MD2508 London Fire Commissioner Medium Term Financial Plan and Reserve

Type of decision: 
Mayoral decision
Code: 
MD2508
Date signed: 
15 August 2019
Decision by: 
Sadiq Khan, Mayor of London

Executive summary

As part of the 2019/20 budget process for the London Fire Commissioner (LFC), a Reserves Strategy and Medium-Term Financial Plan for the Commissioner have been prepared. This is in accordance with the requirements of the National Framework for the Fire and Rescue Service in England which provides that fire and rescue authorities must “publish their reserves strategy on their website, either as part of their medium-term financial plan or in a separate reserves strategy document”.

The Greater London Authority Act 1999 requires these documents to be reviewed by the Fire, Resilience and Emergency Planning (FREP) Committee of the London Assembly and to be subsequently approved by the Mayor of London before being published.

The London Fire Commissioner Governance Direction 2018 requires LFC to consult the Deputy Mayor for Fire and Resilience on any document that is prepared and published by the LFC in accordance with the Fire and Rescue National Framework and which is to be approved by the Mayor.

The Deputy Mayor for Fire and Resilience reviewed the draft Strategy and Plan in report LFC-0133 (Appendix 1) at the Fire and Resilience Board meeting of 19 March 2019.

The FREP Committee considered these documents (Appendix 2 and Appendix 3) at its meeting on 23 May 2019, writing to the Mayor on 21 June 2019 (Appendix 4).

The Mayor is now asked to approve the Strategy and Plan.

Decision

In accordance with the requirements of the Greater London Authority Act 1999, the National Framework for the Fire and Rescue Service in England, and the London Fire Commissioner Governance Direction 2018, the Mayor of London:

Approves the London Fire Commissioner Reserves Strategy and Medium-Term Financial Plan, acknowledging the consideration of drafts of both documents at the meeting of the London Assembly’s FREP Committee on 23 May 2019.

Part 1: Non-confidential facts and advice

Introduction and background

As part of the 2019/20 budget process for the London Fire Commissioner, and in accordance with the governance requirements of the Greater London Authority Act 1999 (GLA Act), the National Framework for the Fire and Rescue Service in England (the Framework), and the Mayor’s London Fire Commissioner Governance Direction 2018, a Reserves Strategy and Medium-Term Financial Plan (MTFP) for the Commissioner have been prepared.

In accordance with the Mayor’s London Fire Commissioner Governance Direction 2018, the LFC must consult the Deputy Mayor for Fire and Resilience on any document which is prepared and published by the LFC in accordance with the Framework and which is to be approved by the Mayor. The Deputy Mayor for Fire and Resilience reviewed the draft Strategy and MTFP in report LFC-0133 (Appendix 1) at the Fire and Resilience Board meeting of 19 March 2019.

The GLA Act requires these documents to be reviewed by the FREP Committee of the London Assembly and subsequently approved by the Mayor of London, as they fall within the definition of a document prepared in accordance with the Framework. The FREP Committee considered these documents at its meeting on 23 May 2019, writing to the Mayor on 21 June 2019 (Appendix 4). The Mayor is requested to approve the Strategy and Plan.

Objectives and expected outcomes

On the 8 May 2018, the Home Office published its updated Framework, which set out the Government’s priorities and objectives for fire and rescue authorities (FRAs). The Framework sets out the documents each FRA is required to produce, which include an integrated risk management plan (the London Safety Plan), an annual statement of assurance (published in November 2018) and its financial plans including an efficiency plan (published in 2016 covering up to 2020), a medium-term financial strategy and a reserves strategy.

As part of the 2019/20 budget process, a Reserves Strategy and MTFP were prepared, in accordance with Chartered Institute of Public Finance and Accountancy (CIPFA) guidance, to assist in decision-making and the ultimate approval of the 2019/20 Budget for the LFC. Draft versions of these documents were included in both the November 2018 Budget Submission to the Mayor and also the final 2019/20 Budget Report.

Medium-Term Financial Plan

The MTFP represents a key part of the LFC’s decision-making process in financial planning for the future. The MTFP brings together all the known factors affecting the organisation’s financial position and its financial sustainability into one place. The draft MTFP covers the four financial years to 2022/23 as set out in Appendix 2. The MTFP shows that the LFC is anticipating that there will be a budget shortfall of £18m by 2021/22.

Reserves Strategy

In setting the LFC’s budget for the 2019/20 financial year, due consideration was given to both the robustness of the estimates used in preparing that budget and also the adequacy of the LFC’s reserve levels. This was set out in a reserves strategy.

To meet the requirement of the Local Government Act 2003 in respect of the adequacy of reserves and to demonstrate compliance with the guidance on local authority reserves and balances issued by CIPFA, but mindful of the requirements in the Mayor's Budget Guidance, the GLA and its functional bodies, including the LFC, must provide:

i. a statement of policy on reserves and contingencies
ii. details of all reserves and general balances
iii. an analysis and explanation of the expected movements between the start and end of each year from 1 April 2018 to 31 March 2023
iv. in the case of earmarked reserves held for purposes beyond 31 March 2020, an indication should be given as to when they are likely to be applied

That strategy is set out in Appendix 3.

