/001/15 by the Finance Director and Treasurer which reported on the expenditure against budget as at 30 November 2014 and identified major variances to the budget for the year.
In introducing the report, the Finance Director and Treasurer highlighted the continuing underspend on the revenue budget.
The Chairman referred to his disappointment that funds allocated for strategic crewing remained underspent as a result of industrial action short of a strike. He also expressed his support for a move to mixed crewing as a means of retaining fire stations and avoiding the need for compulsory redundancy.
Resolved:
1. That the review of income and expenditure against the budget be noted.
2. That the actual position with regard to capital expenditure be noted.
3. That the forecast expenditure for 2014/15 be noted, with a review of the treatment of the underspending to be brought back to the next meeting of the Committee on 18 March 2015.
5. Draft Budget for 2015-16
The Committee considered report EFA/002/15 by the Finance Director and Treasurer which provided options for the revenue and capital budgets for the Authority for 2015/16, together with information on the budget and business planning process. Initial information on the formula grant settlement share of
Page 18 of 132 Minutes: Policy & Strategy Committee 14 January 2015 Page 3 of 7 national non-domestic rates, council tax base and collection account for 2015/16 were also provided.
Members noted that the budget had been prepared showing figures for a Council Tax freeze as this was the option chosen by the Authority in recent years. The Committee was asked to determine whether an option of an increase in Council Tax should be included in the budget submitted to the full Authority.
The Committee gave detailed consideration to this issue. Members acknowledged that public support for the emergency services in general may help to make a Council Tax increase acceptable, but did not consider it necessary. They noted that an increase of 1% would generate additional income equal to the level of the Government’s freeze grant. The Committee considered the potential effects of accepting the grant for a fifth year, noting that, with the exception of the first year, the grants were now included in the Authority’s baseline government funding. Members were of the view that the grant should be accepted, and that, therefore, no option of an increase in Council Tax should be included in the budget submitted to the full Authority. In reaching this view, account was taken of the growing tax base and the improvement in tax collection rates. Prudent decision-making and planning over the last ten years was also highlighted.
The following points arose during consideration of the report:
Some concern was expressed regarding the budgetary pressures expected in future years, regardless of the outcome of the General Election in May. The position was likely to become clearer later on in the year.
The Finance Director and Treasurer advised that the Support Staff referred to in the table on page 8 of the report were those staff covered by Green Book, rather than Grey Book, terms and conditions of employment.
The Director for HR and Organisational Development explained that six posts had been removed from HR and training as the functions they delivered no longer met the needs of the service. She gave an assurance that consultants would not be employed to deliver similar areas of work at increased cost.
The Finance Director and Treasurer stated that, in his view, there would be no further issues causing unexpected budget pressures similar to those arising from the treatment of pension injury payments within the Firefighters Pension Scheme. Changes to pensions administration were due to come into effect during the year, and resources had been planned to manage these. The Chief Fire Officer commented that a great deal of work had been undertaken to understand the pension injury payments issue (which had affected 18 Fire Authorities) and the Authority was now in a strong position to move forward. Other potential areas of concern had also been investigated and, to the best of his knowledge, there were no further issues.
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The Chairman commented that, in order to guarantee quality, the Authority’s resilience arrangements were based on fully-trained and equipped Essex firefighters rather than external contractors.
Resolved:
1. That the budget be agreed for submission to the full Fire Authority as set out below:
2015/16 Council Tax 2014/15 Freeze Budget Budget Net Expenditure £73,271k £71,908k Decrease from 2014/15 -£1,363k
Precept £38,954k £39,678k
Band D Council Tax £66.42 £66.42 Increase from 2014/15 0.00%
1. A net expenditure budget of £71.908m (with a Council Tax Freeze); 2. A precept of £39.678m (with a Council Tax Freeze); 3. A Band D council tax of £66.42 (the same since 2010/11); 4. The bands of Council Tax are shown in the following table.
2015/16 No Council Tax Band Increase A £44.28 B £51.66 C £59.04 D £66.42 E £81.18 F £95.94 G £110.70 H £132.84
5. Capital expenditure budget of £8.175m in 2015/16.
2. That no option of an increase in Council Tax should be included in the budget.
6. Insurance Pooling – Counsel’s Advice
The Committee considered report EFA/003/15 by the Deputy Clerk and Solicitor to the Essex Fire Authority which recalled that, at its meeting on 15 January 2014, the Committee had given agreement in principle to form, in conjunction with other Fire and Rescue Authorities, an entity to act as a pool for insurance purposes. It
Page 20 of 132 Minutes: Policy & Strategy Committee 14 January 2015 Page 5 of 7 had also given approval for Essex Fire Authority to become a full member of the company, for the provision of the necessary financial guarantees and for the commitment to transfer insurances to the pooling entity from 1 November 2014 or thereafter, subject to final arrangements being in place.
The Committee’s resolutions had been subject to a subsequent satisfactory review of the report, to be undertaken by the Clerk, and in particular, a diligence examination of the legal advice set out therein. The report detailed the outcome of the review, in particular relating to a Counsel’s Opinion on the question of whether the Authority had the required vires to engage in the pooling scheme. Counsel had concluded that it was more likely than not that Section 5A of the Fire and Rescue Services Act 2004 did confer the necessary vires.
The Finance Director and Treasurer gave an update on the current situation with regard to the insurance pool, which was that a Pool Manager had now been appointed and was verifying that the Pool was viable. Should Essex Fire Authority agree to confirm its participation, this would be with effect from 1 November 2015.
In response to a question, the Finance Director and Treasurer provided the following information in response to Members’ questions:
In the absence of the Chief Fire Officer, an alternative nominee (such as the Deputy Chief Fire Officer) would be empowered to represent the Authority’s interests at any formal meetings of the pooling entity and to vote on its behalf.
The pool currently comprised nine Fire and Rescue Authorities and expressions of interest had also been received from other Authorities.
Resolved:
1. That Counsel’s Opinion be noted.
2. That it be agreed that Counsel’s Opinion provides satisfactory assurance in relation to the matter of vires and entering into insurance pooling.
3. That the matters resolved by the Committee at its meeting on 15 January 2014, as set out below, be actioned:
1. Agreed to the Authority participating in establishing a Fire and Rescue Authorities insurance Pool; and agreed that the Authority becomes a full member of the company and authorises the Finance Director and Treasurer, and the Clerk, to take all necessary steps to achieve this;
2. Agreed that the Authority utilises the pooling arrangement for its corporate property, liability, motor and other miscellaneous insurance requirements for a minimum period of three years through the pooling entity with effect from 1 November 2014 or thereafter subject to final arrangements being in place;
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3. Agreed to participate in a financial guarantee for supplementary premiums should claims against the pool exceed the funding available and authorise the Finance Director and Treasurer to take all necessary steps to achieve this;
4. Agreed that Officers may serve as Directors of the pooling entity and that the Chief Fire Officer or their nominee be empowered to represent the Authority’s interests at any formal meetings of the pooling entity and to vote on its behalf; and
5. Agreed to waive the Authority’s existing procurement rules that would require competing bids for the provision of insurance services to allow for the provision of cover for losses through the pooling company.
7. MIS Replacement Programme
The Committee considered report EFA/004/15 by the Finance Director and Treasurer which sought approval for an increase in the authorised project costs for the investment to bring in systems to replace the remaining modules of the Management Information System (MIS) from £1,149k to £1,37k.
Resolved:
That the increase in the authorised costs of a programme to procure and implement replacement systems for the last four remaining Management Information System modules be agreed, from a cost of £1,149k to £1,375k.
8. Exclusion of the Press and Public
Resolved:
That the public (including the press) be excluded from the meeting during consideration of the following item of business on the grounds that it involved the likely disclosure of exempt information as specified in paragraphs 1 and 2 of Part 1 of Schedule 12A to the Local Government Act 1972.
9. Minutes (Exempt under paragraphs 1 and 2 - information relating to any individual or which is likely to reveal the identity of any individual)
The minutes of the extraordinary meeting of the Committee held on 10 October 2014 were agreed as a correct record and signed by the Chairman.
10. Closing Remarks: Essex Fire Authority – Future Committee Support Arrangements
The Committee discussed the decision to enter into a service level agreement with Essex County Council for the provision of committee services to Essex Fire Authority and its committees. It was agreed that information should be circulated
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to all members of the Authority to clarify respectively which services would continue to be provided at Service Headquarters and which would now be provided by the County Council.
The meeting closed at 11.05am.
Chairman 18 March 2015
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Page 24 of 132
ESSEX FIRE AUTHORITY Essex County Fire & Rescue Service
MINUTES OF A MEETING OF THE ESSEX FIRE AUTHORITY AUDIT, GOVERNANCE & REVIEW COMMITTEE HELD ON WEDNESDAY 21 January 2015 AT 2.00PM
Present:
Councillor J Knapman Chairman Councillor B Aspinell Councillor A Bayley Councillor G Butland Councillor M Danvers Councillor A Erskine Councillor C Guglielmi Councillor I Henderson Councillor P Honeywood Councillor M McEwen Councillor C Seagers Councillor P Wexham
The following Officers were present in support throughout the meeting:
Adam Eckley Acting Chief Fire Officer Julian Ashley Senior Divisional Officer (attending on behalf of Paul Hill, Assistant Chief Fire Officer, Safer Communities) Dave Bill Assistant Chief Fire Officer - Operations Roy Carter Service Solicitor Mike Clayton Finance Director and Treasurer Lindsey Stafford-Scott Director of Human Resources and Organisational Development Shirley Jarlett Deputy Clerk and Monitoring Officer Daniel Harris Baker Tilly (Internal Auditors) Martina Lee Ernst and Young (External Auditors) Judith Dignum Secretary to the Committee
Apologies for absence were received from Councillors M Hoy, T Kelly and A Wood.
1. Presentation to George Crowe
The Chairman of the Committee, Councillor Knapman, welcomed Mr George Crowe to the meeting and, on behalf of the Essex Fire Authority, made a presentation to him in grateful recognition of the administrative support he provided over many years to
Page 25 of 132 Audit, Governance & Review Committee 21 January 2015 Page 2 of 8
meetings of EFA (Trading) Ltd. Mr Crowe expressed his thanks and commented on how much he had enjoyed his association with the Authority.
2. Declarations of Interest
The Chairman reminded Members that they should declare any interests at this point or during consideration of the appropriate agenda item.
3. Minutes
The minutes of the meeting held on 8 October 2014 were agreed as a correct record and signed by the Chairman.
Arising from consideration of minute 119 (Preliminary enquiry into the treatment of pension injury payments within the Fire Fighters pension scheme), the Acting Chief Fire Officer advised that a meeting of the eighteen authorities affected had taken place in December 2014 to share understanding of how the situation had occurred, address issues of common concern and identify matters to be raised with the Department for Communities and Local Government (DCLG). The Finance Director and Treasurer had now met the DCLG to discuss proposals for recovery of the outstanding liabilities from Authorities. A thorough system of checks and balances had been put in place and Officers were confident that similar issues could not occur in future.
4. Internal Audit Progress Report
The Committee considered report EFA/005/15 by the Finance Director and Treasurer which provided an update by Baker Tilly on progress against the 2014/15 internal audit plan.
Members were pleased to note that, to date, the Auditors had identified no issues which would have a negative impact on their annual report and no common weaknesses. A report concerning the Audit Plan for 2015/16 would be submitted to the next meeting of the Committee on 22 April.
The report was noted.
5. Audit Recommendation Report on Progress Against Action Plans
The Committee considered report EFA/006/15 by the Finance Director and Treasurer which provided an update on progress against the action plans developed by the Service in response to Audit reports. Items reported as completed in the previous quarter’s report had been deleted.
In presenting the report, the Finance Director and Treasurer advised that progress was ‘on track’ for all actions, except that relating to automation of the process for network user formal agreement of the ICT Acceptable Use Policy. Implementation of the new Control Room project had taken priority, meaning that, although the mechanics of the automated system were now in place, a lack of resources had led to a delay in delivery.
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Resolved:
That the progress made against the action plans developed by the Service in response to audit reports be noted.
6. Audit Reports
The Committee considered report EFA/007/15 by the Finance Director and Treasurer which provided internal audit reports on Fleet Management, Performance Management and Fuel Cards for review. Members noted that Fleet Management had received an Audit Conclusion of ‘Substantial Assurance’, and that the Conclusion for both Performance Management and Fuel Cards had been ‘Reasonable Assurance’.
The Committee was particularly pleased to note the Conclusion of ‘Substantial Assurance’ (with no recommended actions) for the audit of Fleet Management and wished to record their thanks and congratulations to all involved.
With regard to the audit of Performance Management, the Committee was satisfied with the recommended actions proposed by Officers to address the audit recommendations, noting that any recommendations which were not fully completed would be included in the regular report on progress against action plans. In response to a question regarding appliance availability, the Acting Chief Fire Officer commented that the Service was aware of the impact of the numbers of retained fire fighters on performance against this indicator, and was committed to improve their recruitment and retention.
With regard to the audit of Fuel Cards, the Committee sought action on the recommended development of a policy and procedures for users of fuel cards and noted that this would be reported to the next meeting as part of the regular report on progress against action plans. In response to a question concerning the sample size for the audit, Mr Harris advised that it had involved analysing claims relating to 20 fuel cards over a period of 4 months.
Resolved:
That the internal audit reports on Fleet Management, Performance Management and Fuel Cards be noted.
7. Organisational Performance Report
The Committee considered report FP/008/15 by the Director of Human Resources and Organisational Development which provided an overview of the Service’s performance for the period November 2013 – October 2014.
In introducing the report, the Director of Human Resources and Organisational Development advised the Committee to disregard the final paragraph of the commentary on the first success measure relating to Objective 2 (We will provide a resilient, timely, safe and effective response when risks become incidents), as this had appeared in error.
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Members reviewed the information provided concerning performance against success measures, and received updates on actions taken or proposed in response. The following information was provided in response to issues raised:
It was important to conduct an Employee Engagement Survey even in times of industrial unrest. Although the outcome would be affected by the climate, experience showed that this was unlikely to cause Essex to be out of line with other Fire and Rescue services, and it was important to obtain a benchmark against which the outcome of future surveys could be measured.
It was proving difficult to recruit to the post of Environment Officer due to a lack of suitable candidates, and alternative methods of recruitment were being investigated. Environmental projects such as the installation of solar panels were continuing in spite of the vacancy, but monitoring and other ongoing work was adversely affected. The post had the potential to generate significant cost savings (as demonstrated by the achievements of the previous post-holder), and for this reason it had been retained as full-time.
Performance targets were set using various methods, including benchmarking against the Service’s ‘family group’, recycling former Best Value indicators, local determination and annual agreement by the Authority.
It was noted that work was ongoing to review the measures associated with Objective 2 (We will provide a resilient, timely, safe and effective response when risks become incidents).
The impact of industrial action and withdrawal of goodwill on the issue of Wholetime Availability was noted, and Members requested that information be submitted to the next meeting to allow the comparison of current performance with that achieved outside a time of industrial unrest. It was also agreed that future reports would include simple explanatory information to support statements such as that relating to a ‘shortage of riders’.
The issues associated with the non-availability of appliances due to staff training were noted.
The formula for standard and minimum crewing had previously been removed by the Fire Authority due to its inefficiency.
SDO Ashley commented on the casualty reduction work undertaken by the Service (in conjunction with partners), which had contributed to a reduction in those killed or seriously injured on the roads. The Committee welcomed the valuable work being carried out and suggested that it be the subject of a report to a future meeting of the Fire Authority.
Resolved:
1. That the report be noted.
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2. That information be provided to the next meeting of the Committee to allow the comparison of current performance with that achieved outside a time of industrial unrest.
3. That future reports include simple explanatory information where appropriate.
8. Budget Review November 2014
The Committee considered report FP/009/15 by the Finance Director and Treasurer which reported on the expenditure against budget as at 30 November 2014 and identified major variances to the budget for the year.
In introducing the report, the Finance Director and Treasurer highlighted that numbers of watch-based firefighters were above the critical minimum. He also referred to the causes of the only area of overspend (on Premises and Equipment), which was due to factors largely outside of the Authority’s control, such as fuel costs associated with a particular incident and increases in the cost of utilities. Finally, the savings on the cost of fire fighters related to a long term strategy which budgeted for posts in the Strategic Crewing Reserve, with a view to offsetting future reductions in government funding.
Resolved:
1. That the review of income and expenditure against the budget be noted;
2. That the actual position with regard to capital expenditure be noted; and
3. That the Forecast expenditure for 2014/15 be noted, together with the planned submission of a review of the treatment of the underspending to the next meeting of the Policy and Strategy Committee.
9. Draft Budget for 2015 - 16
The Committee considered report FP/010/15 by the Finance Director and Treasurer which provided options for the revenue and capital budgets for the Authority for 2015/16, together with information on the budget and business planning process. Initial information on the formula grant settlement, share of national non-domestic rates, council tax base and collection account for 2015/16 were also provided.
In considering the report, Members reaffirmed that the Committee’s role with regard to the report was to satisfy itself that the budget-setting process had been correctly conducted.
The following information was provided in response to points arising from consideration of the report:
The Committee noted that the budget reflected the changing priorities of the Service. The success of the increased emphasis on prevention work had resulted in a change to what was required from the operational response and resources were being rebalanced accordingly. This was in accordance with the medium-term strategy agreed by the Fire Authority.
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The reimbursement of monies associated with the pension injury payments issue had been taken into account, assuming repayment by 31 March.
It was noted that, although staff were encouraged to work flexibly, including from home, they were not provided with additional equipment to facilitate this, and budgetary provision for this had not been made.
In response to a question by the Chairman, the Acting Chief Fire Officer undertook to provide to all Members of the Authority in advance of the meeting on 11 February information concerning an apparent increase in the number of senior staff within the Service.
Resolved:
1. That the draft budget for 2015 – 2016 be noted.
2. That the Committee express the view that the budget-setting process has been properly conducted.
3. That further information be provided to all members of the Authority regarding an apparent increase in the number of senior staff within the Service
10. Treasury Management Strategy Mid-Year Report
The Committee considered report EFA/011/15 by the Finance Director and Treasurer which stated that, in accordance with the requirements of the CIPFA Code of Practice on Treasury Management, a set of indicators had been approved by the Authority in February 2014, which were intended to demonstrate that capital investment plans are affordable and that consequential borrowing would be based upon sound treasury management strategy. The Code of Practice required these indicators to be monitored and reviewed on a rolling basis. The report provided an update on the Authority’s performance in the first six months of 2014/15 against those indicators.
The following information was provided in response to Members’ questions and comments:
Treasury Management Practice 6 (Money Laundering) related to protection for the Authority against being used for that purpose. It had little impact on Essex, which did not handle a great deal of cash.
The Authority aimed to repay any capital finance well before the end of the expected life of appliances and property. It was sometimes possible for appliances to last longer than their projected lifespan, but this did not take account of issues such as obsolescence.
The Committee requested that options for improving the return on the investment of cash balances be investigated, with a further report to be submitted to a future meeting of the Committee, with a view to making recommendations for consideration by the Fire Authority.
It was noted that adoption ofPage a policy 30 of to 132 encourage the early repayment of loans would not be sensible due to the severe penalties associated with it. Audit, Governance & Review Committee 21 January 2015 Page 7 of 8
Resolved:
1. That the Treasury Management position for 2014/15 be noted.
2. That performance against the treasury management indicators for 2014/15 be noted.
3. That a report setting out options for improving the return on the investment of cash balances be submitted to a future meeting of the Committee, with a view to making recommendations for consideration by the Fire Authority.
11. Business Continuity
The Committee considered report EFA/012/15 by the Finance Director and Treasurer which provided an in-depth review of one of the areas agreed for the 2014/15 work plan. The report covered business continuity activities carried out during 2014.
The Chairman commented that the report had reassured him that the resilience programme requested by the Committee was in place. This view was supported by the resilience clearly demonstrated during recent periods of industrial action.
In response to a question, the Finance Director and Treasurer commented on the causes of the ICT Server Room Power Outage in September 2014, stating that remedial action had been taken, and lessons learned. A speedy resolution had ensured that the impact was less extensive than it could have been for an incident of that nature.
Resolved:
That the Committee agree that the business continuity activity described in report EFA/012/15 provide sufficient reassurance that the activities of the Service will continue after a business continuity interruption.
12. Pension Governance
The Committee considered report EFA/013/15 by the Director of Human Resources and Organisational Development which provided information regarding the governance of pension arrangements within the Authority. The report also provided an update on pending changes to the pension arrangements for Firefighters in April 2015.
In response to questions, the Director of Human Resources and Organisational Development advised that it was not yet clear what would be the impact of the new Pension Board on the role of the Committee as it related to pensions. Members were concerned at the possibility of duplication and it was agreed that further information would be provided as soon as it became available. Although the Authority was required to establish a Board for April 2015, it was unlikely to be functioning by that date (as the Pensions Regulator was aware) as the regulations had yet to be finalised. Although locally established boards were required by the draft regulations, it was hoped that economies of scale could be achieved, for example by working with other Fire Authorities to provide training on a regional basis. Page 31 of 132 Audit, Governance & Review Committee 21 January 2015 Page 8 of 8
The Committee welcomed the improved communication with Essex Pension Services (currently contracted by the Authority to provide the administering arrangements for the Fire Pension Schemes).
Resolved:
1. That the report be noted, together with the activity in 2014 related to the governance of pension arrangements and the activity pending in 2015 to ensure the effective introduction of the Pension Board and the new Firefighters’ Pension Scheme.
2. That a further report be submitted to a future meeting of the Committee providing an update on the arrangements for the Fire Scheme Pension Board and information regarding the proposed terms of reference and membership of the Board.
3. That further information regarding the impact of the proposed Pension Board on the role of the Committee with regard to pensions be provided as soon as the position becomes clearer.
13. Date of Next Meeting
Members noted that the next meeting of the Committee would take place on Wednesday 22 April 2015 at 2.00pm.
The meeting closed at 4.10pm
Signed………….………………………………………………..
