Lancashire Combined Fire Authority
Resources Committee
Wednesday, 30 November 2022, at 10.00 am in the Main Conference Room, Service Headquarters, Fulwood.
MINUTES
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PRESENT: |
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Councillors
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T Williams (Chair)
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D O'Toole (Vice-Chair)
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J Mein
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M Pattison
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S Rigby
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S Serridge
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A Sutcliffe
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R Woollam
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Officers |
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S Healey, Deputy Chief Fire Officer (LFRS) K Mattinson, Director of Corporate Services (LFRS) E Sandiford, Head of Human Resources (LFRS) J Hutchinson, HR Business Partner (LFRS) J Meadows, LFRS M Nolan, Clerk and Monitoring Officer to the Authority D Brooks, Principal Member Services Officer (LFRS) L Barr, Member Services Officer (LFRS) |
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In attendance
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K Wilkie, Fire Brigades Union
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27/22 |
Apologies for Absence
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Apologies were received from County Councillors L Beavers and B Yates.
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28/22 |
Disclosure of Pecuniary and Non-Pecuniary Interests
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None received.
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29/22 |
Minutes of the Previous Meeting
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RESOLVED: - That the Minutes of the last meeting held on 28 September 2022 be confirmed as a correct record and signed by the Chairman.
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30/22 |
Financial Monitoring
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The Director of Corporate Services advised that this report set out the current budget position in respect of the 2022/23 revenue and capital budgets.
Revenue Budget The overall position at the end of September was an overspend of £0.5m, largely as a result of price increases associated with energy, fuel and property maintenance costs.
The year-to-date positions within individual departments were set out in the report with major variances relating to non-pay spends and variances on the pay budget being shown separately in the table below: -
As highlighted in the report, inflationary pressures were causing costs to increase in several areas, most notably fuel, energy and property costs, approx. £1m of additional pressures. However, more significant than that was the potential costs associated with pay awards, approx. £1.1m more than budgeted. This was partly offset by increased returns on investments, which was currently anticipated generating a surplus of £0.5m. Other areas for delivering savings continued to be reviewed, however it was clear that there would be a very significant overspend at year end, of between £1.0m and £1.5m.
As such reserves would need to be utilised to offset this. £6.0m of general reserves was currently held, having agreed a minimum level of £4.0m, and as such £2.0m of this could be utilised to offset any in year pressures, although clearly this was a short-term measure only.
It was noted that utilising reserves in this manner would also limit the ability to offset financial pressures in 2023/24 and future years.
Capital Budget Following the slippage agreed at the last Resources Committee the capital budget now stood at £3.3m. Spend to date was just £0.6m as set out in the table below: -
The costs to date would be met by revenue contributions.
It was noted that significant cost increases across various supply chains continued to be seen, particularly in construction projects and this would affect some of the capital projects as they progressed through the procurement stage.
In response to questions raised by County Councillor Woollam and County Councillor S Rigby regarding the difficulties in recruiting staff and a timely recruitment process, the Director of Corporate Services advised that this was due to a shortfall of people with the expertise needed to fill some specialist, technical support vacancies. The process of agreeing any changes to the job description, starting the job evaluation process, advertising, recruitment and selection took time and sometimes the process needed to be repeated. In the meantime, agency staff had been used which was more costly. County Councillor O’Toole added that increases in levels of vacancies appeared to be more across the public sector, with Lancashire County Council also experiencing the same problems with recruitment.
In response to a comment from County Councillor S Rigby regarding the level of reserves falling year on year, the Director of Corporate Services advised that this year the Authority was in a strong position. Future years would be more challenging and would depend on the financial settlement and referendum level for council tax. He advised that in addition to general reserves the Authority also held earmarked reserves and capital reserves. Holding reserves gave time to plan for change such as the Emergency Cover Review. A 5‑year financial strategy would be presented to the Authority in February 2023.
RESOLVED: - That the Committee: i) Noted and endorsed the current financial position; and ii) Noted the anticipated year end forecast overspend of between £1.0m and £1.5m.
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31/22 |
Treasury Management Mid-Year Report 2022/23
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In accordance with the CIPFA Treasury Management Code of Practice and to strengthen Members’ oversight of the Authority’s treasury management activities, the Resources Committee received a treasury management mid-year report and a final outturn report. Reports on treasury activity were discussed on a quarterly basis with Lancashire County Council Treasury Management Team and the Authority’s Director of Corporate Services and the content of these reports was used as a basis for this report to the Committee.
