PURPOSE OF REPORT

This reports sets out the projected outturn position for the 2020/21 financial year as at 31 January 2021. This includes an overview of revenue and capital income and expenditure.

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, including a transfer of £0.1m to earmarked reserves.

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 expenditure revised to £0.15m.

RECOMMENDATIONS

Members are asked to:

note the draft revenue and capital outturn positions as detailed within the report; and
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 projected revenue and capital expenditure outturn position for the 2020/21 financial year.

INFORMATION

REVENUE BUDGET

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

Employee Costs

For the 2020/21 financial year, the budget for expenditure relating to employees is £27.07m which represents 72% of gross expenditure. The draft outturn forecast is an underspend position of £1.2m. 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 of all posts 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.     

The underspend in relation to pay costs will be utilised to fund the new fire kit, which was originally to be funded from borrowing.

Premises

The budget for premises is £2.47m and an overspend of £0.517m 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 £6.1m which is an overspend of £0.95m 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. The projected outturn position also includes £0.765m relating to the purchase of the new fire kit.

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 £0.2m 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 £2.58m, of which £2.21m relates to grant funding. Anticipated income (excluding grants) is £0.43m, of which £0.1m relates to the Local Resilience Forum.

Reserves

Due to the COVID-19 pandemic, a number of delays have been experienced in relation to the completion of projects. It is anticipated that £0.1m will be included in the earmarked reserves to enable these projects to be completed during 2021/22. There is potential for this to increase, depending on the amount of work that is completed by the end of March.

Revenue Grant Funding

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

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.

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 £0.15m.

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.

The purchase of three vans has been brought forward from 2021/22, in order to facilitate the continuation of the mobile working arrangements implemented by the Fleet Department. These were introduced during the COVID-19 pandemic and are set to continue.

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.