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Provisional Outturn 2020/21

PURPOSE OF REPORT

To present the projected revenue and capital expenditure position, as at 30 September 2020.

EXECUTIVE SUMMARY

The Authority approved a revenue budget of £35.9m at its meeting on 16 December 2019. The forecast outturn position remains that the Authority will achieve a breakeven against this budget.

The Authority approved a capital budget of £4.1m on 16 December 2019. Due to the restrictions faced by the Covid 19 pandemic, this has been reviewed and revised to £1.0m.

RECOMMENDATIONS

Members are asked to:

(i) note the draft revenue and capital outturn positions as detailed within the report; and

(ii) approve the budget realignment request.

OBSERVATIONS FROM EXECUTIVE PANEL/AUDIT COMMITTEE

This report has not previously been considered by members.

BACKGROUND

This report provides information on the draft revenue and capital expenditure outturn position for the 2020/21 financial year.

Information

REVENUE BUDGET

The table below sets out the draft revenue outturn position for the 2020/21 financial year. This details a breakeven position against the budget of £35.942m.

Budget heading

Budget

Projection

Variance

£'000

£'000

£'000

Employees

27,182

26,387

-795

Premises

2,461

2,738

277

Transport

1,009

1,014

5

Supplies, Services and Third Party Payments

5,025

5,895

870

Capital Financing

2,836

2,653

-183

Income

-2,571

-2,745

-174

Total

35,942

35,942

0

Employee Costs

For the 2020/21 financial year, the budget for expenditure relating to employees is £27.18m which represents 76% of gross expenditure. The draft outturn forecast is an underspend position of £0.79m. This is due to a significant number of vacancies within firefighter and business fire safety apprentices, retained firefighters and other support roles. Due to the Covid 19 pandemic it has not been possible to progress the recruitment although these posts remain critical to achieving the Authority’s objectives.

The budget setting process included an assumption that pay awards would be 2% for all staff. The pay awards were finalised during August and September and were agreed at 2.75% for LGPS staff (green book) and 2% for firefighting (grey book) staff. For 2020/21 it has been possible to meet the additional costs from in year vacancy savings.

Premises

The budget for premises is £2.46m and an overspend of £0.27m is projected. The projected overspend includes a charge for business rates arising from a backdated valuation amendment and costs relating to the Covid 19 pandemic expenditure for buildings.

Transport

The projected expenditure for transport related costs is £1.0m which is broadly in line with the budget. In year expenditure includes additional costs arising from legislative requirements relating to the replacement of tyres and also costs arising from adjustments necessary to ensure continuity of service during the Covid 19 pandemic.

Supplies

The projected expenditure on supplies amounts to £5.89m which is an overspend of £0.87m against budget. This includes increased costs in relation to computer licences and maintenance, as well as increased costs in relation to transformation projects including agile working and higher levels of personal protection equipment as a result of the Covid 19 pandemic.

Capital Financing

The capital financing budget is £2.84m. The capital financing costs include the charge to revenue for depreciation and also the cost of borrowing. There is an anticipated underspend of £0.18m which reflects the reductions in the 2019/20 and 2020/21 capital programmes. This forecast anticipates that interest rates will remain at their current level.

Income

The income budget is £2.57m, of which £2.21m relates to grant funding. Anticipated income (excluding grants) is £0.41m, of which £0.17m relates to the Local Resilience Forum.

Revenue Grant Funding

A breakdown of grant funding, for 2020/21, is detailed below.

Grant Details

Allocation
£

Arson Reduction

157,170

Safe and Well Checks

223,300

Phoenix

147,980

National Resilience

154,256

Firefighters Pension Contributions

1,110,766

Firelink

415,600

Total Grant Funding

2,209,072

Revised Revenue Budget

During the course of the year it has been necessary to review the allocation of the budget across the income and expenditure headings. The table below provides details of the original and revised budgets. It is anticipated that further amendments will be required during the financial year to reflect the ongoing challenges arising from the Covid 19 pandemic.

Budget heading

Original

£’000

Revised

£’000

Adjustment

£’000

Employees

27,657

27,182

-475

Premises

2,328

2,461

133

Transport

1,041

1,009

-32

Supplies and Services

4,450

4,564

114

Third Party Payments

425

461

36

Capital Financing

2,836

2,836

0

Income

-2,795

-2,571

224

Total

35,942

35,942

0

CAPITAL PROGRAMME

The Authority approved a capital programme of £4.09m. Due to the Covid 19 pandemic, it has been necessary to review and revise the capital programme to reflect projects which can be delivered in year.

The provisional outturn for the capital programme is £1.0m.

2020/21
£000

2020/21
£000

Department

Description

Original Allocation

Revised Allocation

Fleet

Replacement vehicles and appliances

1,350

0

Operations

PPE kit and operational equipment

870

785

Facilities

Building upgrades

1,194

215

ICT/Control

System upgrades and associated works

674

0

Amended Capital Allocation

4,088

1,000

Since the programme was revised, projects in relation to building works and fire appliances have been delayed due to the Covid 19 pandemic.

Some ICT schemes have been delayed due to the reprioritisation of the work of the ICT team to manage the transition to remote working. Other schemes are under review and are not expected to incur capital costs in 2020/21.

It is anticipated that the deferred schemes will be completed in 2021/22.

IMPLICATIONS

Well-being Objectives

This report links to NWFRA’s long-term well-being objectives. Funding for the Service benefits the communities of North Wales and ensures there is sufficient investment in infrastructure to enable the service to provide emergency responses and prevention work well in to the future.

Budget

Budget is set annually in accordance with the proposed service delivery which includes emergency response and prevention work.

Legal

It is a legal requirement that the Authority produces the Statement of Accounts in accordance with the prescribed standards.

Staffing

None

Equalities/Human Rights/Welsh Language

None

Risks

Income and expenditure is closely monitored to ensure that deviations from the approved budget are properly identified and reported to Members.

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