Chairman 22 April 2015
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Page 1 of 1
Essex County Fire & Rescue Service
MEETING AGENDA ITEM Essex Fire Authority 6
MEETING DATE REPORT NUMBER 11 February 2015
SUBJECT Chairman’s Announcements (for period 28 November 2014 – 30 January 2015)
1. FireBreak Pass Out Parades at: Harlow, 28 November, 2014 Colchester, 05 December 2014 – Department for Work and Pensions Harlow, 12 December 2014 Ingatestone, 23 January 2015 – Mother & Child Southend, 30 January 2015
2. Firebreak Squads at: Clacton, 19 December 2014 – Learning Difficulties Corringham, 30 January 2015
3. Attended sites during strike periods: Chelmsford, Basildon, Canvey Island, Grays, Brentwood, Control, 9 December 2014. Service Headquarters, Chelmsford, Southend, Canvey, Grays, Brentwood, 16 January 2015.
4. Attended Fire Stations: Great Baddow, 26 January 2015 South Woodham Ferrers, 28 January 2015
5. Security & Fire Excellence Awards 2014, London, 27 November 2014
6. Ford Dunton Board Chairman’s Leadership Awards, 4 December 2104
7. BAFSA, Reception & Luncheon, London 10 December 2014
8. ECFRS Carol Concert, 17 December 2014
9. Fire Fighters Charity, Littlehampton, 27 January 2015
10. Chairman’s Charity Dinner will take place in 2015 on 20 March at Stockbrook Manor, Billericay
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Page 34 of 132 ESSEX FIRE AUTHORITY Essex County Fire & Rescue Service
MEETING AGENDA ITEM Essex Fire Authority 8 MEETING DATE REPORT NUMBER 11 February 2015 EFA/014/15
SUBJECT Budget for 2015-16
REPORT BY The Acting Chief Fire Officer and The Finance Director & Treasurer
PRESENTED BY The Finance Director & Treasurer, Mike Clayton
SUMMARY
The purpose of this report is to:
Provide the options for the revenue and capital budgets for the Authority for 2015/16;
Provide information on the budget and business planning process; and
Provide information on the formula grant settlement, share of national non-domestic rates, council taxbase and collection account for 2015/6.
Following consideration by the Policy and Strategy Committee the budget has been prepared showing figures for a Council Tax freeze.
RECOMMENDATIONS
Members are asked to agree the budget for the Authority for 2015/16:
2015/16 Council Tax 2014/15 Freeze Budget Budget Net Expenditure £73,271k £71,827k Decrease from 2014/15 -£1,444k
Precept £38,954k £39,758k
Band D Council Tax £66.42 £66.42 Increase from 2014/15 0.00%
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1. A net expenditure budget of £71.827m; 2. A precept of £39.758m; 3. A Band D council tax of £66.42 (the same since 2010/11); 4. The bands of Council Tax are shown in the following table.
2015/16 No Council Tax Band Increase A £44.28 B £51.66 C £59.04 D £66.42 E £81.18 F £95.94 G £110.70 H £132.84
5. Capital expenditure budget of £8.175m in 2015/16.
LOCAL GOVERNMENT FINANCE SETTLEMENT
The provisional settlement figures for 2015/16 were announced on 18 December 2014. The final figures will be confirmed in early February 2014.
For 2015/16 the level of grant, including past years council tax freeze grant will be £31,296k some £2,554k lower than the current year, this is a reduction of 7.5%.
SUMMARY OF GOVERNMENT FUNDING
From 2015/16 the allocation of Revenue Support Grant to local authorities will be calculated by increasing, decreasing, or maintaining (“scaling”) the 2014/15 allocations in line with the level of that year’s Revenue Support Grant. Revenue Support Grant will be equal to the local government spending control total less the holdback and the uprated baseline funding level in 2014/15. Note, that the 2014/15 budget excluded the compensation for government imposed rebates to national non-domestic rates as this was not announced until after the budget had been approved.
The table below summarises government funding for 2015/16 in comparison with the current year:
2014/15 2015/16 Baseline Change in Total Funding Total Total Settlement Revenue Level Settlement Settlement Funding Support (Business Funding Funding Level Grant Rates) Level Level £m £m £m £m £m Fire and Rescue Funding 32.310 14.814 14.548 29.362 -2.948 2011-12 CT Freeze Compensation 1.068 0.618 0.445 1.063 -0.005 2013-14 CT Freeze Compensation 0.433 0.433 0.433 0.000 2014-15 CT Freeze Compensation 0.438 0.438 0.438 Returned Funding 0.039 -0.039 Total 33.850 16.303 14.993 31.296 -2.554
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NATIONAL NON-DOMESTIC RATES
Within the overall amount of funding there is an element funded by the Authorities share (1%) of national non-domestic rates. For 2014/15 decisions by the government to extend relief for small businesses and other policy changes mean that £219k (£465k for 2014/15) of the business rates expected were replaced by a government grant.
In addition the government assumes that the Authority’s share of national non-domestic rates from the billing authorities will be £6,303k for 2015/16. The exact amount may vary from this level and the Authority holds an earmarked reserve to manage this uncertainty and it is proposed that any shortfall or surplus in the final level of billing authority sourced funding is managed through this reserve.
To help maximise the local share of national non-domestic rates the Authority has supported a pooling arrangements with the County Council and eight of the Essex district authorities. Under the pooling arrangements a larger share of any gains in the level of these rates will be retained locally and apportioned within the pool. As a result of this it is estimated that the Authority will gain £180k in additional business rates.
COUNCIL TAX
Since 2011/12 the Authority accepted a government grant to freeze Council Tax. With the exception of the grant for 2012/13 all of these grants are now included in our baseline government funding. In addition there is a commitment that any freeze grants taken in future years will also be included in the baseline.
The longer term impact of a freeze in Council Tax is a lower level of precept income in future years. If the freeze continued until 2018/19 then this income would be £1.5m lower in comparison to an increase in the precept of 2% per annum, the increase allowed in 2014/15 before a local referendum is required. This is a relevant consideration because we expect to see a reduction in our government grant funding in 2015/16 and subsequent years.
For 2015/16 the government has announced 2% as the threshold of the increase in council tax that will require a referendum. This is subject to confirmation by Parliament in early February 2015. Should the Authority propose to increase council tax by an amount that will prompt a referendum then it has to consider whether it will bear any costs through doing so, and what the re-billing costs will be from the 14 billing authorities. It is estimated that a referendum could cost between £1.7m and £2.4m. It should also be noted that the regulations only allow the percentage increase to be included in the referendum, not the cash amount for different householders.
TAX BASE
The position regarding the taxbase of the Authority has been uncertain in recent years. Work with the Billing Authorities has ensured that early figures for the taxbase have been provided to all precepting authorities. This is also supported by in-year monitoring of the progress in collection and an early assessment of the impact of changes to the billing authorities Council Tax support schemes.
Since 2013/14 the Authority has aligned itself with the County Council and the Police and Crime Commissioner and agreed with the billing authorities to share 25% of the precepting authorities gains from technical changes in Council Tax with the billing authority. A new agreement has been made for 2015/16 onwards with the billing authorities receiving a lower share (16%) of the gains in council tax and a larger proportion of the additional collection costs falling on the precepting authorities. It is estimated that the Authorities contribution of £231k in 2015/16 will support the generation of £1,445k of additional council tax for the Authority. Page 37 of 132
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In 2014/5 there was a significant (1.9%) growth in the taxbase following a cautious approach on the level of council tax income in the previous year. The figures for 2015/16 give a further increase of 1.8% reflecting greater confidence in collection rates and housing growth.
COLLECTION ACCOUNT
Initial figures for the Council Tax collection account show a positive balance of £773k. In 2012/13 an earmarked reserve of £1m was established to absorb any negative movement on the collection account fund. This reserve is considered sufficient for future years at this level and so the additional funding has been included in the 2015/16 budget.
2014/15 FORECAST REVENUE BUDGET POSITION
The outturn position for 2014/15 will be subject to a separate paper to the Policy & Strategy Committee. The forecast outturn has been reviewed to reflect the position at the end of November 2014, this forecast is summarised below and this position is reflected in the comparative figures used in this report.
Forecast Variance to 2014/15 Forecast Budget Description £'000s £'000s Firefighters 34,670 (1,578) Firefighters - Retained Duty System 5,502 (234) Control 1,686 33 Support Staff 11,083 (46) Total Employment Costs 52,942 (1,824)
Support Costs 2,124 (58) Premises & Equipment 10,527 373 Other Costs & Services 3,136 (388) Firefighters' Pension Scheme 1,937 1,736 Financing Items 8,726 80 Operational income (4,225) (163) Contribution to/(from) Reserves (1,807) 368 Total Other Costs 20,418 1,949
Total Budget 73,360 124
Total Funding (73,770) (499)
Funding Gap / (Surplus) (409) (374)
The main features of the forecast remain continued underspending on firefighters as a result of the lower headcount, and a lower take-up of the opportunities for rota day working.
BUDGET TRENDS
Since the Committee considered the medium term financial projections in September 2014 further information has become available around future levels of funding. There is an expectation that government funding for the Authority will be cut at a faster rate than previously anticipated. This view was strengthened by the data released with the Autumn Statement. The Local Government Association have identified significant reductions in the overall level of revenue support grant for all local authorities. Their predictions are shown below:
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Source: LGA's Future Funding Outlook 2014 - outturn data to 2012/13, budget data 2013/14. 2014/15 and 2015/16 based on settlement, 2016/17-2019/20 from LGA projections
Following the Chancellor’s Autumn Statement on 3 December 2014 other commentators have suggested that the scale of government funding cuts will be greater in the next five years than they have been in the previous five. This suggests that the scale of savings needed by the Authority will be greater than those reflected in the Medium Term Financial Projections. Initial indications are that savings of £15M could be needed by 2020. This position will not become clear until after the 2015 general election as there are differences in the approach from the main political parties.
RESERVES
At 31 March 2014 the Authority had £9.9m in earmarked reserves and £2.6m in its general reserve. Planned use of the earmarked reserves in 2014/15 will reduce these by £1.8m. The general reserve represents 3.6% of planned expenditure in 2015/16 and is at the lower end of the Authority’s target range. Any net savings in 2014/15 will be available to increase the level of the general reserve if this is judged necessary after a review of the earmarked reserves in March 2015.
The report from the Treasurer (Appendix 1) reviews these factors for 2015/16 onwards including the review periods for the earmarked reserves. Any additional reserves not required in the future can be applied to reduce the outstanding capital financing requirement which will reduce the revenue burden in future years of past capital expenditure.
The budget makes provision for the use of £250k of the Authority’s “spend to save” reserve in line with the decision made in September 2013 to use this resource to support the installation of sprinklers.
2015/16 BUDGET
The budget for 2015/16 has been drawn up reflecting the key decisions made by the Authority. The budget supports the Corporate Strategy and departmental budgets also Page 39 of 132
Page 6 reflect the departmental activities in support of the overall strategy. The plans demonstrate the achievement of a balanced budget.
The budget for 2015/16 is summarised below and compared to the most recent forecast for 2014/15.
2014/15 Budget 2014/15 Forecast 2015/16 Budget Description £'000s £'000s £'000s Firefighters 36,248 34,670 33,311 Firefighters - Retained Duty System 5,736 5,502 5,208 Control 1,653 1,686 1,401 Support Staff 11,129 11,083 10,433 Total Employment Costs 54,766 52,942 50,353
Support Costs 2,182 2,124 1,993 Premises & Equipment 10,154 10,527 10,151 Other Costs & Services 3,524 3,136 3,354 Firefighters' Pension Scheme 201 1,937 2,000 Financing Items 8,646 8,726 7,588 Operational income (4,062) (4,225) (4,116) Contribution to/(from) Reserves (2,175) (1,807) 506 Total Other Costs 18,470 20,418 21,474
Total Budget 73,236 73,360 71,827
Total Funding (73,271) (73,770) (71,827)
Funding Gap / (Surplus) (35) (409) (0)
STAFF NUMBERS
Overall staff numbers are summarised below:
Staff Budget (Average) 2014/15 Changes 2015/16 Wholetime Firefighters 771 -38 733 Strategic Crewing Reserve 44 -44 - On-Call (Retained) Firefighters 514 - 514 Control Staff 44 -10 34 Support Staff 267 -5 262 Total 1,640 -97 1,543
WHOLETIME FIREFIGHTERS
Employment costs equate to over 70% of the Authority’s total revenue budget, with the numbers of firefighters employed the most significant element. The budget reflects the decision made in May 2014 to change the crewing arrangements following the removal of rescue tenders, with the final two fire stations expected to change in June 2015. The total number of officer posts reflects the requirements for command and control of incidents based on current planning scenarios.
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The average numbers of wholetime firefighters in 2015/16 by role are set out below:
Firefighter Budget (Pay Grades 2014/15 2015/16 Changes are shown in brackets) Budget Budget Chief, Deputy Chief & Assistant Chief Fire Officers (Brigade 4 0 4 Managers) Senior Divisional Officers (Area 7 0 7 Managers) Divisional Officers (Group 15 2 17 Managers) Assistant Divisional Officers 32 1 33 (Station Managers B) Flexi Station Officers (Station 10 -4 6 Managers A)
Station Officer (Watch Managers B) 56 -1 55
Sub-Officer (Watch Managers A) 96 -3 93
Leading Firefightes (Crew 102 -10 92 Managers)
Firefighters 449 -23 426
Firefighters - Strategic Crewing 44 -44 0 Reserve
Total 815 -82 733
The increase of 2 in the number of Divisional Officers relates to additional temporary promotions to support specific projects and the additional post at ADO level is for an Officer seconded to the Fire Service College.
ON-CALL (RETAINED) FIREFIGHTERS
The numbers of retained firefighters and the full time equivalent (based on 120hrs per week cover) are summarised below:
Retained Firefighters 2014/15 Changes 2015/16 Head Count 514 0 514 Full Time (120hrs) Equivalent 406 0 406
Recruitment of retained firefighters continues across the county to fill vacancies that arise through normal staff turnover. The budgeted numbers reflect a 10% shortfall in the FTE number compared to the overall target for retained fire stations. The main costs for retained firefighters is for their utilisation, rather than headcount. The retained pay budget reflect the actual levels of activity over the last 12 months and makes no allowance for any abnormal activity levels such as flooding or prolonged summer drought. A specific earmarked reserve is maintained for such eventualities.
The actual number of retained at the end of December 2014 was 484, some 30 below the number budgeted for 2015/16. It is expected that the numbers of retained firefighters will increase as the recommendations from the retained duty systems review are implemented.
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CONTROL STAFF
The budget for control staff reflects resources to cover vacancies, maternity leave and training so that we are able to maintain full staffing. The average number of staff budgeted (34) for reflects a saving of 10 posts from the implementation of the new mobilising system at Kelvedon Park in early 2015.
SUPPORT STAFF CHANGES
For support staff the budget is derived from a review of the organisational departmental structure with the use of managed vacancies. The support staff budget full time equivalent number is 262 next year after allowing for the vacancy factor of 7% (the same vacancy factor was applied for the 2014/15 budget) with a planned reduction to 257 by the end of the year. The number (full time equivalent) budgeted for 2014/14 was 274 (after virements); there is therefore a reduction of 17 posts by the year end.
The overall budget for support staff costs and temporary staff is £0.4m below the outturn position for 2013/14 adjusted for pay inflation, in line with a targeted reduction of £1m by 2016/17.
Support Staff Changes by Year End Department Average 2015/16 Final 2014/15 Changes Changes 2015/16 Position from 2014/15
Community Commands 29.3 -2.1 27.2 -7.2 22.1 Strategic Management Board 8.4 -2.8 5.6 -2.8 5.6 Operations 3.9 1.7 5.6 1.7 5.6 Corporate Comms 6.5 1.0 7.5 1.0 7.5 Performance & Data Management 7.4 1.4 8.8 1.0 8.4 Community Safety 22.7 1.1 23.8 1.1 23.8 Workplace Fire Safety 10.1 -1.2 8.9 -1.2 8.9 Health & Safety 5.1 -1.0 4.1 -1.0 4.1 Training 19.9 -6.4 13.5 -6.4 13.5 Fleet & Equipment 44.2 -3.9 40.3 -3.9 40.3 Finance & Pay 11.0 3.1 14.1 3.1 14.1 Purchase & Supply 18.6 -4.8 13.8 -4.8 13.8 Property & Water Services 21.3 0.2 21.5 0.2 21.5 Human Resources 28.1 0.8 28.9 0.8 28.9 Information Communications Technology 21.5 0.4 21.9 0.4 21.9 Other Departments & Seconded Posts 4.9 -0.1 4.8 -0.1 4.8 Emergency Planning (ECC) 10.8 1.0 11.8 1.0 11.8 Total 273.7 -11.6 262.1 -17.2 256.5 The main changes are::
7 posts removed from Community Commands after completion of the MIS replacement programme; 6 posts removed from HR and Training at the conclusion of the workforce transformation programme; 5 posts removed from Catering, Purchasing and Supply; and Additional temporary posts in Finance and HR to support the interim management and development of the HR and Payroll system and the implementation of pension scheme changes.
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STAFF COSTS
In addition to the numbers of staff employed the overall employment costs are impacted by a number of other elements. These are discussed in the sections below.
RESILIENCE AGREEMENTS
The budgets for firefighter and retained firefighter pay include a specific provision of £300k for resilience agreements. Firefighters who had agreed to these agreements have provided crewing for the appliances deployed during the periods of industrial action undertaken by the Fire Brigades Union as part of a national dispute since the autumn of 2013.
PAY
The budget for firefighter pay includes additional expenditure on overtime where out-duties are worked, including the payment of allowances for pre-arranged out-duties.
As in recent years the budget makes no specific provision for pay inflation this year. For support staff a pay deal agreed in 2014 remains in place until March 2016. The full year impact of the increase for firefighters agreed in 2014 is included within the budget. As in recent years it is proposed that as part of the budget monitoring process authority is delegated to the Finance Director & Treasurer to authorise virements to reflect national pay settlements and also virements for inflationary pressures. For the purposes of the budget the provision of £755k for inflation has been included as a contribution to reserves.
PENSION SCHEMES
FIREFIGHTER PENSION SCHEMES
There are significant changes in the pension schemes for firefighters in 2015. A new pension scheme will be in place, with older firefighters remaining protected within the existing schemes. The main impact of the changes is an increase in the employment costs of retained firefighters, many of these firefighters move into the new 2015 scheme with higher employer contributions than the 2006 scheme. This higher costs is offset by a reduction in employer contribution rates for wholetime firefighters who move from the 1992 scheme into the 2006 scheme. The precise contribution rates had not been announced when this paper was being finalised.
The Authority is required to budget for lump sum charges arising from the ill-health retirement of firefighters. These costs can be spread over three years, starting in the year in which the ill-health retirement occurs. In addition the Authority has to fund the cost of the residual amount of injury scheme payments previously included in the pensions budget. The pension injury payments increase in line with inflation and represent a considerable burden for the Authority. The budget for 2015/16 is £1,950k, there has been one additional injury award made in the year. The level of ill-health retirements has fallen considerably in recent years, and provision has been made for 1 such retirement in 2015/16.
LOCAL GOVERNMENT PENSION SCHEME
The last actuarial review of the local government pension scheme as at 31 March 2013 resulted in an increase in the employers’ contribution rate to 13.9% and an annual deficit contribution of £401k.
EMPLOYERS NATIONAL INSURANCE CONTRIBUTIONS
The budget makes provision for the current level of employers National Insurance contributions. The main rates remain unchanged in 2015/16. Page 43 of 132
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INFLATION
Some specific allowances have been made within the budget bids for expected inflationary increases in business rates, utilities and fuel and for higher supplier prices for property related costs. Other inflationary pressures have been absorbed by budget holders.
NON-STAFF COSTS
For non-staffing costs the budget has been based on the outturn expenditure for 2014/15 “normalised” to exclude the impact of any non-recurring expenditure. This base figure has then been adjusted for efficiency gains and to reflect the impact of specific changes planned for the next year.
All departmental budgets were submitted with a statement showing the activities being undertaken in support of the corporate strategy. The budget process was carried out in conjunction with the 2015/16 business planning process so that the financial plans for the year and the departmental business plans were developed in parallel. Departmental budgets and business plans were subject to reviews by the Strategic Management Board.
Significant savings have been made across a range of non-staff costs in recent years. These have been achieved through the following actions:
Procurement – Often in collaboration with other local authorities and other fire authorities. The Authority participates in the Procurement Agency for Essex and the National Procurement for Fire. The Authority supported a successful bid by Devon and Somerset Fire & Rescue Authority for innovation funding in 2015/16 to support a national procurement hub. We participate in expenditure analysis of spend by function, supplier and category on a national basis. This enables procurement resources to be targeted where they will deliver most savings. In 2015/16 we will support the sector led spend analysis review which are projecting procurement savings of 10% for joint procurement of sector specific items.
Challenge – New areas of expenditure and all projects are subject to approval processes that requires the preparation and consideration of a business case. A process of “SMB Challenge” was used during the 2015/16 budget build process with internal reviews by independent directors of all departmental budgets as part of their review and challenge by the Strategic Management Board.
Monitoring – Areas such as Fleet Workshops have extensive records of the maintenance costs of all appliances with all work recorded and costed. This enables the Service to make informed decisions on equipment replacement and demonstrate the savings achieved through the selection of vehicles. Similarly Property Services use the results of condition surveys to inform decisions around expenditure on maintenance and repairs; and
Restraint – All budget holders have demonstrated the ability to control expenditure and decide if expenditure is appropriate and necessary. This has been supported by a budget monitoring process that provides “Substantial Assurance” according to a review by Internal Audit in late 2011. The continued delivery of in-year savings has demonstrated a high degree of cost awareness and expenditure control and this has been reflected in the budget bids for 2015/16.
All of the major support departments have been subject to independent external scrutiny and review in the last few years.
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ICT PROJECTS
The ICT budget has been focussed on the delivery of core priorities such as the new Control Mobilising System and has been restricted to reflect the delivery of change that departmental resources across the Service can support. Priority will be given to projects that deliver cashable savings in future years including the replacement of the high cost Management Information System.