Economic Overview The economic backdrop during the April to September period continued to be characterised by ongoing high inflation and its impact on consumers’ cost of living and the expectation of low growth. There was no imminent end in sight to the Russia-Ukraine hostilities and its associated impact on the supply chain, and China’s zero-Covid policy. Subsequently, UK inflation remained extremely high. Annual headline CPI hit 10.1% in July, the highest rate for 40 years, before falling modestly to 9.9% in August. RPI registered 12.3% in both July and August.
To combat inflation the Bank of England increased the official Bank Rate to 2.25% over the period. From 0.75% in March, the Monetary Policy Committee (MPC) pushed through rises of 0.25% in each of the following two MPC meetings, before hiking by 0.50% in August and again in September. Current expectations were that the Bank Rate would continue to rise.
Over the period the 5-year UK benchmark gilt yield rose from 1.41% to 4.40%, the 10-year gilt yield rose from 1.61% to 4.15%, the 20-year yield from 1.82% to 4.13% and the 50-year yield from 1.56% to 3.25%.
The Sterling Overnight Rate (SONIA) averaged 1.22% over the period. SONIA is calculated by the Bank of England based on actual transactions reflects the average of the interest rates that banks pay to borrow sterling overnight from other financial institutions and other institutional investors.
A table in the report, now considered by Members showed the latest forecast for interest rates from Arlingclose.
Inflation pressures facing the UK were being faced by countries throughout the world. In the US inflation hit 9.1% in June, although there was some slight easing in July and August to 8.5% and 8.3% respectively. The Federal Reserve continued its fight against inflation over the period with a 0.5% hike in May followed by three increases of 0.75% in June, July and September, taking policy rates to a range of 3% - 3.25%.
Treasury Management position and Policy The underlying need to borrow for capital purposes was measured by the Capital Financing Requirement (CFR), while usable reserves and working capital were the underlying resources available for investment. The treasury management activity was influenced both by the position at the beginning of the year and the plans in year. The position at the start of the financial year was summarised in the report indicating that the level of loans was above the borrowing requirement. This was the result of the Authority adopting a policy of setting aside additional Minimum Revenue Provision (MRP) in order to generate the cash to repay loans either on maturity or as an early repayment. This had resulted in the CFR being reduced but due to early repayment charges it had not been financially beneficial to repay three loans.
It was not anticipated that the new capital expenditure would be funded from borrowing in the year while it was anticipated that there would be some reduction in the level of reserves held.
Borrowing There had been no new borrowing in the first six months of the financial year. This was consistent with the position that the current borrowing was already above the CFR and that the capital programme did not include any expenditure to be financed from borrowing.
The long-term debt outstanding of £2m was from the Public Works Loan Board. The report showed the maturity profile of the Authority's borrowings, along with the interest rate paid.
There needed to be consideration for the early repayment of the loans, which would be subject to an early repayment (premium) charge. Previous reports on treasury management activities had reported that the premium (approximately £0.8m) and the potential loss of investment income had been greater than the savings made on the interest payments therefore, it had not been considered financially beneficial to repay the loans especially with the potential for increased interest rates. However, the estimated premium charge to repay the three loans was currently £0.100m; reflecting the significant increase in base rate. To offset the net savings on repaying the loans it was estimated that future interest on investments over the remaining period of the loans would need to be 4.1%. If it was estimated that investment interest rates would be lower than this then it may be beneficial to repay the loans, however, current forecasts indicated future base rates in excess of this.
Investments Both the CIPFA Code and the MHCLG Guidance required the Authority to invest its funds prudently, and to have regard to the security and liquidity of its investments before seeking the highest rate of return, or yield. The Authority’s objective when investing money was to strike an appropriate balance between risk and return, minimising the risk of incurring losses from defaults and the risk of receiving low investment returns and having the value of reserves eroded by inflation.
The Authority principally invested in a call account provided by Lancashire County Council (LCC) which paid the base rate. Each working day the balance on the Authority's Current Account was invested in this to ensure that interest was received on surplus balances within an acceptable risk framework. During the period all new investments were placed with the County Council via this arrangement. At 30 September there was a balance of £36.055m invested in LCC while the average for the period was £35.187m. The current rate for these investments had increased to 2.25% on 22 September. At the beginning of the financial year the rate was 0.75%.
