Agenda and minutes

Apologies were received from County Councillors D O’Toole and S Serridge and Councillor Z Khan MBE. County Councillor N Hennessy was in attendance as substitute.

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 last meeting held on 27 March 2024 be confirmed as a correct record and signed by the Chair.

The Director of Corporate Services advised that this report set out the Authority’s borrowing and lending activities during 2023/24. All treasury activities undertaken throughout the year were in accordance with the Treasury Management Strategy 2023/24.

Economic Overview

The treasury management activity was undertaken against a backdrop of inflation being above the Bank of England's target and consequently in the first part of the year increasing Bank Rate. With generally weak growth and falling inflation attention turned to when Bank Rate would peak and whether or not there would be subsequent reductions.

At the start of the year UK inflation was at 8.7% which was a fall from the peaks seen in 2022/23. The year saw inflation continuing to fall and in March 2024 the rate was at 3.2%. However, this was still above the Bank of England’s 2% target at the end of the period.

The UK economy entered a technical recession in the second half of 2023, as growth rates of -0.1% and -0.3% respectively were recorded for Q3 and Q4. Over the 2023 calendar year Gross Domestic Product (GDP) growth only expanded by 0.1% compared to 2022. Towards the end of the financial year there were signs of an increase in activity with the Office for National Statistics (ONS) reporting that the economy expanded by 0.2% in January 2024. Subsequently, the first estimate of the UK GDP in Q1 (January to March) 2024 is estimated to have increased by 0.6%.

Having begun the financial year at 4.25%, the Bank of England’s (BoE) Monetary Policy Committee (MPC) increased the Bank Rate in May, June and August to reach a level of 5.25%. The Bank Rate was maintained at 5.25% through to March 2024.

Generally, forecasts have seen 5.25% as the peak rate and following the Bank's quarterly Monetary Policy Report (MRP) in February which showed the Banks expected growth in the UK economy in the first half of 2024 and headline consumer price index (CPI) was to fall below target many forecasters anticipated that interest rates will most likely start to be cut in the second half of 2024.

Sentiment in financial markets during 2023/24 remained uncertain and bond yields, which determine the borrowing rates from the Public Works Loan Board (PWLB), continued to be volatile over the year. During the first half of the year, yields rose as interest rates continued to be pushed up in response to high inflation. From October they started declining again before falling sharply in December as falling inflation caused financial markets to expect cuts in interest rates in 2024. When it emerged in January that inflation was stickier than expected and the BoE were not inclined to cut rates soon, until yields rose once again.

Over the financial year, the 10-year UK benchmark gilt yield rose from 3.44% to peak at 4.75% in August, before then dropping to 3.44% in late December 2023 and rising again to 3.92% (28 March 2024).

Borrowing Overview

The borrowing levels of the Fire Authority remained unchanged  ...  view the full minutes text for item 4/24

The Director of Corporate Services advised that this report presented the financial outturn position for 2023/24, and the impact of this on usable reserves. The revenue outturn position showed an overspend of £0.382m which is broadly in line with previous forecasts. The Capital outturn expenditure for the year was £6.034m.

Revenue Provisional Outturn

The annual budget for the year was set at £68.183m. The provisional outturn position shows net expenditure of £68.565m, giving a total overspend for the financial year of £0.382m, which is broadly in line with previous forecasts presented to the Resources Committee. The detailed provisional revenue outturn was considered by members as set out in appendix A with more significant variances of note shown separately in the table below: -

In March 2024 a grant of £0.245m was received from the Home Office to fund research activity managed by the National Fire Chiefs Council (NFCC). This would be grant funded to the NFCC in 2024/25.

General Reserve

The General Reserve exists to cover unforeseen risks and expenditure that may be incurred outside of planned budgets. In February the Authority approved the minimum level of General Reserve as advised by the Treasurer at £3.75m. Following the provisional outturn the level of the General Reserve at 1 April 2024 was £4.918m, this was above the minimum level of General Reserve set by the Authority.

Earmarked Reserves

Earmarked reserves are all funds that have been identified for a specific purpose. Members considered the proposed transfers to earmarked reserves of £0.532m as set out in appendix B of the report. The balance of all the earmarked reserves was £28.813m as at the 31 March 2024; this includes the Capital Reserve of £20.344m and Private Finance Initiative (PFI) reserves of £4.918m.

Capital Budget Provisional Outturn

The revised Capital Budget for 2023/24 was £7.769m. Total capital expenditure for the year was £6.034m, with slippage of £1.772 proposed to be transferred to the 2024/25 Capital Budget. Members considered the provisional outturn for the main programmes and projects set out in  ...  view the full minutes text for item 5/24

The Director of Corporate Services advised that this report set out the current budget position in respect of the 2024/25 revenue and capital budgets. The year?to?date position was broadly balanced with no significant variances forecast for the year at the time of reporting. 

Revenue Budget

Lancashire Fire and Rescue Service’s 2024/5 revenue budget was set at £74.149m. The budget profiled to the end of May 2024 was £16.144m and expenditure for the same period was £15.999m, resulting in a year-to-date underspend of £0.145m.