INSURANCE
The Authority’s present insurance arrangements were tendered in partnership with eight other Authorities. Proposals to generate further savings from the establishment of a mutual pooling arrangements are on track for implementation in November 2015. This will ensure that benefits as we improve risk management arrangements return directly to the Authority. Funding for the start-up costs of the pooling arrangement has been provided by the government following a successful bid for transformational funding.
REVENUE BUDGET PROVISION FOR CAPITAL FINANCING
The Authority is required to make a statutory provision to fund capital expenditure from council tax. This provision is based on the historic cost depreciation charge for the assets that are purchased. The level of the provision reflects both past capital expenditure, the forecast expenditure in 2014/15 and the planned capital budget for 2015/16. The expected capital receipt from the sale of the former headquarters at Hutton in 2015/16 will provide the opportunity to offset the statutory provision for capital financing, either in 2015/16 or future years.
INCOME
The budget reflects a realistic assessment of income from a range of sources including aerial sites for telephony, re-charges to EFA trading etc. These are analysed in the table below:
Current Full Year Full year forecast 2014-15 Budget 2014-15 2015-16 Budget Description £'000s £'000s £'000s Government Grants 2,286 2,271 2,053 Cycle to Work Scheme 50 40 38 Childcare Vouchers 71 87 84 Sales of Vehicles 40 10 10 Canteen Income 39 62 49 Sale of Vehicle Spares - 45 35 Aerial Sites 122 122 122 Solar Panels - - 60 Hydrant Tests 60 80 80 Lease Cars - Employee Contributions 90 87 87 General Sales 40 30 26 Service Charges 29 29 9 Secondments 105 130 104 Community Safety general - 11 - Labour Credit 50 75 50 Section 12 Income 27 27 40 Interest on short term lending 140 100 120 External Interest Received 4 4 - Community Fire Safety 125 125 311 Reimbursements from EFA(T) 109 93 84 Other Miscellaneous Income 77 190 147 Emergency Planning Income 599 608 608 Total Income 4,062 4,225 4,116 1- Note figures may not sum due to rounding differences Page 45 of 132
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Some of the income changes are entirely offset by a change in the Authority’s costs, for example the Emergency Planning Income from Essex County Council. The most significant changes are for Community Fire Safety where we are expecting higher funding for schemes such as Firebreak, the new income stream from solar panels, and the reduction in grant income following the completion of the Fire Control project.
PRECEPT AND IMPLICATIONS FOR COUNCIL TAX
The table below sets out the calculations of the proposed council tax and show the changes from the 2014/15 budget.
2014/15 Council Tax Change Budget Freeze 2015/16 £'000 £'000 £'000 Budget Requirement 73,271 71,827 (1,444)
Sources of Finance Revenue Support Grant 19,138 16,303 (2,835) National Non-Domestic 14,712 14,993 281 Rates Total Grant 33,850 31,296 (2,554)
Collection Fund Surplus 467 773 306
Precept Requirement 38,954 39,758 804
Tax Base 586,481 598,581 12,100
Council Tax (Band D) £66.42 £66.42 £0.00
The main changes from 2014/15 are the reduction in government funding, the large increase in the collection account balance and a £804k increase in the precept from the higher tax base. .
CAPITAL PROGRAMME 2015/16 – 2017/18
The affordability of the overall capital programme remains a key factor for the Authority in the next few years. Only if the overall capital programme can deliver financial benefits to offset the additional revenue burden of its financing costs will the projects outlined in this section be initiated. Most significant projects already require Member approval before they can be initiated. All projects coming forward for approval will be required to demonstrate how the financing costs will be met and whether this will be from efficiencies generated by the project or from other areas.
The proposed budget only includes projects that are either approved or an advanced stage in the approval and procurement process. The most significant projects are the purchase of new pumping appliances and the completion of the new mobilising system. The proposed budget is summarised in the table below:
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Budget Forecast Capital Bid Capital Bid Capital Bid 2014/15 2014/15 2015/16 2016/17 2017/18 ` £'000s £'000s £'000s £'000s £'000s Property New Premises Service Headquarters 2,185 2,185 - - - Service Workshops 250 250 - - - Existing Premises Solar Panels 1,911 1,652 - - - Asset Protection 2,000 1,600 2,170 2,000 2,000 Total Property 6,347 5,687 2,170 2,000 2,000 Equipment 1,645 1,581 736 1,066 25 Information Technology Projects > £250k 1,042 498 1,300 - - Projects < £250k 2,059 1,766 200 150 150 Total Information Technology 3,101 2,264 1,500 150 150 Vehicles New Appliances 2,200 1,400 3,161 1,940 1,940 Other Vehicles 1,121 578 608 565 228 Total Vehicles 3,321 1,978 3,769 2,505 2,168 Total Capital Expenditure 14,414 11,510 8,175 5,721 4,343
Projects where there is not a confirmed business case are excluded from the above figures. This includes the potential changes to properties as part of the forward review of operations. Specific proposals will be brought forward to Members in due course and the impact on future years budgets included in the reports.
CAPITAL RECEIPTS AND CAPITAL GRANTS
The budget includes a capital receipt for the current market value of the Hutton site. Capital receipts can be used to reduce the requirement to finance capital expenditure from the Authority’s revenue budget, but no provision for this has yet been made.
The government used their Transformation Funding programme to provide capital grants for 2015/16. The Authority was successful in bidding for revenue funding but made no capital bids as they required “spade ready” projects with shared emergency services use of new facilities.
FUNDING CAPITAL EXPENDITURE
The cash generated from the proposed income and expenditure budget is £4.8m with the balance of funding coming from the Authority’s cash balances carried forward from 2013/14. In addition a loan of £4m from the Public Works Loan Board will be paid off during the year. After these changes the Authority will still have around £18m of cash balances at March 2016.
LEGAL IMPLICATIONS
The Local Government Act 2003 gives the Treasurer (Section 151 Officer) a responsibility to report to Members of the Authority on his assessment of the robustness of the estimates used within the budget, and on the adequacy of reserves. Members must have regard to the Treasurer’s report before the full Authority approves the budget for 2015/16.
The Authority is also required to consider and set the capital financing indicators for the period 2015/16. A separate report on this is included on the agenda for the meeting.
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RISK MANAGEMENT IMPLICATIONS
These are covered in the separate report from the Treasurer to Members of the Authority appended to this paper.
FINANCIAL IMPLICATIONS
The financial implications are set out in the report.
EQUALITIES IMPLICATIONS
The budget is designed to provide resources to enable the Authority to carry out its duties in accordance with all statutory requirements. It provides the resources to enable the Authority to meet its equality duties and of itself has no direct equality implications.
USE OF RESOURCES
The use of resources assessment looks at how financial management is integrated with strategy and corporate management, supports Fire Service priorities and delivers value for money. The longer term financial implications of the plans (including the planned level of capital expenditure) have been assessed and are summarised in the paper.
The budget for the Authority is closely linked to the overall Service. At the same time that budget managers prepared estimates of expenditure they were also required to submit departmental plans identifying activities linked to the strategic priorities of the Authority. Subsequent review and amendment to the budget are reflected in revisions to the plans.
The budget recognises that decisions on some key aspects have yet to be made, but is explicit about the financial provision and assumptions made. The revenue and capital budgets are interlinked, and reflect the aim of finding resources to do more, and using the resources on what matters.
The balance between spending and resources is assessed. The budget proposes options for a council tax increase and reflects the impacts of decisions that have been made to ensure that the Authority is able to achieve a balanced budget over the spending review period.
The budget setting process is an important part of the review arrangements by the Members for a range of criteria. The arrangements that have or will be made to ensure that the budget will help the Authority manage and improve value for money are set out in the paper.
LOCAL GOVERNMENT (ACCESS TO INFORMATION) ACT 1985 Appendices Appendix 1 – Treasurer’s Report on 2015/16 Budget Appendix 2 – Budget Book List of background documents
Proper Officer: Director of Finance & Treasurer Contact Officer: Mike Clayton, Essex County Fire & Rescue Service, Kelvedon Park, Witham, Essex CM8 3Hb Tel 01376 576000 E-mail: [email protected]
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Appendix 1 Treasurer’s Report on 2015/16 Budget Page 15
REPORT BY THE TREASURER TO THE ESSEX FIRE AUTHORITY
This paper provides the report by the Treasurer required by Section 25 of the Local Government Act 2003.. The purpose of this report is to provide a review of the risks within the 2015/16 budget:
INTRODUCTION
The Local Government Act 2003 Section 25 includes a specific personal duty on the “Chief Finance Officer” to make a report to the Authority when it is considering its budget and Council Tax. The report must deal with the robustness of the estimates included within the budget and the adequacy of reserves for which the budget provides. The Act requires Members to have regard to the report in making their decisions.
Section 26 of the Act gives the Secretary of State power to set a minimum level of reserves for which an Authority must provide in setting its budget. The Secretary of State indicated that ‘the provisions are a fall back against the circumstances in which an Authority does not act prudently, disregards the advice of its Chief Finance Officer and is heading for serious financial difficulty’.
Sections 32 and 43 of the Local Government Finance Act 1992 also require billing and precepting authorities to have regard to the level of reserves needed for meeting estimated future expenditure when calculating the net budget requirement. There is also a range of safeguards, which are either in place or are about to be introduced, to ensure local authorities do not over-commit themselves financially. These include:
1. The Chief Finance Officer’s S.114 powers, which require a report to all members of the Authority if there is or is likely to be unlawful expenditure or an unbalanced budget; and 2. The Capital Financing Regulations.
RISK ASSESSMENT
LOCAL GOVERNMENT ACT 2003
The Local Government Act does not provide any specific guidance on how to evaluate the robustness of the estimates. The explanatory notes to the act do however identify the need to allow for risks and uncertainties that might lead to expenditure exceeding budget by:
1. Making prudent allowance in the estimates; and in addition 2. Ensuring that there are adequate reserves to draw on if the estimates turn out to be insufficient. It is stressed that decisions on the appropriate level of reserves should not be based on a rule of thumb but on an assessment of all the circumstances considered likely to affect the Authority.
CIPFA GUIDANCE NOTE ON LOCAL AUTHORITY RESERVES AND BALANCES
The Chartered Institute of Public Finance Accountancy (CIPFA) states that the following factors should be taken into account when the Chief Finance Officer considers the overall level of reserves and balances:
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1. Assumptions regarding inflation; 2. Estimates of the level and timing of capital receipts; 3. Treatment of demand led pressures; 4. Treatment of savings; 5. Risks inherent in any new partnerships etc; 6. Financial standing of the Authority (i.e. level of borrowing, debt outstanding etc); 7. The Authority’s track record in budget management; 8. The Authority’s capacity to manage in-year budget pressures; 9. The Authority’s virements and year-end procedures in relation to under and overspends; 10. The adequacy of insurance arrangements. The above are also of relevance when evaluating the robustness of the budget and the subsequent analysis includes comments on these issues.
ISSUES CONSIDERED WHEN EVALUATING THE ROBUSTNESS OF THE ESTIMATES AND THE ADEQUACY OF THE PROPOSED FINANCIAL RESERVES
INFLATIONARY PRESSURES
The background economic climate is more positive than it has been in recent years. The outlook for both inflation remain below the 2% target set for the Bank of England in 2015/16. The Bank of England’s November 2014 inflation forecast is shown below:
A key element in the budget preparation process is building in an appropriate allowance for inflation up to 31 March 2016. This adjustment is known as the cash limit. It is inevitable that the cash limit will either over or under provide for the full cost of inflation as no-one knows exactly how prices will vary against the estimates made.
Some specific allowances have been built into the budget for fuel and utility prices where contracts will be renewed or allow for variations. No other specific allowances have been built into the budget for pay and price inflation. Instead an overall inflation and contingency allowance of £595K has been used. If the requirement to increase cash budgets because of pay awards exceeds this provision then either off-setting savings will need to be found elsewhere in the budget, or the additional costs in 2015/16 will have to be funded from
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Appendix 1 Page 17 reserves. In most cases Budget Managers absorb inflationary pressures within their departmental budgets.
To assess whether the inflation allowance is adequate it is necessary to consider the impact of both pay and non-pay inflation pressures. Firefighters accepted a 1% pay increase in 2014. One indication of the adequacy of the inflation provision is whether it would be sufficient for a similar increase. The same level of increase in 2014 across all firefighters would add £400k to the budget.
Government expectations are that public sector pay increases will continue to be limited over the next few years. Local government has already complied with government pressure, but future increases, perhaps linked to changes in the overall terms and conditions agreements are expected.
There is a risk that external factors such as oil and commodity prices will flow through to the prices of goods purchased by the Authority. An overall 4% increase in such costs could add £500k to the Authorities costs. Existing contractual arrangements for key items including utilities and personal protective equipment means that price inflation will be limited to significantly less than this amount in 2015/16. Most of the potential increases have been allowed for in the budget, including specific provision for known contractual increases. For other areas increases of this nature would be absorbed by budget managers.
In summary, inflationary pressures remain a financial risk to the Authority’s budget, but this is manageable within the overall context of the budget and level of General Balances.
ESTIMATES ON THE LEVEL AND TIMING OF CAPITAL RECEIPTS
The present cash position of the Authority, with cash balances of around £25m expected at the start of the financial year means that there is no funding risk associated with the timing of the capital receipts expected in 2015/16 from the sale of the former headquarters at Hutton.
TREATMENT OF DEMAND LED PRESSURES
The budget process has sought to identify and allow for demand led pressures. The main uncertainties relate to the following areas:-
1. Wholetime Duty System Firefighter Numbers The budget makes provision for an average of 733 wholetime firefighters in 2015/16. The staffing forecast reflect recent experience in the timing of retirement decisions by firefighters and the promotion of staff to other Services. If firefighters chose not to retire then there is a potential risk that firefighter numbers would exceed the budgeted number.
2. On-Call (Retained Duty System) Firefighters This budget has traditionally been difficult to estimate as factors such as extensive flooding and hot summers can have a significant impact on the hours worked by part time firefighters. In addition, the use of retained duty staff on a wider range of community safety and risk review activities has increased the level of expenditure. Our experience in 2014/15 has included some significant one off costs associated with periods of flooding and the long running incident at Thoby Lane. The budget for 2015/16 reflects this level of activity.
For the last six years the Service has used a computer based pay system for capturing the activities of retained duty staff and this has allowed more detailed activity plans to be developed and costed. These controls have enabled the Authority to mitigate the risk and manage the level of expenditure, demand led pressure for operational activity could increase costs in this area. There is a specific earmarked reserve to manage any major increase in Page 51 of 132
Appendix 1 Page 18 the costs of on-call firefighters with an allowance of £1.5m for any potential in-year budget pressures resulting from increased activity levels.
3. Other Other potential expenditure pressures could result from factors such as an unanticipated need for urgent replacement of operational equipment and a need to respond to nationally driven changes in operational procedures. Such factors are viewed by the Service as relatively low risks and while if they did materialise it could lead to additional expenditure of in the order of £300,000, there would be some scope to meet such costs within the existing budget provision by re-prioritisation.
In addition the Authority is committed to a review of the organisational culture. The costs of this review are not yet known and no budget provision has been made – it is anticipated that the review could be funded from the underspending in 2014/15.
4. Industrial Action It should also be borne in mind that the Service is going through a time of change. There are two disputes affecting the Authority. A national dispute around pensions and a local dispute concerning the new shift arrangements for Control. There is potential for both of these to result in strike action. The present resilience arrangements have a fixed (and budgeted) cost of £300k. The implementation of these resilience arrangements costs around a net £10k more per shift to implement. Such costs have been managed within the overall budget in 2014/15 and earlier years.
RISKS INHERENT IN PARTNERSHIP ARRANGEMENTS ETC
The Authority is involved in a range of partnership arrangements mainly in the area of community safety. The financial risks from these partnerships could lead to lower levels of income and partnership funding. A partnership policy is in place, all partnerships are actively managed to mitigate this risk.
FINANCIAL STANDING OF THE AUTHORITY (LEVEL OF BORROWING, DEBT OUTSTANDING ETC.)
This is becoming a less significant issue for the Authority. At 31 March 2014 the Authority had £37.5m of long term debt to fund capital expenditure and a further £0.3m of finance lease obligations. A repayment of £4.0m of debt was made on 1 December 2014 with a further repayment of £4.0m in January 2016. No additional borrowing is planned for the next few years. Further significant capital spending is projected over the next few years. The revenue impact of the planned spend for 2015/16 is included within the budget, and the level of borrowing is within the limits set as part of the bi-annual review of capital financing.
At 31 March 2015 the cash balanced is projected to be £11m. Early repayment of Public Works Loan Board debt attracts financial penalties and so there are no plans for the early repayment of the present debt.
THE AUTHORITY’S TRACK RECORD IN BUDGET MANAGEMENT, INCLUDING ITS ABILITY TO MANAGE IN-YEAR BUDGET PRESSURES
The Authority has a proven track record in financial management and has been able to restrict expenditure to keep within the overall budget. An internal audit report in November 2011 confirmed that the Fire Authority can take substantial assurance from the budgetary controls in place. This area is due to be reviewed again in 2015.
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Appendix 1 Page 19
However, the discipline of Financial Regulations – not incurring spending without the necessary budget provision – must be rigidly observed and the monitoring of the riskier budgets must be given priority. It remains of paramount importance that regular reports continue to be produced on all budgets throughout the year to identify emerging problems at the earliest opportunity. This will allow maximum benefit to be accrued from any corrective action taken.
Incremental improvements to financial processes to ensure that all orders and commitments are captured continued to be made and an Authority wide Contracts Register is in place. There is a high degree of visibility in the level of financial commitments and expenditure for managers who control budgets and their Directors.
The Authority has managed to restrict expenditure in advance of the expected cuts in government funding and achieved significant efficiency savings over the past few years. We have an excellent track record in anticipating and preparing for significant change, and on delivering planned budget savings.
THE AUTHORITY’S VIREMENT AND YEAR-END PROCEDURES IN RELATION TO UNDER AND OVERSPENDS
The Authority has embedded virement procedures that require senior approval to allow funds to be moved to areas of pressure. Budgeted expenditure is only transferred from one budget year to the next with the agreement of Members.
THE ADEQUACY OF INSURANCE ARRANGEMENTS
Current insurance arrangements are in partnership with a consortium of nine fire and rescue authorities. The Authority is one of the larger Authorities in the group (along with Devon & Somerset, Hampshire and Kent) who bear the first part of each loss. These limits are £50k for motor claims (own damage only), £25k for public and employers liability and £5k for property. In addition the Authority maintains a provision for the value of unsettled and unknown claims. These arrangements have delivered significant savings to the Authority over recent years.
There is a potential risk that this will expose the Authority to an increase in costs if consortium members experience a high level of claims. To reflect this potential risk the level of reserves held for insurance related costs remains at £1.0m. The present contractual arrangement for insurance was retendered during 2013 and the level of insurance premiums payable was maintained. In November 2015 the insurance will transfer to a pooling arrangement of the consortium, under these arrangements the Authority will directly benefit if it reduces the number and value of its claims, although there is also a small increase in exposure to the claims experience of the other Authority’s in the consortium. The consortium continues to work together on benchmarking and improving risk management to help to mitigate this risk.
PENSION LIABILITIES
5. Fire-fighters The liability for firefighter pensions, whilst remaining with the Authority has been transferred to a separate account funded by government grants. The level of authority contributions has been reviewed for 2015/16.
6. Support staff The Authority makes contributions to the Essex County Council Local Government Pension Fund in respect of its control and support staff, which are invested in order to meet its liability Page 53 of 132
Appendix 1 Page 20 to provide for the benefits provided to past employees and future benefits for existing employees. The Fund is valued every three years with the most recent valuation based on the position as at 31 March 2013. The level of contributions by the Authority is fully reflected in the 2015/16 budget and these rates and amounts will be fixed until March 2017.
RESERVES
The general reserves of the Authority were £2,574k on 1 April 2014. The present forecast suggests that the Authority has a net underspending in 2014/15 which will be either be utilised to make voluntary contributions towards capital financing, or to increase the general reserve. The budget for 2015/16 makes no planned use of the general reserve.
EARMARKED RESERVES
The Authority has established specific reserves to manage key financial risks. Movements between these specific reserves are determined by the Treasurer and reported to Members. The table below considers the specific reserves planned and the timetable for their review:
Specific Reserves Comment & Review March 2014 Balance £’000s
Emergency Planning To hold savings on the costs of 315 Emergency Planning Reviewed annually with Essex County Council Retained Payroll – Demand Main area of risk is retained pay 1,500 Pressures budget. Need to provide £1.5m in case of in-year pressure Reserve at Maximum Limit – To be reviewed March 2015. Spend to Save Reserve Good track record of delivering 2,930 savings. Provides the ability to fund a period of transition before savings are delivered. £1,930k allocated for solar panels and £250k allocated for sprinklers in both 2014/15 and 2015/16 Reviewed Annually – Level to reduce. Taxbase and Collection Account A new area of risk for 2013/14. 1,000 Reserve Initially set at 2.5% of precept income. Reserve at Maximum Limit – To be reviewed March 2015. National Non-Domestic Rates A new area of risk 600 Collection Reserve To be reviewed for 2016/17 after three years of the new arrangements. Infrastructure Reserve To support future capital expenditure 1,000 on buildings. Planned increase to even out future capital spending
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Appendix 1 Page 21
Specific Reserves Comment & Review March 2014 Balance £’000s
Rolling Budgets Reserve To hold balances of expenditure 584 carried forward into the next financial year. £584k utilised in 2013/14. Reviewed in March each year. Business Continuity Reserve To provide funds for any business 500 interruption event not covered through insurance. Reviewed annually. Recommended level is maintained. Insurance Provide for an amount equivalent to 2 1,500 years premiums (£1.2m) and an amount in respect of in-year losses (£0.3m) To be reviewed in late 2015 when Pooling arrangements commence. Total 9,929
Apart from the provision for taxbase and collection account fluctuations these areas have previously been included in the assessment of the general level of reserves. The changes to the taxbase calculation following the localisation of council tax support and the increased collection risk create new uncertainties for the Authority. This is complicated by there being fourteen separate billing authorities.
