Mid and West Wales Fire and Rescue Authority

FINANCE AND GENERAL PURPOSES COMMITTEE

MONDAY, 14 APRIL 2003

REPORT OF THE CHIEF FIRE OFFICER

MATTERS FOR DECISION

1. INSURANCE RENEWAL – 2003/2004

Terms have been agreed, via the Authority’s brokers, Marsh UK, for the portfolio of insurance policies for the 2003/2004 financial year.

In negotiating insurance arrangements for next year, the brokers drew early attention to a continuing ‘hardening’ of the insurance market, with the crash in the equity market in 2002 compounding the effects of 11 September 2001, which continue to influence premium levels. A very substantial premium increase was therefore expected, particularly in relation to the Employers and Public Liability policies.

This proved to be the case, with total premium levels for next year increasing by £64,859 over last year’s premium.

This represents an expenditure increase of £167,462 over the original budget provision last year, which had been set, as was the case this year, prior to formal notification of actual premium increases. Last year premia were of course badly affected by the reaction within the insurance industry to the terrorist attacks on New York and Washington. This year, the effect of the crash in equity values were known at the budget setting stage, and reasonable estimates of premium increases were provided in advance by the Brokers, which proved to be fairly accurate.

Consequently the individual premium levels shown within the following table, are just containable within the budget provision made:

Officers have expressed their appreciation for the work undertaken on the Authority’s behalf by Marsh UK, in securing terms which remain below the combined insurance premium paid by the three former Brigades prior to 1996.

Importantly, Marsh have secured a continuance of ‘ground up’ cover on the liability policies, despite for the first time some reluctance from the Insurers to provide this, due in some measure to the implications of the Crymlyn Burrows compensation claim, which it is anticipated could be settled shortly. A report on this will be presented to Committee, once final settlement terms have been agreed with the internal (Brigade) and external claimants.

RECOMMENDATION

1. That the insurance renewal terms, as outlined above, be approved, and
   
   
2. That the contract with Marsh UK, acting as the Authority’s brokers, be continued in 2003/2004, at the fee level shown in the above-mentioned table.

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2. INTEGRATED BUSINESS HEADQUARTERS FACILITY, CARMARTHEN – PFI PROJECT

Members will recall that in January 2002 the Authority submitted an Outline Business Case (OBC) to the Department of Transport, Local Government and the Regions, setting out its proposals for an integrated Headquarters facility at the Lime Grove Avenue site in Carmarthen, using the Private Finance Initiative as the preferred procurement methodology.

Since forwarding the OBC to the DTLR policy responsibility for fire services has transferred to the Office of the Deputy Prime Minister, and the latest understanding is that the Authority’s submission has yet to be formally considered, due to ongoing difficulties with the funding and distribution arrangements for PFI credits in Wales. As a result, a number of changes have occurred, as indicated below.

1. Financial basis of all the detailed cost calculations and financial models used within the Outline Business Case was predicted upon the economic situation in the Autumn of 2001. Members will be aware of the many changes that have occurred in the intervening 18 months, and much of the costing information will therefore need to be revalidated.
   
2. The former Headquarters facility at College Road, Carmarthen, has now been sold, and officers relocated to temporary rented offices in Johnstown, Carmarthen.
   
3. The Fire Authority has agreed to relocate the Stores facility in Carmarthen to refurbished accommodation at Earlswood. A central stores facility, currently included within the PFI scheme, will not consequently be required.
   
4. A best value review of vehicle maintenance facilities within the Brigade is almost complete. Preliminary indications should support a reduction from the current five workshops, which may or may not impact upon the current plans to replace the Carmarthen workshops facility as part of the PFI project.

Given the potential cumulative impact of the above issues on the PFI scheme as presently constituted, coupled with what it would be fair to describe as only luke-warm political support for the project, (if not this kind of procurement methodology) it is considered timely for the Fire Authority to now reconsider its ongoing commitment to the scheme.

From the Brigade’s managerial and operational perspectives, it is becoming increasingly difficult to manage effectively on split sites in Carmarthen. This position is likely to worsen unless some early decisions are taken to develop an alternative strategy for integrating the business, managerial and operational support functions.

Committee will recall that at its meeting on the 29th July 2002, approval was given to the development of alternative design briefs to meet the immediate accommodation needs in Carmarthen. It was also decided at that meeting that when work on producing alternative plans had been commissioned, and in the event that no response had been received to the OBC, the Authority would at that stage consider the viability of retaining the PFI option. That position has now been reached.

In determining whether or not to retain the PFI project as a viable alternative, Members would wish to consider the issues set out in Paragraphs 1-4 above, together with an assessment of the likelihood of securing the required local and national political support within a reasonable time frame. The consensus view of officers who have worked closely on the project is that the Authority should now consider withdrawing support for procuring using the PFI route, given the passage of time and the uncertainties facing the Authority set out above, and the potential change in the nature of the Brigade’s accommodation requirements in Carmarthen.

RECOMMENDATION

1. That the Authority considers formally withdrawing its support for the PFI project for an integrated Headquarters facility at Carmarthen, and
   
2. That the Members’ PFI Working Group be convened as a matter of urgency to agree alternative means of satisfying, in the short term, the Authority’s most pressing Headquarters accommodation requirements, focussing initially in bringing all staff in Carmarthen onto the Lime Grove Avenue site.

