Section 1: Part 1 - Reserves
| Reference | Earmarked reserves | Forecasted balance as at 31 March 2024 | Forecasted balance as at 31 March 2025 | Forecasted balance as at 31 March 2026 |
|---|---|---|---|---|
| 1 | Grants unapplied from previous years | (772) | (265) | 0 |
| 2 | Invest to improve | (1,789) | (800) | (300) |
| 3 | Budget smoothing reserve | (666) | 0 | 0 |
| 4 | Direct funding to capital | (12,038) | (7,322) | (2,842) |
| 5 | PFI equalisation | (50) | (35) | (20) |
| 6 | Emergency Services Mobile Communications Programme | (576) | (576) | (576) |
| 7 | Mobile data terminals replacement | (144) | (72) | 0 |
| 8 | Pension liability reserve | (1,218) | (600) | (200) |
| 9 | Budget carry forwards | (130) | (60) | (10) |
| 10 | Environmental strategy | (130) | (80) | (30) |
| 11 | MTA action plan | (76) | 0 | 0 |
| 12 | Control futures project | (1,200) | (1,200) | (500) |
| Total earmarked reserves | (18,789) | (9,810) | (3,978) | |
| 13 | General Fund (non-earmarked) balance c5% of net-revenue | (4,631) | (4,922) | (5,150) |
Planned use of earmarked reserves
1. Grants unapplied from previous years
The balance of £0.772m pertains to historical grants received (e.g. pension admin grant, protection uplift grant, Grenfell infrastructure grant etc.) which will continue to be used through the forthcoming years as and when the conditions of the respective grants are satisfied.
2. Invest to improve
This reserve is managed by the Portfolio Board and is used to fund transformation projects which do not form part of business-as-usual spending. On-going and new areas of investment include:
- Investment in replacement systems such as a new HR system (c£0.535k) is in the implementation phase with the initial go live during Q3 2023. Further phases during 2024/25 will also aim to align and integrate improved finance and training requirements with our HR workforce data. The estimated cost of the Finance element is estimated to be c£0.567k.
- The reserve is also planned to be used for the purchase of new hardware in the form of tablets for operational crews to enable recording and repatriation of assets to their parent appliance and station, as well as enhancing processes for standard testing of equipment. This project is also in the implementation phase with c£0.156k remaining in the budget.
- Funds are also expected to be invested in a new command support system to enhance implementation of recommended outcomes from the Grenfell Report (c£0.126k).
- An upgrade to systems for recording the Service prevention and protection activity is also in progress with an allocated budget of c£0.176k along with some possible enhancements to our core estate in terms of technology to enhance flexible/hybrid working building on the new ways of working adopted during Covid.
- A further adjustment is planned for our availability system to enable proposed changes to our whole-time duty system which is expected to roll out during Q4 2024 c(£0.100k).
- Funds are also allocated to further enhance and improve our performance monitoring through the use of Microsoft 365 products including power BI and to improve our Service intranet.
3. Budget smoothing
Residual reserve which has been drawn on periodically to accommodate any adverse budget impact from delays with implementing saving initiatives.
4. Direct funding to capital
This reserve was created to fund the capital programme and remove the requirement to borrow funds externally from the PWLB. This includes the replacement of fire engines (e.g. Medium Rescue Pumps/ Area Ladder Platform etc.) and also station rebuild and enhancements. The strategic aim is to transfer a minimum of c£2m annually to this reserve to suppose the multi-year capital programme and defer the need to borrow.
5. Public Finance Initiative
Based on the performance of the PFI fund, it may be possible to release this reserve into the general fund balance. The PFI contact ends on 31 March 2028 so the risk of underperformance over the remainder of the contract is low.
6. ESMCP
This reserve has been created via grant funding to support the completion of the Airwave system replacement which is currently on hold. This reserve could be used sooner once the project is declared live again but cannot be used for any other purpose.
7. Mobile data terminal replacement
The current mobile data terminals in service are all due for replacement. We plan to replace half by March 2024 with the remainder during 2024/25.
8. Pension liability reserve
This reserve has been created and maintained to respond to any additional costs that fall on the Authority due to legislative changes impacting the firefighter's pension scheme. Forecast utilisation is uncertain.
9. Budget carry-forwards
We forecast a modest balance will remain at the end of 2023/24, the remainder will be used over the next two financial years.
10. Environmental strategy
Investment in renewable energy, electric vehicle charging points, and a grant funding officer will see the remainder of this reserve used.
11. MTAP
Investment in replacement equipment for our MTA officers will ensure this reserve is spent during 2024/25.
12. Control futures project
Reserve created to meet our financial obligation toward the procurement of a new command and control system which is being acquired through our partnership arrangements with Network Fire Control Partnership (NFSP).