In addition, in order to increase the rate earned on current balances, the Authority had placed fixed investments with other local authorities. To attract a higher rate of interest than was available on the call account these investments would need to be fixed for a longer period of time. The report identified the investments that had been in place during the year. At 30 September there was £5m fixed term investment in place, therefore the total investment held at 30 September was £41.055m. The overall rate of interest earned during this period was 1.49% which was favourable when compared with the benchmark 7-day index which averaged 1.30% over the same period.
All investments were made in accordance with the current Treasury Management Strategy and the CIPFA treasury management code of practice.
Members noted that 2 further fixed term investments with other Local Authorities had now been taken out as follows:-
Current interest rates available for lending to other Local Authorities were:-
Prudential Indicators In order to control and monitor the Authority’s treasury management functions a number of prudential indicators were determined against which performance may be measured. At its meeting on 22 February 2022 the Authority approved the indicators for 2022/23 which were detailed in the report alongside the current actual.
Revenue Budget Implications The 2022/23 revenue budget for treasury management activity showed that anticipated income exceeded expenditure by £200k. Taking into account the activity for the first six months of the year and estimated cash-flow for the remainder of the year the latest forecast was as below:
The interest receivable was above budget as the balances and interest rates were higher than anticipated when setting the budget. The forecast assumed interest rates on the call account averaged 3% for the remainder of the financial year.
RESOLVED: - That the Committee noted and endorsed the report.
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32/22 |
Sub-Surface Rescues Using Remotely Operated Vehicles
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The Deputy Chief Fire Officer presented the report.
In March 2021, the National Fire Chiefs Council (NFCC) published a position statement entitled “Rescues of submerged casualties” which included the following:
“The HSE have indicated that not preparing for a foreseeable risk, including rescues of submerged casualties, is unacceptable. Fire and rescue services may face action if they are found to be exposing their staff to a situation that involves an intervention to save a submerged casualty. Operational discretion is not seen as applicable in circumstances that require actions not supported by legislation, policy and procedure, when there is evidence to support this is foreseeable.”
NFCC position: “Unless services are able to address the identified gap in the required resources, equipment, training, and the actions that are required to remain compliant with legislation, when attending an incident involving a casualty that is submerged – All rescues of a submerged casualty should be taken from the land, the surface of the water or by personnel in the water maintaining the correct levels of Personal Protective Equipment (PPE). Rescuers should be competent to risk assess and carry out rescues and should maintain the correct levels of PPE. Operational discretion should not be used to remove PPE, enter confined spaces underwater or act outside of service policy to go underwater.
There may be specific sub-surface situations that can be controlled to allow a rescue attempt. These situations will usually be when the casualty is visible and submerged in shallow water. The NFCC will consider future National Operational Learning cases but are unlikely to re-evaluate existing guidance unless they include new evidence, alternative safe systems of work or equipment, or other technical solutions that are deemed as a potential improvement in this matter.”
Lancashire Fire and Rescue Service (LFRS) Response LFRS sought to minimise the impact of this necessary operational restriction through investment in Swift Water Rescue Technician (SRT) equipment such as reach poles. This only went a short way in closing the capability gap that existed for submerged casualties.
Remotely Operated Vehicles (ROVs) A ROV normally involved a small submersible that housed a battery, propellers, and a camera with high powered lighting. It was connected to the land via a tether cable which carried the command wire. The controller was held by the pilot on the bankside.
In order to fully close this gap, the Drone Team secured a small amount of investment from the Research and Development group (c.£3,000) for an underwater ROV in order to conduct feasibility trials, to prove concept. The purpose of its use was to assess its potential for life saving operations and to identify a list of necessary requirements for a fully capable unit. According to national guidance, as set out in the report, a recently submerged person could present a viable rescue for up to 90 minutes. During that time Fire and Rescue Services and other Blue Light responding partners must be seen to be responding or there was a likelihood that others would intervene.
Research FindingsThe LFRS ROV, manufactured by FiFish, was procured for less than £3k, but was capable of demonstrating most of the basic functions of the more expensive industrial ROVs. Importantly it had a claw which could be operated by the pilot.
In order to get a wider understanding, LFRS attended a ROV expo in London and invited two of the largest manufacturers – FiFish and Deeptrekker to demonstrate a number of their ROV models at Fleetwood Campus.
In order to improve LFRS’ understanding of Sound Navigation and Ranging (SONAR) the team also visited Blueprint Subsea in Ulverston who allowed LFRS pilots to use SONAR equipped ROVs in Lake Windermere. The company was very helpful and provided a number of recovery videos to the team to show how casualties were located in real life.