The Strategy and the MTFP were approved by the LFC in report LFC-0133 (Appendix 1) for consideration by the Mayor and the Assembly. In accordance with the Governance Direction to the Commissioner (Part 2, 2.1(d)), the Deputy Mayor considered the Strategy and the MTFP at the Fire and Resilience Board on 19 March 2019, approving both for consideration by the FREP Committee and the Mayor.

The FREP Committee considered these documents (Appendix 2 and Appendix 3) at its meeting on 23 May 2019, writing to the Mayor on 21 June 2019 (Appendix 4). That letter, from the Chair, Assembly Member Dismore, said: “At its meeting on 23 May 2019, the Fire, Resilience and Emergency Planning Committee formally received and noted the Reserves Strategy and Medium Term Financial Plan, and agreed that this form the recommendation to you, in accordance with the requirement set out at Section 327(I) of the Policing and Crime Act 2017.”

Equality comments

The Public Sector Equality Duty, under section 149 of the Equality Act 2010, applies to the Mayor of London when making decisions. The duty requires the Mayor to have due regard to the need to:

a) Eliminate unlawful discrimination, harassment and victimisation and other behaviour prohibited by the Act. In summary, the Act makes discrimination etc. on the grounds of a protected characteristic unlawful.
b) Advance equality of opportunity between people who share a protected characteristic and those who do not.
c) Foster good relations between people who share a protected characteristic and those who do not including tackling prejudice and promoting understanding.

The protected characteristics are age, disability, gender reassignment, pregnancy and maternity, marriage and civil partnership, race, religion or belief, gender, and sexual orientation. The Act states that ‘marriage and civil partnership’ is not a relevant protected characteristic for (b) or (c) although it is relevant for (a).

A full equality impact analysis of the budget proposals was undertaken and included within the budget papers (see Appendix 7 of the budget papers which are at Appendix 1 of this report). The Mayor should consider the equality impact analysis undertaken.

Staff savings proposed for the 2019/20 year were identified as five operational staff, one Station Manager and four Watch Manager Bs, who will be assimilated into other vacant operational posts. There is an increase of three Watch Manager As. The non-uniformed staff savings proposed currently identify three grade FRS B posts to be deleted. The two FRS B posts within Strategy and Risk (reference 33, minor staff restructure) are vacant.

The FRS B post that is proposed to be deleted (appendix 4 ref. 17, control admin staff) would need to be selected from one of the two FRS B established posts. The posts are filled by one male and one female with both post-holders being categorised as Black and Minority Ethnicity staff. Staff have been consulted on the proposal and management are currently looking to redeploy one member of staff subject to the redundancy and redeployment code.

Other considerations

Sustainability

The introduction of apprenticeships including the firefighter apprenticeship which will make use of the apprenticeship levy funds before they expire, supports the LFC Sustainable Development Policy to provide apprenticeships to our workforce.

The 20-year capital investment strategy identifies the costs associated with future fleet replacement programmes based on the current vehicle specification with inflation. The costs of achieving the 2030 zero emission capable fleet target as set out in the London Environment Strategy are yet to be included as both the technology and associated costs cannot be defined at this time.

Sustainability works identified in the LFC Capital Investment Ambition include works that will deliver carbon reduction through heating improvements, window replacements, air conditioning replacements and other essential works including rewiring and asbestos removal.

The Croydon Training Centre has been re-designed as a refurbishment and is expected to achieve the corresponding LFC target for ‘BREEAM Very Good’. The planned size of the associated renewables installation has not been changed.
Links to Mayoral Strategies and Priorities

The LFC financial documents have been prepared in accordance with the budget guidance given by the Mayor to the functional bodies within the GLA Group. They also support delivery of the priorities for London as set out in the London Safety Plan.
Risks and Opportunities

None specifically arising from this Decision. The substantive risks and opportunities relating to the LFC’s financial position were set out in detail in its budget.

Financial comments

Report LFC-0133 and the Reserves Strategy and MTFP for the London Fire Commissioner are prepared by the Commissioner’s Assistant Director for Finance. The documents are based on the funding levels set out in the Mayor's Final 2019-20 Draft Budget which was approved without amendment by the London Assembly on 25 February 2019. The plans do not commit the Mayor to provide additional funding to LFC and, as a result, there are no new direct financial implications for the GLA.

In late June 2019 the Mayor issued his budget guidance to functional bodies, including LFC, to assist bodies in preparing their budgets for the 2020-21 financial year and beyond. As part of the 2020-21 budget process, functional bodies will begin preparing budgets on the basis of this guidance and will review existing plans, including the MTFP and Reserves Strategy.


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