Merseyside Fire & Rescue Authority 2012/2013 Budget

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Tel: 0151 296 4237

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Finances

The Government has announced the level of grant it will provide to the Fire Authority for the years of 2013/14 and 2014/15. The Authority's funding is being cut by 8.7% and 7.5% respectively in those years - a �6.3m cash reduction. The funding reduction is worse than the national average for fire and rescue services and means that over the next two years the Fire Authority will need to make savings of �10m to balance the financial plan. This is in addition to significant Government grant reductions in the first two years (2011/12, 2012/13) of the spending review period which required �9.2m of savings to balance its budget.

The Authority recognises the financial pressures on the communities of Merseyside and has with a heavy heart and after careful consideration kept to its financial plan and increased council tax by the maximum allowable, this is only 2% or an extra �1.34 for a band D property (3p per week) which is below the rate of inflation. This is in order to minimise the long term impact of government cuts on the services to the Merseyside Community.

Dealing with the Government Cuts and the �10m saving challenge:

In order to balance the books the Authority first looked for savings from Back Office and Support Services and has been able to identify �7m of the required �10m savings from those areas including:-

1. Assuming a further two years of pay restraint for all staff.
2. Technical savings of �2.5m were identified from inflation and capital expenditure budgets.
3. Additional income of �0.5m including :- a. Shared use of fire stations with the ambulance service, b. Increased efficiency through a Joint Command and Control Centre with Merseyside Police, c. Shared services at the vehicle workshops, d. Cost recovery of smoke alarms from low risk households.
4. Efficiencies identified in support service areas of �2.307m. This has placed a large number of non uniform staff at risk of redundancy. Many of the support service areas and posts affected in fact provide front line services to the community of Merseyside notably prevention and protection,

Despite the efficiencies this still leaves �3m in cuts to be identified from front line services.

A fundamental review of fire cover was undertaken by the Chief Fire Officer that will deliver a cut of �3m. More details of this are available in our IRMP (http://www.merseyfire.gov.uk/aspx/pages/IRMP/pdf/IRMP%202013-16.pdf) but the key points are:-

1. A reduction of 90 fire-fighter posts
2. We are aiming to keep all our fire stations open at present (apart from Huyton and Whiston stations which are being considered for a merger)
3. There will be a 33% cut in the number of fire appliances immediately available from 42 to 28.
4. The introduction of a standard response time standard across Merseyside of 10 minutes (on Average the first response to an incident will be much faster) It will take over three years to deliver these front line savings from natural turnover of firefighting staff through retirement. The Chief Fire Officer will manage the implementation of the new fire cover model in order to deliver the savings and efficiencies in such a way to minimise risk.

Summary of Budget Changes Overall

The Authority has set a budget of �66.721 million for 2013/14, �3.027m lower than that in 2012/13. Further savings will be required for 2014/15. The main changes between this year's budget and last year's are:-

Reductions in Support Service, Management & Other Costs	(�2.6m)
Unavoidable Cuts in Front Line Staffing including a changed duty system at Whiston Fire Station and the Marine Unit	(�1.0m)
Net movement on reserves	�1.2m
Increased capital financing costs to fund Capital Expenditure	�1.2m
Forecast inflationary cost increases	0.6m
	(�3.0m)

The Authority also recognises that the Government has given notice that it expects to continue cutting public spending until at least 2017. Even if the Authority does as well as the national average the cuts are likely to continue to be significant current forecasts on a best case scenario suggest at least �5m.

How the money is spent

The Authority has managed to set a financial plan that allows investment in line with its Integrated Risk Management Plan (IRMP) and will help maintain its high performing status. The IRMP sets out the future strategic direction for the Authority and is available on our website at www.merseyfire.gov.uk.

The Authority has a financial plan that as far as possible maintains the front line response and service to the people of Merseyside.

The Authority has budgeted to spend in the following areas:-

Budget Expenditure 2013/14	�' m
Employees - Uniform	37.9
Employees - Non-Uniform	9.7
Employees - Pensions	2.9
Employees - other indirect	1.8
Premises	3.6
Transport	1.6
Supplies & Services	3.6
Agency Services	2.3
Central Expenses	0.4
Capital Financing	5.8
	69.6
Income	-2.9
	66.7

Analysis of Expenditure by Type of Service

The Authority has an excellent track record of investing in services in line with its corporate priorities. It can be seen from table below that 64.8% of expenditure goes on Operational Response; 7.9% on Prevention and Protection; and 6.2% on Operational Preparedness. Revenue cost associated with capital investment in fire stations, appliances and other infrastructure accounts for a further 8.8%, and therefore 87.7% of expenditure is on the front line, with Support costs making up the remaining 12.3%.

Summary

Expenditure 2013-14	�'m	%
Operational Response & Control	43,246.3	64.80%
Prevention & Protection	5,238.2	7.90%
Operational Preparedness	4,135.0	6.20%
Support Services & Other	8,244.0	12.30%
Revenue Costs Associated with Capital Spend	5,857.5	8.80%
	66,721.0	100.00%