Agenda and minutes

Apologies were received from County Councillor Tony Martin and Councillor Tony Williams.

Members are asked to consider any pecuniary and non-pecuniary interests they may have to disclose to the meeting in relation to matters under consideration on the Agenda.

None received.

RESOLVED: - That the Minutes of the CFA held on 17 December 2018 be confirmed and signed by the Chairman.

RESOLVED: - That the proceedings of the Strategy Group held on 5 November 2018 be noted and endorsed.

RESOLVED: - That the proceedings of the Performance Committee held on 29 November 2018 be noted and endorsed.

RESOLVED: - That the proceedings of the Planning Committee held on 26 November 2018 be noted and endorsed.

RESOLVED: - That the proceedings of the Audit Committee held on 29 January 2019 be noted and endorsed.

Oral report.

The Chief Fire Officer advised that the Chairman and Vice-Chairman had met with the Police and Crime Commissioner (PCC) on 22 January 2019 where they received assurance of his intention not to proceed with any changes to the fire governance arrangements at this time.  During the meeting the potential for further collaboration was discussed which required further consideration and included: i) the delivery of Police Public Order Training from Service Training Centre – this work had in part already been initiated which had been observed by Home Office officials at a visit the previous week; ii) the potential for the relocation of Service Headquarters to Hutton and iii) the formation of a small Board of 8 with 4 representatives from the Police (2 from the Police and Crime Commissioners Office and 2 from the Constabulary) and 4 from Fire (2 Members and 2 Officers).  However, as the Combined Fire Authority (CFA) was the decision-making body, the Chairman was in discussions with the Chief Fire Officer and the Clerk on how this might be constituted.

The Authority remained committed to deliver the best outcomes for the public in Lancashire and the Service continued to work collaboratively with the Police. 

The Chairman stated his gratitude to all Members of the CFA for their support in maintaining current governance arrangements.  He confirmed that he would be thanking all Members of Lancashire County Council (LCC) on behalf of the Authority at the next Full Council meeting and he had already written to MPs and Lancashire Leaders.

County Councillor O’Toole acknowledged the cross-party support received from Members of the CFA and LCC colleagues and commended the Chairman for his determination in opposition of the proposal.

RESOLVED: - That the report be noted and endorsed.

The Director of People and Development presented a report informing the Authority that in accordance with the provisions of the Localism Act 2011 a pay policy statement for 2019/20 had been prepared. 

The pay policy published data on senior salaries and the structure of the workforce and demonstrated the principles of transparency.

The pay policy statement set out the Authority’s policies for the financial year relating to:

-           The remuneration of its chief officers;

-           The remuneration of its lowest paid employees;

-           The relationship between the remuneration of its chief officers and that of other employees who are not chief officers.

The statement included:-

-           The level and elements of remuneration for each chief officer;

-           Remuneration range for chief officers on recruitment;

-           Methodology for increases and additions to remuneration for each chief officer;

-           The use of performance-related pay for chief officers;

-           The use of bonuses for chief officers;

-           The approach to the payment of chief officers on their ceasing to hold office under, or be employed by, the authority, and

-           The publication of and access to information relating to the remuneration of chief officers.

It also included the Authority’s policies for the financial year relating to other terms and conditions applying to its chief officers. 

The approval of a pay policy statement could not be delegated by the Authority to a Panel and the Authority’s pay statement must be approved by the 31st of March each year. Any decision under powers delegated to the Authority’s Constitution with regard to remuneration to be taken in 2019/20 would be bound by and must comply with the 2019/20 Statement. The Director of People & Development must be consulted prior to any decision impacting on remuneration where there was any question regarding compliance with the Statement.

In general terms, the Fire Authority recognised terms and conditions negotiated nationally by the National Employers with the National Employees’ bodies for 3 distinct staff groups.  These were: i) National Joint Council for Brigade Managers (referred to in Lancashire Fire Authority as Principal Officers) of Local Authority Fire and Rescue Services (commonly referred to as ‘Gold Book’); ii) National Joint Council for Local Government Services (commonly referred to as ‘Green Book’); and iii) National Joint Council for Local Authority Fire and Rescue Services (commonly referred to as ‘Grey Book’).

Under the definitions provided for within the Act, the officers included in this pay statement were the Chief Fire Officer (CFO), Deputy Chief Fire Officer (DCFO), Assistant Chief Fire Officer (ACFO), Director of Corporate Services (DoCS) and Director of People & Development (DoPD).  It was noted that the Treasurer’s responsibilities were undertaken by the Director of Corporate Services and the Monitoring Officer’s duties were undertaken by the Clerk to the Authority who is engaged on a contract for services basis.  The Fire Authority had delegated responsibility for any local terms and conditions, including remuneration for chief officers, to the Appointments Panel/Succession Planning Sub-Committee.

