Recommendations That the Finance and Personnel Committee recommends the Authority to agree that -

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Report title Agenda item

Budget 2012/13

7

Meeting Date

Finance and Personnel Committee

Authority

12 March 2012

15 March 2012

Report by Document Number

Director of Finance and Contractual Services 2 March 2012

FEP 1891

Public

Summary

This report presents the Authority’s final draft revenue and capital budgets for 2012/13 for approval. It is presented to the Finance and Personnel Committee for information, and to the Authority for decision.

Recommendations

That the Finance and Personnel Committee recommends the Authority to agree that -

1. subject to the decisions below, a 2012/13 revenue budget of £379,800k be approved being made up of net expenditure of £409,800k with £30,000k funding from reserves;

2. the revenue estimates as set out in Appendices 1 to 3 showing proposed savings and budget movements are approved;

3. the establishment changes associated with the revenue budget as set out in Appendix 3 are agreed; 4. the capital programme with gross expenditure in 2012/13 of £12,519k as set out in Appendix 4 be agreed;

and

5. that the Authority give notice to the Chief Fire Officers Association that it wishes to withdraw its membership, avoiding costs of £9k in 2012/13.

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Introduction/Background

1. The Mayor’s budget was passed unamended by the London Assembly on 9 February. The Mayor’s background statement to his budget report states:

‘Against a background of severe public expenditure constraint, the Mayor has been successful in negotiating good settlements for the GLA and its functional bodies…Overall the GLA Group’s revenue and capital expenditure is set to increase by 13.5 per cent in 2012-13.

At the same time, the Mayor has been relentless in ensuring that the GLA Group delivers value for money. This prudent management of the GLA’s finances also allows the Mayor to make a proposal to reduce the Council Tax Precept in 2012-13’.

2. This budget report reflects the Mayor’s agreed budget and updates the budget proposals agreed by this Authority at its meetings in November and January. This includes the use of £30,000k of LFEPA’s general reserves to fund the budget in 2012/13 and total savings of £22,715k. The budget builds upon the additional savings of £5,300k that were identified in March of last year which meant that the planned drawing on reserves for this year could be reduced from £19,300k to £14,000k. It also builds upon the in-year savings of £8,096k that were agreed by the Authority in June of this in-year which allowed for a further reduction in the amount of reserves required to support the current budget. This has provided additional funds to balance the budget for 2012/13 in accordance with the Mayor’s plan that LFEPA’s reserves should be held to smooth the impact of the planned spending reductions for council tax payers going forward.

3. These savings and efficiencies have been achieved in the context of improved performance which puts the Authority in a good position to deliver many of the commitments set out in the final year of the Fourth London Safety Plan (2012/13) which this budget supports. Performance achievements include:

 The arrival of fire engines at emergency incidents continues to be well within the targets set in LSP4 ensuring that there is a 1st fire engine at an incident, on average, in 5 minutes and 22 seconds and the 2nd_{fire engine, on average, in 6 minutes and 35 seconds (in 2011).}

 Fires attended are now well below 30,000 a year (just over 26,800 in 2011) and continue to fall; the number of fires attended is at the lowest level since records for Greater London were collected in 1966.

 A record number of home fire safety visits (HFSVs) are being delivered (running at over 81,000 for 2011) which indicates that the LSP4 commitment to deliver some 230,000 visits over the three years of LSP4 will be exceeded.

 The time station staff are spending on HFSVs and other community safety activity remains ahead of target (at 13 per cent in 2011), and this is delivering a reduction in the number of fires in the home; it is expected that the 2 per cent reduction set out in LSP4 will be achieved.

 The Authority’s aim, as set out in LSP4, to reduce the number of ‘unwanted’ calls (i.e. false alarms due to automatic fire alarms, and shut in lift releases) continues to deliver reductions in the numbers of calls attended thus freeing-up the time of fire crews for essential training and community safety work. AFA false alarms, at just under 41,000 in 2011, are 13,000 fewer than the worst year (2005) over the last 10 years. The number of shut in lift releases attended is more than half the number attended 10 years ago (at 7,800 in 2011).

4. The budget requirement for LFEPA is as set out in the Mayor’s final draft consolidated budget presented to the Assembly on 9 February which is unchanged to that set out in the consultation draft. This in turn reflects the November budget submission by LFEPA. The headline figures are set out in Table 1 below.

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Table 1: Mayor’s proposals for LFEPA

Revenue Budget for 2012/13

£000

Net Revenue Expenditure 409,800

Funded from reserves 30,000

Budget Requirement 379,800

5. During the course of this budget preparation cycle, the Government issued legislation which means that the basis for the Mayor’s budget proposals must be the ‘council tax requirement’ rather than the budget requirement (the budget requirement relates to expenditure funded by both Central Government general grant and council tax). For comparative purposes this report refers to both. LFEPA’s final fire formula grant figure for 2012/13 was published on the 31 January and will be £259,085k. This includes £7,025k of council tax freeze grant which the Mayor had previously intended to apply to the GLA’s council tax requirement. This change has not impacted on LFEPA’s budget requirement as the revised LFEPA council tax requirement figure that the Mayor has set has also been reduced by this amount.

6. The 2012/13 budget requirement of £379,800k represents a reduction of £29,600k from that approved for the 2011/12 financial year. This reflects a one off reduction in LFEPA’s precept of £30,000k, based on using general reserves, and an increase of £400k in fire formula grant. The resulting council tax requirement for LFEPA is £120,715k.

Financial Context

7. As Members are aware the Comprehensive Spending Review announcement included an intention to reduce the formula grant for the fire and rescue service nationally by 25 per cent over the four year period to 2014/15 and that this reduction would be back loaded to the latter two years. The total reduction in fire formula grant over the two years to 2012/13 is 6.5 per cent leaving a further 18.5 per cent reduction to be made from 2013/14 if the full 25% reduction is to be achieved. If the remaining 18.5 per cent of reductions across the whole fire service were in line with the current formula allocation, and based on the latest projections of LFEPA’s expenditure requirements in those years, it is estimated that LFEPA would need to achieve savings of some £64,000k over that two year period.

8. In December 2011, CLG announced that the fire service would be part of the reforms to local government financing from 2013/14. These are the repatriation of business rates proposals which the Authority agreed that it wished to be part of in September 2011 (FEP 1799). This planned reform of local government funding adds further uncertainty in terms of what the grant position might be for LFEPA in 2013/14 and 2014/15, as final details on the operational arrangements for the new system, including the share of growth to be apportioned between the GLA, LFEPA, the London boroughs and the Corporation of London, are unlikely to be known until mid 2012.

9. It is expected that the Mayor will issue budget guidance for 2013/14 and 2014/15 before the summer recess. Based on the current projections and the Mayor’s latest budget documentation LFEPA’s projected savings requirements of £64,000k are forecast as £29,516k and £35,279k in 2013/14 and 2014/15

respectively. The detail of those projections is set out in the revised medium term forecast in Appendix 1.

