Apologies were accepted from: ACFO Robin Porter, ACO Paul Bullen and Stuart McCartney.
Minutes and Actions from previous meeting
SM welcomed everyone to the meeting
The minutes from the previous meeting were approved.
Relevant updates on any outstanding actions were provided and the Action Log updated
Budget outturn position and Treasury Management Outturn 2020/2021
The Commissioner considered a report which provided details of the final outturn position for Northamptonshire Fire and Rescue Service for the financial year 2020/2021
The report included the return relating to Treasury Management.
Having reflected on the report, the Commissioner was pleased with the progress that has been made whilst acknowledging there is still some way to go.
This was also acknowledged by the external auditors who recognised the significant progress that has been made, despite the fragile state of NCFRA reserves at the time of the governance transfer.
Helen King pointed to a few areas that she feels need to have additional focus by the service as there is still too much volatility in these areas:
Property – both capital and revenue. Slippage in plans happen but these are not always reflected in a timely manner by the budget manager and often plans are not achieved.
ICT – Although there is now more confidence in what is going on this year this is still an area for improvement
Wholetime and retained budgets – there are pressures on the budget for 2021/22 that need to be closely monitored – this includes additional resource requirements and bank and overtime pressures.
There was a discussion about benefit realisation of the Enabling Service functions. (Estates, HR, Finance, Fleet & IT).
Whilst these are clear to see from a Senior Leadership perspective and in establishing firm infrastructure, in property and ICT they are taking longer to translate into benefits that can be seen in stations.
The Commissioner asked if the Chief Fire Officer felt that the new Head of IT has a grip on both the revenue and capital budgets for IT
The Chief Fire Officer confirmed that this was a developing and improved position so he could not give complete assurance at this point. There is clearly much for her to get to grips with; it was not where it needs to be, and he will meet with her soon for an update.
In terms of property, the Chief Fire Officer felt there is the opportunity for some ‘quick wins. and he is keen to communicate these to the stations to manage expectations and demonstrate some benefits.
Regular meetings between Kate Perriss and Kev Hardwick are now taking place which should expedite these.
The Commissioner confirmed his approval for the carry forward requests of £99K which were explained by Helen King.
The total 2020/21 revenue budget was £25.319m and the outturn reflects a £637k underspend.
The underspend and additional Home Office grants have given NCFRA the opportunity to build general reserves and wider reserves to a more sustainable level to meet unforeseen circumstances.
However, significant challenges remain in delivering financial stability over the Medium Term and the overall increase in reserves (an increase of £2.56m) does not protect the service from the need to make savings for the 22/23 financial period.
Helen King advised that reserves are sufficient if not used but are not sufficient to meet the forecast shortfalls over the medium term,
The Commissioner approved the Carry Forwards listed in the paper of £63k, £28k and £8k
A technical review of all material invoices over the financial year has been undertaken to ensure that costs are accounted for appropriately.
Helen King acknowledges the improvements NFRS have made in this regard, but there remains work to be done to embed and change practices, it is a developing position each year.
Helen King advised that assets remain an area of significant review and where improvements in their management is required. In her view given their accounting value on the Balance Sheet, it is envisaged that Fixed Assets will form a large part of the external audit sampling and she welcome this.
Impact of Covid-19
The Covid-19 pandemic delayed the 2019/20 sign off of accounts and also significantly changed the working practises and focus of NCFRA, this impact will be also be felt in 2020/21.
There will be a positive impact on Business Rates throughout 2021/22 but future years are envisaged to be more challenging which could add further pressure to reserves.
There was a discussion about grants being held for Covid as well as Grenfell, Protection and Prevention. Returns will continue to be required until these are fully spent; and this is unlikely to happen in this financial year.
The Commissioner asked for an update of the Grenfell grant.
HK confirmed this is nearly all spent apart from MAIT which is awaiting a national solution.
There are good plans in place for the Protection grant with the Highrise elements having been completed.
The focus is now on improvements that will make a long-term difference with an ambition to get future Protection funding included in the baseline budget.
There was a discussion about Houses of Multiple Occupation. (HMO’s) and a genuine concern around the proliferation of these properties.
It was agreed that the Commissioner would add HMO’s to the agenda of a future Police, Fire and Crime Panel and promote via the newly formed CSP’s
Action – SM to put HMO’s on a future Panel meeting agenda and Paul Fell to raise with Lisa Bryan at NFRS in order to look to see if a coordinated multi agency approach can be taken to resolving some of the issues associated with HMO and risk.
Overall, the Commissioner recognised that financial due diligence had improved and continues to improve.
Helen King confirmed external funding is utilised before the utilisation of internal funding and borrowing in order to minimise the direct impact on future years revenue costs.
Whilst this can be costly, the capital programme is scrutinised and arranged to enable investments to be prioritised and affordability considered.
Whilst still in line with the reserves strategy published in February 2021, the outturn has enabled a better than anticipated reserves position to be established at the end of the year.