A chosen natural  ...  view the full minutes text for item 71/18

The report set out the Treasury Management Policy and Strategy for 2019/20, which was in line with the Chartered Institute of Public Finance and Accountancy’s (CIPFA) revised Code of Practice.  The Strategy was based on the capital programme as presented to the Authority elsewhere on the agenda, and the financial implications were reflected in the revenue budget, also presented elsewhere on the agenda.

Statutory requirements

The Local Government Act 2003 (the Act) and supporting Regulations required the Authority to “have regard to” the CIPFA Prudential Code and the CIPFA Treasury Management Code of Practice to set Prudential and Treasury Indicators for the next three years to ensure that the Authority’s capital investment plans were affordable, prudent and sustainable.  

This report fulfilled the Authority’s legal obligation under the Local Government Act 2003 to have regard to both the CIPFA Code and the Ministry of Housing, Communities and Local Government (MHCLG) Guidance.

Treasury Management Strategy for 2019/20

This Strategy Statement had been prepared in accordance with the CIPFA Treasury Management Code of Practice.  Accordingly, the Lancashire Combined Fire Authority's Treasury Management Strategy would be approved by the full Authority, and there would also be a mid-year and a year-end outturn report presented to the Resources Committee. In addition there would be monitoring and review reports to Members in the event of any changes to Treasury Management policies or practices.  The aim of these reporting arrangements was to ensure that those with ultimate responsibility for the treasury management function appreciated fully the implications of treasury management policies and activities, and that those implementing policies and executing transactions had properly fulfilled their responsibilities with regard to delegation and reporting.

The Treasury Management Strategy covered the following aspects of the Treasury Management function:-

·        Prudential Indicators which would provide a controlling framework for the capital expenditure and  treasury management activities of the Authority;

·        Current Long-term debt and investments;

·        Prospects for interest rates;

·        The Borrowing Strategy;

·        The Investment Strategy;

·        Policy on borrowing in advance of need.

Setting the Treasury Management Strategy for 2019/20

In setting the treasury management strategy the following factors needed to be considered as they might have a strong influence over the strategy adopted: economic forecasts, interest rate forecasts, the current structure of the Authority’s investment and debt portfolio and future capital programme and underlying cash forecasts.

Economic Context

The UK’s progress in negotiating its exit from the European Union (EU), together with its future trading arrangements, would continue to be a major influence on the economy in 2019/20. The latest (2018 Quarter 3) Gross Domestic Product (GDP) growth figures showed a year on year growth of 1.5%. It was anticipated that the growth would continue with the Bank of England, in its November Inflation Report, expecting GDP growth to average around 1.75% over the forecast horizon, providing the UK’s exit from the EU was relatively smooth.

The Bank of England remit included a 2% inflation (Consumer Price Index) target and it was slightly above this level at 2.1% in  ...  view the full minutes text for item 72/18

The Fire Authority held reserves to meet potential future expenditure requirements. The reserves policy was based on guidance issued by the Chartered Institute of Public Finance and Accountancy (CIPFA). It explained the difference between general reserves (those held to meet unforeseen circumstances), earmarked reserves (those held for a specific purpose) and provisions (where a liability existed but the extent and/or timing of this was uncertain). In addition, the policy identified how the Authority determined the appropriate level of reserves and what these were. The policy confirmed that the level of, and the appropriateness of reserves would be reported on as part of the annual budget setting process and as part of the year end accounting process.

General Reserves

Review of Level of Reserves

In determining the appropriate level of general reserves required by the Authority, the Treasurer was required to form a professional judgement on this, taking account of the strategic, operational and financial risk facing the Authority. This was completed based on guidance issued by CIPFA, and included an assessment of the financial assumptions underpinning the budget, the adequacy of insurance arrangements and consideration of the Authority’s financial management arrangements. In addition, the assessment should focus on both medium and long-term requirements, taking account of the Medium Term Financial Strategy (as set out in the draft budget report discussed later on the agenda). For Lancashire Combined Fire Authority this covered issues such as: uncertainty surrounding future funding settlements and the potential impact of this on the revenue and capital budget; uncertainty surrounding future pay awards and inflation rates; the impact of proposed changes to pension schemes; demand led pressures, risk of default associated with investments as set out in the Treasury Management Strategy, cost associated with maintaining operational cover in the event of Industrial Action etc.

2019/20 was the final year of the current 4 year settlement. This meant that funding beyond 2019/20 was subject to the outcome of next year’s Spending Review, as well as the outcome of the fair funding review of relative needs and resources and the Government intention to move to greater retention of Business Rates, as opposed to maintaining Revenue Support Grant. Furthermore the impact of Brexit on the national economy was still unknown. Therefore there was greater degree of uncertainty over long term funding than in recent years.

