NAO finds fire authorities coming under greater financial stress

5 Nov 15

There are signs that some fire authorities are beginning to face financial stress, with some warning their ability to respond to major incidents might be limited by further funding cuts, according to the National Audit Office.

In an analysis of the financial resilience of the sector, the NAO highlighted that fire brigades’ own auditors, as well as peer review teams, had raised concerns in a small number of England’s 46 authorities.

There was a 12% real-terms reduction in spending on fire and rescue services between 2010/11 and 2014/15, the report found. Given the savings already made, some services told the NAO any further savings in the forthcoming Spending Review could only be able to be met through further reductions in firefighters.

Fulltime firefighter numbers fell by 14% between 2010/11 to 2014/15.

Auditor general Amyas Morse said fire authorities had managed funding reductions well since 2010.

“There have been no financial failures and the numbers of fires and casualties have continued to fall,” he stated, while the sector as a whole has increased its financial reserves since 2010/11.

However, Morse said he expected the Department for Communities and Local Government to have a better understanding of the appropriate funding level necessary to support services in order to maintain the financial sustainability of the sector in the context of funding cuts.

“The department should also seek greater assurance that authorities are maintaining service standards and delivering value for money locally,” he concluded.

The NAO also said that, unlike other emergency services, there was no external inspection of fire and rescue authorities. Ministers rely on local scrutiny – from local councillors, the public and fire chiefs themselves – to safeguard services and value for money. However, a lack of standardised data on response standards makes it hard for people to compare the performance of their local fire authority with others.

The NAO called on DCLG to strengthen its operational performance assurance by gathering more substantive evidence to support the secretary of state’s assurance statement to Parliament on the sector. It should also encourage authorities to standardise the format of operational targets and performance reporting.

Responding to the report, a DCLG spokeswoman said it was disappointed the NAO did not recognise the excellent work of fire and rescue authorities in reducing fire deaths and incidents by around half over the last decade.

“We collect and publish an extensive range of data from fire and rescue authorities across the country on spending, performance and outcomes, which show improvements across the board,” she added.

“DCLG has considerable expertise in this area which allows us to challenge and validate the data and we are confident that services have been maintained while making valuable savings for taxpayers.”

CIPFA chief executive Rob Whiteman said the report shined an important spotlight on the challenges that fire and rescue services were facing.

“It’s reassuring to see that despite central government funding reductions the sector has continued to maintain its front line provision,” he stated.

“However, some serious concerns are starting to emerge - notably whether some smaller authorities will be able to sustain services and respond effectively to major incidents as they grapple with further funding cuts and falls in income as the government presses ahead with the full retention of business rates.

“Secondly, although the sector as a whole has increased its financial reserves over the last five years – a growing number of authorities have begun using their reserves to offset funding gaps.”

Such a move which is a recipe for significant financial problems in the future, he warned. “We would therefore urge fire and rescue services to adopt a robust approach to reserves ensuring that they are used prudently to drive forward service transformation and protect against future risks and not plug shortfalls in recurring government funding.”

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