Factor Comment Lower Upper Limit Limit
Inflation and interest The increase in the overall level of 0.6% 1.5% rates borrowing exposes the Authority to a degree of risk in the future if loans cannot be replaced at a similar interest rate. An increase of 2% on a loan of £20m would add £0.4m of costs equivalent to 0.6% Level and timing of At present the Authority is funding a 0.2% 0.5% capital receipts significant capital programme with a gap before capital receipts will be realised. This risk is offset by high cash balances which eliminate the need for borrowing in 2015/16 Savings Good track record of delivering 1.5% 4.7% Track Record in savings identified. Budget Management Capacity to Manage in Year Budget pressure Partnerships Increased risks associated with 0.2% 0.6% Community Budgets. Limited partnership funding of £0.2m pa
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Appendix 1 Page 22
Factor Comment Lower Upper Limit Limit
Financial Standing Increasing level of borrowing limits 0.5% 2.0% future flexibility. Separate provision for future years. Total 3.0% 9.3%
The lower limit of 3.0% of turnover equates to £2.1m and the upper limit of 9.3% of turnover equates to £6.6m. The Authority is at the lower end of this range.
CONCLUSION
Given the level of General Balance available in 2015/16 of £2.6m; the prudent approach to the budget setting process for next financial year; and the Authority’s good past record of budget management, it is my conclusion that there is sufficient capacity in the budget to cope with the financial risks the Authority faces in 2015/16 and future years.
M Clayton Finance Director & Treasurer 30 January 2015
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Appendix 2 Budget Book 2015/16
ESSEX FIRE AUTHORITY BUDGET 2015/2016
Table of Contents
REPORT BY THE TREASURER OF THE FIRE AUTHORITY 1-5
REVENUE BUDGET 6-8
TOTAL REVENUE BUDGET £45.0m TOTAL REVENUE BUDGET £45.0m SERVICE REPORTING CODE OF PRACTICE 9
CAPITAL PROGRAMME 10 TOTAL REVENUE BUDGET £45.0m
Page 57 of 132 Appendix 2 Budget Book 2015/16
REPORT BY THE TREASURER TO THE FIRE AUTHORITY
Staff Budget 2014/15 Changes 2015/16 KEY FEATURES OF THE 2015/16 BUDGET Wholetime Firefighters 815 (82) 733 The revenue budget requirement of £71.827m is a decrease of Retained Firefighters 514 - 514 £1.444m against the 2014/15 budget of £73.271m. Control Staff 44 (10) 34 Support Staff 267 (5) 262
The budget for capital expenditure has been set at £8.175m. Total 1,640 (97) 1,543
The planned General Reserve as at 31 March 2016 is £2.574m. For non-staffing costs the budget has been based on the outturn expenditure for 2014/15 “normalised” to exclude the impact of any THE REVENUE BUDGET - BACKGROUND non-recurring expenditure. This base figure has then been adjusted for efficiency gains and to reflect the impact of specific changes planned for the next year. Employment costs equate to over 70% of the Authority’s total revenue budget, with the number of firefighters employed the most significant element. The budget reflects the decision made in May 2014 to change the crewing arrangements following the removal of On-going changes from 2014/15 rescue tenders, with the final two fire stations expected to change in June 2015. The total number of officer posts reflects the requirements for command and control of incidents based on current £000 % planning scenarios. The budget for control staff reflects resources to 2014/15 budget requirement 73,271 cover vacancies, maternity leave and training so that we are able to maintain full staffing. The average number of staff budgeted (34) for Inflation 755 1.0 reflects a saving of 10 posts from the implementation of the new Committed changes arising from 2013/14 (2,199) (3.0) mobilising system at Kelvedon Park in early 2015. The support staff 2015/16 budget requirement 71,827 (2.0) budget is derived from a review of the organisational departmental structure with the use of managed vacancies.
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1 Appendix 2 - Budget Book 2015/16
FINANCING THE BUDGET INFLATION The budget requirement is financed as follows: Some specific allowances have been made within the budget bids for expected inflationary increases in business rates, utilities and fuel and for higher supplier prices for property related costs. Other £000 % inflationary pressures have been absorbed by budget holders. Revenue budget requirement 71,827
Financed by : CHANGE IN THE REVENUE BUDGET REQUIREMENT Revenue support grant 16,303 22.7 The table below summarises the changes in the revenue budget National non-domestic rates 14,993 20.9 requirement between 2014/15 and 2015/16. The budget reflects the Council tax 39,758 55.4 achievement during 2013/14 of £1,274k efficiency savings identified Collection fund deficit 773 1 with departments during budget prioritisation work.
71,827 100.0
Committed changes arising from 2013/14
£000 Support staff pay award 195 Provision for capital financing (956)
Lease and interest charges (164) Efficiency savings (1,274) (2,199)
Page 59 of 132PRECEPT AND IMPLICATIONS FOR COUNCIL TAX
2 Appendix 2 - Budget Book 2015/16
The table below sets out the calculations of the proposed council tax and shows the changes from the 2014/15 budget.
2014/15 2015/16 Change Change The Council Tax bands for 2015/16 are set out below: £000 £000 £000 % Band Valuation Band £
Budget Requirement 73,271 71,827 (1,444) -2.0 A Up to £40,000 £44.28 B £40,001 to £52,000 £51.66 Sources of Finance C £52,001 to £68,000 £59.04 D £68,001 to £88,000 £66.42 Revenue Support Grant 19,138 16,303 (2,835) -14.8 E £88,001 to £120,000 £81.18 National Non-Domestic Rates 14,712 14,993 281 1.9 F £120,001 to £160,000 £95.94 Total Grant 33,850 31,296 (2,554) -7.5 G £160,001 to £320,000 £110.70 H More than £320,000 £132.84
Collection Fund Deficit 466 773 307 65.9 SERVICE REPORTING CODE OF PRACTICE
Precept Requirement 38,954 39,758 804 2.1 Page 9 sets out the Authority’s budget in the standard form required by the Service Reporting Code of Practice. This analysis is not consistent with the Authority’s internal management structure as set Tax Base 586,481 598,581 12,100 2.1 out in the detailed estimates and therefore apportionments have been made to enable these figures to be produced. One of the key Council Tax (Band D) 66.42 66.42 - - aims of the Code is to enable comparisons to be made between Fire Authorities.
The main changes are the lower levels of government funding.
The Council Tax, which is levied on domestic property, consists of a county, police, fire, district/borough and, where appropriate, parish element. The tax is set at one of eight bands, depending upon the value of the property.
The Band D Council Tax required to fund the Authority’s Page 2015/1 606 of 132 precept requirement of £71.827m is £66.42.
3 Appendix 2 - Budget Book 2015/16
Page 61 of 132 THE CAPITAL BUDGET
4 Appendix 2 - Budget Book 2015/16
THE CAPITAL PROGRAMME CONTACT POINTS
The Authority has set a budget of £8.175m for capital payments in If you would like further information please contact the Finance 2015/16. The programme for 2015/16 is set out on page 10. This Director & Treasurer to the Fire Authority, at budget book also gives details of draft programmes for the following three years. The forecast programmes are provided in order that advance design work may be carried out in good time and also to Essex Fire Headquarters, ensure that the longer lead times for the purchase of appliances can Kelvedon Park, be planned for in the medium term. Witham, Essex. CM8 3HB
As part of the budget process, the Authority will review the (Tel: 01376 576000) uncommitted elements of these future programmes before a decision is taken to commit resources to them. The budget figures for the 2016/17, 2017/18 and 2018/19 programmes are £5.721m, £4.343m and £0.775m. Future programmes that do not have an agreed outline business case are excluded from the forward plans. Mike Clayton Finance Director & Treasurer to the Fire Authority CAPITAL FINANCING Email [email protected]
It is planned to finance the Authority’s capital programme by internal resources from the accounting provisions for capital expenditure in earlier years and the opening cash balance. The interest cost of loans used to finance capital expenditure is included within the revenue budget.
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5 Appendix 2 Budget Book 2015/16
REVENUE BUDGET SUMMARY
2013/2014 2014/2015 2015/2016 Actual Original Budget Updated Budget Estimate £000 £000 £000 £000
35,833 Firefighters 36,888 36,248 33,311 4,901 Firefighters - retained duty system 5,096 5,736 5,208 1,654 Control staff 1,653 1,653 1,401 10,587 Support staff 11,129 11,129 10,433
52,976 Total Employment costs 54,766 54,766 50,353
2,090 Support costs 2,182 2,182 1,993 10,854 Premises & equipment 10,154 10,154 10,150 2,682 Other costs & services 3,524 3,524 3,354 1,937 Firefighters' ill-health pension costs 201 201 2,000 8,919 Financing items 6,531 6,531 8,092
(4,909) Operational income (4,087) (4,087) (4,116)
21,572 Total Other costs 18,505 18,505 21,473
74,548 Total Budget 73,271 73,271 71,827 Funding (21,692) Revenue support grant (19,138) (19,138) (16,303) (14,410) National non domestic rates (14,712) (14,712) (14,993) (38,233) Council tax (38,954) (38,954) (39,758) (213) Collection fund (surplus)/deficit (466) (466) (773)
(74,548) Total Funding (73,271) (73,271) (71,827)
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6 Appendix 2 Budget Book 2015/16
DETAILED ESTIMATES
2013/2014 2014/2015 2015/2016 Actual Original Budget Updated Budget Estimate £000 £000 £000 £000
Employment costs 35,833 Firefighters 36,888 36,248 33,311 4,901 Firefighters - retained duty system 5,096 5,736 5,208 1,654 Control staff 1,653 1,653 1,401 10,587 Support staff 11,129 11,129 10,433 52,976 Total Employment costs 54,766 54,766 50,353
Support costs 468 Training 749 749 480 834 Other employee costs 738 738 777 789 Travel & subsistence 695 695 736 2,090 Total Support costs 2,182 2,182 1,993
Premises & equipment 2,315 Property maintenance 2,332 2,332 2,288 634 Utilities 546 546 476 1,400 Rent & rates 1,365 1,365 1,438 1,507 Equipment & supplies 1,453 1,453 1,434 1,482 Communications 1,426 1,426 1,269 2,451 Information systems 2,025 2,025 2,205 1,065 Transport 1,006 1,006 1,041 10,854 Total Premises & equipment 10,154 10,154 10,150
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7 Appendix 2 Budget Book 2015/16
DETAILED ESTIMATES (cont.)
2013/2014 2014/2015 2015/2016 Actual Original Budget Updated Budget Estimate £000 £000 £000 £000
Other costs & services 934 Establishment expenses 1,203 1,203 1,210 473 Insurance 547 547 511 1,081 Professional fees 1,534 1,534 1,377 139 Democratic representation 155 155 155 55 Agency services 86 86 102 2,682 Total Other costs & services 3,524 3,524 3,354 1,937 Firefighters' ill-health pension costs 201 201 2,000
Financing items 2,669 Lease & interest charges 1,971 1,971 1,807 (671) Other financing items - - - 9,136 Statutory Provision for Capital Financing 6,675 6,675 5,779 0 Voluntary Provision for Capital Financing 60 60 - (2,216) Contribution to/(from) General Balance (2,175) (2,175) 506 8,919 Total Financing items 6,531 6,531 8,092 (4,909) Operational income (4,087) (4,087) (4,116)
74,548 Total Net Financing Requirement 73,271 73,271 71,827
Funding (21,692) Revenue support grant (19,138) (19,138) (16,303) (14,410) National non domestic rates (14,712) (14,712) (14,993) (38,233) Council tax (38,954) (38,954) (39,758) (213) Collection fund (surplus)/deficit (466) (466) (773) (74,548) Total Funding (73,271) (73,271) (71,827) Page 65 of 132
8 Appendix 2 - Budget Book 2015/16
SERVICE REPORTING CODE OF PRACTICE 2013/2014 2014/2015 2015/2016 Actual Updated Gross Income Net Budget Expenditure Expenditure £000 £000 £000 £000 £000 Community safety 5,597 Statutory inspection, certification and enforcement 5,420 5,641 (222) 5,419 8,163 Prevention and education 9,490 9,744 (608) 9,136 Fire fighting and rescue operations 45,192 Operational responses 42,755 42,217 (1,884) 40,333 7,322 Communications and mobilising 7,288 7,488 (518) 6,970 771 Securing water supplies 767 826 (112) 714
608 Fire Service Emergency Planning and Civil Defence 661 1,332 (640) 692 Corporate and Democratic Core 686 Democratic representation and management 722 850 (12) 838 70 Corporate Management 97 68 - 68 17 Non distributed costs - - - -
68,426 Net cost of services 67,200 68,166 (3,996) 64,170 Other items excluded from net cost of service (117) Interest and investment income (144) - (120) (120) 9,136 Provision for repayment of external loans 6,735 5,779 - 5,779 2,013 Pension interest & reserve movements - - - - 1,764 Interest payable 1,655 1,492 - 1,492 (4,362) Reversal of depreciation charge - - - - (2,216) Contribution to/(from) General Balance (2,175) - 506 506 (96) Transfer to Holiday Pay Account - - - - 74,548 Total Net Expenditure for Council Tax 73,271 75,438 (3,610) 71,827
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9
Appendix 2 - Budget Book 2015/16
CAPITAL PROGRAMME
Capital programme Capital budget 2015/16 2016/17 2017/18 2018/19 £000 £000 £000 £000
Property Asset Protection 2,170 2,000 2,000 -
Equipment 736 1,066 25 -
Information Technology Projects > £250k 1,300 - - - Projects < £250k 200 150 150 -
Vehicles Appliances (Pumping) 3,161 1,940 1,940 - Other vehicles 608 565 228 775
Total 8,175 5,721 4,343 775
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10
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ESSEX FIRE AUTHORITY
Essex County Fire & Rescue Service
MEETING AGENDA ITEM
Essex Fire Authority 9 MEETING DATE REPORT NUMBER
11 February 2015 EFA/015/15
SUBJECT Treasury Management Strategy
REPORT BY The Finance Director & Treasurer Draft PRESENTED BY The Finance Director & Treasurer, Mike Clayton
SUMMARY
This paper provides an update on 2014/15 and proposed treasury management indicators and the proposed treasury management strategy for 2015/16. The regulations require these indicators to be monitored and reviewed on a rolling basis. One purpose of this report is to review the indicators approved by the Authority, in the light of latest assessment of capital spending and actual treasury management activity during the first three quarters of 2014/15.
As the indicators are to ensure that capital investment plans are affordable, and that consequential borrowing will be based upon sound treasury management strategy, Members are also asked to approve capital financing indicators and the treasury management strategy for 2015/16.
RECOMMENDATIONS
It is recommended that:
1. the Treasury Management Policy Statement 2015/16 at Appendix 2 be approved;
2. the Treasury Management Practices 2015/16 at Appendix 3 be approved;
3. the Treasury Management position for 2014/15 be noted;
4. the performance against the capital financing indicators for 2014/15 be noted;
5. the 2015/16 prudential indicators outlined in Appendix 1 be approved; and
6. the calculation of the minimum revenue provision for capital financing using the Depreciation Method for all assets be approved.
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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 financing 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 any debt previously drawn may be restructured to meet authority risk or cost objectives.
CIPFA defines treasury management as:
“The management of the local authority’s 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 required to receive and approve, as a minimum, three main reports each year, which incorporate a variety of policies, estimates and actuals.
1. Treasury Management Indicators and Treasury Strategy (This report) – The first report and most important covers: the capital plans (including capital financing indicators), a Minimum Revenue Provision Policy, the Treasury management Strategy including treasury indicators and an investment strategy.
2. A Mid-Year Treasury Management Report – This was provided to the Audit Governance and Review Committee in January 2015 and it updated Members with the capital position, amending capital financing indicators as necessary and whether the treasury strategy is meeting the strategy or whether any polices require revision.
3. An Annual Treasury Report – This provides details of a selection of actual capital financing and treasury indicators and actual treasury operations compared to the estimates within the strategy.
TREASURY MANAGEMENT STRATEGY 2015/16
The strategy for 2015/16 covers two main areas:
Capital issues
the capital plans and the capital financing indicators; the minimum revenue provision (MRP) policy. Treasury management issues
the current treasury position; treasury indicators which will limit the treasury risk and activities of the Authority; prospects for interest rates; Page 70 of 132
Page 3
the borrowing strategy; policy on borrowing in advance of need; debt rescheduling; the investment strategy; and 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.
TREASURY MANAGEMENT CONSULTANTS
The Authority uses Capita 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.
THE CAPITAL PRUDENTIAL INDICATORS 2015/16 - 2017/18
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 capital financing indicators, which are designed to assist members’ overview and confirm capital expenditure plans.
The budgeted, forecast or estimated capital expenditure to be incurred for the current and future years that are recommended for approval, are summarised below:
2014/15 2015/16 2016/17 2017/18 Original Updated Forecast Forecast Estimate Estimate Estimate £000s £000s £000s £000s £000s Capital Expenditure 13,379 11,389 8,175 5,721 4,343
Financed by Capital Grant 2,759 2,759 - - - Capital receipts 3,500 - 8,000 - - Provision for Capital Financing 4,805 6,766 5,779 5,779 5,779 (Increase)/decrease in cash 2,315 1,864 (5,604) (58) (1,436) Borrowing - - - - - Total Financing 13,379 11,389 8,175 5,721 4,343
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THE CAPITAL FINANCING REQUIREMENT
The Capital Financing Requirement (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 underlying borrowing need. Any capital expenditure above, which has not immediately been paid for or funded by government grant or capital receipts, will increase the CFR.
The CFR does not increase indefinitely, as the minimum revenue provision (MRP) for capital financing is a statutory annual revenue charge which broadly reduces the borrowing need in line with each assets life. Voluntary contributions (VRP) to capital financing costs can also be made. The original estimates for 2014/15 were agreed before the re-statement of the Authority’s accounts for 2012/13 and the removal of voluntary provisions previously made.
The comparison of the CFR to the original indicators for 2014/15, and the new indicators to be agreed for 2015/16 are shown below:-
Estimate of Capital Financing Requirement 31/3/15 31/3/16 31/3/17 31/3/18 £000 £000 £000 £000 Original 2014/15 estimates 32,138 28,093 21,934 17,109
Fixed Assets 130,457 138,632 144,353 148,696 Estimate of MRP/VRP (6,766) (5,779) (5,779) (5,779) Capital Adjustment Account (83,990) (95,933) (106,889) (117,845) Updated 2014/15 indicators 39,701 36,920 31,685 25,072
MINIMUM REVENUE PROVISION FOR CAPITAL FINANCING POLICY STATEMENT
The Authority is required to pay off an element of the accumulated General Fund capital spend each year (the Capital Financing Requirement) through a revenue charge (the minimum revenue provision for capital financing - MRP), although it is also allowed to undertake additional voluntary payments if required (voluntary revenue provision for capital financing– VRP).
For 2015/16 the following arrangements are proposed:
Depreciation Method for any increase in the capital financing requirement based on the average annual depreciation charge for the assets purchased subject to the maximum lives set out below: o ICT - 5 years o Property - 20 years o Plant & Equipment – 8 years o Appliances – 12 years o Other Vehicles – 6 years o Cycle Scheme – 1 year
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AFFORDABILITY PRUDENTIAL INDICATORS
The incremental effects of these plans on our revenue expenditure are shown below:
Incremental effect on revenue of the 2015/16 to 2017/18 capital programmes and borrowing 2015/16 2016/17 2017/18 £000s £000s £000s Interest & MRP cost of 2014/15 programme 204 736 736 Interest & MRP cost of 2015/16 programme - 143 515 Interest & MRP cost of 2016/17 programme - - 109 Incremental revenue cost in each year 204 879 1,359
INCREMENTAL IMPACT OF NEW CAPITAL INVESTMENT ON COUNCIL TAX
The impact of capital investment on the council tax is used for budgeting. The incremental impacts on the 2014/15 and 2015/16 council tax on the capital programmes are shown below;
Incremental effect on Council Tax of the 2014/15 & 2015/16 Capital Programme 2014/15 2015/16 £000s £000s
Effect on Council tax £0.49 £0.34
These figures represent the maximum potential impact, given the assumptions made.
The incremental impact of the proposed capital programme has been determined assuming that the revenue costs of borrowing would be fully met from Council tax. In reality, these costs would be financed from a combination of Revenue Support Grant, non-domestic rates, revenue account savings from earlier investment and Council tax income, though it is not possible to identify the different components.
It should be noted that the incremental impact of capital investment decisions for 2015/16 has been included within the proposed Council tax level, as set out elsewhere on this agenda.
The estimate of the incremental impact of capital investment decisions proposed in the capital programme report for the three year period beginning 2015/16, over and above capital investment decisions that have previously been taken by the Authority, are:-
Incremental effect on revenue and Council tax of the 2015/16 to 2017/18 programmes 2015/16 2016/17 2017/18 £000s £000s £000s Total revenue cost in each year 204 879 1,359 Impact on Band D Council tax £0.35 £1.47 £2.28
Estimated increase in Council tax that year resulting from the three year programme 0.58% 1.74% 1.18%
The full year effect of these programmes in 2015/16 and future years is £1,642k additional revenue payments per year, with a £2.75 impact on the Council tax. This does not include the effect of any new capital projects started in 2015/16 or later. Page 73 of 132
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RATIO OF FINANCING COSTS TO NET REVENUE STREAM
Estimates of the ratio of financing costs to budget requirement for the current and future years and the actual figures for 2014/15 are:-
Ratio of financing costs to net revenue stream 2014/15 2015/16 2016/17 2017/18 £000 £000 £000 £000 Actual Estimate Estimate Estimate Original 2014/15 estimate 11.25% 11.34% N/A N/A Updated estimate 11.35% 9.94% 10.01% 10.00%
The estimates include interest payable and receivable, and the amounts required for the repayment of external loans. Net revenue streams represent the amounts to be met from government grants and local taxpayers.
BORROWING
The capital expenditure plans set out earlier 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. 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 or capital financing indicators, the current and projected debt positions and the annual investment strategy.
CURRENT PORTFOLIO POSITION
The Authority’s treasury portfolio position at 31 March 2014, 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.