As such the Treasurer considered it prudent to increase the minimum target reserves level to £3.2m, 5.7% of the 2019/20 net revenue budget, reflecting the increasing level of uncertainty. This was broadly in line with the 5% threshold identified by the Home Office above which the Authority was required to justify why it held the level of reserves.  Should reserves fall below this minimum level the following financial year's budget would contain options for increasing reserves back up to this level, which it was noted may take several years to achieve.

Whilst this exercise set a minimum level of reserves it did not consider what, if any, maximum level of reserves was  ...  view the full minutes text for item 73/18

A report was presented that set out the Capital Strategy and capital programme for 2019/20-2023/24, together with the funding of this.

Capital Strategy

The Authority’s capital strategy was designed to ensure that the Authority’s capital investment:

·        assisted in delivering the corporate objectives;

·        provided the framework for capital funding and expenditure decisions, ensured that capital investment was in line with priorities identified in asset management plans;

·        ensured statutory requirements were met, i.e. Health and Safety issues;

·        supported the Medium Term Financial Strategy by ensuring all capital investment decisions considered the future impact on revenue budgets;

·        demonstrated value for money in ensuring the Authority’s assets were enhanced/preserved;

·        described the sources of capital funding available for the medium term and how these might be used to achieve a prudent and sustainable capital programme.

Proposed Capital Budget

Capital expenditure was expenditure on major assets such as new buildings, significant building modifications and major pieces of equipment/vehicles.

The Service had developed asset management plans which assisted in identifying the long-term capital requirements. These plans, together with the operational equipment register had been used to assist in identifying total requirements and the relevant priorities.

The 2019/20 & 2020/21 programmes included various items of slippage that had been removed from the 2018/19 programme.

A summary of all capital requirements was considered by Members:

Vehicles

The Fleet Asset Management plan had been used as a basis to identify the vehicle replacement programme as detailed in the report.  It was noted that the pumping appliance budget included the majority of the stage payments for the 7 appliances slipped forwards from the 2018/19 programme, in addition to the full cost of the 3 to be purchased in 2019/20.

LFRS currently had several vehicles provided and maintained by CLG under New Dimensions (5 Prime Movers and 1 Incident Response Unit), which under LFRS replacement schedules would be due for replacement during the period of the programme.  However the understanding was that CLG would issue replacement vehicles if they were beyond economic repair, or if the national provision requirement changed.  Should LFRS be required to purchase replacement vehicles, grant from CLG may be available to fund them.  Based on the current position, we had not included these vehicles (or any potential grant) in our replacement plan.  

In addition, Fleet Services continued to review future requirements for the replacement of all vehicles in the portfolio, hence there may be some scope to modify requirements as these reviews were completed, and future replacement programmes would be adjusted accordingly.

A number of vehicles had protracted lead times in excess of 12 months. Therefore in order to deliver vehicles in line with their replacement timeframes it was necessary to order pumping appliances, water towers and Ariel Ladder  ...  view the full minutes text for item 74/18

In order to determine the future budget requirement, the Authority had used the approved 2018/19 budget as a starting point and had uplifted this for inflation and other known changes and pressures to arrive at a draft budgetary requirement, prior to utilising any reserves as set out in the report.

The final proposed gross revenue budget for 2019/20 was £56.5m, an increase of 3.2%. This majority of the increase in costs related to forecast pay awards and revised pension contributions all of which was partly offset by the identification of £1.2m of efficiency savings/budget reductions.

As highlighted the budget allowed for a 2% pay award for grey book personnel in 19/20, whilst the current pay claim from the FBU was for 17%.  Each 1% pay award in excess of the assumption equated to an additional cost of £340k per year for grey book personnel, and if this was mirrored for green book personnel an additional £70k.  In order to give a flavour for the potential impact of this, a 5% pay award would add in a further £1.0m on an annual basis, compared with the budgeted allowance.  Clearly the outcome of pay discussions would have a significant impact on this and future years’ budgets.

The budget also allowed for an average increase of 12.6% in employer pension contributions for the Firefigher Pension Schemes (moving from 17.6% to 30.2%).  This was due to a combination of changing factors, the most significant of which was the revised discount rate used in unfunded public sector pension schemes would change.  It was noted that the split by individual pension schemes had not been provided, only the average, and hence the actual additional cost would vary according to the mix of personnel in each pension scheme.  This equated to an additional cost of £3.3m.  However, the Government had allowed an additional £2.6m of funding in 2019/20 to offset some of this pressure (hence the net additional cost of £0.7m shown in the report).  The additional cost pressure in future years would be considered as part of the next Spending Review, hence for medium?term planning it had been assumed that the additional £2.6m grant would continue.

The Local Government Finance Settlement confirmed funding was in line with the 4?year settlement figures, at £23.8m a reduction of £0.5m (2.0%), and that the council tax referendum level remained at 3.0%.