Budget Update

10.It is for the Mayor, subject to Assembly scrutiny and decision, to determine LFEPA’s council tax

requirement. It is for LFEPA to agree its final spending and funding plans to balance to that requirement. The approved LFEPA council tax requirement of £120,715k reflects the Mayor’s view that LFEPA’s general balances can be reduced by £30,000k. The Mayor’s Final Draft Consolidated Budget 2012-13 states that having considered the needs of the fire service against the delivery of the Mayor’s wider priorities, it is

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proposed to align LFEPA’s reserves position closer to its target level. LFEPA’s stated minimum level of reserves is 2.5 per cent of net revenue expenditure (this is £10,300k). Based on the financial position as at the end of December, the anticipated level of general reserves in March 2012 will be £11,468k, some £1,168k above this amount. In addition to this LFEPA is forecast to hold earmarked reserves of £6,298k, giving a total forecast reserves position of £17,766k. The Mayor’s budget states that the use of reserves in future years’ budgets will be kept under close review and will be considered as part of LFEPA’s future budget plans.

11.The November Budget Submission included £9,159k of savings due to in year savings made in 2011/12 and further savings proposals of £11,919k for 2012/13. The estimates have been kept under review in the light of financial performance during the 2011/12 financial year and future planning assumptions. A number of changes are proposed to the base budget presented in November including further savings and pressures. Additional budget reductions, reflecting changes in the cost of agreed policies of £1,637k have been identified in this report, which in total provides savings of £22,715k. This is £2,215k in excess of the original target of £20,500k set by the Mayor in the June 2011 Budget Guidance, which was based on the Medium Term Forecast in the March 2011 budget report, and offsets additional budget pressures which have subsequently been identified. The £2,215k savings are made up of £1,637 identified in this report, together with £578k additional savings identified in the November budget submission. Revisions to the November estimates, together with commentary, are set out in table 3 below.

Table 3: Budget changes since November Budget

Submission £ Comment

Decreases

LFB Operations Centre (74,689) This reflects the latest forecasts of the costs relating to Merton Control Centre in 2012/13.

Maintenance Contracts (266,812) These are savings on the retendering of maintenance _{contracts as set out in FEP 1832.} London Waste and Recycling

Board (84,655)

This budget reduction relates to rental income from the London Waste and Recycling Board through sharing accommodation at Union Street.

New Dimensions Grant (314,605) This is additional grant advised by CLG for which LFEPA _{had already made spending provision.}

Gas Tight Suits (391,500)

As noted in FEP 1892, there is a forecast underspend in 2011/12 on gas tight suits, due to a more cost effective solution being identified for the first tranche of gas tight suits. It is proposed that a reserve be created, as part of closing the 2011/12 accounts, to carry forward the funding to take advantage of new technology in future years, currently anticipated in 2013/14.

Trainees (504,647) This is based on the latest forecast of recruitment levels required for 2012/13.

Total Decreases (1,636,908)

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Table 3: Budget changes since November Budget

Submission £ Comment

Increases

National Insurance 0.3% rebate

decrease 620,000

The rebate on contracted out pensions will change on 1 April from 3.7% to 3.4%. This change was notified following preparation of the November budget submission.

Non staff inflation 652,846 A review of non staff inflation has identified a number of inflationary pressures since the preparation of the November budget submission.

Property Rates 129,140

This is an additional pressure which was identified following further work done to reassess the rateable values of Authority Premises.

Interest Receipts 150,000 A separate report on today’s agenda proposes a Treasury Management Strategy going forward. The actual levels of return will be kept under review. Fire Investigation Income 44,000

This adjustment reflects a reduction in the expected training requirements to be provided to external organisations in 2012/13.

Secure Website 20,922

This reflects a shared service arrangement with the MOPC to access the government's secure portal, and is a cost effective solution, avoiding direct costs of £800k over the next three years.

Borrowing costs 20,000

This reflects the impact of the purchase of the West Norwood site in 2011/12 following the successful appeal in January of this year.

Total Increases 1,636,908

12.Appendix 1 to this report sets out a revised medium term forecast for 2012/13 through to 2014/15. Appendix 2 sets out the detailed estimates. Appendix 3 sets out the savings proposals. Appendix 4 sets out the capital programme which is discussed further below, and Appendix 5 sets out information about the costs of closing the Brigade Museum.

Chief Fire Officers Association

13.The Chief Fire Officers Association (CFOA) wrote to the Commissioner on 19 February, advising that the proposed charge for LFEPA’s membership in 2012/13 would be £8,670. This charge reflects the cessation of central government funding for CFOA from 1st April 2011, and the funding model is being restructured. The charge represents an increase of 20% on the 2011/12 charge. The Chairman has requested that the Authority consider withdrawing membership of CFOA, which would avoid costs of £8,670.

Reserves

14.The latest forecast position on reserves is set out in table 4 below. This reflects the latest financial position, as reported to the Finance and Personnel Committee on 12 March 2012 with a forecast underspend of £2,442k. As previously reported, the table reflects changes to reserves including the draw of £30,000k from the general reserve and a draw of £1,119k from the firefighters pension reserve in support of the 2012/13 budget. The draw on the pensions reserve is to cover inflationary increases and the impact of changes in the scheme sanction charge arrangements, which will be built into the 2013/14 base budget.

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15.As set out in the November budget submission, there are also three proposals to create specific reserves, funded from the general reserve, for changes to staff terms and conditions (£4,469k), the national operational guidance program (£6,000k) and pension early release costs (£1,797k). The effect of these transfers would leave £11,468k in the general reserve which is £1,168k above the £10,300k assessed as the minimum adequate level.

Table 4, Position on reserves Opening Balance at 1/04/11 Forecast use of reserves to support 2011/12 budget Forecast drawings from earmarked reserves Projected underspend in 2011/12 Forecast Balance at 31/03/12 Transfer Between Reserves Use of Reserves in 2012/13 Forecast Balance at 31/03/13 £000 £000 £000 £000 £000 £000 £000 £000 Firefighters' Pension 1,771 1,771 (1,119) 652 PFI 631 631 631 Hydrants 1,500 (400) 1,100 1,100 Compensation 3,000 (1,301) 1,699 1,699 Sustainability 235 235 235 Salix 195 (194) 1 1 London Resilience 1,980 1,980 1,980 General 57,389 (6,098) 2,442 53,734 (12,266) (30,000) 11,468 Total 66,701 (6,292) (1,701) 2,442 61,150 (12,266) (31,119) 17,765

Changes to Staff Terms

and Conditions 0 0 4,469 (4,469) 0

National Operational

Guidance Programme 0 0 6,000 (2,000) 4,000

Pension Early Release

Costs 0 0 1,797 1,797

Total 66,701 (6,292) (1,701) 2,442 61,150 0 (37,588) 23,562

16.Levels of reserves will be kept under review in relation to updated assessments of financial risks. There are a range of risks to the long-term financial position which are as yet unquantified in the estimates in this report, as set out below:

a) Pensions changes on all schemes in future years

b) Costs associated with the options for the provision of mobilising c) A review of rates items

d) Other inflationary pressures over the medium term

Capital Programme and Prudential Indicators

17.The detailed programme is set out in Appendix 4, with proposed gross expenditure in 2012/13 of £12,519k and borrowing of £5,019k. The programme for 2012/13 has increased since it was reported in November 2011 in order to take account of the latest forecast underspend in 2011/12, which in some cases it is proposed to carry forward into 2012/13. There will be no impact on cumulative borrowing levels. The significant movements in the capital programme since the November budget submission are set out with comment in table 5 below:

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Table 5: Changes to the 2012/13 Capital Programme since reported in November 2011 (FEP 1824) Estimate for 2012/13 reported in November Current estimate for 2012/13 Movement from Nov to current 2012/13 Comments £000 £000 £000

Firelink project 200 250 50 This is slippage from 2011/12 which is due to

the relocation of the mobilising function to Merton and the consequent delay in the upgrade of the Mobile Data Terminal infrastructure.