All of the models investigated had a long battery life in excess of 90 minutes. Some were more rugged than others, but several important requirements were identified beyond the anticipated operational requirements. These were:
Vision The degree of detritus in the water severely limited normal camera vision, and high-powered lighting (an absolute necessity at night) could further exacerbate rather than solve this problem, similar to using high beam headlights in the fog. During trials the ROV was able to locate a child dummy casualty at the bottom of Rivington Reservoir in good, clear and still water. It was noted though as the operation went on that the propellers quickly stirred up sediment and vision became poor. This was a conceivable scenario for rescues even in excellent conditions. Search was therefore very difficult with normal cameras either day or night.
Requirement: An ROV requires SONAR in order to search and ‘see’ through the water. SONAR is particularly valuable in identifying air voids in the water created by recently submerged casualties.
Positioning ROVs cannot access GPS underwater. It was possible however, to know the depth via a barometer and the aspect (the direction the ROV is facing) via a compass. The tether cable was buoyant so it was feasible to get an approximate location of the ROV on a straight run underwater from shore. An available option was to surface the ROV which was not ideal practice once a casualty had been located.
Requirement: An underwater positioning system is required in order to gain precise location data for a casualty. This has a number of other benefits in that the ROV calculates where it is and can stabilise this position accurately against water flows. The positioning system can enable systematic search patterns to be employed by operators (i.e., we know exactly where the ROV has been and where it is going).
Casualty Recovery to Surface No easily transportable ROV can bring a submerged casualty to the surface using just power from propellers. This idea was quickly dismissed during trials. A number of factors can influence the difficulty in raising a person, including size, weight, clothing, buoyancy and water current. The team looked into the feasibility of attaching and operating items such as air lifting bags. Attaching recovery systems was very difficult with the claw operating in good visibility and no current. The only realistic chance of success was to attach the ROV onto the casualty (or more likely their clothing) using an interlocking claw to allow proper grasp. This was confirmed as being in use for body recovery in other parts of the world. A manual hauling from above/alongside via the tether cable would then be required.
This ‘grab and retrieve’ method was achieved during the trials at Fleetwood Nautical Campus with a higher rated ROV model (the current LFRS £3k ROV did not have sufficient strength in claw or tether cable). It must be noted that moving a casualty was easier from land (i.e., at a low angle) rather than from directly above which meant lifting the weight of the casualty and the ROV. Much of the recovery involved getting momentum established in the first instance. It was likely that a recently submerged casualty would be more buoyant than the weights/dummies used in trials.
Requirement: An ROV must have a sufficiently strong claw grasp & tether cable in order to raise a submerged casualty by manual means from bankside/boat.
Operation Operating a ROV in a 3D ‘blind’ environment such as murky water was a challenging proposition. The drone pilots were used to operating without sight of an aerial drone but the ROV brought another dimension in that it was able to rotate vertically to face upwards or downwards. Some ROVs such as the FiFish could fully rotate in all three directions and on a number of occasions the ROV was upside down without the pilot being aware of its aspect. Other ROVs were demonstrated however, that stayed level with the surface and the camera rotated on a gimbal much like an aerial drone. This was far more controllable for the pilot and much more suitable for systematic searches.
Requirement: The ROV needs to have a simple operation method which eliminates the ability for the ROV to rotate vertically, giving the ability to carry out systematic searches.
Control ROVs were provided with a controller for the pilot to operate. In the case of the LFRS FiFish ROV, a simple controller was provided and a smart phone was used to see the camera feed via an app connected by wi-fi. The controller’s simplicity added to pilot confusion as many of the commands and settings were located on an app instead. The use of a smartphone to operate the ROV was understandable due to its costs, but the app often required a reset during operations. LFRS had learned this limitation already with drones and thus used standalone, manufacturer-built controllers for its operational drones. In trialling SONAR, it was noted that some manufacturers did not integrate the sonar output into the controller, and a laptop or similar device was also required.
Requirement: The ROV needs to be provided with a manufacturers specific controller which integrates all of its functions and imagery.
Recommendation
LFRS had deployed a ROV three times to incidents (as at 11/2022) over the 2022 summer period in order to assist rescue teams in recovering casualties from under the water. All three incidents demonstrated the value in deploying the ROV. Unfortunately, these incidents also demonstrated the ineffectiveness of the existing subsurface rescue. In fact, a submerged casualty was located within seconds of the first ever ROV deployment despite extensive searches already having taken place by crews and other agencies.
