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Financial sustainability of fire and rescue services

Funding for fire and rescue authorities has fallen significantly between 2010-11 and 2015-16. The sector has, so far, coped well with financial changes, according to two complementary reports today from the National Audit Office: Financial sustainability of fire and rescue services, and Impact of funding reductions on fire and rescue services.

The NAO finds there have been no financial failures and the sector as a whole has increased its financial reserves since 2010-11. At the same time, the number of fires and casualties have continued their long-term downward trend: primary fires, those involving casualties or damage to property, fell by 23% from 2010-11 to 2014-15, while the number of fatalities in fires fell by 22% over the same period.

These improvements are despite significant reductions to numbers of firefighters and prevention and protection activities over the same period. From 2010-11 to 2014-15, fire authorities cut numbers of whole-time firefighters by 14%, while carrying out 30% fewer audits of business premises and 27% fewer hours spent on home fire safety checks. Authorities have also changed the scope of their emergency response, sometimes sending fewer firefighters to incidents.

There are, however, some potential signs of low-level stress emerging. Local auditors and peer challenge teams have raised concerns in a small number of authorities. According to the NAO, some fire authorities have indicated their capacity to respond to major incidents might be compromised by further funding reductions. Given the savings made to date, a number of authorities anticipate that further savings will only be possible via further reductions in firefighters, and have expressed concerns at the potential impacts this may have.

While protecting the sector relative to local authorities overall, the Department for Communities and Local Government (DCLG) has reduced funding most to fire and rescue authorities with the highest levels of need. Although DCLG has supported the sector to improve efficiency through a £75 million Fire Transformation Fund, in many case the sector’s transformation projects aim at adding value to other sectors – such as adult social care, or youth services – as much as reducing its own costs.

Unlike in other emergency services there is no external inspection of fire and rescue authorities. DCLG now relies on local scrutiny – from local councillors, the public, and fire chiefs themselves – to safeguard service standards and value for money. Councillors can however lack technical independent support, while 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 Secretary of State has a statutory duty to assure Parliament on the standards of fire and rescue authorities, but DCLG’s evidence to support these statements is limited. DCLG is almost entirely reliant on authorities to self-certify they are in compliance with their mandated duties.

In its accompanying report, Impact of funding reductions on fire and rescue services, the NAO takes an in-depth look at how fire and rescue authorities have responded to declining budgets since 2010-11. The NAO warns that if funding reductions were to continue in future years, the sector would be faced with twin challenges: to implement new cost-reduction measures, and to manage increased risks. Where cost reduction leads to further reductions in operational capacity, it may lead to risks such as to firefighter safety, the potential shrinking of the service as a whole, and the possibility of industrial action. The NAO finds it would be important for authorities to seek assurance that such risks were being successfully managed.

Among the NAO’s recommendations is that the Department should assess the likely impacts of different types of service transformation on cost reduction and service improvement. The Department should also strengthen its assurance on the operational performance of the sector by gathering substantive evidence to support the Secretary of State’s assurance to Parliament and encouraging authorities to standardise the format of operational targets and performance reporting.

“Fire and rescue authorities have managed funding reductions well since 2010. There have been no financial failures and the numbers of fires and casualties have continued to fall. I would expect 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.”

Amyas Morse, head of the National Audit Office

Notes for Editors

Fire and rescue authorities including stand-alone and county authorities alongside the London Fire and Emergency Planning Authority

Estimated average real-terms reduction in spending power of stand-alone fire authorities from 2010-11 to 2015-16

Fall in number of primary fires in England from 2010-11 to 2014-15

Real-terms reduction in spending on fire and rescue services from 2010-11 to 2014-15

Reduction in whole-time firefighters between 2010-11 to 2014-15

Reduction in number of fire stations between 2010-11 and 2014-15

'Section 114' reports issued during the 2010 spending review period by local authority chief finance officers because of unbalanced budgets

Reduction in fatal casualties at fires from 2010-11 to 2014-15

Net reduction in government grant to fire and rescue authorities in 2015-16 compared to 10% for local authorities

Authorities that received funding in 2015-16 under the Fire Transformation Fund

Authorities with response standards available on their websites

  1. The Department for Communities and Local Government is responsible for ensuring the public is adequately protected from fires and other emergencies. It does this by providing financial resources to fire and rescue authorities, enabling them to raise their own income, and establishing a statutory framework within which they must operate.
  2. Over the last Parliament, the Department reduced funding for fire and rescue authorities. Under localism it also provided authorities with greater control over their spending decisions and withdrew some of the detailed frameworks for monitoring spending and performance. The Department is clear that fire and rescue authorities are responsible for organising their own services, and being accountable to local communities.
  3. Impact of funding reductions on fire and rescue services is the NAO’s third Local Government report, published under its new powers in the Local Audit and Accountability Act 2014.
  4. Press notices and reports are available from the date of publication on the NAO website. Hard copies can be obtained by using the relevant links on our website.
  5. The National Audit Office scrutinises public spending for Parliament and is independent of government. The Comptroller and Auditor General (C&AG), Sir Amyas Morse KCB, is an Officer of the House of Commons and leads the NAO, which employs some 810 people. The C&AG certifies the accounts of all government departments and many other public sector bodies. He has statutory authority to examine and report to Parliament on whether departments and the bodies they fund have used their resources efficiently, effectively, and with economy. Our studies evaluate the value for money of public spending, nationally and locally. Our recommendations and reports on good practice help government improve public services, and our work led to audited savings of £1.15 billion in 2014.

PN: 58/15