Business Continuity for PFI Projects - Phase 1

20 220 200 The increase in 2012/13 reflects the 2011/12

underspend. Phase 1 of this project is expected to be completed within the Authority approved sum.

West Norwood Fire Station

2,807 £728 (2,079) This is due to the site being purchased in 2011/12 following the successful appeal on planning permission. The purchase spend was previously profiled into 2012/13. Holloway Fire Station -

Extensions/Internal alterations

301 361 60 Delays to the project due to unforeseen

ground conditions have caused some slippage into 2012/13. The project is expected to be completed within the Authority approved sum.

Total London Resilience Yards and Forecourts Project

150 566 416 Pending the conclusion of a review of

incident support the programme of yard works has put on hold and is now expected to occur in 2012/13. This is slippage from 2011/12 and reflects the reallocations of funds as reported in FEP 1746.

Walthamstow Fire Station

178 238 60 This reflects the consultants’ revaluation of

their fees reflecting the higher value build contract sum. The overall project cost will be within budget.

Total Energy Conservation

Projects/Invest to Save

800 1,207 407 This project had to be retendered with

revised specifications causing slippage into 2012/13.

Total Building Energy Efficiency Programme 2 (BEEP2)

800 1,050 250 As reported in FEP 1704, the works were

delayed due to the need to refine the initial design package in order that it adequately reflected fire station requirements. This has caused slippage into 2012/13.

Fire Safety Works at Fire Stations

500 938 438 Finalising the scope of works has caused

slippage into 2012/13.

TOTAL PROGRAMME 12,717 12,519 (198)

18.As agreed in the November budget submission, the capital programme’s presentation has been revised in order to better manage project prioritisation and slippage on individual projects. As previously, the programme is presented in a number of sections, distinguishing projects that have already been approved by the Finance and Personnel Committee and those that are new bids for 2012/13. The November budget submission included the recommendation that a new approach for managing capital spend be implemented, which was approved. This proposal was to set aside the contingency element of each

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project in one location that can then be drawn down on by each project up to a maximum of 10% of its approved budget. In addition underspends identified in year will also be transferred to this central contingency. The new Capital Planning and Strategy (CAPPS) group chaired by the Director of Finance and Contractual Services will then approve the reallocation of this funding to other projects under existing delegated authorities for capital expenditure.

19.The capital programme now includes long term liabilities in respect of leases. This is to be consistent with the presentation of LFEPA’s prudential indicators, which need to include long term liabilities, and with International Accounting Standards. As reported in FEP 1824, the Mayor has been requested to increase this element of the prudential indicators to reflect the outsourcing of training functions. The Mayor’s final draft consolidated budget states that this increase is currently subject to consultation, and the Mayor expects to increase the levels by the amounts required by the end of March 2012. In addition an estimate of the cost of capital expenditure that would be required if the current mobilising system were purchased by LFEPA is shown in the 2013/14 programme. The impact of these changes is reflected in the prudential borrowing levels set out in Appendix 4.

20.The programme includes the projects that are currently expected to be progressed over the next three years until 2014/15. This includes the West Norwood Fire Station development, for which planning permission was received on 15 February. Members are also asked to note that no provision has yet been included for a potential new project at Heathrow Fire Station, should it not be possible to renew the lease (FEP 1705).

Fees and Charges

21.LFEPA receives income from a range of charges which are calculated on a cost recovery basis. The major impact on these is normally due to increases in staff pay. As a result of nil pay awards in 2010/11 and 2011/12 the changes continue to be minimal. Any changes needed for charges have been recalculated by the Director of Finance and Contractual Services and advised to charging departments in line with

delegations to officers in order to be applied from 1 April 2012. As part of this exercise, it is intended to update the charges for the provision of information by Fire Safety Regulation department about premises that have had petrol tanks (as described by the Authority’s licensing records) to ensure that they cover the cost of providing the information. To this end, these charges will now be included in the Authority’s Publication Scheme and will be a variation to the basis for these charges that was set out in the Freedom of Information Act charging scheme.

The Fifth London Safety Plan

22.The Mayor’s final draft consolidated budget states that the fourth London Safety Plan (LSP 4) for 2010-11 to 2012-13 was approved by LFEPA in March 2010. The two key elements of the Plan are to maintain the service’s current focus and to further improve the safety of London and Londoners, and the proposed budget ensures that LFEPA is able to continue to deliver the Authority’s priorities in the Safety Plan in 2012-13.

23.A fifth London Safety Plan is in development which will be in place for the start of the 2013/14 financial year. This plan will set out the Authority’s proposals for maintaining operational cover and resilience in a challenging financial context.

Interim Head of Legal and Democratic Services comments

24.The procedure for setting the Authority’s overall budget is prescribed by Schedule 6 of the Greater London Authority Act 1999. Under those provisions responsibility for the Authority’s total budget lies with the Mayor of London. They set out how the Mayor must liaise with the Authority and other functional bodies during the budget process and then gain approval of the London Assembly. Within the limits set down in the component budget approved by the GLA the formulation and approval of the Authority’s budget are matters for the Authority.

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Director of Finance and Contractual Services comments

25.This report is by the Director of Finance and Contractual Services and there are no additional comments.

Environmental Implications

26.The savings proposals have been reviewed for sustainability and environmental implications with

consideration of the Mayor’s strategies to promote improvement of the environment, and where relevant this is reflected in the detailed commentary on the savings in Appendix 3.

Staff Side Consultations Undertaken

27.The proposals set out in this report include a number of staffing reductions. Consultation with the unions about potential redundancies started on 29 September and will continue until the final budget for 2012/13 is set in March 2012.

Staffing Implications

28.The staffing reductions are subject to individual and staff side consultation, and therefore the proposals set out in Appendices 4 and 5 are subject to change. In relation to operational posts, these are generic, and so post holders will be found alternative roles unless they opt to retire or leave the service for other reasons. The proposed reduction of 12 posts to the operational establishment total are summarised below. Deputy Assistant Commissioner – 1 post

Group manager – 5 posts Station manager – 1 post Watch manager B – 4 posts Watch manager A – 1 post

29.The Commissioner is confident that even with these operational reductions, it will still be possible to service operational response in accordance with currently defined mobilising requirements.

30.In relation to FRS, the proposed variation in establishment is set out in Table 6 below.