The overall underspend position was further broken down between pay and non-pay budgets; there was an underspend of £0.211 on pay and a £0.066m overspend on non-pay activities.

While two months was a short period to determine any underlying trends it did serve as a guide for further work to identify potential changes that might impact the outturn position for the year. The main variance relates to pay as set out in the table below. The year-to-date positions within all departmental budgets were set out in Appendix 1.

Future Pressures

The outcome of the 2024/25 Grey book pay award negotiations resulted in a 4% increase to all basic pay and CPD payments with effect from 1 July 2024. A 3% increase was budgeted. The anticipated pressure for the year was c. £0.300m. Green book pay award negotiations were ongoing and were budgeted at 3%.

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

Capital Budget

The original Capital Programme for 2024/25 is £10.196m. Slippage from 2023/24 of £1.773m was added to the original budget to give a revised budget of £11.969m. To date £0.206m was spent, predominantly on wide area network replacements as set out in Appendix 2. This appendix set out the revised capital programme and committed expenditure position against this.

A broad overview of the programme is set out below: -

The Director of Corporate Services presented the productivity and efficiency statement 2024/25 to members. As part of the Spending Review 2021, the National Fire Chiefs Council (NFCC) and the Local Government Association (LGA) agreed that between 2022/23-2024/25, fire and rescue services in England would increase wholetime firefighter productivity by 3% and create 2% of non-pay efficiency savings. Linked to these targets, the Minister of State for Crime, Policing and Fire asked that all standalone Fire and Rescue Authorities (FRAs) draft and publish Productivity and Efficiency Plans. A plan was produced for 2023/24, the information provided a strong evidence base for the next Spending Review and demonstrated positive leadership from the sector to engage with the productivity and efficiency agenda.

For 2024/25, the Minister had again requested that all FRAs, publish a Productivity and Efficiency Plan for 2024/25 to help the Home Office, NFCC and LGA to build a more comprehensive picture on the sector’s progress against the agreed targets and savings achieved.

Guidance was provided by the Home Office setting out the information that must be contained in the statements; providing primary information about the Authority, detailed of efficiencies and productivity measures achieved to date and planned. The guidance provided three examples from FRAs of well written plans from 2023/24 of which Lancashire was one of the good practice examples.

The 2024/25 plan follows the same format as the previous year. It showed that compared to the Government Spending Review non-pay efficiency savings target for fire authorities of 2%, the LCFA achieved 5.6% on average over the period.

Productivity improvements in aspects of Prevention and Protection activity have also been achieved; from 22,375 combined Home Fire Safety Checks and Business Fire Safety Checks in 2022/23, to 24,393 in 2023/24.

The plan as set out in appendix A sets out many other efficiency and productivity activities and is accessible on the LFRS website.

In response to member questions regarding the report, the Deputy Chief Fire Officer advised that improved efficiency and digitalisation of fire engines would maximise firefighters time spent in the community. The Assistant Chief Fire Officer added that increased efficiency would increase productivity and digitalisation would increase capacity for firefighters.

Resolved: That the Committee noted and endorsed the productivity and efficiency plan.

The next scheduled meeting of the Committee has been agreed for 10:00 hours on 25 September 2024 in the Main Conference Room, at Lancashire Fire & Rescue Service Headquarters, Fulwood.

Further meetings are:          scheduled for 27 November 2024

The next meeting of the Committee would be held on Wednesday 25 September 2024 at 1000 hours in the Main Conference Room at Lancashire Fire and Rescue Service Headquarters, Fulwood.

Further meeting dates were noted for 27 November 2024.

The Committee is asked to consider whether, under Section 100A(4) of the Local Government Act 1972, they consider that the public should 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.

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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Members were provided with an update from the Capital Building Projects Working Group.

Resolved: That the report be noted.

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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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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 and endorsed the report.

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Members considered a report regarding an IDRP Stage 2 application under the Internal Disputes Resolution Procedure. The report outlined the facts of the case.

Resolved: That the Committee declined the application presented.

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Members considered a report regarding an IDRP Stage 2 application under the Internal Disputes Resolution Procedure. The report outlined the facts of the case.

Resolved: That the Committee declined the application presented.

An item of business may only be considered under this heading where, by reason of special circumstances to be recorded in the Minutes, the Chairman of the meeting is of the opinion that the item should be considered as a matter of urgency.  Wherever possible, the Clerk should be given advance warning of any Member’s intention to raise a matter under this heading.

Only officers relevant to this discussion were present for this item.

Political Balance

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Members received a verbal update from the Clerk to the Authority on the political balance of committees which will be discussed further with party leaders and if necessary, depending on cross party views, would be raised for consideration by the full Fire Authority.

Resolved: That the report be noted and endorsed.

Executive Board succession arrangements

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Members received an update from the Clerk to the Authority on the succession arrangements for the Director of People and Development, with a recommendation on the arrangements, pursuant to The Authority’s Constitution and relevant Terms of Reference.

Resolved: That the report be noted and endorsed.