2014/15 2015/16 2016/17 2017/18 Estimate Estimate Estimate Estimate External Debt £000 £000 £000 £000 Debt at 1 April 37,500 33,500 29,500 28,000 Expected change in Debt (4,000) (4,000) (1,500) - Actual gross debt at 31 March 33,500 29,500 28,000 28,000 Capital Financing Requirement 39,701 36,920 31,685 25,072 Under/(over) borrowing 6,201 7,420 3,685 (2,928) Within the capital financing 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 2015/16 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 purposes.
The Authority met this capital financing indicator at 31 March 2014 and expects to meet it at 31 March 2015. Present PWLB rules mean that there is no advantage to the Authority in repaying debt early and so the present cash surplus is expected to remain for a few years.
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TREASURY INDICATORS: LIMITS TO BORROWING ACTIVITY
In respect of its external debt, it is recommended that the Authority approves the following authorised limits for its total external debt gross of investments for the next three financial years, and agrees the continuation of the current year’s limit as no amendment is necessary. These limits separately identify borrowing from other long-term liabilities, such as finance leases. The Authority is asked to approve these limits.
Authorised limit 2015/16 2016/17 2017/18 £000 £000 £000 Borrowing 47,600 47,500 46,100 Other long-term liabilities - - - Total 47,600 47,500 46,100
The recommended limits are based upon the estimate of most likely, prudent, but not worst- case scenario, with sufficient headroom for fluctuations in cash balances. Risk analysis and risk management strategies have been taken into account, as have plans for capital expenditure, estimates of the CFR and estimates of cash flow requirements for all purposes.
The Authority is also asked to approve the following operational boundary for external debt for the same time period. The proposed operational boundary is based on the same estimates as the authorised limit, but reflects directly the Treasurer’s estimate of the most likely, prudent, but not worst case scenario, without the additional headroom included within the authorised limit to allow for unusual cash flow movements, and equates to the maximum external debt projected by this estimate. The operational boundary represents a key management tool for monitoring by the Treasurer.
Operational Boundary 2015/16 2016/17 2017/18 £000 £000 £000 Borrowing 44,600 44,500 43,100 Other long-term liabilities - - - Total 44,600 44,500 43,100
The Authority has remained well within the operational limit during 2014/15 as shown in the graph below which outlines the Authority’s total external debt compared to the operational and authorised limits. The actual level of borrowing at 31 December 2014 was £33.5m.
80 70 60 50 40 30
Borrowing £ Borrowingmillion 20 10 £-
Actual Borrowing Operational boundary Treasury Management Limit
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PROSPECTS FOR INTEREST RATES
The Authority has appointed Capita 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 the Capita Asset Services central view.
Annual Average % Bank Rate % PWLB Borrowing Rates % (including certainty rate adjustment) 5 year 25 year 50 year March 2015 0.50 2.20 3.40 3.40
June 2015 0.50 2.20 3.50 3.50
Sept 2015 0.50 2.30 3.70 3.70
Dec 2015 0.75 2.50 3.80 3.80
March 2016 0.75 2.60 4.00 4.00
June 2016 1.00 2.80 4.20 4.20
Sept 2016 1.00 2.90 4.30 4.30
Dec 2016 1.25 3.00 4.40 4.40
March 2017 1.25 3.20 4.50 4.50
June 2017 1.50 3.30 4.60 4.60
Sept 2017 1.75 3.40 4.70 4.70
Dec 2017 1.75 3.50 4.70 4.70
March 2018 2.00 3.60 4.80 4.80
The current economic outlook and structure of market interest rates and government debt yields have several key treasury management implications:
Greece and the Eurozone Counterparty Investment returns; and Borrowing interest rates;
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 relatively high.
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Against this background and the risks within the economic forecast, caution will be adopted with the 2015/16 treasury operations. The Director of Finance will monitor interest rates in financial markets and adopt a pragmatic approach to changing circumstances.
TREASURY MANAGEMENT LIMITS ON ACTIVITY
It is further recommended that the Authority set upper and lower limits for the maturity structure of its borrowings. The proposed limits are calculated as the projected amount of fixed borrowing that is maturing in each period, as a percentage of the total projected borrowing that is fixed rate. The Authority is recommended to set a lower limit of 0% for all years.
Maturity profile upper limits 2014/15 2015/16 2016/17 Lower Upper Lower Upper Lower Upper Limit Limit Limit Limit Limit Limit % % % % % % Period under 12 months - 22 - 25 - 14 12 to 24 months - 22 - 13 - 7 24 months to 5 years - 28 - 19 - 21 5 to 10 years - 11 - 19 - 14 10 years and over - 100 - 100 - 100
The Authority is in no danger of exceeding the maturity profile upper limit in 2014/15.
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.
ANNUAL INVESTMENT STRATEGY
The Authority’s investment policy has regard to the CLG’s Guidance on Local Government Investments (“the Guidance”) and the revised CIPFA Treasury Management in Public Services Code of Practice and Cross Sectoral Guidance Notes (“the CIPFA TM Code”). The Authority’s investment priorities will be security first, liquidity second, and then return.
Counterparty limits will be set through the Authority’s Treasury Management Practices (Appendix 3).
INVESTMENT COUNTERPARTY SELECTION CRITERIA
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. 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. It will also ensure that it has sufficient liquidity in its investments.
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BORROWING STRATEGY
The level of long term debt at 31 December 2014 was £33.5m. The first graph below shows the maturity profile of all outstanding PWLB loans, and the second the cumulative profile.
PWLB Loans Maturing
£6,000,000
£5,000,000
£4,000,000
£3,000,000
£2,000,000
£1,000,000
£0
The longest dated loan is one of £4.5m that runs until December 2034.
Total PWLB Loan Maturity
£40,000,000 £35,000,000 £30,000,000 £25,000,000 £20,000,000 £15,000,000 £10,000,000 £5,000,000 £0
LOOKING FORWARD - REMAINDER OF 2014/15
Currently, indications are that as resources are deployed for capital expenditure there will be a reduction in cash balances during the remainder of the financial year. Existing cash balances will be used to fund this expenditure. Capital expenditure at 31 December was £4.6m with a further £6.8m projected by year end.
CASH FLOWS
The table below shows the estimated future cash balances for the Authority:
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2014/15 2015/16 2016/17 2017/18 £000 £000 £000 £000 Cash balance at 1 April 26,593 11,026 12,630 11,188 Minimum Revenue Provision 6,766 5,779 5,779 5,779 Voluntary Revenue Provision - - - - Capital expenditure (11,389) (8,175) (5,721) (4,343) Capital receipts - 8,000 - - Capital grants 2,759 - - - PWLB repayments (4,000) (4,000) (1,500) - Pension Injury payment (13,300) - - - Surplus/(Deficit) 3,597 - - - Cash balance at 31 March 11,026 12,630 11,188 12,624
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.
RISK MANAGEMENT IMPLICATIONS
The purpose of this report is to set out the risks and the approach to risk in the financing of capital expenditure.
LEGAL IMPLICATIONS
The Treasurer must ensure that all relevant matters with regard to setting or revising these indicators are reported to Members. The Treasurer is also responsible for establishing procedures for monitoring performance against the prudential indicators.
It is for the Authority, to make the judgement between the constraints of affordability and the demands of services for capital investment. The advice of the Treasurer is, however, important as there are specific duties placed upon the Treasurer, by section 114 of the 1988 Act, for proper financial administration.
FINANCIAL IMPLICATIONS
The financial implications are set out in the report.
USE OF RESOURCES
There are two implications for the Authority regarding the use of resources and value for money implications of the approach to funding capital expenditure. Firstly, there is the balance between utilising cash surplus generated by the Authority and held as Reserves, and external borrowing. The Authority’s approach to the retention of reserves is considered as part of the budget setting process. The intention is to provide funds to enable significant fluctuations in expenditure within a budget year to be absorbed, whilst maintaining on-going expenditure funded by government grants and council tax.
The cash generated as reserves are used to reduce borrowings, should the reserves be needed to fund expenditure, the borrowings of the authority will increase.
The second implication is in the choice of lender. The lender of choice for the Authority is the Public Works Loan Board.
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EQUALITY IMPLICATIONS
There are no Equality Implications arising from this report.
LOCAL GOVERNMENT (ACCESS TO INFORMATION) ACT 1985 List of background documents - None Proper Officer: Finance Director & Treasurer Contact Officer: Mike Clayton, Essex County Fire & Rescue Service, Kelvedon Park, London Road, Kelvedon CM8 3HB. 01376 576000 E-mail: [email protected]
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Appendix 1 Page 13
Treasury Management Indicators 2013/14 2014/15 2014/15 2015/16 2016/17 2017/18 Original Updated Actual Forecast Forecast Estimate Estimate Estimate
Indicators for Affordability
Ratio financing costs to net revenue streams% 9.26% 11.35% 11.35% 9.94% 10.01% 10.00%
Indicators for Prudence
Net borrowing and capital financing It is not envisaged that net borrowing will exceed the Capital requirement Financing Requirement over this period
Confirmation of treasury management good Treasury management will be carried out in accordance with practice approved policies and practises
External debt within prudent and sustainable Treasury management indicators for external debt take limits account of their affordability
Indicators for capital expenditure
Capital expenditure £000 8,120 13,379 11,389 8,175 5,721 4,343 Capital financing requirement £000 37,837 32,138 39,701 36,920 31,685 25,072
Indicators for external debt
Actual external debt £000 37,500 33,500 33,500 N/A N/A N/A Authorised limit £000 42,600 45,200 45,200 47,600 47,500 46,100 Operational boundary £000 39,600 42,200 42,200 44,600 44,500 43,100
Interest rate exposures Upper limit - fixed rates % 100 100 100 100 100 100 Upper limit - variable rates % 80 80 80 80 80 80
Maturity structure of borrowing (upper limit) Under 12 months % 21 22 22 25 14 - 12 months and within 24 months % 21 11 22 13 7 7 24 months and within 5 years % 16 17 28 19 21 21 5 years and within 10 years % 21 17 11 19 14 21 10 years and above % 100 100 100 100 100 100
Sum invested for more than 364 days £000 ------
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Appendix 2 Page 14
TREASURY MANAGEMENT POLICY STATEMENT 2015/16
Definition
Essex Fire Authority defines its treasury management activities as:
The management of the Authority’s 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.
The Authority regards the successful identification, monitoring and control of risk to be the prime criteria by which the effectiveness of its treasury management activities will be measured. Accordingly, the analysis and reporting of treasury management activities will focus on their risk implications for the Authority.
The Authority acknowledges that effective treasury management will provide support towards the achievement of its business and service objectives. It is therefore committed to the principles of achieving value for money on treasury management, and to employing suitable comprehensive performance measurement techniques, within the context of effective risk management.
PRINCIPLES
The Authority will create and maintain, as the cornerstones for effective treasury management:
a treasury management policy statement, stating the policies, objectives and approach to risk management of its treasury management activities; and suitable treasury management practices (TMP’s), setting out the manner in which the Authority will seek to achieve those policies and objectives, and prescribing how it will manage and control those activities. The Authority will receive reports on its treasury management policies, practices and activities, including, as a minimum, an annual strategy and plan in advance of the year, a mid-year review and an annual report after its close.
The Authority delegates responsibility for the implementation and regular monitoring of its treasury management policies and practices to the Policy and Strategy Committee, and for the execution and administration of treasury management decisions to the Finance Director and Treasurer, who will act in accordance with the Authority’s policy statement and Treasury Management Practices and CIPFA’s Standard of Professional Practice on Treasury Management.
The Authority nominates the Policy and Strategy Committee to be responsible for ensuring effective scrutiny of the treasury management strategy and policies.
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Appendix 3 Page 15
TREASURY MANAGEMENT PRACTICES
TMP1 Risk management
The Finance Director and Treasurer will design, implement and monitor all arrangements for the identification, management and control of treasury management risk.
Credit and counterparty risk management
The Authority will ensure that its counterparty lists and limits reflect a prudent attitude towards organisations with which funds may be deposited. It will have a formal counterparty policy in respect of those organisations.
The following counter parties are included on the lending list as it acts as the main banker to the Authority - Lloyds plc.
Other money market funds, banks and similar institutions with “high Grade” credit ratings as defined in the table below may be used, subject to the agreement of the Treasurer. Should the rating for an institution vary across ratings agencies the Fitch rating will be used. Both the short and long term rating criteria must be met.
Moody's S&P Fitch Long- Short- Long- Short- Long- Short-
term term term term term term Aaa AAA AAA Prime Aa1 AA+ AA+ A-1+ F1+ Aa2 AA AA High grade P-1 Aa3 AA- AA- A1 A+ A+ Upper medium A-1 F1 A2 A A grade
Alternative Investment Funds (New category for 2015/16)
The Authority may invest funds in the CCLA managed Local Authorities Property Fund. The amounts invested will be determined by the Treasurer and must comprise cash balances not expected to be required within the next two years. The value of funds invested shall be limited to the higher of £2m or 30% of the Authority’s net cash funds.
Liquidity risk management
The Authority will ensure it has adequate though not excessive cash resources, borrowing arrangements, and overdraft facilities to enable it to have the level of funds available to it which are necessary for the achievement of its service objectives. The Authority will only borrow in advance of need where there is a clear case for doing so and will only do so for the current years capital programme or to finance future debt maturities.
Long-term borrowing, undertaken for periods in excess of 364 days, will only be undertaken for the purpose of financing capital spending. Short-term borrowing will be undertaken to cover temporary shortfalls of cash arising from timing differences between income and expenditure. It may also be used to temporarily finance capital spending, if the long-term borrowing rates are not favourable, in order to defer longer-term borrowing until interest rates are more advantageous. Consideration will therefore be given to a mix of short and long-term borrowing, having regard to the cash flow position and prevailing interest rates.
Borrowing will not be undertaken solelyPage for the 83 purposes of 132 of profiting from onward investment.
Appendix 3 Page 16
Short term borrowing will only be undertaken in accordance with the arrangements in place with the Authority’s bankers (Lloyds plc). In February 2015, these arrangements provide for a short term overdraft facility of £0.5m.
It is the government’s aim that the Public Works Loan Board (PWLB) should be able to meet all of an authority’s legitimate need for long-term loans. It is therefore anticipated that if it is necessary to undertake long-term borrowing within the forthcoming year this will be secured from the PWLB. Alternative borrowing arrangements from the money market or other financing options will continue to be considered as well.
Interest rate risk management
The Authority will manage its exposure to fluctuations in interest rates with a view to containing its interest costs, or securing its interest revenues. It will achieve this by the prudent use of its approved financing and investment instruments, methods and techniques to create stability and certainty of costs and revenues, at the same time retaining a sufficient degree of flexibility to take advantage of unexpected, potentially advantageous changes in the level or structure of interest rates.
The Authority set the following upper limits on net exposure to variable and fixed interest rates:
Interest rate exposures 2014/15 2014/15 2015/16 2016/17 2017/18 Original Updated Limit limit % % % % % Upper limit - Fixed rates 100 100 100 100 100 Upper limit - Variable rates 80 80 80 80 80
These limits were set based on limiting surplus cash balances which are invested at variable rates of interest and to reflect the current practice of securing all long-term loans at fixed rates. The position for 2014/15 is set out in the chart below:
120%
100%
80%
Fixed rate limit 60% Fixed Rate Actual
40%
20%
0%
Exchange rate risk management
The Authority will manage its exposure to fluctuations in exchange rates so as to minimise any detrimental impact on its budgeted income/expenditure levels.
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Appendix 3 Page 17
Refinancing risk management
The Authority will ensure that its borrowing, private financing and partnership arrangements are negotiated, structured and documented, and the maturity profile of the monies so raised are managed, with a view to obtaining offer terms for renewal or refinancing, if required, which are competitive and as favourable to the organisation as can reasonably be achieved in the light of market conditions prevailing at the time.
Legal and regulatory risk management
The Authority will ensure that all of its treasury management activities comply with its statutory powers and regulatory requirements.
Fraud, error and corruption, and contingency management
The Authority will ensure that it has identified the circumstances which may expose it to the risk of loss through fraud, error, corruption or other eventualities in its treasury management dealings. Accordingly, it will employ suitable systems and procedures, and will maintain effective contingency management arrangements.
Market risk management
The Authority will seek to ensure that its stated treasury management policies and objectives will not be compromised by adverse market fluctuations in the value of the principal sums it invests, and will accordingly seek to protect it from the effects of such fluctuations.
TMP2 Performance measurement
The Authority is committed to the pursuit of value for money in its treasury management activities, and to the use of performance methodology in support of that aim, within the framework set out in its treasury management policy statement. Accordingly the treasury management function will be the subject of on-going analysis of the value it adds in support of the Authority’s service objectives. It will be the subject of regular examination of alternative methods of service delivery, of the availability of fiscal or other grant or subsidy incentives, and of the scope for other potential improvements.
TMP3 Decision-making and analysis
The Authority will maintain full records of its treasury management decisions, and of the processes and practices applied in reaching those decisions, both for the purposes of learning from the past, and for demonstrating that reasonable steps were taken to ensure that all issues relevant to those decisions were taken into account at the time.
TMP4 Approved instruments, methods and techniques
The Authority will undertake its treasury management activities by employing appropriate instruments, methods and techniques, and within the limits and parameters defined in TMP1 Risk management.
TMP5 Organisation, clarity and segregation of responsibilities, and dealing arrangements
The Authority considers it essential that all treasury management activities are structured and managed in a fully integrated manner and that there is at all times clarity of treasury management responsibilities. The principles on which this will be based is a clear distinction between those charged with setting treasury management policies and those charged with implementing and controlling these policies.
The responsible officer will ensurePage that 85 there of 132 are clear written statements of the responsibilities for those engaged in treasury management, ensure that policies and
Appendix 3 Page 18 procedures are followed at all times and ensure that there is proper documentation for all deals and transactions.
TMP6 Reporting requirements and management information arrangements
The Treasurer will ensure that regular reports are prepared and considered on the implementation of its treasury management policies.
The Authority will receive an annual report on the strategy and plan for the coming year. The Audit Governance and Review Committee will receive a mid-year review and the Policy & Strategy Committee will receive an annual report on the performance of the treasury management function.
TMP7 Budgeting, accounting and audit arrangements
The Finance Director and Treasurer will prepare an annual budget for treasury management, which will bring together all of the costs involved in running the treasury management function. The Finance Director and Treasurer will exercise effective controls over this budget and will report upon and recommend any changes required accordingly.
TMP8 Cash and cash flow management
Unless statutory or regulatory requirements demand otherwise, all monies in the hands of the Authority will be under the control of the Finance Director and Treasurer. Cash flow projections will be prepared on a regular and timely basis.
TMP9 Money laundering
The Authority is alert to the possibility that it may become the subject of an attempt to involve it in a transaction involving the laundering of money. Accordingly, it will maintain procedures for verifying and recording the identity of counterparties and reporting suspicions to an appropriate authority.
TMP10 Training and qualifications
The Authority recognises the importance of ensuring that all staff involved in the treasury management function is fully equipped to undertake the duties and responsibilities allocated to them.
TMP11 Use of external service providers
The Authority recognises that responsibility for treasury management decisions remains with the organisation at all times. It recognises that there may be potential value in employing external providers of treasury management services, in order to acquire access to specialist skills and resources. When it employs such service providers, it will ensure it does so for reasons which have been submitted to a full evaluation of the costs and benefits. It will also ensure that the terms of their appointment and the methods by which their value will be assessed are properly greed and documented, and subject to regular review. Where services are subject to formal tender, legislative requirements will always be observed.
The Authority currently uses Capita Asset Services, Treasury solutions for external treasury management advice.
TMP12 Corporate governance
The Authority is committed to the pursuit of proper corporate governance throughout its businesses and services, and to establishingPage 86 the of principles132 and practices by which this can be achieved. Accordingly, the treasury management function and its activities will be undertaken with openness and transparency, honesty integrity and accountability.
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Essex Fire Authority
Essex County Fire & Rescue Service
MEETING AGENDA ITEM Essex Fire Authority 10
MEETING DATE REPORT NUMBER 11 February 2015 EFA/016/15
SUBJECT Pay Policy Statement
REPORT BY Lindsey Stafford-Scott, Director of HR & OD
PRESENTED BY Lindsey Stafford-Scott, Director of HR & OD
SUMMARY
Relevant Authorities are required by section 38(1) of the Localism Act 2011 to prepare Pay Policy Statements. These statements must articulate an Authority’s own policies towards a range of issues relating to the pay of its workforce, particularly its senior staff (or ‘Chief Officers’) and its lowest paid employees.
This paper sets out the Pay Policy Statement for Essex Fire Authority (EFA) for the period 2015/16.
The guidance from the Local Government Association entitled ‘Pay policy and Practice in Local Authorities – A guide for Councillors’ has been used in the production of the Pay Policy Statement and the template document provided has been used as the template for the Pay Policy Statement. The EFA approved this report template as part of the 2014/15 pay policy statement report (EFA/021/14).
RECOMMENDATIONS
Members of the Essex Fire Authority are asked to approve and publish the attached Pay Policy Statement (Appendix) via the Service website.
BACKGROUND
As Members will be aware The Localism Act 2011 was enacted via Royal Assent on 15 November 2011. Section 38(1) of the Localism Act 2011 required English and Welsh local authorities to produce a Pay Policy Statement for 2012/13 and for each subsequent financial year after that. The Bill as initially drafted, referred solely to Chief Officers (a term which includes both statutory and non-statutory Chief Officers, and their deputies) but amendments reflecting concerns over low pay and also drawing on Will Hutton’s 2011 Review of Fair Pay in the Public Sector, introduced requirements to compare the policies on remunerating Chief Officers and other employees, and to set out policy on the lowest paid.
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Pay Policy Statements must be prepared for each financial year. They must be approved by Full Council, or a meeting of Members in the case of a Fire and Rescue Authority, and published on the Authority’s website and in any other manner that the Authority thinks appropriate, as soon as is reasonably practicable after they are approved or amended.
The Act defines remuneration widely, to include not just pay but also charges, fees, allowances, benefits in kind, increases in/enhancements of pension entitlements, and termination payments.
RISK MANAGEMENT IMPLICATIONS
The Fire Authority needs to attract, retain and motivate staff so that Essex County Fire & Rescue Service (ECFRS) can perform at its best. Extensive research shows that individuals are attracted, retained and engaged by a range of both financial and non-financial rewards so a coherent link between reward and the overall approach to people management and to attraction will deliver the best outcome.