Table 6, FRS Staffing Impact Grade Non-vacant posts proposed to be deleted Vacant posts proposed to be deleted New posts proposed to be created Overall proposed net change FRSA 2 3.5 FRSB 1 3 FRSB/C/D 0 1 FRSC 9 5 FRSC/D 1 5.4 FRSC/D/E 0 1 FRSD 2 1.5 1 FRSE 1 1 1 FRSF 1 1 FRSG 1 Total* 18 22.4 2 38.4

31.A total of 35 FRS staff were identified as being ‘at risk’ as a result of the proposal to disestablish 18 non-vacant posts. A number of these were because of proposed reductions in generic posts. All affected FRS staff were informed about the proposed establishment changes and the trade unions consulted. Of the staff affected, 8 have accepted severance terms (5 white men, 1 white woman and 2 BME women) and 4 have been offered redeployment (1 white man and 3 white women). There are currently 6 staff who remain ‘at risk’ (2 white men, 1 white woman, 1 BME man and 2 BME women) and in accordance with the

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provisions of the Redundancy and Redeployment Code officers will seek to identify suitable redeployment opportunities in the period up to 31 March 2012.

Equalities Implications

32.The Equality and Human Rights Commission has provided guidance stating that organisations subject to the Equality Duty must ensure that the impact financial proposals could have must be properly considered as part of the decision making processes. The guidance also advises that any equality analysis should be proportionate to the decisions being considered.

33.An equality impact analysis has been produced which concludes that the savings proposals will have minimal impact on the Authority’s ability to deliver services to diverse communities. Proposed reductions in specific areas will be mitigated by changes in working practices and the utilisation of partnership and third sector contacts.

List of Appendices to this report:

1 Medium Term Financial Strategy

2 Detailed Estimates and Notes to Detailed Estimates

3 Proposed Savings

4 Capital Programme

5 Costs to close the Museum

LOCAL GOVERNMENT (ACCESS TO INFORMATION) ACT 1985

List of background documents

1. The Mayor's Budget and Capital Spending Plan for 2012/13, Final draft consolidated budget, 1 February 2012

2. FEP 1854 - Mayor’s Consultation on Budget for 2012-13 3. FEP 1824 - November Budget Submission

4. FEP 1742 - Budget Update 5. FEP 1698 - Budget 2011/12

Proper officer Sue Budden, Director of Finance and Contractual Services

Contact officer Telephone Email Alison Ross 020 8555 1200 x31376 alison.ross@london-fire.gov.uk

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Medium Term Financial Strategy Appendix 1

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2012/13 2013/14 2014/15 Comments

£m £m £m

Net Revenue Expenditure 2012-13

423.594 409.802 387.360

In year savings agreed June 2011

(9.159) 0.000 0.000 This reflects the full year impact of 2011-12 In year savings.

Unavoidable Pressures

Central Contingency for Inflation

9.065 9.778 10.067 This includes sums for known unavoidable inflationary pressures.

Increased Data Storage Capacity

0.035 0.000 0.000 These are the revenue costs associated with the project to implement a secondary data storage solution as set out in FEP 1484. Borrowing costs 0.020 0.309 0.310 The provision is in respect of prior years

capital expenditure financed by borrowing (Excluding vehicles and Merton Control). This is based on the latest capital programme as set out in Appendix 4, including the purchase of the West Norwood site in 2011/12.

Firefighter's Pensions 0.000 0.793 0.611 This relates to pension increase and retirement allowance payments. Energy Costs 0.210 0.226 0.243 The forecast is now based on a 'low risk'

strategy of a 7.5% annual increase each year. Business Rates - other 0.331 0.397 0.435 The forecast increase assumes a 5% increase

each year.

Occupation of Merton RCC 0.461 0.171 0.000 This reflects the additional costs after relocation as set out in FEP 1665.

Reduction in rental income 0.208 0.000 0.000 The potential lease at Paddington was not completed resulting in an additional £110k not being achieved. The site is to be re-marketed. There is also a reduction in Telecom income resulting from vacating sites at PFI stations.

PEG - Telemetry system. Total care maintenance contract

0.063 0.062 0.000 This relates to the telemetry system maintenance contract.

Fleet Management

Replacement 0.245 (0.205) 0.000 Pumping appliances are provided by AssetCo as part of the PFI fleet and operational equipment items management and maintenance contract. The Brigade’s fleet of pumping appliances is due for replacement between 2014 and 2021. This project is to ensure that Authority

requirements and specifications are met in a timely manner whilst seeking efficiencies and improvements including reducing environmental impact.

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2012/13 2013/14 2014/15 Comments

£m £m £m

PFI - Business Rates 0.000 0.052 0.033 The 9 new PFI stations will be larger

buildings that are expected to have a higher rateable value. The additional cost is estimated at £702k pa based on 2010 rateable values. The average cost is £78k per site. The current provisional projection is that 4 stations will be completed in February 2014 and 5 in February 2015.

PFI - Contract Letting Team 11/12 base £1,055k

0.000 (1.055) 0.000 The reduction in 13/14 follows the projected completion of the property PFI contract letting process.

PFI - Property Cost 0.000 0.235 (0.103) This reflects the estimated revenue costs as set out in FEP1662 for Business Continuity arrangements.

PFI - Independent Certifier (Total £250k)

0.040 0.000 0.040 This relates to the cost of an Independent Certifier that will be jointly appointed by the LFB and selected PFI Bidder to mediate on issues raised at the point of building

completion/handover to LFB. The Authority will fund 50% of this cost between 2013 – 2016.

Property PFI 0.000 0.752 0.000 This relates to the new team required to manage the Property PFI contract when it moves to the construction phase of project. It is envisaged that a team of 5 staff will be required for the ongoing contract

management over 25 years at an estimated cost of £300k per annum. This team will require consultancy services to deliver this project at an estimated cost of £452k per annum during the construction phase. FireLink Grant 0.116 0.000 0.000 This reflects a reduction in the grant

provided by CLG to offset the increased costs of the FireLink Service. This reduction has occurred due to a discount in the charges as a result of the delay in

implementation of phase B of the FireLink delivery.

Changes to Savings identified

in 2011/12 Budget 0.145 0.000 0.000 This adjustment reflects the profile of savings in the 2011/12 budget. National Insurance 0.3% rebate

decrease

0.620 0.000 0.000 The rebate on contracted out pensions will change on 1 April from 3.7% to 3.4%. Fire Investigation Income 0.044 0.000 0.000 This reflects a reduction in the expected

training requirements to be provided to external organisations in 2012/13.

Secure Website 0.021 0.000 0.000 This reflects a shared service arrangement with the MOPC to access the government's secure portal, and is a cost effective solution. Short Term Lending Interest

Receipts

0.150 (1.214) (0.375) A separate report on today’s agenda proposes a Treasury Management Strategy going forward. The actual levels of return will be kept under review.

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Medium Term Financial Strategy Appendix 1 13 2012/13 2013/14 2014/15 Comments £m £m £m Total Unavoidable Pressures previously identified 2.615 10.301 11.261

Updated Forecast since 2011/12 Budget Report - Savings

Insurance Company Income 0.000 (0.675) (0.700) Following review, this forecast is based upon the 2011/12 outturn position and assumes growth of 3.5% per annum going forward. PFI - Unitary Payment 0.000 (2.240) 0.760 This is a provisional forecast. Cost and PFI

credit flows will be confirmed on completion of the contract with the successful bidder. Volunteering 0.000 0.000 0.000 This adjustment has now been included in

the savings schedules. Low Emmission Zone - LFEPA

Vehicles

(1.457) 0.000 0.000 This reduction reflects the agreed spend profile in FEP 1698 (March 2011 Budget Report).

