To consider the Budget and Financial Plans for 2025/26 – 2029/30 (CFO/85/25)

Chair of the Authority, Councillor Byrom, reported that the Labour budget had been submitted to the Director of Finance in line with the Constitution and then shared with the membership of the Authority prior to publication of the agenda. No amendments had been received during that time and therefore the budget for 2025/26 – 2029/30 was put before Members for consideration.

Director of Finance and Procurement Mike Rea presented the budget, which allowed Members to set a medium-term capital and revenue financial plan in line with the Authority’s strategic aims.

Mike Rea took Members through the report noting that the proposed capital programme was £43.291 million, of which £39.701 million was prudential borrowing. This had increased by £13.336 million and included £11.809 million of new schemes and it was explained that inflation and growth had increased the current 2025/26 programme costs by £1.547million.

Mike Rea took Members through section D of the report, to consider the Minimum Revenue Provision and recommended members adopt a similar strategy to the current Minimum Revenue Provision strategy and continue to use the asset life method for all unsupported borrowing.

Members were advised that the Authority was required to consider the impact of borrowing over its prudential indicators as detailed in Section E of the report.

The Authority’s Treasury Management Strategy could be found in Section F of the report and it was noted that the revenue costs built into the Medium Term Financial Plan had been deemed to be prudent, sustainable and affordable.

It was noted that the Authority had maintained a 2.5% annual pay award assumption for 2025/26 and future years. Members were advised that although CPI had risen in the previous month, it was expected to return to 2.75% by mid-2025. There had been an increase in the precept of £5 and an assumption of an increase of 2% had been applied to future years. Members were made aware that there had also been a decrease in Government funding in 2025 as summarised in the report.

Members were assured that the budget was balanced, subject to the key assumptions remaining consistent throughout the year.

The Chair thanked staff for their hard work in preparing the budget which was well received and put the Authority on firm accountancy footing.

Councillor Thompson referred to page 26 of the agenda which stated that the government funded Services Grant had been removed and she queried whether this would be permanent or if a better deal was being discussed with central government. Mike Rea explained that the grant had been removed completely from Fire and Rescue Authorities and Local Authorities to be repurposed as a Recovery Grant which the Fire and Rescue Authorities had not been in receipt of. Members were advised that it was now a case of waiting to see what the next funding review would provide for Fire and Rescue Authorities.

Councillor Makinson wished to place on record his thanks to the finance team for their hard work on the budget under such challenging circumstances nationally. He noted that the report recorded that the Authority had started taking cuts in 2010 but actually Merseyside had started to lose significant numbers of firefighters from 2005. He queried whether by not highlighting that, the Authority was not accurately conveying the impact of the challenges it had faced in the last 20 year. Furthermore, he noted that the government settlement this year had been an actual cash cut that Merseyside taxpayers would have to shoulder alongside a £1million extra national insurance rise. Councillor Makinson also queried what was being done to mobilise Merseyside MPs and Council Leaders to make it clear that the Authority had been cut enough.

Chief Fire Officer, Phil Garrigan, assured Members that he had been in dialogue with the Treasury and Key Ministers including the Deputy Prime Minister over the forthcoming budget and Comprehensive Spending Review. He explained that the Authority had lobbied for £5 council tax flexibility which had been granted and would be used to protect the services that the Authority provided to the community. Members were advised that the budget was drafted without any detrimental impact on services and as such it was a testament to the officer’s hard work and creativity. He questioned how far back the report should go in terms of referencing the significant periods of austerity imposed on Merseyside, but he felt that it had been dealt with effectively and the Authority had reinvested into the Service to replace resources that had previously been lost. The concerns about funding had been submitted to the Home Office and would now be passed on to Ministry of Housing, Communities and Local Government (MHCLG) given the changes in central government. The Chief Fire Officer had made it clear in that submission that he was seeking reinvestment into Fire and Rescue Services and seeking investment into areas of central provision that had previously been stripped out by austerity. The College of Fire was also included in that submission alongside a request for capital funding to be made available to the Authority so that it didn’t have to set aside revenue and borrow to invest in its fire stations.

Councillor Brian Kenny welcomed the report noting that it was a robust and legally balanced budget. He noted that the Authority would be seeking to lobby the MHCLG Minister Alex Norris MP for a better deal with a multiyear settlement moving forward. He placed on record his thanks to Mike Rea and the team for their hard work to deliver this budget.

Chair of the Authority, Councillor Byrom explained that prior to austerity, the Authority’s budget had been over £80million showing that it had not recovered yet from the cuts during that period. He noted the Authority would continue to lobby for a multi-year settlement. It was noted that the Authority had written to Angela Rainer MP and the Treasury about how the budget worked in practice and it was envisioned this lobbying would increase moving forward.

Councillor Gorst thanked the Authority for ensuring that the increase in council tax would not affect residents on Band A - C and he felt this adhered to the Authority’s endeavours to protect the most vulnerable people in Merseyside.

Members were asked to agree the recommendations and the Chair asked explicitly if any Members were not in agreement with the recommendations. No Members wished to vote against the recommendations and as such they were passed unanimously.

RESOLVED that:

a) the report and proposed budget be noted,

b) the 2025/2026 Merseyside Fire and Rescue Authority budget as detailed in this report be approved,

c) the Director of Finance and Procurement’s recommendation on maintaining the current general fund balance at £3.700m and maintaining the reserves as outlined in paragraphs 148 to 158 of this report be approved,

d) the proposal to increase the precept by £5.00 for Band D properties in 2025/2026, raising the Band D Council Tax from £91.25 to £96.25 and confirm the strategy for future precept rises (the plan assumes further increases of 2% in each year after that) be approved,

e) the assumptions in developing a five-year financial plan outlined in the report and approve the 2025/2026 budget estimate of £77.934m be noted,

f) the Capital Programme as summarised in Appendix B be approved,

g) the 2025/2026 – 2029/2030 updated Medium Term Financial Plan (MTFP) outlined in the report and summarised in Appendix C be approved,

h) the discretionary fees and charges uplift outlined in the report and summarised in Appendix E be approved,

i) the Minimum Revenue Provision (MRP) strategy for 2025/2026, as this report outlines in paragraphs 87 to 96 be approved,

j) the prudential indicators relating to the proposed capital programme, outlined in paragraphs 97 to 106 of this report be noted,

k) the Treasury Management Strategy outlined in Section F be approved and the Treasury Management indicators set out in the section be agreed for:

- External Debt Prudential Indicators

- Operational Boundary for Debt

- Upper limits on fixed interest rate exposure

- Upper limits on variable rate exposure

- Upper and lower on the maturity structure of debt

- Total principal sums invested for periods longer than 365 days

l) that the recommendations above provide an approved framework within which officers undertake the day-to-day capital and treasury management activities be noted.