Lancashire Combined Fire Authority

Resources Committee

Meeting to be held 25 September 2024

Financial Monitoring 2024/25

(Appendices 1 and 2 refer)

Contact for further information:

Steven Brown - Director of Corporate Services – Telephone Number 01772 826804

Executive Summary

The report sets out the current budget position in respect of the 2024/25 revenue and capital budgets.

Recommendation

The Committee is asked to:

· note and endorse the financial position; and

· approve slippage in the capital programme of £3.654m to 2025/26.

Information

Revenue Budget

Lancashire Fire and Rescue Service’s 2024/25 revenue budget has been set at £74.149m. The budget profiled to the end of May 2024 is £25.307m and expenditure for the same period is £25.172m, resulting in a year-to-date underspend of (£0.129m).

This is further broken down between pay and non-pay budgets; there is a year to date underspend of (£0.209m) on pay, which is largely due to vacancies, and a small year to date overspend of £0.080m on non-pay activities.

We are now four months into the year and therefore can start to look at the forecasts. Adjustments have been made to the forecasts to reflect known changes, but in headline terms the forecast for the year is a small overspend of £0.173m, which is 0.2% of our net budget.

The year-to-date and forecast positions within all departmental budgets are set out in Appendix 1, with the major variances of note shown separately in the table below.

Area	Year to Date	Forecast	Reason
Service Delivery -  Pay	£0.019m	£0.279m	The pay award of 4% was agreed effective July 2024, this is 1% above our budgeted assumptions which largely accounts for the forecast variance.
Prevention and Protection  - Pay	(£0.168m)	(£0.361m)	Several vacant posts exist in the current staffing establishment for which recruitment is planned long term. It is anticipated that 3 posts will be recruited to in year, with a few vacancies to persist for the duration of the financial year. Challenges persist in recruitment and retention due to competition from the private sector.
Fleet – Non Pay	£0.103m	£0.223m	Vehicle repair and maintenance costs remain high due to inflationary pressures and demand for parts across the industry.
Bank Interest	(£0.068m)	(£0.196m)	Favourable interest rates and new fixed term investment opportunities indicate an early forecast of additional income on budget.

Future Pressures

Green book pay award negotiations are ongoing and are budgeted at 3%. Unison have put the current offer of a flat £1290 pay increase to ballot for industrial action among its members. Current pay projections use the 3% budgeted rate.

Additionally, the employer’s contribution rate to the 2015 Firefighters’ pension scheme as determined by the scheme actuary has been increased from 28.8% to 37.6%.  Additional grant funding has been assumed to offset this pressure.

Capital Budget

The revised Capital Programme for 2024/25 approved by the Resources Committee is £12m. To date £0.984m has been spent predominantly on operational equipment for cutting and extraction. A summary of the programme is set out in the table below and in more detail in Appendix 2.

Area	Budgeted Items	Budget	Year to Date
Operational Vehicles Budget	The budget includes initial costs of two water towers, two climate change vehicles and an aerial appliance from previous programmes. It also includes three pumping appliances for the 2024/25 programme. A number of other vehicles are on course for delivery at budget in year, including two water towers, a prime mover, plus a foam pod and an All-Terraine Vehicle.	£2.943m	£0.139m
Other vehicles Budget	This budget allows for the replacement of various operational support vehicles including several cars, vans and a beavertail lorry.	£0.948m	£0.066m
Operational Equipment Budget	This budget allows for operational equipment purchases including CCTV cameras for appliances and cutting and extrication equipment.	£1.846m	£0.639
Building Modifications Budget	This budget includes the continued programme of Drill Tower Replacements and budget for the initial works to support the upgrade to Preston station.	£3.639m	£0.094
IT systems Budget	This budget includes various projects including upgraded Firewalls, network upgrades and replacement of pooled PPE and stock management systems.	£2.593m	£0.046

A detailed review of the Capital Programme has identified a number of areas where expenditure will slip into 2025/26, the table below sets out the main items of slippage:

Area	Slippage to 2025/26	Reason
Operational Vehicles	(£1.501)	Delivery times on operational vehicles post COVID and Brexit are still much longer than anticipated across the sector resulting in delays; a number of pumping appliances, an Aerial Ladder Platform (ALP) and climate change vehicle are delayed to early 2025/26.
Other vehicles	(£0.388)	The useful remaining life of a number of operational support vehicles has been extended resulting in slippage to the following year.
Operational Equipment	(£0.250)	The project to introduce ballistic vests and helmets to operational staff will slip to 2025/26 as the equipment is still being trialled.
Building Modifications	(£0.962)	The project to enhance facilities at W30 (Blackpool) has incurred some initial costs and will continue to deliver in year, but will see final completion in 2025/26. Similarly, Drill Tower replacement works will see part delivery in year.
IT systems	(£0.544)	A review of the IT systems capital programme has identified a number of projects that will likely slip into 2025/26; in particular the replacement systems for the management of stock, assets and pooled PPE. Existing contracts have been extended.
	(£3.654)

Financial Implications

As outlined in the report

Legal Implications

None

Business Risk Implications

None

Environmental Impact

None

Equality and Diversity Implications

None

Human Resource Implications

None

Local Government (Access to Information) Act 1985

List of background papers

Paper:

Date:

Contact:

Reason for inclusion in Part 2 if appropriate: N/a

Appendix 1

Appendix 2