Low Emmission Zone - New Dimension Vehicles

(0.250) 0.000 0.000 This reduction reflects the agreed spend profile in FEP 1698 (March 2011 Budget Report).

Telemetry Modifications (0.065) 0.000 0.000 This reduction reflects the agreed spend profile in FEP 1698 (March 2011 Budget Report).

Additional Public Holiday 0.000 (0.312) 0.000 This reflects additional Public Holiday in 2012/13 which will not be used in 2013/14 Future Options for Training (0.750) 0.000 0.000 This is the removal of budgets that support

the Future Options for Training project as the project will have concluded.

Legal & Democratic Services Administration Restructure

(0.080) 0.000 0.000 This item has been actioned in year under officers' delegated authority and restructures and administrative support within Legal and Democratic Services to make it more cost effective.

Procurement Saving (0.019) 0.000 0.000 This saving has been actioned in year under officers' delegated authority and relates to staffing changes in the Contracts

Management Group. Strategic Advisor to the

Commissioner Saving

(0.046) 0.000 0.000 This saving has been actioned in year under officers' delegated authority and removes a post.

Changes to Unavoidable Pressures Identified in 2011/12 Budget

(0.259) 0.000 0.000 This adjustment reflects the spend profile of budget pressures in the 2011/12 budget. Trainees (0.505) 0.000 0.000 This is based on the latest forecast of

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14

2012/13 2013/14 2014/15 Comments

£m £m £m

Gas Tight Suits (0.392) 0.000 0.000 As noted in FEP1892, there is a forecast underspend in 2011/12 on gas tight suits, due to a more cost effective solution being identified for the first tranche of gas tight suits. It is proposed that a reserve be created, as part of closing the 2011/12 accounts, to carry forward the funding to take advantage of new technology in future years, currently anticipated in 2013/14. New Dimensions Grant (0.315) 0.000 0.000 This is additional grant advised by CLG for

which LFEPA had already made spending provision.

London Waste and Recycling Board

(0.085) 0.000 0.000 This budget reduction relates to rental income from the London Waste and Recycling Board through sharing accommodation at Union Street. Maintenance Contracts (0.267) 0.000 0.000 These are savings on the retendering of

maintenance contracts as set out in FEP 1832.

Total Savings previously identified

(4.488) (3.227) 0.060

Total Unavoidable Pressures and Savings identified

(1.873) 7.074 11.321 Revised Net Revenue

Expenditure

421.721 416.876 398.681

Net Additional Savings Required to Meet Target Reduction

(11.919) (29.516) (35.279)

Net Revenue Expenditure 409.802 387.360 363.402

Less Use of Reserves (30.000) 0.000 0.000

Budget Requirement 379.802 387.360 363.402

Increase on Previous Year -7.2% 1.99% -6.18% Revenue Support Grant 259.085 228.860 205.660

(15)

Detailed Estimates Appendix 2

Top Classification GLA Class

Base 2011/12 Budget In Year Savings 2011/12 MTFS Growth/ Savings 2012-13 Revised 2012-13 Base Budget Proposed Savings

2012-13 Budget Movements Grand Total _Notes

Staff Operational Staff 278,161,222 -1,117,434 15,353 277,059,141 -1,425,818 -12,134,266 263,499,057 1

Control Staff 6,061,933 0 10,000 6,071,933 0 0 6,071,933 2

Fire & Rescue Staff 48,276,414 -1,026,387 -3,886 47,246,141 -1,972,309 217,796 45,491,628 3 Staff Total 332,499,569 -2,143,821 21,467 330,377,215 -3,398,127 -11,916,470 315,062,618

Staff Related Compensation 430,602 -428,202 0 2,400 0 0 2,400

Employee Related Insurance 195,000 0 0 195,000 0 0 195,000

Medical & Welfare Expenses 2,095,800 -61,328 30,000 2,064,472 -267,862 0 1,796,610 4

Other Pension Payments 990,000 0 0 990,000 0 0 990,000

Recruitment 282,142 -80,000 0 202,142 -40,100 40,000 202,042

Severance Payments 999,000 0 0 999,000 -599,000 0 400,000

Payment to Training Contractor 0 0 0 0 0 17,800,000 17,800,000

Training Expenses 4,480,576 -191,750 0 4,288,826 -951,500 -2,812,116 525,210 Employee Capitalised Costs -512,400 0 0 -512,400 -133,000 0 -645,400 Staff Related Total 8,960,720 -761,280 30,000 8,229,440 -1,991,462 15,027,884 21,265,862

Premises Building Maintenance 8,833,710 -825,000 -15,065 7,993,645 -630,000 -194,429 7,169,216 5 Cleaning & Domestic Supplies 3,008,715 -189,350 -10,647 2,808,718 0 0 2,808,718 6 Energy Costs 3,143,413 -300,000 210,000 3,053,413 0 -40,000 3,013,413 7

Fixtures & Fittings 340,367 0 7,235 347,602 0 117,479 465,081 8

Grounds 114,093 0 2,624 116,717 0 0 116,717 9 Insurances 472,000 0 0 472,000 0 -40,000 432,000 Property Rates 7,716,137 -66,000 1,035,140 8,685,277 -781,800 0 7,903,477 10 Rents 6,494,900 0 196,656 6,691,556 -742,000 -845,278 5,104,278 11 Security 465,445 -43,400 9,707 431,752 0 0 431,752 12 Water Rates 188,305 0 21,000 209,305 0 40,000 249,305 13

Other Property Services 1,620,998 0 834 1,621,832 0 -3,000 1,618,832 14

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2012-13 Budget Movements Grand Total _Notes Premises Total 32,398,083 -1,423,750 1,457,484 32,431,817 -2,153,800 -965,228 29,312,789

Transport Contract Hire & Operating Lease 1,478,850 0 0 1,478,850 -9,400 26,800 1,496,250 Repairs/Pfi Passthroughs 20,792,256 -20,064 -1,154,024 19,618,168 -372,063 -115,000 19,131,105 15 Running Costs 1,948,896 -2,373 0 1,946,523 1,500 -138,504 1,809,519 Travel 2,273,221 -28,735 0 2,244,486 -658,522 -209,626 1,376,338 Vehicle Insurance 938,100 0 0 938,100 0 150,000 1,088,100 Transport Total 27,431,323 -51,172 -1,154,024 26,226,127 -1,038,485 -286,330 24,901,312 Supplies and Services Advertising 79,013 0 0 79,013 -12,808 68,872 135,077 Catering 111,398 0 0 111,398 0 -10,752 100,646

Clothing & Laundry 3,667,643 -161,482 44,900 3,551,061 -110,000 11,140 3,452,201 16 Computing 5,587,132 -330,474 197,973 5,454,631 -190,000 -14,305 5,250,326 17

Expenses 965,367 -16,208 0 949,159 -153,500 -71,633 724,026

General Office Expenses 804,694 -104,000 0 700,694 -115,000 -84,596 501,098 Grants & Subscriptions 142,393 -12,900 480 129,973 0 7,462 137,435 18