The reserve has significantly increased to £3m as a result of the £2m special grant from the Home Office, however £1m will be used to fund 2021/22 and the balance of £2m is needed to manage unforeseen risks and mitigate future pressures on the MTFP.
Treasury management paper.
Report accepted by the Commissioner and no questions raised.
Budget Outturn report
The Commissioner was assured that he had seen further improvement in the budget and financial management from staff at NFRS.
However, some areas require robust financial management and both Chief Fire Officer and Chief Finance Officer assured him that there was a plan in place to tackle these remaining areas.
The Commissioner agreed three carry forward proposals that were articulated in the paper presented to him.
Treasury Management Outturn report
The Commissioner noted the paper presented to him.
He was assured that there were effective processes in place, that complied with CIPFA guidelines relating to Treasury Management.
The Commissioner noted the low level of income generated from investments but recognised that this was as a result of the current economic climate and the need to be prudent with public money.
Call handling and command and despatch system update
NFRS currently use call handling and command and despatch systems that will reach end of life and be unsupported in January and March 2023, respectively. Current arrangements for these services are in place for joint operation with Warwickshire Fire and Rescue Service and NFRS are during July 2021 issuing an invitation to tender for replacements with WFRS.
The capital replacement programme has a sum allocated for this and the Commissioner has agreed to this RFQ process on the basis that the Chief Fire Officer will need to identify savings to pay for any product that he wishes to procure over this amount where no option exists to deliver it for the amount set aside.
The Commissioner requests a report that:
Demonstrates the progress being made to identify where additional savings will be made if this is a course that the CFO intends to take
Describes the business continuity plan relating to the loss of either of these systems and how this would work if there was a permanent loss of these system ahead of any new system going live
NFRS currently use call handling and command and despatch systems that will reach end of life and be unsupported in January and March 2023, respectively.
These systems are currently provided by Capita through a joint arrangement with Warwickshire Fire and Rescue Service.
Upgrades have been delayed due to the uncertainty of the Emergency Service Network (ESN) programme.
The delays in relation to ESN are impacting on decisions in relation to control systems across the country for all three emergency services.
A joint tender process is underway with Warwickshire with a 5-year budget envelope of £1.175m including annual revenue costs.
Should an increase in capital costs be required the capital programme will be further reviewed and if additional revenue is required, then the existing suggested list of potential savings, previously provided by the Chief Fire Officer to the Commissioner, would be required to be considered again to fund the gap.
Until the quotes are returned it is difficult to provide further details on likely mitigations. What is certain is that there is a requirement to replace the systems.
Once quotes have been received, the Commissioner reiterated his position that he will not sign off on the purchase of any new system unless it is accompanied by a full business case with clearly identified savings included within it.
There was a discussion about the number of licences that would be required with any new system procured.
Assistant Chief Officer Hallam has asked for quotes for 3, 4 and 5 with the option to scale up if required on a pay as you go basis
The lesson post Grenfell – Fire survival is that if you have too few licences and there is a major incident the Service couldn’t upscale quickly.
The Commissioner remains neutral in terms of supplier preference; the key consideration must be getting the right product for the Service.
The Commissioner also asked for confirmation that the budget envelop was £1,175m and not £1.3 million as stated in the paper.
The Commissioner made it clear to the Chief Fire Officer that in the event of him requesting a solution that fell outside of the agreed financial envelope he would not agree to and sign an order without first being presented a clear plan as to where the savings to make up the difference would come from.
Action – HK to check the budget envelope in the revenue budget.
There was a discussion about Business continuity for the Call Taking, Command and Despatch System should the end of life dates be reached before a new system was in place.
Chief Fire Officer Dovey advised he will have that discussion with Capita but cannot do that whilst the tender process is in play.
Fire Control Update
The was pleased to see that progress was being made on the tender for a replacement system.
He reminded the Chief Fire Officer that there was an agreed financial envelope for the procurement of a new system and that in the event that the Chief Fire Officer wished to procure a product beyond this envelope, he would not sign an order until he was assured that the appropriate savings had been identified to meet this gap.
There was a discussion about retirement planning. Potentially 20 people who are approaching or have completed 30 years’ service.
It was agreed that Helen King and ACO Shaun Hallam would do some work on this
Action – HK/SK to review the impact of those approaching retirement on the NFRS establishment
There was a discussion about the Firefighter Apprenticeship Scheme.
It was agreed CFO Darren Dovey would write a business case for this being the preferred method for recruitment going forward.
Action – DD to write business case around the Firefighter Apprenticeship scheme and discuss with the Commissioner.
There was a discussion about Pension detriment – Additional resource and expertise in place however CFO Dovey reiterated that everything must be in place 18 months after legislation so working to a March 2025 timeline
HK will share draft of letter she has written to the Home Office with DD
Action – HK to share draft Home Office letter with DD