Prior to the start of the meeting, information regarding general housekeeping was provided by the Chair to all in attendance.

The Chair confirmed to all present that the proceedings of the meeting would be filmed and requested that any members of the public present who objected to being filmed, make themselves known.

No members of the public voiced any objection therefore the meeting was declared open and recording commenced.

Members are requested to consider the identification of:

a)  declarations of interest by individual Members in relation to any item of business on the Agenda

b)  any additional items of business which the Chair has determined should be considered as matters of urgency; and

c)  items of business which may require the exclusion of the press and public during consideration thereof because of the possibility of the disclosure of exempt information.

Members considered the identification of declarations of interest, any urgent additional items, and any business that may require the exclusion of the press and public.

Resolved that:

a)  no declarations of interest were made by individual Members in relation to any item of business on the Agenda

b)  no additional items of business to be considered as matters of urgency were determined by the Chair; and

c)  no items of business required the exclusion of the press and public during consideration thereof because of the possibility of the disclosure of exempt information.

The Minutes of the previous meeting of the Policy and Resources Committee, held on 22^nd March 2018, are submitted for approval as a correct record and for signature by the Chair.

The Minutes of the previous meeting of the Policy and Resources Committee, held on 22^nd March 2018, were approved as a correct record and signed accordingly by the Chair.

To consider a presentation from the Authority’s External Auditor – Grant Thornton, on the audit findings for 2017/18.

Members considered report Audit Findings 2017/18 from the Authority’s External Auditor – Grant Thornton. 

The Treasurer thanked Grant Thornton for the report and informed Members that it was a positive report and that as of today, it is complete and well ahead of next week’s deadline.  

Mike Thomas from Grant Thornton then gave Members an update of the report.  It was indicated that this qualified opinion of MFRA’s Financial Statements, Value for Money Arrangements and Statutory Duties were all satisfactory and there was nothing to bring to the Members attention.  All comments and feedback from Grant Thornton on the Audit

Findings were positive. 

Members complimented the report and it was asked how MFRA are using our reserves.  The response from Grant Thornton was that MFRA have an acceptable level of reserves and that reserves are good to have for rainy days.  Grant Thornton said the Treasurer for MFRA checks that it is an acceptable amount for 3-5 years, but that over time you can’t rely on reserves, over time it has to be sustainable.  Members were advised that it is not sensible to use ear marked reserves to pay staff wages. 

Members asked why no fair value has been disclosed for the PFI liability and what this would look like over time.  Members were advised that on assessment it is a risk the Authority is managing and in future Statement of Accounts the fair value will be reflected.  

Grant Thornton confirmed that the 17-18 Audit was now complete. 

Members resolved that:

The audit findings 2017/18 from the Authority’s External Auditor – Grant Thornton, be noted. 

To consider report CFO/049/18 of the Treasurer, presenting to members the audited 2017/18 Statement of Accounts for approval and request that they be authorised for issue.

Members considered report CFO/049/18 of the Treasurer, presenting to members the audited 2017/18 Statement of Accounts for approval and request that they be authorised for issue. 

Members were informed that there have been significant changes from 2016/17 to 2018/19.  There has been an unusable reserves reduction of £8.994m and that this has been created to allow the technical aspects of accounting required by the Code to be reflected in the Statement of Accounts.  It does not form part of the costs. 

A question was raised about the increase in Employee Benefits Expenses and it was said that we would check the reason and will answer this in writing. 

Members wanted clarification about the reserves at the end of 2017/18 as it looks like a lot of money and because the Government think we hold all the reserves.  It was explained that the increase is split between firefighter pensions and that this is not a real fee it is a notional entry. 

Appendix B “letter of representation”, was signed accordingly by the Treasurer and the Chair. 

Members resolved that:

the audited Statement of Accounts 2017/18; the Statement of Accounts 2017/18 to be authorised for issue; and the letter of representation in relation to the 2017/18 accounts, be approved.

To consider report CFO/048/18 of the Treasurer, reporting upon the Authority’s year-end financial position for 2017/18.