Hydrants 677,900 0 0 677,900 0 0 677,900

Operational Equipment 2,145,210 -144,500 -658,000 1,342,710 -52,003 -211,441 1,079,266 19 Operational Equipment - PFI 137,555 0 -65,000 72,555 -8,253 0 64,302 20 Other Equipment, Furniture &

Materials

1,084,551 -77,265 0 1,007,286 -52,000 -203,984 751,302

Other Insurance 190,000 0 0 190,000 0 0 190,000

Other supplies and services 419,675 -47,994 0 371,681 -164,000 -29,297 178,384

Postal Services 164,850 0 0 164,850 -20,000 -3,895 140,955

Professional Services 4,827,958 -121,692 285,000 4,991,266 -94,320 -27,825 4,869,121 21

Smoke Detectors 800,000 0 0 800,000 0 0 800,000

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17

2012-13 Budget Movements Grand Total _Notes Telecommunications & Radio 3,664,084 -101,000 20,997 3,584,081 -179,000 -3,490 3,401,591 22 Supplies and Services Total 25,469,423 -1,117,515 -173,650 24,178,258 -1,150,884 -573,744 22,453,630

Third Party Payments Audit & Bank Charges 148,600 0 0 148,600 0 0 148,600

Other Agencies 261,700 0 16,000 277,700 0 0 277,700 23

Other Local Authorities 77,600 0 0 77,600 -20,000 0 57,600

Third Party Payments Total 487,900 0 16,000 503,900 -20,000 0 483,900

Capital Financing Costs

External Interest 5,637,858 -155,000 20,000 5,502,858 -343,000 0 5,159,858 24 Provision For Debt Repayment 5,935,000 0 0 5,935,000 -84,000 0 5,851,000 Capital Financing Costs Total 11,572,858 -155,000 0 11,417,858 -427,000 0 10,990,858

Income Customer & Client Receipts -5,018,488 0 140,000 -4,878,488 -160,000 103,826 -4,934,662 25 Government Grants -11,065,711 0 -198,605 -11,264,316 0 0 -11,264,316 26 Insurance Companies -17,840,000 -750,000 0 -18,590,000 -710,000 0 -19,300,000 Interest -857,600 0 150,000 -707,600 -701,000 0 -1,408,600 27 PFI Grant -1,509,247 0 0 -1,509,247 0 0 -1,509,247 Income Total -36,291,046 -750,000 91,395 -36,949,651 -1,571,000 103,826 -38,416,825

Firefighter's Pension Expenditure 18,055,880 0 0 18,055,880 -168,000 0 17,887,880

Central Contingency Against Inflation 3,009,600 -2,756,380 6,976,694 7,229,914 0 -1,389,938 5,839,976 28

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Notes to Detailed Estimates Appendix 2 MTFS Items &

Approved Growth/Savings Note Service Expenditure

£ 1 Operational Staff

Rebate on contracted out pensions decreases from 3.7% to

3.4% (estimated effect on Operational Staff budgets) 520,000 Revised forecast of required trainees for 2012/13 -504,647 Included in the MTFS = 15,353

2 Control Staff

Rebate on contracted out pensions decreases from 3.7% to

3.4% (estimated effect on Control Staff budgets) 10,000 Included in the MTFS = 10,000

3 FRS Staff

FEP1321, 2009/10 Budget, saving ref: 32A – HR

restructure 63,981

FEP1698, 2011/12 Budget, SF07 2011-12 - reduce HR

recruitment team -79,550

FEP1698, 2011/12 Budget, SF36/7 – review of Radio

Group in ICT -49,500

FEP1698, 2011/12 Budget, SO03 - restructure the Contract

Management Team -14,100

FEP1698, 2011/12 Budget, SF19 - outsource lease car

scheme -32,900

FEP1698, 2011/12 Budget, SF20 - outsource vehicle

accident management scheme -32,900

FEP1698, 2011/12 Budget, SF16 - PFI team 51,083 Rebate on contracted out pensions decreases from 3.7% to

3.4% (estimated effect on FRS Staff budgets) 90,000 Included in the MTFS = -3,886

4 Medical & Welfare Expenses

Inflationary increase for Occupational Health Service

contract 30,000

Included in the MTFS = 30,000

5 Building Maintenance

Revised forecast for increase in project work at 4% 161,000 FEP1832, Award of Cyclical and Reactive Building

Maintenance Contracts – savings on retendering of maintenance contracts

-176,065

Included in the MTFS = -15,065

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£ 6 Cleaning & Domestic Supplies

Inflation increase for Premises budgets at 2.3% 64,853 FEP1698, 2011/12 Budget, SN09 - waste management -14,000 FEP1698, 2011/12 Budget, SN14 - reduce cleaning at

Union Street -19,000

FEP1698, 2011/12 Budget, SN15 - reduce appliance bay

cleaning -42,500

7 Energy costs

Revised forecast for energy costs based on low risk strategy

of 7.5% annual increase 210,000

8 Fixtures and Fittings

Inflation increase for Premises budgets at 2.3% 7,235 Included in the MTFS = 7,235

9 Grounds Maintenance

10 Property Rates

Forecast 5% annual increase 202,000

Review of Property related provisions 704,000

Additional pressure following further work done to reassess

the rateable values of Authority premises 129,140 Included in the MTFS = 1,035,140

11 Rents

FEP1665 - costs of occupation of Merton Control Centre

(revised for latest forecast) 461,311

FEP1698, 2011/12 Budget, SF11 - end lease of Skyline

House -180,000

Rent income from London Waste & Recycling Board -84,655 Included in the MTFS = 196,656

12 Premises Security

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£ 13 Water Rates

Inflationary increase on water rates 21,000

14 Other Property Services

Inflation increase for Premises budgets at 2.3% 834 Included in the MTFS = 834

15 PFI Pass-through

Inflationary increase in PFI unitary payment 542,376 Inflationary increase in PFI Pass-through 10,600 FEP1698 - cost to LFEPA to upgrade vehicles to comply

with new Low Emission Zone regulations and on-going

maintenance -1,707,000

Included in the MTFS = -1,154,024

16 Clothing & Laundry

Inflationary increase to PPE contract 71,900

FEP1698, 2011/12 Budget, SN20 - terminate warehouse

and distribution contract -27,000

17 Computing

FEP1484 –change in forecast increased data storage

capacity 35,000

FARYNOR and MOBIS contractual indexation 12,000 Mobilising system contractual indexation 43,000 Contractual increase on other software systems 50,000 FEP1698, 2011/12 Budget, UP05 - fund software licenses,

hardware support and renewal 37,051

Secure Website - Laptop access to MPA website 20,922 Included in the MTFS = 197,973

18 Grants & Subscriptions

Inflationary increase in donation to Salvation Army for

provision of canteen facilities at incidents 480 Included in the MTFS = 480

19 Operational Equipment

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£

There is a forecast underspend in 2011/12 on gas tight suits, due to a more cost effective solution being identified for the first tranche of gas tight suits. It is proposed that a reserve be created, as part of closing the 2011/12

accounts, to carry forward the funding to take advantage of new technology in future years, currently anticipated in 2013/14