FINANCIAL IMPLICATIONS
The financial implications are set out within the report.
LEGAL IMPLICATIONS
The legal implications are set out within the report.
USE OF RESOURCES
There are no direct implications within this report relating to use of resources.
ENVIRONMENTAL IMPLICATIONS
Publication of the Pay Policy Statement will be via the Service website.
EQUALITY IMPLICATIONS
There are no equality implications associated with this paper having had due regard to the requirements of the Equality Act.
LOCAL GOVERNMENT (ACCESS TO INFORMATION) ACT 1985 List of appendices attached to this paper: Appendix – Pay Policy Statement
List of background documents (not attached):
Proper Officer: Director of HR & OD, Lindsey Stafford-Scott, Contact Officer: Jenny Dines, Interim Head of HR County Fire & Rescue Service, Kelvedon Park, London Road, Rivenhall, Witham CM8 3HB Tel: 01376 576000 E-mail: [email protected] Page 88 of 132 Appendix Agenda Item 10 EFA/016/15 Page 1 of 10
Essex County Fire and Rescue Pay Policy statement
2015 – 2016
Introduction and Purpose
Under section 112 of the Local Government Act 1972, the Authority has the “power to appoint officers on such reasonable terms and conditions as the authority thinks fit”. This Pay Policy Statement (the ‘statement’) sets out the Authority’s approach to pay policy in accordance with the requirements of Section 38 of the Localism Act 2011. The purpose of the statement is to provide transparency with regard to the Authority’s approach to setting the pay of its employees by identifying:
the methods by which salaries of all employees are determined; the detail and level of remuneration of its most senior staff i.e. ‘Principal Officers’, as defined by the relevant legislation.
This policy statement has been approved by the Authority and is effective from 1 April 2015. It will be subject to review annually and in accordance with new or proposed legislation to ensure that it remains relevant and effective.
Accountability and Decision Making
All new and amended Principal Officer appointments are subject to full Fire Authority approval. Subsequent appointments to such positions are made by a panel of Fire Authority Members and the pay and reward package for a Principal Officer post is decided by Fire Authority Members via the HR Committee.
Responsibility and Scale
The Service is directly responsible for a budget of £71.9m and for the employment of 15501 staff. This includes responsibility for £0.6m for the Emergency Planning work-stream. The Service provides services to a total population of 1,725, 000 residents and 41.9 million visitors.
The Authority’s Pay Strategy
In determining the pay and remuneration of its employees, the Authority will comply with all relevant employment legislation. This includes the Equality Act 2010, Part Time Employment (Prevention of Less Favourable Treatment) Regulations 2000, The Agency Workers Regulations 2010 and where relevant, the Transfer of Undertakings (Protection of Earnings) Regulations. The Authority takes the following approach to assessing individual and overall pay levels.
Determining the job size – this process ranks the Authority’s jobs by using job evaluation techniques in order to ensure fairness and transparency and to allow for direct comparison between roles. Where appropriate national role maps are used to determine responsibilities and accountabilities within roles.
1 (numbers from January 2015 finance report) Page 89 of 132
Appendix Agenda Item 10 EFA/016/15 Page 2 of 10
Determining overall pay levels – this allows the Authority to assess the right pay policy and pay levels based on a number of key factors, including ability to pay, national pay comparators and local and regional pay comparators where appropriate
Determining pay structure – pay is frequently made up of a number of elements. This Authority has adopted an approach which includes basic pay, incremental progression related to performance for support staff, service and financial and non-financial benefits. Information on the financial benefits available to employees is given within this statement.
Pay Arrangements for Principal Officers
For the purpose of this statement the following roles are reported within this pay policy:
1. Chief Fire Officer and Chief Executive
2. Deputy Chief Fire Officer and Deputy Chief Executive
3. Assistant Chief Fire Officer (Director of Safer and Resilient Communities)
4. Assistant Chief Fire Officer (Director of Operations)
5. Assistant Chief Executive – Director of Finance and Treasurer
6. Director of Human Resources and Organisational Development
The Chief Fire Officer is also the County’s Emergency Planning Officer for which he receives a non-pensionable allowance. This allowance is £28,000 per annum and is funded via a service level agreement with Essex County Council.
The statutory role of Monitoring Officer is discharged by the County Solicitor and Director for Essex Legal Services, Essex County Council under an annual contractual arrangement pursuant to the Local Authorities (Goods and Services) Act 1970.
The following roles are all full time employees on permanent contracts and all are paid on spot annual salaries:
Chief Fire Officer and Chief Executive
The current annual salary for the post of Chief Fire Officer and Chief Executive is £150,748.66. This figure does not include the allowance for undertaking the role of Emergency Planning Officer which is £28,000 per annum.
Deputy Chief Fire Officer and Deputy Chief Executive
£123,524.00.
Assistant Chief Fire Officer (x2)
£112,312.04
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Appendix Agenda Item 10 EFA/016/15 Page 3 of 10
Assistant Chief Executive and Director of Finance and Treasurer
£112,312.04
Director of Human Resources and Organisational Development
£111,100
The Authority does not apply any bonuses or performance related pay to its Principal Officers.
Determining Levels of Pay for Senior Officers
There is a two track approach for determining levels of pay for Brigade Manager roles. At National level the National Joint Council for Brigade Managers of Fire and Rescue Services annually reviews the level of pay increase applicable to all those covered by the National Agreement. All other decisions about pay levels and remuneration for individual Brigade Managers are taken by the Essex Fire Authority which annually reviews salary levels. The role of Assistant Chief Executive/Director of Finance and Treasurer and the role of Director of Human Resources and Organisational Development are employed on National Joint Council for Local Government Services conditions of service and some locally determined conditions of service.
There was a national pay award effective from 1 January 2014 for Brigade Managers of either 1% or £1000. The role of Chief Fire Officer received £1000. However, on the recommendation of the Senior Management Board (SMB) and in light of ongoing austerity, this pay award was not applied to Principal Officers. There was no local pay award requested or offered.
Employment Arrangements
All new and amended Principal Officer appointments are subject to full Fire Authority approval. Subsequent appointments to such positions are made by a panel of Fire Authority Members and the pay and reward package for Principal Officer posts is decided by Fire Authority Members via the HR Committee, with figures detailed above.
When recruiting to all posts the Authority will take full and proper account of its own policies and procedures and legislation. The Authority has reviewed its recruitment processes for all roles and new processes are in the process of implementation.
In exceptional circumstances, where the Authority remains unable to recruit to a Principal Officer post or where there is a need for interim support to provide cover for a vacant post, the Authority may consider engaging an individual through a ‘contracts for service’. Such arrangements can be advantageous because they can reduce employment costs and are flexible because they can be used for short periods of time without the need to pay termination payments. Where these arrangements are used the Authority will use relevant procurement processes to ensure that it can demonstrate value for money. Such arrangements will be kept under regular review by the HR Committee.
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Appendix Agenda Item 10 EFA/016/15 Page 4 of 10
Determining Levels of Pay for All Other Staff
For all other personnel, the Authority uses incremental salary ranges. Pay grades for support staff are between Scale 1 (£13,500 – as part of the 2014-16 NJC pay award, this scale point (5) will be deleted on 1 October 2015 and employees on scale point 5 will progress to scale point 6) and SMG5 (£98,185). Whole-time uniformed employees employed under Grey Book terms are paid between the levels of Trainee Firefighter (£21,799) and Area Manager B (£55,568). Retained uniformed employees, employed under Grey Book terms are paid an annual retaining fee between the levels of Trainee Firefighter (£2,180) and Area Manager B (£5,557); retained employees are also paid hourly rates for attending calls between the levels of Trainee Firefighter (£9.95p/h) and Area Manager B (£25.37p/h). All retained personnel regardless of seniority are paid a disturbance fee of £3.82 for attending a call.
All unformed employees who are designated as Flexi Officers by their role receive a 20% pensionable uplift on their basic pay, in accordance with part B paragraph 3 of the Grey Book.
These arrangements apply to different groups of staff and the reasons are clearly evidenced and documented. The Service’s approach to pay is detailed below.
Where necessary the Authority may apply market supplements or other individual pay levels for specific roles in order to ensure that it can recruit the best staff. This approach will only be adopted where there is evidence of recruitment difficulty.
Pay Design
The Authority’s pay policy is based on a nationally negotiated pay scheme which applies to local government employees.
For uniformed staff there was an increase in the national pay spine of 1% in 2014, employees are remunerated in accordance with NJC Circular NJC/03/14 7 August 2014 accordingly.
The nationally agreed NJC pay award of 2.20% was applicable from 1 January 2015 for employees on Local Government Services Conditions of Service. This award included non-consolidated payments for employees on some salary points. This pay award covers 2014 – 2016 NJC Circular November 2014.
In determining its grading structure and setting overall pay levels for all posts the Authority takes account of the need to ensure value for money in respect of the use of public expenditure, balanced against the need to recruit and retain employees who are able to meet the requirements of providing high quality services to the community, delivered effectively and efficiently and at times at which those services are required.
Pay Grades and Progression
To encourage employees to develop in their role and to improve their performance the Service has arranged its pay scales within 19 progressive2 grades for support staff on Green Book terms. For uniformed staff on Grey Book Terms there are 63 progressive role levels. Within the scales for
2 http://hr-od/_img/pics/pdf_1418394402.pdf 3 http://hr-od/_img/pics/docx_1408639130.docx Page 92 of 132
Appendix Agenda Item 10 EFA/016/15 Page 5 of 10 support staff, there are between 2 and 8 different spinal column points or increments; for uniformed staff there are between 1 and 3 different pay levels within a role. Progression through the pay grade is based on the Service’s business need and through promotion via open recruitment and selection.
New employees will usually be appointed to the minimum pay level for the relevant grade. Managers have the discretion to recommend an employee for acceleration of increments within the grade when they have demonstrated the achievement of key Service Objectives. In addition, the Service follows directives from the National Joint Council for Local Government Services, which determines when Services have the budgetary remit to increase employees’ salary.
Essex Fire Authority does not operate a bonus scheme or a Performance Related Pay Policy for its employees with the exception of employees in the Emergency Planning function of the Authority, who have transferred to the Authority from Essex County Council under Transfer of Undertaking Protection of Employment Regulations and retain their former Essex County Council performance related pay scheme.
Fixed Pay Rates
The Authority also uses fixed pay rates or points. These are used:
• For short term appointments
• Where the required duties are in a limited range, can be closely defined and easily implemented so that there is limited scope to undertake additional responsibility or to develop expertise;
• Where the level of salary paid is designed to cover the full range and scope of the job – for example Principal Officer posts
• The payments are in accordance with the National Joint Council For Local Authority Fire and Rescue Services Scheme of Conditions of Service, 6th Edition.
Financial & Non-Financial Benefits
The Authority awards employees with the following supplementary remuneration elements, which are determined by either national, regional and local or collective bargaining arrangements, as well as Authority policy. Each item below is labelled as to whether it is nationally negotiated or a local agreement
The Authority uses the following:
Market supplements (Local): in order to attract and retain employees with particular experience, skills and capacity, for example when there are skills shortages locally or nationally. The Authority will ensure that the requirement for additional allowance or supplement is objectively justified.
Continual Professional Development (National): The Service pays uniformed staff, up the level of Area Manager, an allowance for Continual Professional Development. Employees must have at
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Appendix Agenda Item 10 EFA/016/15 Page 6 of 10 least 8 years continuous service and be deemed competent for pay purposes to qualify. The amounts for the allowance range from £48.45 per calendar month for a whole-time firefighter to £12.12 per month for a retained firefighter.
Relocation Mileage (Regional): Support staff are entitled to claim a time limited relocation mileage if they are moved further away from their home at the behest of the Service. The amounts the service currently use are detailed in the following circular, with employees entitled to claim the difference between their previous home to work journey (1 way) and their new journey.
Home to Duty Mileage (Local): The Service pays uniformed staff a home to duty supplement if an employee of the level of Watch Manager A and above is required to move to a Service training venue, or Service Headquarters. The rules were set out in the following memo and the rate for cars is 15p per mile, and 8.7p per mile for motorbikes.
Pay Protection (Local): The Service applies a pay protection policy for support staff employees who are moved from their current role to a role that holds a lower level of financial remuneration. Under the Service’s Reorganisation, Redundancy and Redeployment policy employees will be entitled to 3 years’ pay protection starting from the effective date of the change.
Study Support (Local): The Service operates a policy whereby employees can apply for financial assistant to a course or further study, up to a maximum amount of 50% of the applicable fees.
Lease Car Scheme (Local): The Service provides assistance in the procurement of lease cars to employees if they meet specific criteria through the Car Lease Scheme. In some cases operational commitments necessitate the provision of an emergency vehicle.
Principal Officers Car Scheme (Local): Principal Officers have the option to join a separate car provision scheme (The Principal Officers’ Provided Car Scheme), which involves the Authority purchasing a car and providing it for the officers’ use along with a fuel charge card for providing fuel for both private and business use, with any resultant tax liability being the responsibility of the Officer. For Uniformed staff the vehicle is an emergency vehicle in relation to their duties.
Mileage Allowance (National): If Service employees are not a member of either of the above schemes and they use their own vehicles for Service purposes, then they are entitled to claim a mileage allowance reimbursement in accordance with NJC Circular 08/13.
Subsistence (Local): The Service pays employees the following amounts for subsistence expenses incurred when carrying out Service duties. Breakfast – (£5.82); Lunch – (£8.04); Evening Meal – (£9.96); Overnight Allowance for courses – (£4.53).
Expenses (Local): Principal Officers my claim reimbursement for out of pocket expenses incurred in the course of carrying out their duties. The Authority also permits Officers to utilise Government Procurement cards to pay expenses.
Rent, Fuel & Light (National/Local): Day crewed employees, required to live in specific accommodation for the purposes of carrying out their retained duties, under page 32 paragraph 13 of the Grey Book, receive a rent and fuel and light allowance. Employees are housed in Service properties and remunerated for fuel and light at a level set by the Service.
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Appendix Agenda Item 10 EFA/016/15 Page 7 of 10
Telephone line rental (Local): The Authority reimburse expenditure incurred by employees in the provision of telephone line rental for the purposes of their role.
Medical Expenses (National): The Service provides uniformed employees, under paragraph 5 part B of the Grey Book the payment of medical expenses incurred under ss.77, 78 and 79 of the National Health Service Act 1977. In addition, under Appendix A paragraph 8 of the Grey Book, uniformed employees who have continuous service prior to 1 November 1994 will be eligible to claim for expenses incurred in accordance with ss.77, 78 and 79. This means that they are able to claim without the pre-requisite of that expense being as a result of a service related injury.
Aids to vision (Local): Employees are entitled to claim for certain expenses related to their vision and the effect it may have on their work undertaken for Authority purposes. The rules are laid out in the Aids to Vision Guidance.
Acting Up & Temporary Promotion (Local): The Service pays employees the applicable salary for acting up and being temporarily promoted. With the maximum movement permitted being one rank above their current rank.
Professional Memberships (Local): Essex Fire Authority will reimburse employees for the cost of joining or maintaining membership of professional bodies essential to the duties of their role.
Relocation scheme (Local): Essex Fire Authority will pay those meeting the following criteria for relocation allowance: New starters taking up a permanent appointment (where the role has been identified for receipt of relocation allowance); An existing employee who is compulsorily required by the Service to move work location; An employee who is compulsorily required by the Service to live in a certain proximity to a work location (e.g. within 1 hour of Gold Command). Payments up to £8,000 can be authorised by the Chief Fire Officer, between £8000 and £15,000 can be authorised by the CFO in consultation with the Chairman of the Fire authority, and payments above £15,000 have to be approved by the Principal Officers’ Discipline Pay and Remuneration Committee.
BUPA Care Scheme (Local): In order to maintain availability to cover operational needs and meet Authority resilience requirements, Principal Officers and Area Managers are entitled to be a member of the Corporate BUPA care scheme, the cost of which is met by Essex Fire Authority. If Officers elect to take up this benefit, they are entitled to single persons cover, parent and child cover or married cover. Eligible Officers may apply for cover for their dependents, but the cost of this additional cover is the personal liability of the Principal Officer and is deducted from monthly salary accordingly.
Child Care Vouchers & Cycle Scheme salary sacrifice arrangements (National/local): The Authority offers employees the ability to engage in these salary sacrifice arrangements. Contributions to the cost of the scheme are deducted from an employee’s gross salary before tax deductions are made.
Resilience Payments (Local): The Authority has established individual agreement with operational employees, who have volunteered to continue provision of firefighting and rescue services in the event that the Authority notifies the Employee that a Contingency Situation exists. This practice is in place so that the Authority can effectively assess what resources will be available to the Authority when a risk to its business continuity arises, meaning it is therefore able
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Appendix Agenda Item 10 EFA/016/15 Page 8 of 10 to plan accordingly. “Contingency Situation” means any event or situation which may threaten or cause disruption to the provision of service and or performance of the Authority’s functions, or its business continuity. The rate of payment is calculated on a percentage basis, for whole-time uniform employees (including control operatives) and equates to 10% of annual salary and for employees on the retained duty system, this constitutes 100% of their annual retainer.
Area Manager Supplement (Local): Area Managers are paid a negotiated and voluntary additional supplement to their usual basic rate of pay, to recognise local ways of working which have been agreed,
Payment of untaken annual leave (National): The authority pays employees for their proportionate entitlement to outstanding annual leave on termination.
Other employment-related arrangements
Local Government Pension Scheme. Subject to qualifying conditions, employees have a right to belong to the Local Government Pension Scheme. The employee contribution rates, which are defined by statute, currently range between 5.5 per cent and 12.5 per cent of pensionable pay depending on actual salary. The Employer contribution rates are set by Actuaries advising each of the 89 local LGPS funds and reviewed on a triennial basis in order to ensure the scheme is appropriately funded.
The Firefighters Pension Scheme (1992) employee contributions currently range from 11% to 17%. The New Firefighters Pension Scheme (2006) employee contributions currently range from 8.5% to 12.5%
The Service operates within the Retained Firefighters Compensation Scheme rules. These rules mean retained firefighters have special protected rights under the Firefighters’ Compensation Scheme Order 2006 which allow certain compensation benefits to be assessed on similar principles to those that would apply to whole-time regular firefighters. Retained firefighters appointed on or after 6 April 2006 will be treated as part-time firefighters under the Compensation Scheme.
In addition the Service will acting in accordance with the rules to be set, pursuant to the Retained Firefighters’ Pension Settlement consultation exercise. These rules will give retained personnel who were employed by the Authority between 1 July 2000 and 6 April 2006, access to the equivalent pension rights they would have been entitled to under the Firefighters’ Pension Scheme 1992.
Lowest paid employees
The lowest paid persons employed under a contract of employment with the Authority are employed on full time [37 hours] equivalent salaries in accordance with the minimum spinal column point currently in use within the Authority’s grading structure. As at 1 April 2015, this is £13,500 per annum.
Pay multiple
Lowest paid employee: £12,540
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Appendix Agenda Item 10 EFA/016/15 Page 9 of 10
Full time median salary of the Authority: £34,746
Highest paid employee: £150,748.66
As described above the Authority uses an established process of defining roles, determining job size and salary levels. This process determines the relationship between the rate of pay for the lowest paid and senior manager post, including officers, described as the pay multiple. The current pay multiple between the lowest paid (full time equivalent) employee and the Chief Fire Officer is 12.0:1 and; between the lowest paid employee and average of all principal officers is 9.1:1. The multiple between the median (average) full time equivalent earnings and the Chief Fire Officer is 4.3:1; the median (average) full time equivalent earnings and average of all principal officers is 3.3:1.
This is currently within the limits recommended by The Hutton Review of Fair Pay in the Public Sector (2010)4 and will be monitored and recorded annually.
The lowest paid employee’s hourly rate is currently that of an Apprentice Trainee Engineer who has an hourly rate of £6.50, which is the current national minimum wage.
Payments on Termination of Employment
The Authority’s approach to discretionary payments on termination of employment of support staff, who are eligible to be members of the Local Government Pension Scheme, prior to reaching normal retirement age, is set out within its policy statement in accordance with Regulations 5 and 6 of the Local Government (Early Termination of Employment) (Discretionary Compensation) Regulations 2006.
There is currently no legislative provision to pay enhanced redundancy payments for officers who are eligible to be a member of one of the Firefighters Pension Schemes.
The Authority reserves the right to negotiate a compensatory payment for termination of employment by mutual consent. Such payments may only be made if the Authority is satisfied that it is in the best interests of both the Authority and the Public Interest and may only be authorised by the Chief Fire Officer and the Chairman of the Fire Authority. Severance packages for Principal Officers are subject to the approval of the Fire Authority
The Authority reserves the right to make payment in lieu of notice in exceptional circumstances, where this is deemed to be in the best interests of the Authority.
It is not the Authority’s policy to re-employ or to contract with Principal Officers who have been made redundant from the Authority unless there are exceptional circumstances where their specialist knowledge and expertise is required for a defined period of time or unless a period of two years has elapsed since the redundancy and circumstances have changed.
4 http://webarchive.nationalarchives.gov.uk/20130129110402/http:/www.hm- treasury.gov.uk/d/hutton_fairpay_review.pdf Page 97 of 132
Appendix Agenda Item 10 EFA/016/15 Page 10 of 10
Publication of pay statement
Upon approval by the Essex Fire Authority, this statement will be published on the Service’s website. In addition, for posts where the full time equivalent salary is at least £50,000, the Authority’s annual statement of accounts includes the number of officers whose remuneration, excluding pension contributions, was £50,000 or more.
The statement of accounts also shows the following information in relation to Principal Officers:
• Salary or allowances paid to or receivable by the person in the current and previous year;
• Car and mileage taxable benefits, health insurance and employers pension contribution.
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ESSEX FIRE AUTHORITY Essex County Fire & Rescue Service
MEETING AGENDA ITEM Essex Fire Authority 11
MEETING DATE REPORT NUMBER 11 February 2015 EFA/017/15
SUBJECT Charging
REPORT BY Mike Clayton, Finance Director & Treasurer
PRESENTED BY Mike Clayton, Finance Director & Treasurer
SUMMARY
This paper reviews the arrangements for charging for the provision of specific services and seeks approval for a 2% increase in charges from 1 April 2015.
