North Yorkshire Fire & Rescue Service Financial Update: Budget Overview 2012/2013 and Beyond

1. Presentation to Staff Budget 2012/2013 North Yorkshire Fire & Rescue Service

2. Financial Update • 2012/2013 Budget Balanced • All about 2013/2014 and beyond • For 2012/13 Council Tax Freeze Grant and 4% Trigger for Referenda • Effectively Decision was a Council Tax increase of O%, 1.6% or 4% for 2012/13 North Yorkshire Fire & Rescue Service

3. Outcome • Opted for Freeze in 2012/2013 • 3% Council tax Increase in Future Years • Use of Reserves in 2013/14 • £2.5m Savings over three years • £900,000 in 13/14 • £1,200,000 in 14/15 • £400,000 in 15/16 • Unlikely to Stop There – up to 2020 North Yorkshire Fire & Rescue Service

4. From £4m to £2.5m • November projection for Worst Case was £4m Savings by 2016/2017 • Option of £1.8m by 2015/16 • Now £2.5m by 2015/2016 Why? • 3 Main Areas • Acceptable Council Tax Increases • Forecast Pay and Prices • Use of Reserves North Yorkshire Fire & Rescue Service

5. £4m By 2016/17 Based On.. • Council Tax Freeze in 2012/13 • 2% Increase Thereafter • 2.5% Pay Award in 2012 • 2% Thereafter • No Use of Reserves North Yorkshire Fire & Rescue Service

6. £1.8m Based On • 1% on Council Tax (Roughly) = £200,000 • 1% on Paybill (Roughly) = £200,000 • 4% On Council Tax 2012/2103 (£800,000) • 3% Thereafter (£200,000 per year for three years - £600,000) • 1% Pay 2012 and 2013 (£500,000) • Reserves £300,000 • Total £2.2m Less £4m = £1.8m North Yorkshire Fire & Rescue Service

7. £2.5m Based On • 0% On Council Tax 2012/2013 • 3% Thereafter (£200,000 per year for three years - £600,000) • 1% Pay 2012 and 2013 (£500,000) • Reserves £400,000 • Total £1.5m Less £4m = £2.5m • £700,000 difference on Freeze over three years North Yorkshire Fire & Rescue Service

8. Savings/Reserves/Council Tax Increases • First Call - Legal Duty of Best Value “continuous improvement…economy, efficiency and effectiveness” • Second Call – Council Tax Increases • Third Call – Use of Reserves • Balance Between the Three as a Medium Term Approach to Grant Cuts and a Sustainable Service to 2020 North Yorkshire Fire & Rescue Service

9. Considerations • Fairness and Flexibility of a “Middle Way” • “Retribution” in 2013/14 For CT Increases • 3% Increases less likely to be “Excessive” after two years of Freeze • Some Use of Reserves but 2020 • Savings represent c.7.5% Current Annual Budget Delivered over Three Years • Underspend of 3.2% in 2011/12 Alone North Yorkshire Fire & Rescue Service

10. Use of Reserves • Estimated £6.2m @ 31.3.12 • Contingency £600,000 • Pensions £1,250,000 • Pay/Price £2,350,000 • New Developments £100,000 • General £1,900,000 North Yorkshire Fire & Rescue Service

11. A Sustainable Organisation in 2020? • No Savings Then Bankrupt by 2015/16 unless Council Tax Increase > 11% (inc Referendum) in that Year • Pensions Reserve – Possible Employers’ increase £350,000 extra p.a (3.5 years) • Possible Financing of Support Service Reductions (LGPS) North Yorkshire Fire & Rescue Service

12. Cont’d • Pay/ Price covers 12% variation from assumptions • 1%,1%,2%,2%,2% = 8.3% (Planned) • Short Term may be different • But e.g 2%, 2%, 4%,4%,4% = 17% • Contingency £600,000 • New Developments £100,000 • Capital £Nil North Yorkshire Fire & Rescue Service

13. Cont’d • General £1,900,000 • Competing Demands • Less Use 13/14 £4-500,000 • Council Tax Benefit £250,000 • Grant Reductions £+/-??? • Repayment of Debt • Loss of Income • Est £250,000 p.a. available 2016 to2021 North Yorkshire Fire & Rescue Service

14. Conclusions • 2012/13 Done • All About 2013/2014 and After • Risk and the Balance between: • Efficiencies, • Allowable Demands on Council Tax, • A Sustainable Organisation to 2020 • www.northyorksfire.gov.uk/about-us/financial-information/accounts North Yorkshire Fire & Rescue Service