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3. PROVISION OF ALLOWANCES TO MEMBERS OF COMBINED FIRE AUTHORITIES

A paper has been produced by the Welsh Assembly Government setting out a proposal to extend the Local Authority (Allowances for Members of County and County Borough Councils and National Park Authorities) (Wales) Regulations 2002 and guidance, to encompass members of the three Welsh combined fire authorities.

A copy of the proposals are attached at Appendix 1 for members’ attention. Comments on the paper are to be received no later than the 9th May.

The substantive issue of whether the Authority wishes to support the proposal to extend these Regulations to encompass the three Welsh Fire Authorities, to introduce consistency with England, is a matter entirely for Members’ consideration. There will be a resource implication, for which no provision has been included within the budget for 2003/2004, and the following is an estimate of the cost that would arise if a scheme is introduced with allowances set at or near the levels suggested in the proposal:

Special Responsibility Allowances (Excluding any allowances for Chairs/Vice-Chairs of Committee)	£15,302
Members’ Allowances	£20,861
Travelling and Subsistence	£23,250
(Assuming all meetings in Carmarthen and existing Committee structure and meeting frequency is maintained)	£59,413

In addition, it would be necessary to include some provision for attendance at meetings of ad-hoc working groups and special meetings of the Authority and its Committees, particularly given the changes to the service that may arise in the next year or so which will require what is likely to be a significant Member involvement. A budget provision of £62k is therefore considered to be a reasonable estimate of the additional costs that will face the Authority in the current financial year, in the event that the Regulations are introduced with effect from the 1st April 2003.

Committee is asked to consider its response to the proposal set out in the attached paper, and to address the funding issues.

RECOMMENDATION

That Committee considers its response to the proposal from the Welsh Assembly Government, and notifies the constituent authorities of the potential budgetary implications, in the event that the Fire Authority is required to introduce payment of allowances as from the 1st April 2003.

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DAMAGE TO DRIVEWAY - DIVISIONAL OFFICER A

A request has been made from Divisional Officer A for reimbursement of the cost of repairing/re-instatement of a section of the driveway of his home, which has been contaminated by engine oil which leaked from the Brigade owned vehicle used by the officer for Brigade purposes.

Following investigation by the Transport Services Manager, it has been confirmed that the oil leaked from the vehicle’s oil filter housing, although the officer did not apparently report the leakage to the Transport Department immediately upon the fault becoming apparent to him, as should have been the case under the provision of the Brigade’s Standing Orders. The cost of making good the damage caused to the driveway, where a section of the asphalt surface has apparently been stained by the spillage, is fairly significant, and will likely amount to some £400 - £500, as it will probably require the whole surface of the drive to be re-laid. Brigade officers are currently examining the feasibility of using specialist asphalt restorers to re-instate just the damaged section, although neither the costs, nor the efficacy, of this approach are known at this stage.

Committee is asked to consider the officer’s request for reimbursement of this cost, either of re-laying the driveway, or repairing the damaged section, whichever offers the most cost effective solution for the Authority. In the event that re-laying the driveway is required, it is suggested that this work be contracted directly by the Brigade’s Premises Department.

RECOMMENDATION

That Committee consider its response to the above mentioned request.

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5. FIRE SERVICE CIRCULAR FSC 7/2003 – INTEGRATED FIRE RISK MANAGEMENT PLANNING

Attached at Appendix 2 is a copy of the above mentioned Circular, which provides early information on the Government’s intention to implement a programme of reform and modernisation of the framework within which the fire service operates. Also attached at Appendix 3 are copies of the guidance notes issued to accompany the Circular, which is published for consultation at this stage, with the intention to issue the final guidance in June 2003. Following that, FSC 7/2003 suggests that draft Integrated Fire Risk Management Plans should be published by fire authorities for consultation by the end of September 2003, which sets a really challenging timetable.

It is clear from reading these documents that the basis upon which the fire service has traditionally assessed its operational response and fire safety delivery methodologies will face fundamental change under the proposals to require each Fire Authority to produce an Integrated Fire Risk Management Plan, specific to the circumstances in its area. It is likely that fire authorities will be asked to make wide ranging policy decisions once plans have been drawn up, and Members will note that the process is expected to be undertaken within a very tight time frame.

In order to ensure that the Fire Authority is in a position to respond comprehensively to the consultation paper accompanying this Circular, within the time deadlines set by Government, the Authority will need to consider the implications of the introduction of the Fire Risk Management Plans at its meeting on the 12th May 2003. This is of course the meeting at which the normal cyclical business of the Authority will be transacted, followed on the afternoon of that day with interviews for the post of Deputy Chief Fire Officer. This will leave insufficient time for Members to consider and debate what is arguably the most important and fundamental development within the fire service over the last twenty five years.

In view of this, the Chair and Vice-Chair of the Authority have agreed that a Members’ seminar should be held prior to the next normal meeting of the Authority, at which officers of the Brigade will outline, and discuss with Members, the key elements of the proposed changes to current risk categorisation methodologies. Following the seminar, which the Chair and Vice-Chair have agreed will be held on the 2nd May 2003, the Fire Authority will then receive a report, for consideration at its meeting on the 12th May, setting out a proposed response to the consultation paper which will take account of the views expressed at the seminar.

RECOMMENDATION

That the arrangements set out above to hold a seminar on the 2nd May 2003, in order to enable the Authority to formulate a response to the consultation paper at its normal business meeting on the 12th May, be approved.