RECOMMENDATIONS
It is recommended that Members;
1. Agree the areas where charges will be applied;
2. Agree initial charges for the Fire Service brand to EFA(Trading) Ltd and delegate Authority to the Finance Director and Treasurer to alter these charges to levels set by an independent expert; and
3. Agree the proposed tariff and charging arrangements for implementation from 1 April 2015.
BACKGROUND
Section 19 of the Fire and Rescue Act 2004 makes provision for charging, provided that the amount of the charge is set by the Authority and that the income from charges does not exceed the costs incurred. The Fire and Rescue Services (England) Order 2004 (SI 2135/2004) provides the details of the activities that may be charged for.
NEW CHARGES
One area where charges have not been raised to date is for the value of the Fire Service brand for the trading activities of the Fire Authority through EFA (Trading). This is an area that has been the subject of controversy and has led to a formal complaint about the use of state aid to the European Commission. As an interim measure a charge for the value of the fire service brand is proposed withPage effect 99 fromof 132 1 April 2014. This will, in effective, provide a small dividend from the trading company to the Authority from pre-tax profits. Page 2
The rate of charge is proposed to be 5% where training is provided by uniformed officers and 2% for all other trading activities.
As part of the response to the state aid claim it is expected that there will be an independent assessment of the charges that should be made to fire authority trading companies for the use of the Fire Service brand. It is proposed that Authority is delegated to the Finance Director & Treasurer to implement any alternative charge proposed by the independent assessor.
ACTIVITIES NOT CHARGED FOR
One area where the Authority does not charge is for rescuing animals. This area was debated at length by the Authority in February 2009 when a decision was made to invest in a large animal rescue unit. At that time the Service carried out around 200 animal rescues a year and it was believed that there would be a greater risk to animal owners and other members of the public if charges were made as this may mean that owners would not seek assistance from the fire service. Officers support the continuation of our current approach.
Section 10 of the Localism Act 2011 amends the 2004 act to allow the Authority to charge for the attendance in response to automatic fire alarms (AFAs) where there is no fire and there are persistent false alarms. There are no proposals for the Authority to consider charging at this time because it is not the Authority’s policy to respond to such incidents unless specific risks are present, or the AFA call is supported by a confirmation of a fire. The option to charge for such calls will be considered as part of any future review of the policy on attendance at AFAs.
FINANCIAL IMPLICATIONS
The charges were increased by 2.0% in 2014; the proposed increases of 2.0% (rounded to the nearest pound) reflect an allowance for an increase in costs. Income from charges in the year to 31 March 2014 was some £120k. Some 70% of this is for testing of hydrants and fire mains with the balance for the provision of fire reports and the time of officers.
RISK ANALYSIS
There is a risk that the average time required for the activities being charged is exceeded. The charges scheme makes provision for charges on a time and materials basis where a set charge is clearly inappropriate.
LEGAL IMPLICATIONS
There are no direct legal implications from this report. The statutory instrument requires the Authority to determine the charges.
USE OF RESOURCES
The regular review of the activities being charged for and the basis of charging is important. The scope for trading is also considered for activities where the arrangements are commercial in nature and there is scope in the market for higher prices.
ENVIRONMENTAL IMPLICATIONS
There are no environmental implications associated with this report.
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Page 3
.
LOCAL GOVERNMENT (ACCESS TO INFORMATION) ACT 1985 List of appendices attached to this paper: Appendix 1 – Special Service Charges from 1 April 2015 Appendix 2 – Extract from Statutory Instrument List of background documents (not attached):
Proper Officer: Mike Clayton Contact Officer: The Finance Director and Treasurer, Mike Clayton Essex County Fire & Rescue Service, Kelvedon Park, London Road, Rivenhall, Witham CM8 3HB Tel: 01376 576000Page 101 of 132 E-mail: [email protected] Appendix 1 Page 4
Charges from 1 April 2015
Essex Fire Authority 2015 SI 2135/2004 VAT GROSS Charge Reference £ £ £ 1 - NON EMERGENCY SERVICES CHEMICAL /HAZARDOUS INCIDENTS (COMMERCIAL) 3 406.00 81.20 487.20
SUBSEQUENT RECOVERY OF COSTS INCURRED WILL BE DETERMINED BY THE NATURE AND DURATION OF THE INCIDENT
EFFECTING AN ENTRY INTO PREMISES OR LIFTS (COMMERCIAL) 5,6 213.00 42.60 255.60 EFFECTING AN ENTRY INTO PREMISES OR LIFTS (DOMESTIC) 5,6 69.00 13.80 82.80 REMOVE/MAKE SAFE TV AERIAL (COMMERCIAL) 10 354.00 70.80 424.80 REMOVE/MAKE SAFE TV AERIAL (DOMESTIC) 10 69.00 13.80 82.80 HIRING OR PROVISION OF EQUIPMENT, VEHICLES OR PREMISES (eg THERMAL IMAGE PER DAY OR PART DAY 1 213.00 42.60 255.60 CAMERA & OPERATOR)
2 - ANIMAL RESCUE
PROVISION OF FIREFIGHTERS FOR ANIMAL FIRST HOUR 7 213.00 42.60 255.60 RESCUE
SECOND AND SUBSEQUENT 134.00 26.80 160.80 HOURS OR PART THEREOF
Charges may be waived at the discretion of the Officer in Charge of the Incident
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Appendix 1 Page 5
2015 SI 2135/2004 VAT GROSS Charge Reference £ £ £ 3 - PERSONNELINTERVIEWS - Including WITH re-charges OFFICERS to and EFA NON- (Trading) Ltd UNIFORMED DIRECTORS (RELATING TO PER HOUR, OR PART THEREOF INCIDENTS, SOLICITORS, INSURANCE (IRRESPECTIVE OF RANK or 11 203.00 40.60 243.60 COMPANIES, ETC) GRADE) From 19.00 3.80 22.80 UNIFORMED PERSONNEL (By Rank) PER HOUR, OR PART THEREOF to 90.00 18.00 108.00 From 11.00 2.20 13.20 NON UNIFORMED PERSONNEL (By Grade) PER HOUR, OR PART THEREOF To 86.00 17.20 103.20
NB - THE ABOVE CHARGES ARE SUBJECT TO ADDITION IN ANY CASE WHERE THE USE OF LABOUR, MATERIALS, VEHICLES etc RENDERS THE CHARGES SPECIFIC CLEARLY INAPPROPRIATE.
4 - WATER SERVICES SECTION TESTING OF FIRE HYDRANT 2 28.00 5.60 33.60 DRY RISER WET TESTS - INITIAL 2 266.00 53.20 319.20 ADDITIONAL RISER IN SAME BUILDING 2 192.00 38.40 230.40 MANUAL LABOUR - PER HOUR 2 15.00 3.00 18.00 MATERIALS COST + 10% FLOW AND PRESSURE TEST - PER HOUR 2 91.00 18.20 109.20 HIRE OF 25MM HOSE REEL - PER WEEK 2 15.00 3.00 18.00 HIRE OF BRANCH JET - PER WEEK 2 15.00 3.00 18.00 STAND PIPE - PER WEEK 2 74.00 14.80 88.80
5 - MEDIA & BRAND COSTS USE OF ECFRS COPYRIGHT MEDIA - Charges are waived if source is 8 STILL IMAGES acknowledged 74.00 14.80 88.80
USE OF ECFRS COPYRIGHT MEDIA - Charges are waived if source is 8 VIDEO IMAGES acknowledged 294.00 58.80 352.80 USE OF FIRE SERVICE BRAND BY TRAINING WITH UNIFORMNED 1,8,9 EFA(TRADING) LTD OFFICERS 5% USE OF FIRE SERVICE BRAND BY 1,8,9 EFA(TRADING) LTD OTHER SALES 2% Page 103 of 132
Appendix 2 Page 6
EXTRACT FROM STATUTORY INSTRUMENT
Action taken by fire and rescue Person who may be charged authority 1. Hiring out or provision of The person who requests the service equipment, vehicles, premises or or to whom the service is provided. employees of a fire and rescue authority, except where done pursuant to any of the following provisions of the Act - (a) section 6;
(b) section 8; or
(c) sections 13 to 17. 2. Inspection, testing, maintenance The person who requests the service and repair of equipment and vehicles, or to whom the service is provided. including the re-charging of compressed air cylinders and breathing apparatus. 3. Containment and clearance of The owner, occupier or operator of any debris, spillages, discharges or leaks premises or vehicle which, prior to the from a vehicle, storage tank or pipe. incident giving rise to the charge, contained or conveyed the material to be contained or cleared, or the person who requests the service or to whom the service is provided. 4. Provision or removal of water. The owner, occupier or operator of any premises in relation to which the service is provided or the person who requests the service or to whom the service is provided. 5. Effecting entry to, or egress from The owner, occupier or operator of the premises. premises, or the person who requests the service or to whom the service is provided. 6. Rescuing persons from lift cabins. The owner or operator of the lift. 7. Rescuing animals. The owner or keeper of the animal. 8. Provision of documents, The person who requests the service photographs, tape, video or other similar or to whom the service is provided. recordings, where charging is not already authorised or prohibited by another enactment. 9. Provision of training, other than The person who requests the service training provided to employees of other or to whomthe service is provided. fire and rescue authorities under a reinforcement scheme.
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Appendix 2 Page 7
Action taken by fire and rescue Person who may be charged authority 10. Removal of dangerous The owner, occupier or operator of the structures. structure or premises where the structure is located or the person who requests the service or to whom the service is provided. 11. The giving of advice to persons in The person who requests the service relation to premises where a trade, or to whom the service is provided. business or other undertaking is carried on, other than the giving of advice for which arrangements are required to be made under section 6(2)(b) of the Act. 12. Lifting of incapacitated persons. The person who requests the service. 13. Extinguishing fires at sea or The person who requests the service under the sea, or protecting life and or to whom the service is provided. property in the event of such fires.
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Page 106 of 132 Essex Fire Authority
Essex County Fire and Rescue Service
MEETING AGENDA ITEM Essex Fire Authority 12
MEETING DATE REPORT NUMBER 11 February 2015 EFA/018/15
SUBJECT Corporate Risk Register
REPORT BY Finance Director & Treasurer, Mike Clayton
PRESENTED BY Finance Director & Treasurer, Mike Clayton
SUMMARY
This paper reviews the corporate risk appetite for the Fire Authority and brings forward for review the significant risks and opportunities facing the Authority identifying the potential causes and impacts of these risks together with the current status of the associated controls. In addition the paper summarises the areas where, during the last 12 months, risks have become issues.
RECOMMENDATIONS
It is recommended that Members:
1. Endorse the assessment of risk appetite; 2. Review the risk register and agree any further actions to be taken to mitigate against the likelihood or impact of corporate risks; and 3. Note the issues that have arisen in the past year.
BACKGROUND
In November 2014 the Policy & Strategy Committee considered the risk appetite of the Authority. The Committee requested that all Members should be asked to consider this matter and as a result the table seeking views on the individual risk appetite of Members was circulated and a small number of Members responded.
Risk appetite is an important factor in the design of controls and assurance for key risks within the corporate risk register. The scale adopted by the Authority for this exercise was as follows:
Level Definition Averse Avoidance of the risk is a key organisational objective.
Page 107 of 132 Level Definition Controls measures and positive assurance required. Minimalist Preference for a low degree of risk or limited reward. Controls measures required. Cautious Minimal risk is acceptable if justified by the outcomes and the value for money considerations. Open Willingness to consider all options and choose the one most likely to result in success while providing value for money. Hungry Innovative solutions and higher risks that deliver greater benefits are acceptable.
To assess the risk appetite this scale was applied to a number of example scenarios associated with potential risks for the Authority. The table below sets out the position, reflecting the views of Members and Officers. It should be noted that as a general rule, Members had a lower risk appetite. It should also be borne in mind that there are significant potential costs associated with a risk adverse approach as there will be costs associated with both the additional control measures required, and in obtaining assurance that the controls identified are in place and effective.
Objective Activity Averse Minimalist Cautious Open Hungry We will identify the risks to our Home Fire Safety Visit communities and work in Schools Visit partnership with them to Firebreak manage the risk, to reduce its Workplace Inspection likelihood or its impact on our Fire Bike/ Fire Car communities Data availability
Answer 999 Call Mobilise Appliance We will provide a resilient, Appliance Availability timely, safe and effective Attend incident response when risks become Deal with incident incidents Employee injury Train for risks Assess competence
We will use our resources Funding shortfall flexibly, efficiently and Wide Area Network failure effectively, reducing the cost Cost increase of the Service to match the Staffing shortfall funding available Strike
We will ensure our people are Employee communications involved, engaged and Short term sickness empowered to deliver Paying staff on time excellence Diverse local decisions
We will use our assets to Solar panels support sustainable Environment damage from an incident communities and promote Vehicle or equipment purchases
Our leaders will demonstrate Inappropriate comments trust and honesty, listening to Breach of trust others to support an open and Information Security Breach
ISSUES
There are always occasions where the risk of something occurring is replaced by the fact that it has occurred. In these circumstances a risk becomes an issue. At that point the focus is
Page 108 of 132 then on the controls to mitigate the impact of the risk, rather than on controls that would prevent it occurring. One key example that the Authority faces at the moment is the loss of staffing resources through strike action being undertaken by the Fire Brigades Union as part of a dispute with the Fire Authority. At the time of writing this paper the Fire Brigades Union have two disputes where they have a mandate for strike action. The first is a national dispute over pensions and has led to 48 periods of strike action since September 2013. The second is a local dispute focussed on the proposed shift arrangements following the transfer of the Authority’s Control Room to Kelvedon Park in January 2015.
During the periods of strike action the controls to mitigate the impact have proved to be very effective with a high level of appliance availability being achieved without a significant impact on costs.
APPROACH TO RISK MANAGEMENT
The Authority uses the “bow tie” method to identify the potential causes of risks and their impacts, together with the associated controls. Using this approach a number of key risks and opportunities have been identified and the most significant potential causes and impacts assessed. Risks are scored using a 5 by 5 matrix which assesses the likelihood of the risk occurring and the consequences if it does.
Likelihood
Level Descriptor Measure 1 Rare < 10% The event may occur in exceptional circumstances 2 Unlikely 10% - 35% The event may occur infrequently 3 Possible 35% - 65% The event may occur at some time 4 Likely 65% - 90% The event is expected to occur 5 Almost Certain > 90% The event will occur in most circumstances
Impact (Examples)
Level Service Financial Impact Safety Impact Impact 1 Insignificant Financial loss <£25k No injuries 2 Minor Financial loss >£26k <£100k Minor injuries 3 Moderate Financial loss >£101k <£250k Serious injury 4 Significant Financial loss >£251k <£500k Severe or multiple injuries. 5 Major Loss of life or long term Financial loss >£501k hospitalisation.
A summary of the risk register is provided in Appendix1. The more detailed assessment of these risks, the factors that could contribute to them occurring and the impact should the risk occur are contained in Appendix 2.
RISK MANAGEMENT IMPLICATIONS
The risk management implications are set out in the paper.
FINANCIAL & USE OF RESOURCES IMPLICATIONS
The financial implications are primarily associated with the risk appetite assumed. For example, to ensure that the Authority is able to receive calls and mobile appliances back-up Page 109 of 132 systems and alternative sites for mobilisation are available. These arrangements have to be tested so that there is assurance that they will work if needed. These arrangements add to the authority’s costs. The cost burden would not be as great if the risk appetite was greater.
LEGAL, ENVIRONMENTAL AND EQUALITY IMPLICATIONS
There are no direct legal, environmental or equalities implications from the decisions in this paper.
LOCAL GOVERNMENT (ACCESS TO INFORMATION) ACT 1985 List of appendices attached to this paper: Appendix 1 – Risk Register Appendix 2 – “Bow Tie” Methodology List of background documents (not attached):
Proper Officer: Mike Clayton, Finance Director and Treasurer Contact Officer: Mike Clayton Essex County Fire and Rescue Service, Kelvedon Park, London Road, Rivenhall, Witham CM8 3HB Tel: 01376 576000 E-mail: [email protected] Page 110 of 132 Risk Register
RISK Initial Assessment KEY CONTROLS After Mitigation OWNER L I Rating L I Rating 1. If we have a large or (L) Governance and audit unexpected loss in our income arrangements. Treasury or cash there is a risk that we management policy and advice. Finance will have to reduce the level of 4 5 20 (I) Temporary reductions in non- 4 3 12 Director & prevention, protection and core spend and investment. Short Treasurer response services we provide to our communities. term borrowing. Planned service reductions 2. If we have a significant failure, loss or reduction of our (L) Physical security. Secondary physical infrastructure or bearers for key services. Fitness resources (including our and occupational health services. ACFO people) there is a risk that we 5 5 25 (I) Exercised business continuity 3 3 9 Operations will not deliver the same level plans. Succession plans. of prevention, protection and response services to our Insurance. Reduce appliance communities. crewing levels.
3. If there is a loss of public or (L) Governance arrangements. stakeholder confidence in the Performance management. Service there is a risk that we Operational, Health and Safety will not be able to engage procedures. Appraisal. Acting Chief 3 5 15 2 4 8 effectively with our (I) Communications plan. Fire Officer communities, which will impact Member scrutiny. Management on our ability to deliver our services. training and development. Inter- service liason.
Page 111 of 132 RISK Initial Assessment KEY CONTROLS After Mitigation OWNER L I Rating L I Rating 4. If our governance processes are ineffective there is a risk (L) Fire Authority constitution. that we may not be able to National framework. Financial engage effectively with Regulations. Appointment and Finance partners or we may misalign 4 4 16 Appraisal processes. 2 3 6 Director & resources to need and may (I) Communication plan. Member Treasurer comprise safety in the delivery of our services to our scrutiny. Service plans and communities. Integrated Risk Management Plan.
5. If we do not have motivated (L) Recruitment advertising and and engaged people with the pay. Appraisal. Joint Negotiating right skills and competencies and Consultation Committees. there is a risk that we will be Staff communication. Director HR unable to innovate and deliver 4 4 16 (I) Budget monitoring. Back to 3 3 9 safe and effective services to & OD work interviews and appraisal. our communities. Flexible working and secondments. Staff meetings and visits. OPPORTUNITY Initial Assessment CONTROLS After Mitigation OWNER L I Rating L I Rating 6. If we are able to react in an (L) Wider engagement with agile way to changes in our partners. Agile decision making. environment there is an Positive attitude to risk. Team opportunity to identify new and development. ACFO Safer 2 3 6 4 5 20 effective ways to deliver our (I) Staff development and training. Communities services. Internal communications. Staff secondments and internal promotions.
Page 112 of 132 Risk Causation Controls Most Likely Causes Risk Key Impacts Mitigation Controls
Reduction in Government Asset Management Plans Support to LGA in showing Temporary reductions in non- funding and prioritisation of resource value of fire core spend and investment use
Governance and Audit Fraud Prosecution Communications plan arrangements A large or unexpected loss in our income or cash. Reduce capital expenditure. Treasury Management Policy Loss of cash through banking Short term borrowing to fund Look at alternative financing and independent advice failure expenditure options.
Support for Essex growth and Reduction in National Non- Future reduction identified in Service reductions employment agenda Domestic rates longer term Service plans
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Causation Controls Most Likely Causes Risk Key Impacts Mitigation Controls
Process delays and contact Exercised Business Physical security Denial of Premises - difficulties for public and Continuity plans colleagues.
Loss of supporting Primary and secondary Short term loss of use of Exercised Business infrastructure or services bearers for key services premises or systems Continuity plans (ICT, Water etc.)
A significant failure, loss or Appliances unavailable, reduction of our physical Occupational Health service Critical staff shortage routine activities curtailed, Management teams/meetings infrastructure or resources training delayed. (including our people)
Senior managers and Major incident. Succession planning decision makers unavailable
Physical security, spare Loss of appliances or Cost of business continuity or Major losses covered by appliances and equipment equipment asset replacement insurance
Page 114 of 132 Failure to secure the services Lower levels of appliance Regular communication. Reduce appliance crewing of sufficient resilience availability during strike Minimum payment periods. levels workers during a strike period periods.
Key Controls Most Likely Causes Risk Key Impacts Controls
Very bad and enduring Governance arrangements publicity over financial Reputational damage Communications plan matters
Very bad and enduring Performance Management Intervention by Secretary of Member scrutiny of publicity over operational arrangements State performance performance Loss of public or stakeholder confidence in the Service Reduced and reducing Operational procedures, Very badly managed single efficiency and morale, and Improved management Health and Safety reporting operational incident ability to deliver services with decline in performance
Poor corporate leadership Appraisal arrangements. across the Service and down On-going poor relations with Senior Officer Liaison Governance arrangements. through the management other emergency services meetings structure
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Key Controls Most Likely Causes Risk Key Impacts Controls
Unable to recruit key Higher costs of interim and Good advertising and specialist staff into the Budget monitoring and temporary staff appropriate rates of pay Authority as an employer of budget virements
choice
Uncertainty around future Higher levels of sickness and Back to work interviews. Share information with staff employment conditions and absence Appraisal System shape/size of the Authority We do not have motivated and engaged people with the right skills and competencies Lack of skilled and Poor career planning and experienced key employees Flexible working Appraisal individual development to deliver the Service strategy Secondments
Joint Negotiating and Disputes with representative Lack of flexibility in service Staff engagement Consultation Committee bodies delivery
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Key Controls Most Likely Causes Risk Impacts Controls
Poor Internal and External National Framework Lack of Member engagement Communications strategy Audit reports
Loss of Elected Member Immediate and public review Financial Regulations Poor financial management confidence of governance arrangements
Our governance processes are ineffective
Fire Authority Constitution Loss of public, partner and Immediate review of senior Lack of budgetary control stakeholder confidence management
Poor corporate leadership Appraisal across the Service and down Appointment and selection through the management processes structure
Page 117 of 132 Opportunity Key Controls Most Likely Causes Risk Impacts Controls
Focus on wider role in Agile and flexible decision Improve our organisational supporting partners in Internal communications making culture meeting their objectives
Opportunity to identify Encouraging colleagues to Improved communications Changes to funding new and effective ways work together more with partners, stakeholders External communications arrangements effectively to deliver our services. and the public
Improved and intelligent use Technological advances of data
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ESSEX FIRE AUTHORITY
Esse x County Fire & Rescue Service
MEETING AGENDA ITEM Essex Fire Authority 14
MEETING DATE REPORT NUMBER 11 February 2015 EFA/019/15
SUBJECT Essex County Fire & Rescue Service Workforce Report 2014
REPORT BY The Director of HR and Organisational Development, Lindsey Stafford-Scott
PRESENTED BY The Director of HR and Organisational Development, Lindsey Stafford-Scott
SUMMARY
This paper details information for Members on formal Human Resources (HR) casework issues addressed by the Service’s HR Business Partner team and Managers over the twelve month period January – December 2014. The HR team are in the process of transitioning to a new operating model. The model will include improved recording and monitoring of cases, which will allow a more detailed analysis of cases for future reports. In the interim, this report provides a basic overview of numbers and types of cases.