-391,500

Forecast cost of maintenance for telemetry supporting new

Breathing Apparatus, with total cost forecast to be £125k 63,000 FEP1698, 2011/12 Budget, SN19 - review maintenance

costs following completion of RPE project -33,000 FEP1698, 2011/12 Budget, UP03 - gas tight suits -296,500

20 Operational Equipment – PFI

FEP1585 - telemetry modifications -65,000

21 Professional Services

FEP1698, 2011/12 Budget, UP01 - cost of an independent

certifier for PFI negotiations 40,000

Fleet management replacement project 245,000

22 Telecommunications & Radio

FireLink contractual indexation at 5.35% 59,000 FEP1698, 2011/12 Budget, SN23 - reduce spend on IT

circuits -24,503

FEP1698, 2011/12 Budget, SN25 - reduce spend on

telecommunications -13,500

23 Other Agencies

Contractual increase for management of Firefighters’

pensions 16,000

24 Capital Financing Costs

This reflects the impact of the purchase of the West

Norwood site in 2011/12 20,000

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Notes to Detailed Estimates Appendix 2

22

MTFS Items & Approved Growth/Savings Note Service Expenditure

£ 25 Customer & Client Receipts

FEP1698, 2011/12 Budget, IN003 - residential rent increase -2,000 FEP1698, 2011/12 Budget, IN005- potential new lease at

Paddington Fire Station -110,000

FEP1698, 2011/12 Budget, IN004 – commercial rent

income 208,000

Fire Investigation Income – reduction to reflect expected

external training requirements 44,000

26 Government Grants

Additional New Dimensions Grant received for funding

already budgeted -314,605

A reduction in the grant provided by CLG to offset the

increased costs of the FireLink service 116,000 Included in the MTFS = -198,605

27 External Interest

Reduced forecast income on investments 150,000 Included in the MTFS = 150,000

28 Central Contingency against Inflation

Movement on non staff inflation 652,846

Reduction in the requirement for the Training project team -750,000 Contingency for price inflation and pay award 7,218,812 Savings actioned under Delegated Authority in 2011/12 -144,964

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Savings Proposals Appendix 3

Non Staff Reductions

Ref No. Description and Comment Savings

in 2012/13 £ Savings in 2013/14 £ Savings in 2014/15 £

SAV001 Community Safety Consultancy

This is a proposal to reduce the budget used for small scale ad hoc consultancy to support projects. This will impact on flexibility, for example this year the budget has been used to fund a specialist to advise on development of the secondary schools pilot.

11,930 11,930 11,930

SA002 Community Safety Advertising

This proposal reflects a review of the current budget. The impact of the reduction will be managed by better targeting of campaign work. 12,808 12,808 12,808

SAV003 Community Safety community relations

This proposal is to reduce the budget for the volunteers pilot by £41k leaving £11k to support the work. There will be no impact as this reflects the changed approach taken to delivering the work using existing staff and with minimal set up costs using existing volunteers from extant volunteer organisations (Neighbourhood Watch and Street Wardens).

41,000 41,000 41,000

SAV004 Operations non-staffing budgets

The proposal reflects a review of historical underspends in a number of budgets. The proposed reductions will have no impact on service delivery.

345,000

345,000 345,00

SAV005 Area Community Safety Budgets

It is considered that area community safety spend can be contained within the existing central community safety budget. This will enable better management oversight of activity and there will be no impact.

100,000 100,000 100,000

SAV006 Mobilising, non staff budgets

The proposal reflects a review of historical underspends in a number of budgets. The proposed reductions will have no impact on service delivery.

82,500 82,500 82,500

SAV007 Strategy and Performance professional services

This proposal reflects a reduction in charges associated with mapping products from the Ordnance Survey and the deletion of a budget which was used to complement the work of the policy and improvement team. The team was deleted as part of the 2011/12 savings and it is now considered that this budget is also no longer needed.

40,000 40,000 40,000

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SAV008 Communications General Office Expenses

It is expected that the drive towards greater use of IT will further reduce the demand for printed materials in Union Street and fire stations, and a saving of £30k on print room stationery; the press cutting service and printed materials for stations is proposed. Increasing the use of IT for communications (where IT is readily available) will help reduce resource consumption.

30,000 30,000 30,000

SAV009 Communications Review of funding for Carol Service

There will be a review of how the Carol Service is funded, with the aim of achieving alternative funding by making the event cost neutral such as charging for tickets or

sponsorship. 18,000 18,000 18,000

SAV010 Finance Department, ill Health pensions

This proposal reflects the reduction in ill-health payments from twelve to nine. There are four ill-health retirements to date in 2011-12 and there were six in 2010-11.

168,000 168,000 168,000

SAV011 Finance Department, loan principal payments

This reduction is based on the revised borrowing

requirement to fund the capital programme as set out in this report. 84,000 84,000 84,000

SAV012 Finance Department, reduction in long term borrowing interest

This reduction is based on the revised borrowing

requirement to fund the capital programme as set out in this report. 343,000 343,000 343,000

SAV013 Finance Department, MFB Act Insurance Companies

Following a review, this forecast is based upon the 2011/12 outturn position and assumes growth of 3.5% per annum going forward. Any variation from the growth assumption will impact upon the actual receipt in each year.

710,000 710,000 710,000

SAV014 Finance Department, Short Term Lending Interest Receipts

The additional income reflects assumptions based on interest rates, use of reserves and daily balances.

701,000 701,000 701,000

SAV015 Finance Department, Shared Services Arrangement for GLA Payroll and HR Services

This proposal reflects a reduction in the budget for payroll costs as a result of the implementation of the shared service arrangement with the GLA for Payroll and HR services.

35,000 35,000 35,000

SAV016 ICT, Shared Services arrangement for GLA Payroll and HR Services (ICT costs)

This proposal reflects a reduction in the budget for ICT costs as a result of the implementation of the shared service arrangement with the GLA for Payroll and HR services.

30,000 30,000 30,000 24

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SAV017 ICT FireLink Costs

Phase B of the Firelink national radio replacement project was delayed. As a result of this the Authority is able to take advantage of reduced costs for the Airwave service. This is effectively a discount from DCLG on the Airwave service.

149,000 149,000 149,000

SAV018 ICT Reduction in telephony support costs

The introduction of a new telephony system at fire stations will result in lower telephony support costs. The existing system known as (2+8) is now obsolete and the

replacement system is much more modern and cost effective. The telephony replacement costs include the waste removal of the existing system, which must be undertaken in compliance with the Waste Electronic and Electrical Equipment regulations.

56,000 56,000 56,000

SAV019 ICT Storage Areas Network Support

ICT Department has just completed the installation of a new storage area network (SAN) that is used to hold most of the Authority’s data. The migration to this newer technology means that the amount we pay in support of the SAN has reduced following our migration to this new environment. The new storage area network will allow for an increase of storage requirements without increasing our energy requirements. 50,000 50,000 50,000

SAV020 ICT Reduction in SharePoint Support costs

ICT Department is currently examining the support contract for LFEPA's SharePoint environment. It is expected that the amount being paid out annually for external support can be reduced, without impacting upon service levels.

