Agenda item

Area

Overspend/

(Under spend)

Reason

30 Sept 2021

Forecast

£’000

Service Delivery

(51)

(104)

The underspend for both the first six months, and the year-end forecast, largely related to the reduced activity levels in the following areas:

• Smoke detectors, in addition recent difficulties in the supply chain for smoke alarms were partially resolved, however a potential increase in costs had been identified which may impact final spend in year;
• Travel budgets, were significantly underspent, it was expected that changing working practices for non-operational staff would mean reduced usage in the future

Covid-19

-

-

We have received total funding of £1.6m since March 2020. In addition, as previously reported, we have transferred £0.2m of travel/mileage budgets into this reserve to reflect savings in respect of differing working practices during the pandemic, resulting in total funding of £1.8m.

We have spent £1.7m to the end of September, as follows:

• Additional staff costs £0.5m
• Additional cleaning £0.1m
• Consumable items £0.2m
• Remote working and video conferencing equipment £0.2m
• PPE £0.7m

With effect from 1 September, LFRS reduced the level of support offered to the large vaccination centres, handing over control back to the NHS. The remaining had been partially utilised during October, with some staff overtime and the order for personal issue P3 masks costing £21k, leaving an estimated balance of £50k for use in November/December.

TOR

(44)

(209)

The current and forecast underspend largely related to the position with apprentice levy income for wholetime recruits. At the time of setting the budget it was anticipated that the recruit numbers would fully utilise the balance in the levy account, therefore the income budget was set at £0.2m. During the year, levy drawdown forecasts had been updated as follows:

• Following a nationwide review of the wholetime fire-fighter apprenticeship programme, which LFRS participated in, the government apprentice levy setting body agreed an uplift to the funding for each apprentice starting after January 2021 from £12k to £14k over the 24 month apprenticeship, resulting in additional income circa £46k in 2021/22;

• levy account shortfalls would be met by 95% funding (known as co-investment) from the Government, which meant we will benefit from £163k additional levy income in the financial year.

TOR had been catching up on training during the year and spend on external training was currently in line with budget.

Property

(203)

(148)

Whilst non-essential maintenance was re-instated prior to the end of the last financial year, departmental capacity due to a vacant surveyor post, and the ongoing situation meant that there was an underspend to date. The post was filled from the start of November; therefore the outturn forecast assumed that there would be some catch up spend for the final few months, reducing the current level of underspend.

Non DFM

273

582

Both the year to date and outturn overspend position reflected:

• the £0.3m funding gap identified at the time of setting the budget in February
• additional RCCO for the capital programme STC workshop and South Shore refurbishment previously approved, plus
• the request for the approval of additional £0.1m RCCO in relation to the purchase of a second Haglund vehicle (see capital budget below).

Wholetime Pay (including associate trainer costs)

114

66

As previously reported there had been significantly more early leavers than allowed for in the budget. At the end of September, we had 10 fewer wholetime members of staff than budgeted, resulting in an underspend of circa £200k against budgeted establishment levels. It was extremely hard to predict leavers for the remainder of the year, however assuming that early leavers slowed down in the second half of the year, we anticipated an underspend against establishment of approx. £0.5m.

In addition, as previously reported, there was a shortfall in recruit numbers this year, with 35 recruits compared with a budgeted 48, which lead to a further underspend of £130k.

Broadly speaking these were offset by:-

• the unbudgeted grey book pay award of 1.5%, at a cost of £0.4m, as previously reported.
• increased overtime costs, associated with covering vacancies, and staff absences,. (As the May recruits were posted to station in September the reliance on overtime should reduce during the second half of the year.)

The net of all the above factors was the forecast overspend of £66k, however it should be noted that if we continued to experience higher than expected early leavers this overspend may reduce or, in all probability, become an underspend.

On Call Pay

(42)

(49)

The position within On-call staffing was slightly  underspent, with the unbudgeted pay award being more than offset by higher staff vacancies than budgeted.

Support staff (less agency staff)

(228)

(239)

The underspend related to vacant posts across various departments, circa 12% of the establishment in early October, far in excess of the 3.75% vacancy factor built into the budget.  This was partly offset by spend on agency staff, which amounted to £41k in the period.

Although recruitment activity had now recommenced the labour market had become more challenging and we were experiencing difficulties in filling posts. As such we anticipated the high level of vacancies remaining throughout the year.

This would be partly offset by the eventual pay award for green book staff. This had not yet been agreed, but the pay offer has been increased to 1.75%, which had been reflected in the forecast outturn position which would be updated as we progressed through the year.

Apprentice Levy

(9)

(23)

The apprentice levy was payable at 0.5% of each months payroll costs, the budget for this was set at anticipated establishment levels, hence the underspend against this budget reflected the various pay budget underspends reported above.

Spend to 30 Sept 2021

£m

Other vehicles

0.2

This budget allowed for the replacement of various operational support vehicles. Whilst some of the operational support vehicles had been ordered and delivered, others were still being reviewed and it appeared increasingly unlikely that the budget would be fully utilised in year.

Operational Equipment / Future Firefighting

0.1

This budget allowed for

• replacement of capital items from the equipment replacement plan, namely defibrillators and a replacement drone which had been delivered
• replacement of light portable pumps, which had yet to be ordered
• progression of CCTV on pumping appliances, where it was proposed trialling this in the first instance and hence the project would not be complete by year end

The anticipated slippage relating to the latter two programmes

Building Modifications

2.4

This budget allowed for:

• Provision of a new workshop, BA Recovery and Trainer facility at STC. Committed spend to date was £2.4m.  Work had been completed and the building was handed over to the Authority at the end of October 2021. A contact variation of £42k had been agreed for Compressor and furniture items that ISG had manufactured and installed;
• Enhanced station facilities comprising the final payment in respect of South Shore refurbishment and extension, and changes at Hyndburn fire station, where final designs were being reviewed prior to moving to the procurement phase, but where budget seems likely to slip into 2022/23;
• Replacement drill towers where a partner contractor had been appointed to take the project forward, with a view to commencing construction prior to the year end;
• Fees associated with progressing the business case for a SHQ relocation, which were unlikely to be spent in year.

As with the revenue budget, current departmental capacity to progress these was previously limited, hence the slippage indicated in Appendix 2.

IT systems

-

The budget related to the replacement of various systems and ICT hardware, in line with the ICT asset management plan. Whilst initial scoping work was on-going to facilitate the replacement of some of these systems, utilising the budget in the current year was still forecast.