RECOMMENDATION
Members of the Essex Fire Authority are asked to note the contents of the report.
BACKGROUND
At the end of December 2014 the Fire Authority employed 1493 employees made up of 250 Support staff, 35 Control staff and 1208 Uniformed staff. Of these employees 213 (14.3%) are female and 1280 (85.7%) male. There remains a lack of monitoring data available, for example 795 (53.2%) individuals have no record for the category of ethnicity. In future, an annual request for employees to update the information held on them will be circulated. However, it is not mandatory for employees to provide this information. From the records we do have, 44.6% of employees identify as White British with 0.9% identifying as Black, Asian or Minority Ethnic (BAME). 6 (0.4%) employees identify themselves as disabled.
Formal Disciplinary Cases
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It should be noted that for the purposes of this report Discipline cases refers to not only matters of misconduct but also to matters of attendance management and performance. This is due to the Service using Disciplinary Procedures to manage all such matters in accordance with the national terms of conditions for Firefighters (Grey Book). However, the new ECFRS Attendance Management policy was agreed by the Unions during 2014. The policy is due to be formally launched with e-learning and face to face training for Managers from February 2015. Any new relevant absence cases will be dealt with using this policy and recorded separately.
In the year from 1 January to 31 December 2014 there have been 36 disciplinary cases which have resulted in formal disciplinary action being taken against ECFRS employees. This is an increase on 2013 figures which saw 28 cases. However, the Service has continued to robustly manage attendance and take a zero tolerance approach to bullying and harassment claims and these are the areas where the increases are reflected. For 2014, all cases that were initiated via the formal route have been included even where the final outcome was not a formal warning (e.g. management advice letter, no case to answer or resignation).
12 have resulted in a First Written Warning, of which: o 4 were issued to Whole-time Firefighters, o 3 to Whole-time Supervisory Managers, o 1 to Retained Duty System (RDS) Firefighters o 3 to Support employees o 1 to Fire Control Operators
Of these First Written Warnings 4 were issued for Misconduct and 8 for Attendance. This is a reduction on 2013 which saw a total of 17 First Written Warnings with 5 for Misconduct and 11 for attendance
13 cases have resulted in a Final Written Warning, of which: o 4 were issued to Whole-time Firefighters o 2 to Whole-time Supervisory Managers o 1 to RDS Firefighters o 5 to a Support Employee o 1 to Fire Control Operators
7 Final Written Warnings were issued for Misconduct and 6 for Attendance. In 2013 there was a total of 9 Final Written Warnings, 6 were issued for misconduct and 3 for attendance.
4 Dismissals have been effected: o 2 RDS Firefighters for Misconduct o 2 Support Employees for failing probation period (capability)
In addition to the above, one RDS Firefighter resigned prior to a hearing for Misconduct, 2 management advice letters were issued to Support Employees for misconduct, 3 allegations were found to have no case to answer and 1 is still under investigation.
Bullying and Harassment Cases
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Of the 36 formal disciplinary cases 7 involved allegations of Bullying and Harassment. The formal outcomes were (these figures are included in the formal disciplinary information above):
1 Wholetime Firefighter resulted in Dismissal 2 Wholetime Firefighter resulted in Final Written Warning 3 Wholetime Middle Managers resulted in no case to answer 1 is still under investigation
This compares with 3 cases involving Bullying and Harassment in 2013. One of these received a first written warning and the other two were found to have no case to answer. The increase is reflective of the zero tolerance approach to bullying and harassment and the current industrial relations climate. Each case was investigated in response to a complaint made by an employee of bullying and harassment under the Dignity at Work policy.
Diversity Breakdown
Of the 36 cases 20 were White British Males, 12 Males (ethnicity unknown), 4 White British Females and 0 BAME. 1 was identified as potentially disabled under the terms of the Equality Act.
Summary
With the exception of 2011, where the figures were unusually high due to one incident which resulted in 44 employees being subject to disciplinary action, the figures have shown a steady year on year increase since 2011 for final written warnings, this is due to the Service taking a firm stance on unacceptable behaviour, namely the bullying and harassment of employees by other employees. Figures are otherwise consistent with records for 2010, 2011 (having removed the extra ordinary 44 cases), 2012 and 2013 as follows:
20
15 Dismissal 10 Final Written Warning First Written Warning 5
0 2010 2011 2012 2013 2014
ECFRS Formal Disciplinary Action
Grievance
Grievance cases were not reported separately for 2013. During 2014 there were 10 formal Grievances lodged. Of these 2 were upheld, 3 were not upheld and 5 moved to the formal disciplinary process and are included in the numbers above.
Ill Health Retirement
3 Ill-Health Retirements were processed during 2014. All were Support Employees, 1 White British and 2 Unknown. Employment Tribunal Claims
Two Employment Tribunal Claims were lodged during 2014:
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One where the cause of action was unfair dismissal. The tribunal hearing took place during July and the claimant was successful with 50% reduction for contributory conduct.
The second case has been heard and is awaiting judgement. The causes of action are direct disability discrimination, discrimination arising from disability, failure to make reasonable adjustments, unfair dismissal, harassment and victimisation.
RISK MANAGEMENT IMPLICATIONS
All cases have been dealt with in accordance with SIS Volume 4/36 Disciplinary Procedure and with current employment legislation by Service Managers at the appropriate level, supported by HR Business Partners and their teams. There are no additional risk management implications.
FINANCIAL IMPLICATIONS
One bullying and harassment case has involved the services of an external investigator. All other cases have been investigated and hearings arranged using existing ECFRS resources. All costs have remained within budget. Employment Tribunal preparation has included the use of formal legal representatives though the existing contractual arrangements between the Authority and Essex County Council Legal Department. Legal costs incurred within this period have remained within budget.
LEGAL IMPLICATIONS
The Discipline Procedure does comply with the Employment Act 2002 (Dispute Resolution) Regulations 2004 and with the ACAS Code of Practice. However, it is currently under review along with the Grievance procedure and a new Capability procedure to ensure it is completely fit for purpose in a modern Fire Service. Where necessary, legal advice has been sought and acted upon.
EQUALITY IMPLICATIONS
The equality implications are set out within the report.
ENVIRONMENTAL IMPLICATIONS
There are no environmental implications associated with the content of this report.
LOCAL GOVERNMENT (ACCESS TO INFORMATION) ACT 1985 List of appendices attached to this paper: N/A List of background documents (not attached): N/A Proper Officer: The Director of HR and OD Contact Officer: The Director of HR and OD, Lindsey Stafford-Scott Essex County Fire & Rescue Service, Kelvedon Park, London Road, Rivenhall, Witham CM8 3HB Tel: 01376 576000 E-mail: [email protected] Page 122 of 132 Page 1 of 5
ESSEX FIRE AUTHORITY
Essex County Fire & Rescue Service
MEETING AGENDA ITEM Essex Fire Authority 15
MEETING DATE REPORT NUMBER 11 February 2015 EFA/020/15
SUBJECT ‘Sprinkler’ Scheme 2014 Update
REPORT BY Assistant Chief Fire Officer Paul Hill
PRESENTED BY Assistant Chief Fire Officer Paul Hill
SUMMARY
In 2014 Essex Fire Authority supported a three year programme (£250k per year) of match funding the installation of Sprinklers in buildings that accommodate vulnerable members of our communities. ECFRS have been actively promoting the use of sprinklers, hosting events to promote their benefits and dispel the myths that often inappropriately affect decisions on whether to install or not.
To date two projects have been completed, with a further two due to begin imminently. These four projects account for £160K of the fund and bids for a further eight projects have been received that will account for the remaining £90K, and may be deferred to qualify for funding in 2015-16.
RECOMMENDATION
It is recommended that Members:
1. Note the contents of the update. 2. Continue to support the programme 3. Support the carry forward of £90k to 2015/16 as bids are currently being assessed
BACKGROUND
On September 4 2013 Essex Fire Authority approved a proposal (EFA/080/13) to set up a fund from the ‘spend to save’ reserve to support the retro fitting of sprinklers in high risk premises in Essex. The fund agreed was £250K per year for three years. To promote the use of sprinklers ECFRS hosted two events, the first at Spains Hall on 22 April 2013 and the second at the Colchester Council Housing Department on 29 October 2013. The events included presentations to explain how systems work, dispelling the myths and a live fire and sprinkler
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demonstration comparing a fire in a compartment with sprinklers and one without. Subsequently ECFRS received a number of applications for funding and has supported two projects (£50k each) and has committed a further £60K to another two projects. Further applications have been received and they are currently being assessed, these are for a hostel and tenanted homes.
The two projects already completed and ECFRS support provided are Parkside Tower and Mornington House:
Parkside Tower - The first project completed was Parkside Tower in Chelmsford. The building is managed by the Chelmer Housing Partnership. The building is a 15 storey tower block containing 53 flats with a high percentage of vulnerable residents. The total cost of the renovation project that included the retro-fitting of sprinklers in flats and shared spaces was £187K. ECFRS contribution to the project was £50K.
Figure 1 - Parkside Tower, Figure 2 - A typical flat at Parkside Tower post Chelmsford sprinkler installation, the sprinkler head outlined with a Red Circle
Mornington House - The second Project (completed 11 December 2014) is Mornington House, Southend. It is a four storey building containing 52 flats with a number of transient vulnerable residents. The building was initially constructed in 1928 and has been remodelled several times; the remodelling has created many cavities and voids, which present a hazard to fire-fighters.
The building has already had a significant fire on the 26th July 2007 when a fire broke out in flat 25. The fire caused by a television set developed rapidly and penetrated the wall entering the cavity and spread undetected, breaking out at roof level and affecting the flats it passed.
The cost of the sprinkler installation at Mornington House was £118K and ECFRS has made a contribution of £50K.
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Figure 3 - Mornington House, Southend (Sprinkler Head in Lounge Circled in Red)
The two bids that have been approved, but the installation has not been completed and so funding is committed but not yet provided, are Brooke House and Bokingham Green:
Brooke House is an iconic listed building in the heart of Basildon Town Centre. It is a 1960’s built tower block containing 84 flats. Many of the flats house vulnerable residents and due to the building’s height a fire would pose significant risk to both residents and fire-fighters.
The estimated cost of installation is £150K and ECFRS has agreed to support the installation with a grant of £50K. Funds will be released after completion and receipt of appropriate certification. The project tender had a closing date of 10 December 2014 with the contract due to be awarded shortly after.
Figure 4 - Brooke House, Basildon
6-11 and No.23 Bockingham Green Basildon. These 7 properties are located on the Felmores Estate in Basildon and were constructed in 1977 using timber framed construction and the Page 125 of 132 Page 4 of 5
properties were clad with timber weatherboarding. The Estate has experienced a number of serious fires in recent years. The installation of a suppression system in these properties is part of their refurbishment following a fire in Flat No.6, that spread and severely affected the surrounding properties.
Following the fire in August 2013, ECFRS carried out an investigation and produced a report on the fire. The report contained a number of recommendations that included consideration be given to fitting a suppression system to the properties. Due to the nature of the construction and missing cavity barriers etc. fires starting within and on the exterior of the properties have spread quickly behind the cladding affecting multiple homes and causing significant danger to both the occupants and fire-fighters attending incidents. The estimated cost of the project is £20k and the ECFRS have agreed to offer a grant of £10K.
Figure 5 - Bockingham Green, Basildon
Bids Awaiting Approval - Further bids have been received and are due to be visited by the Services Fire Engineers for an on-site assessment prior to consideration by the panel.
A bid has been received from South Essex Homes for a Hostel for the vulnerable and homeless in Southchurch Avenue, Southend. The premises has 28 flats in a three storey building. The building itself is pre-1900 and is described as containing a number of unprotected voids and cavities. The cost of the project is estimated to be £115K and South Essex Homes have requested funding of £48K.
Basildon Borough Council have made seven separate bids for Littlebury Green, Loxford, Winstree, Bartlow End, Delvins, Malyons and Bockingham Green on the Felmores Estate, which was mentioned above. The total number of dwellings (a range of flats and houses) in all seven roads is 269. The estimated cost of the seven projects is £1.35m.
Feedback - Following the installation of sprinklers at both Parkside Tower and Mornington House, the Chelmer Housing Partnership and South Essex Homes have reported the installation to have been a positive experience with few if any problems, all of which have been satisfactorily addressed. South Essex Homes are currently looking to install sprinklers in more of their premises.
The opportunity has also been taken to discuss the installation itself with the occupiers. None of the occupiers had to move out of their properties whilst the installation took place, and the average time taken was a day and a half. Virtually all of the occupiers have had a positive Page 126 of 132 Page 5 of 5
experience and are pleased with their new sprinkler system from the perspective of the protection it affords and aesthetically as the system has been sympathetically installed.
South Essex Homes have nominated ECFRS for the National Fire Sprinkler Network’s Bernadette Hartley Memorial Award for ‘A significant contribution to the cause for sprinklers by a group or individual’. The nomination followed on from South Essex Homes attendance at the Sprinkler Event held at Colchester and the assistance given to them by ECFRS in relation to sprinklers both before and after their application for sprinkler funding. This included site visits to discuss the various types of systems and an event held by ECFRS staff on site to discuss the benefits of the system with the residents and to allay their fears about the installation within their homes. The decision on the Award will be announced in late January 2015.
The sprinkler funding scheme has been a great success in its first year, ECFRS has used £160K of the assigned £250K for 2014/15 and has bids for up to a further £398K, meaning that this year’s budget has been heavily oversubscribed.
The sprinkler funding currently used and committed will mean that ECFRS will have assisted in the provision of sprinkler systems in 196 premises that are home to vulnerable persons and/or in premises that constitute significant risk to fire-fighters.
FINANCIAL IMPLICATIONS
2014/15 budget:
£100k used £60k committed £90k bids currently being assessed
It is foreseeable that the previous Fire Authority commitment for £250k in 2015/16 and 2016/17 to support the installation of sprinklers in premises that have vulnerable residents will be used.
RISK, LEGAL, EQUALITY, ENVIRONMENTAL IMPLICATIONS There are no implications arising out of the recommendations set out in this report.
LOCAL GOVERNMENT (ACCESS TO INFORMATION) ACT 1985 List of appendices attached to this paper:
List of background documents (not attached):
Proper Officer: Assistant Chief Fire Officer Paul Hill, Safer & Resilient Communities Contact Officer: Assistant Chief Fire Officer Paul Hill, Safer & Resilient Communities Essex County Fire & Rescue Service, Kelvedon Park, London Road, Rivenhall, Witham CM8 3HB Tel: 01376 576000 E-mail: [email protected] Page 127 of 132
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Essex Fire Authority
Essex County Fire & Rescue Service
MEETING AGENDA ITEM Essex Fire Authority 16
MEETING DATE REPORT NUMBER 11 February 2015 EFA/021/14
SUBJECT New Control Facility – Go Live
REPORT BY Assistant Chief Fire Officer, Paul Hill - Safer and Resilient Communities
PRESENTED BY Assistant Chief Fire Officer, Paul Hill - Safer and Resilient Communities
PURPOSE OF THE REPORT
To inform members of the Fire Authority of the current status of the new Control facility, the change over from the old to new systems and the current impact of the Fire Brigades Union (FBU) dispute on the change.
The report also offers Fire Authority Members assurance that the Service has the resilience arrangements in place to ensure the Service will respond appropriately to emergency calls during the commissioning of the new mobilising system, facility and working practices.
RECOMMENDATIONS
It is recommended that members of the Fire Authority note the content of this paper.
BACKGROUND
It was originally the Services intention to leave the Emergency Fire Control Mobilising facility (Control) at Hutton until it moved to a Regional facility.’FiReControl’ was a project, initiated in the UK in March 2004, to reduce the number of Control rooms used to handle emergency calls for Fire Services and Authorities. The failure of that programme led to the Fire Authority’s decision (Paper EFA/079/11) to move from Hutton to Kelvedon Park. A DCLG grant was successfully bid for and has provided funds for a replacement of the mobilising systems for the Service. In line with the Services commitment to collaboration, an agreement was reached to host a Control solution for Bedfordshire Fire and Rescue Service (BFRS).
The Service and BFRS developed a specification document for the solution and a tender process for the procurement of that solution started on 15 January 2013. The system went live on 14 January 2014.
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Page 2 of 4
The change from the old system to the new is not a simple upgrade but a move to the new generation of integrated data (rather than the older systems reliance on voice traffic) led intelligent systems. When fully commissioned, the system will improve the Service’s ability to optimise its use of resources and maximise the use of risk information.
The new system is designed to communicate directly with: Officers pagers ~ to ensure the closest and most appropriately trained Officer is mobilised, Mobile data terminals on appliances ~ linking incidents to appropriate risk information and operational procedures, providing information about the incident and support to the Incident Commander via communication between the appliance and Control. The Integrated Recording System that stores data about every incident and is used to identify trends for the Service’s Safer Communities function, Personnel training records that assure competent people occupy places on appliances and have the specialist skills for specific tasks, Global Positioning Systems that ensure we know where all are assets are, A live road network layer that helps to provide the optimum route to incidents, Location software that can identify where the emergency call is originating from, and National Address database to ensure more accurate data of premises on the system.
Before going live the system went through three test stages of testing: Factory, Site and User acceptance. These tests include everything that the Service could reasonably expect the system to cope with, from the simplest call to a complete loss of the Kelvedon site and staff. The infinite variety of circumstance and environment that we deal with means that as complete as these tests might be they will never include every conceivable scenario, so in addition to this, well established resilience arrangements, which have been developed over a number of years, remained in place.
GO-LIVE
The Service intended to move from the old system to the new and from Hutton to Kelvedon Park on the 15 January 2015, but moved the date forward one day as a result of the FBU strike action from 09:00 on the 14 January 2015. The main drivers behind this decision were: The need to provide sufficient Control Operators to swap between systems. The Kelvedon Park site offers more opportunity to support those staff who did not wish to strike. The decision to bring the date forward was only made once the system had passed appropriate tests.
The FBU strike was called between 09:00 on 14 January 2015 to 18:00 on 16 January 2015, though the Service decision not to accept partial perform meant that some Officer’s did not return to work until 09:00 on the 17 January 2015. The Service resilience arrangements were once again very strong with the Service responding to just fewer than 80 calls, the majority of which were false alarms. In not accepting partial performance, the cost to the Service is estimated to be £227k, with pay deductions at £131k and the net cost £96k.
We understand that the change in workplace, shift pattern, colleagues (as watches have been reshaped), Officers, numbers and system is likely to be stressful for the Control staff. The stress and challenges which this has presented the Service’s Control staff should not be underestimated. We chose not to go-live with all the functionality of the new system immediately. This allows the Service to deal with any issues with the system and Control Operators to become familiar with the changes before they adopted a new and truly dynamic mobilising
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methodology (allowing the system to pick the closest and most appropriate resources); and before they relied on data messages rather than verbal ones.
It is apparent from our experience with the new mobilising system that the new system requires a very different approach to mobilising. Control Staff have done well adjusting and recognise the change is significant and not easy, and are responding positively.
The Service responds to a huge range of operational incidents, which occur in numerous scenarios in countless locations (private addresses, roadways, business premises to name a few). When you include the need to identify and allocate the most appropriate, the challenge in making this as accurate as possible from the start is clear. The development of the configuration of the system is dynamic as our staff develop the system through rules and actions plans so the closest and most appropriate resource will be mobilised; rather than relying on Parish boundaries lines which formed the basis of previous attendances.
During the first few weeks there have been occasions where the mobilisation of appliances has been different, and there have been incidents where resources identified have proved to be incorrect, on by far the majority of occasions this have been corrected quickly due to the experience of our Control staff.
Though the system continues to present daily challenges to the project team, on-site support still continues in place and the systems reliability improves daily, as issues are raised they are prioritised and route causes identified and solutions found.
RISK MANAGEMENT IMPLICATIONS
The new Control mobilising system successfully passed all commissioning tests and went live on 14 January 2015. The significant difference between the old and new mobilising system is their integration with other systems and applications. This new approach to mobilising systems requires a great deal of careful protection from impacts internally and externally. These are dealt with through physical and IT based security.
The Service has ensured that if the new system commissioning exposes issues we were not aware of we have business continuity arrangements that ensure emergency calls can still be received and responded to.
These business continuity arrangements include a live system running in the background just meters away from the new Control Operator’s desks. This is a version of the old system and runs from our back up servers.
LEGAL IMPLICATIONS
There are no legal implications arising from this paper.
FINANCIAL IMPLICATIONS
There are no financial implications arising from this paper.
EQUALITY IMPLICATIONS
There are no equality implications arising from this paper.
ENVIRONMENTAL IMPLICATIONS
There are no environmental implications arising from this paper. Page 131 of 132
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LOCAL GOVERNMENT (ACCESS TO INFORMATION) ACT 1985 List of appendices attached to this paper:
List of background documents (not attached): EFA/079/11 – EFA Meeting 7 September 2011
Proper Officer: Assistant Chief Fire Officer Paul Hill, Safer and Resilient Communities Contact Officer: Assistant Chief Fire Officer Paul Hill Essex County Fire & Rescue Service, Kelvedon Park, London Road, Rivenhall, Witham CM8 3HB Tel: 01376 576103 E-mail: [email protected]
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