20,000 20,000 20,000

SAV021 ICT Reduction in application support

This budget funds minor enhancements and developments for some business applications. The intention in future will be for departments to seek funding for systems

enhancements via submission of a business case, rather than have these paid for by IT.

60,000 60,000 60,000

SAV022 Procurement, Savings from PFI - Not Fair Wear and Tear budget

As reported in FEP 1748, steady beat payments towards "pass-through charges" such as tyre damage has recently been stopped because of failure by Assetco to provide sufficient supporting data for annual review. Out of all payments made a total of £287k remains unsubstantiated.

287,000 - -

SAV023 Procurement,Reduction in the PFI non fair wear and tear budget

These proposals are efficiency savings. Measures will be taken to contain future spend on vehicle non fair wear and tear within the remaining budget.

15,055 15,055 15,055

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SAV024 Procurement, reduction in the vehicle modifications budget.

Measures will be taken to contain future spend on vehicle modifications within the remaining budget. These include rolling some modifications into subsequent years; including some modifications within the imminent replacement of some of the fleet i.e. as part of the new build output specification for the new pumping appliances. All modifications will be prioritised such as by safety

requirements or on invest to save principles. The ongoing review of whole life costing models as part of the

Sustainable Development Strategy will assess the potential to use whole life costing in the prioritisation of modifications work. 50,000 50,000 50,000

SAV025 Procurement, rationalisation training support vehicles

This proposal is based on rationalising a number of non front line support vehicles for training.

18,000 18,000 18,000 SAV026 Technical and Service Support, reduction in the

non-cyclical maintenance budget

This proposal would be achieved through a reduction in improvements and enhancements to the estate. In addition, some maintenance at fire stations and buildings will be reduced. Improvement projects such as redecorations will be stopped or will be run over a longer cycle. Preventative maintenance work may not be carried out, and work is only likely to be done when absolutely necessary. The budget will be managed in order to minimise any need to carry out more expensive repairs in the future. This proposal will not impact upon the ability to comply with statutory and health and safety requirements.

630,000 630,000 630,000

SAV027 Technical and Service Support, reduction in the specification of the stations being built as part of the PFI Property project.

This will result in an annual reduction in the unitary charge once the project is underway as reported to the Finance and Personnel Committee on the 5th September 2011 in FEP 1782, Property PFI Project - Change to Project Scope. The reduction in capital build will avoid an unnecessary

consumption of resources. - 100,000 100,000

SAV028 Technical and Service Support, surrender of lease on City Forum

This proposal is subject to early surrender of the lease at City Forum in June 2012 being accepted. Discussions are ongoing with the landlord regarding an early vacation of the site. Staff could be relocated to Shoreditch or another alternative and work is ongoing to assess the options.

332,000 443,000 443,000 26

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SAV029 Technical and Service Support, Transfer Programme Team costs to capital projects

Following a review of the basis for charging time for staff who work on capital projects, it is considered that a revised approach will lead to an increased recharge of staff costs from staffing budgets to capital projects. This saving assumes that 25% of costs of staff who work on capital projects can be transferred to capital.

133,000 133,000 133,000

SAV030 Technical and Service Support, rents payable

This reduction reflects the rental saving agreed as part of negotiations to sign a new 15 year lease for Union Street.

400,000 400,000 400,000 SAV031 Technical and Service Support, Rates

There are provisions on the balance sheet against late rate demands. It is expected that these rate demands will expire in 12/13 and the provision can be taken into the revenue account as one-off savings.

768,000 - -

SAV032 Technical and Service Support, Professional Services

This reduction reflects a revised assessment of our requirements from our external property advisors and will mean that this work is done internally.

20,000 20,000 20,000

SAV033 Technical and Service Support, rates

This saving reflects reductions in rateable values at four fire stations.

13,800 14,400 15,000 SAV034 Technical and Service Support, rent income

This reduction is based on income from the sublet of Union St £28.50/sq ft let (includes rates & rent only).

75,000 75,000 75,000 SAV035 Technical and Service Support

This is additional income to be raised as additional single person quarters are to be rented out at Braidwood Court cottages at Clapham. 20,000 20,000 20,000

SAV036 Human Resources and Development (HRD), Terms and Conditions

Annual savings of £1,362k could be achieved as a result of buying out a range of staff terms and conditions. This would be at a one-off cost of £4,469k to be funded from the general reserve.

1,362,332 1,362,332 1,362,332

SAV037 Human Resources and Development, Firefighter recruitment advertising budget

A reduction in the firefighter advertising budget is proposed. If funding were needed it would need to be funded from other budgets or from reserves.

35,100 - - 27

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SAV038 Human Resources and Development, severance payments

The budget going forward would only include redundancy lump sum costs, with pension early release costs to be funded from an earmarked reserve. Any member of the Local Government Pension Scheme who is made redundant aged 55 or over receives a full pension and since April 2010 the Brigade has to pay its pension fund administrator the full cost of the early release of benefits. This cost is actuarially assessed and the Brigade is invoiced. This proposal would reduce the severance budget and allow for payments to be made from a reserve as and when they occur. To date approximately 60% of total redundancy costs are associated with early release and 40% actual severance costs.

599,000 599,000 599,000

SAV039 Human Resources and Development, medical appeals

This proposal reflects lower than anticipated activity based on spend in 2010/11. 30,000 30,000 30,000 SAV040 Human Resources and Development, medical reports

This is a proposal to reduce the budget for occupational health service third party reports. It reflects the spend for the last two years so there is a risk that if there is a rise in the need for external reports that the budget would then be insufficient. 20,000 20,000 20,000

SAV041 Human Resources and Development, medical expenses

The number of Health Road shows to be run in 2012/13 will be reduced from 12 down to 5/ 6. Maintaining a health road show programme can reduce costs associated with sickness. 25,000 25,000 25,000

SAV042 Human Resources and Development, occupational health

This saving has been negotiated with the contractor and was reported to the Finance and Personnel Committee in June 2011 (FEP 1747).

94,000 TBA TBA

SAV043 Directorate of Operational Policy and Training, central operational equipment budget

This is a proposal to reduce the central budget for operational equipment for the Directorate of Operational Policy and Training based on a review of requirements.

19,003 19,003 19,003

SAV044 Operational Procedures, Clothing

This is a proposal to reduce the clothing budget to match requirements.

25,000 25,000 25,000 SAV045 Operational Procedures, equipment

This is a proposal to reduce the equipment budget to match requirements. 30,000 30,000 30,000 28

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29

SAV046 Training Department, Future Options for Training

This saving reflects budget reductions following the outcome of the future options for training project.

900,000 900,000 900,000

SAV047 Operational Resilience, Olympic Project

This saving proposal is related to the staff changes that will occur in October 2012 after the Olympic and Paralympic Games have finished. Upon completion of the Olympic project a number of dedicated project team members will return to their base postings. This will realise savings in respect to salary costs that have been incurred through temporary promotions and the backfilling of the project team member’s base posts.

23,000 46,000 46,000

SAV048 Authority Wide

This saving reflects a range of small budget reductions from departments. 184,801 182,301 182,301 Total 9,196,329 8,244,329 7,899,929