In order to deliver a realistic search and casualty recovery capability Fire and Rescue Services would need to deploy a ROV currently costing in the region of £70-80k. The complex nature of operations would require a significant investment in training for SRT or boat crews, but much less so with the Drone Pilots who had immediately transferable skills. The ability for the ROV to search for objects in addition to casualties should not be overlooked in this regard.
Therefore, the recommendation was for the Combined Fire Authority to support the procurement of a higher capability subsurface ROV, thereby enabling the Service to become the first nationally to have improved underwater body location and potential rescue capability.
An investment of around £80,000 was anticipated which would be funded from the existing innovation budget and be built in to the capital programme, if approved. The deployment of this would place additional pressures on the Drone Teams revenue budget, which was currently overspent. A review of its deployment was currently underway to ensure it was only mobilised where required.
County Councillor O’Toole had been impressed at a demonstration of the drones recently at the Strategy Day. He commented that during his tenure of office, the Authority ensured its firefighters had the best equipment and he considered the underwater drone to be essential.
County Councillor Woollam queried who would be trained to use the underwater drone. In response the Deputy Chief Fire Officer advised that the Service had an on-call drone team which operated the aerial drone. They were responsible for doing the feasibility trials for the underwater drone and had been working with the manufacturing company to undertake further trials. It would be that team which would deploy the underwater drone to approximately 10 – 20 incidents per year.
County Councillor S Rigby queried how the overspent budget (as detailed on page 34 of the agenda pack) would be managed. In response, the Deputy Chief Fire Officer advised that the overspend related to the aerial drone and the development of the new Drone Team. Previously the deployment of the aerial drone was by full time officers who also carried out fire investigations. Due to the number of deployments the workload was too much therefore a separate team was set up. As the aerial drone was new and innovative everyone requested it. The drone team were now managing a process to ensure it was only deployed where it could add value / benefit.
Councillor Williams queried if other Fire and Rescue Services were also interested in procuring underwater drones, whether there was the potential for a national preferred supplier which would bring financial benefits. In response, the Deputy Chief Fire Officer advised that the Service’s Drone Manager chaired the NFCC National Tactical Group and Lancashire was leading the way regarding the use of aerial drones. To move to underwater capability provided an additional opportunity to do something others were not doing. Alternative suppliers had been considered and there had been a lot of interest in the underwater drone from other Fire and Rescue Services however, not all were in a position where they could currently invest.
RESOLVED: - That a high-specification Remotely Operated Vehicle be procured from the innovation budget at a cost of circa £80,000 and this be built into the capital programme.
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33/22 |
Date and Time of Next Meeting
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The next meeting of the Committee would be held on Wednesday 29 March 2023 at 1000 hours in the Main Conference Room at Lancashire Fire and Rescue Service Headquarters, Fulwood.
Further meeting dates were noted for 12 July 2023 and 27 September 2023 and agreed for 29 November 2023.
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34/22 |
Exclusion of Press and Public
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County Councillor Pattison left the meeting at this point.
RESOLVED: - That the press and members of the public be excluded from the meeting during consideration of the following items of business on the grounds that there would be a likely disclosure of exempt information as defined in the appropriate paragraph of Part 1 of Schedule 12A to the Local Government Act 1972, indicated under the heading to the item.
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35/22 |
Pensions Update (Standing Item)
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(Paragraphs 4 and 5)
Members considered a report that provided an update on the various issues which had arisen in respect of the changes to the pension schemes applying to the uniformed members of the Fire Sector.
RESOLVED: - That the report be noted.
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36/22 |
Request for Extension of Paid Sick Leave
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(Paragraphs 1 and 2)
RESOLVED: - That the Committee approved the Chief Fire Officer’s recommendation as outlined in the report.
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37/22 |
High Value Procurement Projects
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(Paragraph 3)
Members considered a report that provided an update on all contracts for one-off purchases valued in excess of £100,000 and high value procurement projects in excess of £100,000 including: new contract awards, progress of ongoing projects and details of new projects.
RESOLVED: That the Committee noted the report.
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38/22 |
Urgent Business (Part 2) - Executive Board Succession Arrangements
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(Paragraph 1)
Members received an update from the Clerk to the Authority on the appointment of Treasurer / Director of Corporate Services by the Resources Sub-Committee Appointments Panel.
RESOLVED: - That the report be noted and endorsed.
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M NOLAN
Clerk to CFA
LFRS HQ
Fulwood