Executive Summary

The booklet sets out the agreed revenue and capital budget set by the Combined Fire Authority at its meeting in February 2023.

The annual budget is the means by which the Authority expresses, in financial terms, its plans for service provision during the forthcoming year.

Revenue Budget

In considering its council tax requirements the Authority aims to balance the public’s requirement for and expectations of our services with the cost of providing this.  As such the revenue budget focuses on the need to:

  • Deliver services as outlined in the Risk Management Plan and other plans.

  • Maintain future council tax increases at reasonable levels.

  • Continue to deliver efficiencies in line with targets.

  • Continue to invest in improvements in service delivery and facilities.

  • Set a robust budget that takes account of known and anticipated pressures.

  • Maintain an adequate level of reserves.

The Local Government Finance Settlement confirmed funding at £26.0m an increase of 6%, and that the council tax referendum level of £5.00.

The lack of a multi-year settlement makes longer term planning more difficult as there can be no certainty around future funding forecasts. Offsetting this is the opportunity provided by the £5 council tax flexibility allowed this year. The Home Office have indicated that this flexibility is only for this year.

Raising council tax by the maximum permissible still only increases the overall council tax bill by £5 but generates £2.25m of funding for the Authority. It gives greater long term funding certainty which will form the basis of our future investment requirements, which are essential if we are to hit our ‘road to outstanding’ ambition and be the best equipped, best trained and best accommodated Service.

The final proposed revenue budget for 2023/24 is £68.2m, an increase of 8%. This results in a council tax requirement of £8227 per Band D property, an increase of £5.00 per annum (less than 10p per week).

Until such time as the outcome of next year’s Spending review is published it is impossible to provide any meaningful funding forecast, however for the purpose of medium-term financial planning we have assumed that funding is increased by 5.0% next year and 2% thereafter, and the council tax referendum principle returns to its standard 3%.

Based on this, and the other assumptions within the budget, the Authority is able to deliver a balanced budget in future years, utilising a combination of further savings and drawdown of reserves.

Looking at the medium-term plans it is clear that the key variables remain pay awards, pension costs and funding. Any significant increase in pay award over and above those built into the budget or in the cost of  FF pensions will add in significant financial pressures. Similarly, should funding settlements be worse than budgeted then the level of deficit will increase accordingly.

The Authority remains in a good financial position.

Capital Strategy/Budget

In terms of the Authority’s Capital Programme our capital strategy is designed to ensure that the Authorities capital investment:

  • Assists in delivering the corporate objectives.

  • Provides the framework for capital funding and expenditure decisions, ensuring that capital investment is in line with priorities identified in asset management plans.

  • Ensures statutory requirements are met, i.e. Health and Safety issues.

  • Supports the Medium-Term Financial Strategy by ensuring all capital investment decisions consider the future impact on revenue budgets.

  • Demonstrates value for money in ensuring the Authority’s assets are enhanced/preserved.

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

In light of this, the capital budget continues to invest in our asset base, in particular vehicle replacement, refurbishment/replacement of stations, potential relocation of Headquarters, new IT requirements and new operational equipment. This gives rise to a capital program of £55m over the next five years.

Whilst the programme over the next five years requires £11m of borrowing, this is accounted for in the revenue budget, and hence the capital programme is considered affordable, prudent and sustainable.

Reserves and Balances

In terms of reserves and balances, the Authority has identified a General Reserves minimum target of £3.75m and a maximum target of £10.0m. After allowing for the anticipated usage the Authority estimates it will hold £4.0m of uncommitted reserves by 31 March 2023. The revenue budget identifies a need to utilise £0.15m of these in 23/24, leaving a balance of £3.85m, in excess of the minimum level, and hence the Treasurer considers these are adequate to meet our requirements.

Other reserves reduce significantly over the 5 year plan, reflecting their utilisation to support the capital programme.

Treasury Management

The Treasury Management strategy shows the Authority holding surplus cash, which is available for investment or to pay off existing debt. However, given the penalty associated with debt repayment, and the future need to borrow, it is not considered appropriate to pay off debt at this point in time.

Lancaster Community Fire and Ambulance Station