Based on the council tax referendum limit the Authority had a funding gap of £0.5m and would need to either identify additional savings or utilise reserves to set a balanced budget. Doing so would result in a net budget of £56.0m, and a council tax requirement of £69.48 per Band D property, an increase of 2.99% (£2.02 per annum, 4p per week). It was proposed that an unidentified saving target of £0.2m be agreed and that £0.3m of reserves were utilised to deliver a balanced budget in 19/20.

Until such time as the outcome of next year’s Spending review was published it was impossible to provide  ...  view the full minutes text for item 75/18

The current funding baselines for local authorities in England, as determined by the annual local government finance settlement, were based on an assessment of their relative needs and resources. The methodology behind this assessment was first introduced over ten years ago and had not been updated since the introduction of the 50% business rates retention system in 2013-14.

Whilst this approach had ensured that authorities which had grown their business rates since that time had benefited from the additional income generated, it also meant that authorities’ underlying levels of ‘need’ had not been updated since the 2013-14 settlement. In addition, a desire to fully capture every aspect of local authorities’ needs had led to increasingly large numbers of variables being included in the formulas, many of which had a relatively minimal impact on the overall distribution of funding.

As such it had been agreed that a simplified needs assessment formula, based on a smaller number of indicators, could achieve outcomes that were a good approximation of those of a more complex system.

The Government published a consultation document A Review of Local Authorities’ Relative Needs and Resources in December, setting out proposals relating to future funding formulas. It was noted that the consultation would close on 21 February 2019. The consultation only related to the funding formula used i.e. how overall funding would be divided across the various authorities; it did not refer to the overall level of funding that would be made available in future settlements.

At the time of writing the report there are a number of workshops being held to discuss the issues, hence it had not been possible to draft a response until such time as these had taken place.

RESOLVED: - That the Authority delegated agreement of a response to the Treasurer in consultation with the Chief Fire Officer and the Chairman.

The concept of Member Champions was introduced in December 2007.  A review of the areas of focus for Member Champions was considered at the Authority meeting held in June 2017 where new areas of responsibility were agreed.  The current Member Champions and their areas of responsibility were:

·        Community Safety – County Councillor Mark Perks

·        Equality, Diversity and Inclusion – Councillor Zamir Khan;

·        Health and Wellbeing – County Councillor Tony Martin;

·        Road Safety – Councillor Fred Jackson.

Reports relating to the activity of the Member Champions were provided on a quarterly basis to the Authority.  This report related to activity for the period up to 31 January 2019.  During this period all had undertaken their respective role in accordance with the defined terms of reference.

The Member Champions present extended their gratitude to the teams of staff for their dedication, enthusiasm and hard work supporting our communities and making Lancashire safer.

RESOLVED: - That the Authority noted the report and acknowledged the work of the respective Champions.

A report detailing prosecutions in respect of fire safety management failures and arson related incidents within the period 1 December 2018 to 1 February 2019 was provided.  A number of prosecution cases under the Regulatory Reform (Fire Safety) Order 2005 were being prepared.  The Deputy Chief Fire Officer advised that in relation to the Crown Hotel, Burnley prosecution, a guilty plea had been entered.  There were 6 cases for the owner to answer and 1 case for the employer with sentencing scheduled for 25 March 2019.

County Councillor Shedwick asked that thanks be provided to the officers whose hard work had contributed to securing these prosecutions.

Fire protection and business support information was provided and Members noted that there were 3 arson convictions during the period.

The Deputy Chief Fire Officer advised that in response to a significant incident in Poland where lives were lost in a fire in an escape room, the 10 properties of this kind in Lancashire had been inspected.

RESOLVED: - That the Authority noted and endorsed the report.

This report included information for the 2 Unitary and 12 District Authorities relating to Fire Safety Initiatives and Fires and Incidents of particular interest.

The Assistant Chief Fire Officer advised that, during the period had been a challenging time with incidents on the motorway; there had been 2 incidents on the M58 and more recently on the M61 and there had also been a number of large multi-pump incidents.

County Councillor O’Toole asked whether Councillor Jackson as Road Safety Champion could find out if there were ongoing problems with the same stretch of the M58.  The Assistant Chief Fire Officer advised that both he and Councillor Jackson sat on the Lancashire Road Safety Partnership.  Councillor Jackson confirmed he would raise the question at a future meeting of the partnership given the Service was involved in road safety accidents, some of which were very traumatic. 

RESOLVED: - That the Authority noted and endorsed the report.

Oral report.

The Monitoring Officer confirmed that there had been no complaints since the last meeting.

RESOLVED: - That the current position be noted.

The next meeting of the Authority will be held on Monday 29 April 2019 at 1000 hours at Washington Hall Training Centre, Euxton.

The next meeting of the Authority would be held on Monday 29 April 2019 at 10:00am at the Training Centre, Euxton.