Members considered report CFO/048/18 of the Treasurer, reporting upon the Authority’s year-end financial position for 2017/18.

Members were given a brief overview of the report describing how the Authority has underspent on its revenue services budget by £2.4million. The remaining net underspend of £1.961m is approximately a 3% variance on the budget and reflects the continuing drive to maximise savings in the year in light of the financial challenge ahead.

The Authority receives grants and external funding during the year to deliver specific projects.  Because these sometimes span more than one financial year this necessitates the carrying forward of the funding through creation of earmarked reserves.  Any potential liabilities arising in the year or previous years for which the Authority is required to set aside a contingency will also require the creation of a reserve.  At the end of 2017/18 £0.442m of earmarked reserves were established to cover timing issues between funds and spend for projects and grant funded schemes. 

It is proposed that the Authority use the £1.961m underspend (£2.403m saving less the £0.442m used for new earmarked year-end reserves) to;

•           Increase the capital investment reserve by £1.017m to fund the expected increase in costs associated with the new St Helens community fire station, and

•           Increase the inflation reserve by £0.200m in light of the risk around the 2017/18 to 2019/20 annual firefighter pay increase. The budget assumes a 2% increase but this offer for 2017/18 has been rejected by the FBU. Each additional 1% would require £0.400m of permanent savings to be identified. By increasing the inflation reserve it is hoped that this will provide the one-off funds for any backdated increase above the 2% assumed, and

•           Increase the recruit reserve by £0.744m to enable new firefighter recruits to be taken on in advance of firefighter retirements over the next 5 to 8 years – removing any reliance on staff undertaking voluntary additional shifts.

The Authority’s final capital budget for 2017/18 was £17.857m. Actual spend in the year was £10.160m resulting in a variance of £7.697m.

Members were informed that we should avoid borrowing money, as there is money set aside for various requirements.  With regards to the recruits reserve, if we wait for firefighters to retire we would not have the staff, so there is £3m to resource that. 

Members stated that a good job is being done by our finance team and that we are doing right by keeping our capital for what it is meant.  The revenue used for recruits is good as it will increase our establishment and more money for firefighters means more bodies to keep people safe.  That we have no free capital.  Staff were thanked for their hard work and it was added that in the next 5 years we will lose up to 50% of firefighters due to retirement.  It was added that we had another recruit course last year and a reminder that it takes time for new firefighters to gain skills over time.  The recruits  ...  view the full minutes text for item 5.

To consider report CFO/051/18 of the Deputy Chief Fire Officer, informing Merseyside Fire and Rescue Authority of the completion of the North West tender process for the replacement of the North West Fire Structural Fire kit framework agreement, and request approval to award contract to the preferred bidder.

Members considered report number CFO/051/18 of the Deputy Chief Fire Officer, concerning the completion of the North West tender process for the replacement of the NW Fire Structural Fire kit framework agreement, and request approval to award contract to the preferred bidder.

Members were reminded of the recommendations outlined in the Authority Budget Meeting report dated 22nd February 2018 informing them that the procurement team has recently led a North West (NW) tender process for structural fire kit.

Members were advised that operational staff are to be issued with 2 sets of structural firefighting kit in the coming months, meaning they will have 1 to wear and one spare instead of just 1 of their own and sharing kit.  This will relieve ill-fitting kit and sizing issues with relation to gender.

Members were informed that it is not always best for operational staff to wear full firefighting kit when attending certain incidents (for example wildfires or road traffic collisions) and a technical rescue jacket is more suited. 

Therefore Members were advised that current operational staff kit is to be replaced with 2 fire kits and a technical rescue jacket and as the contract value is over £250,000 it has been brought to Members for their approval. 

Members expressed that this was a good use of capital expenditure and that operational staff had brought the issue of wearing ill-fitting kit to Members attention at previous Authority Station Visits. 

Members resolved that:

the outcome of the tender process and agree the award of contract to the successful supplier, be noted.