Financial sustainability of fire and rescue services Contents

Conclusions and recommendations

1.Central government does not have a strong understanding of the potential impacts of future funding reductions on fire and rescue services. The Government has announced further funding reductions for the period 2016–17 to 2019–20, forecasting that as a whole local government spending, including funding for fire and rescue, will decline by 7% in real terms. It is important the Government understands the potential impacts of these funding reductions, as it has a responsibility for ensuring the public is adequately protected from fires. While the Department for Communities and Local Government commissioned research on ways in which fire authorities could save money, it lacked a detailed understanding of their capacity to absorb further reductions through continued efficiencies. Although it took comfort from the fact that fire incidents are on a long-term downward trend, it lacked a sophisticated understanding of how reductions in fire authorities’ prevention and protection activities might affect this trend.

Recommendation: By summer 2016, the Home Office should write to us, setting out how it is improving central government’s understanding of the impacts of ongoing funding reductions on fire and rescue authorities. This should take into account, in particular, both fire authorities’ capacity to make further efficiency savings, and the impact of prevention and protection activities on reducing fire risk.

2.Reductions in funding are forcing local consideration of mergers but there is no clear plan centrally about whether these will be cost effective, deliver better outcomes, or be possible because of legal and financial hurdles. The Department told us that collaboration and mergers between authorities were important ways of increasing efficiency, and that some authorities might need to merge sooner rather than later. While in 2015–16 it provided a £75 million Fire Transformation Fund partly to support such projects, overall the Department regarded mergers and collaboration as primarily a matter for individual fire authorities to take forward. This kind of approach could create risks, however, during a period in which fire authorities—and other ‘blue-light’ services—may be forced to make rapid decisions to restructure under financial pressure, potentially missing out on opportunities to take a planned approach to optimising their joint use of resources. If financial pressures mean mergers between fire authorities are being discussed locally then central government has a responsibility to address the barriers to merger, such as rules on equalising council tax precepts. However, the Department offered no substantive answers to these issues, and was contradictory in its responses as to whether and how it would support possible mergers, generally adopting a laissez-faire attitude. It remains to be seen if this approach will be adopted by the Home Office in its new role. .

Recommendation: If fire and rescue authorities are considering merging the Home Office should work with them to assess options and support them in a planned way, rather than waiting for ‘forced’ mergers as an emergency measures to avoid financial failure due to the financial pressures they face. It is not clear that mergers are necessarily the best option.

3.On the possibility of collaboration between fire authorities and police forces, the DCLG was clear that collaboration between ‘blue-light’ services did not mean fully merged services but only ‘aligning overall oversight’. As the Home Office is now taking over responsibility, the Home Office should make clear if this is also its position and what this means in practice.

4.While the expansion of fire fighter activities beyond their statutory roles has potential to benefit vulnerable groups, it is not yet clear to what extent such projects represent value for money. Fire authorities are increasingly expanding their services into other areas: for example, co-responding with paramedics to medical emergencies; reducing the risks of trips, slips, and falls when checking the properties of elderly residents; and working with disadvantaged young people to help prevent youth offending. These activities offer potentially significant benefits, but the Department accepted that questions should be raised as to whether it necessarily makes financial sense for fire fighters to carry them out. In particular, we noted a tension between the Department’s expectation that fire authorities will transform their services in ways that will reduce their own long-term costs, and fire authorities’ own vision, which often focuses primarily on adding value to other sectors by using their existing capacity more flexibly.

Recommendation: By summer 2016 the Home Office should publish a robust evaluation of the sector’s wider community service projects (which assist other areas of the public sector), setting out best practice and criteria for determining which are effective and an efficient use of public money, and if there is any impact on the financial challenges faced by the fire and rescue sector.

5.The strength of local governance and accountability is variable, posing risks for the local maintenance of value for money and service standards. The Department devolved accountability for fire authorities’ use of public money, and compliance with mandated duties, to authorities themselves, subject to a framework of legal controls. It was aware, however, of criticisms of the standards of local scrutiny in some cases: the National Audit Office, for example, has highlighted difficulties in comparing the performance of authorities, as well as the lack of independent technical advice to authority members. The Department suggested that one way to improve local governance was to have fire authorities taken over by police and crime commissioners, where this was supported locally. Whether or not this is a good solution, we welcome the Department’s acknowledgement there was room for improvement in local accountability. We were particularly concerned about weak local scrutiny over the remuneration of senior officers, and while the Government is taking some action on public sector exit payments, we remain unconvinced that the Department was addressing the quality of local governance.

Recommendation: By summer 2016, the Home Office should have begun to strengthen local governance and accountability by consulting the sector on additional guidance, to underpin the duty in the National Fire Framework on authority members to hold their chief fire officer to account.

6.The lack of an independent inspectorate creates the risk that scrutiny of fire authorities will be inconsistent, and that oversight exercised by the Department will be incomplete. Unlike other emergency services, there is no external inspection of fire and rescue services in England. While external challenge continues to be provided in the form of peer reviews organised by the sector itself, these are not designed to provide independent assurance to the Government, either on value for money or operational standards. The Department said it would consider ways both of strengthening peer reviews, and of drawing on the services of inspectorates such as HM Inspectorate of Constabulary, and was going to write to us on these options within six months. However the Home Office decides to develop this policy, we would be concerned if there were to be a disjointed approach to external scrutiny, in which authorities were subject to differing standards of scrutiny from different types of body. Whatever new approaches the Home Office considers, it should improve on the previous approach to assurance, which remained too dependent on the readiness of chief officers and chairs to volunteer concerns about their own service.

Recommendation: The Home Office should publish a delivery plan by summer 2016 that ensures there is a coherent approach to external scrutiny across the sector, capable of providing independent assurance to the Government, and ensures that every fire authority is covered by a consistent, objective, and rigorous form of review.

7.The Department did not provide Parliament with sufficiently rigorous assurance on the standards and sustainability of fire and rescue authorities. The Secretary of State has a statutory duty to assure Parliament, at least every two years, on the extent to which fire authorities are in compliance with their mandated duties. Despite its awareness of criticisms of the system of local governance, at the time of our evidence session the Department was relying for this assurance almost entirely on the self-certification provided by fire authorities themselves. Although it gathered significant amounts of data on the sector, and maintained extensive personal contact with senior officers, it did not appear to analyse this information systematically to detect the emergence of key themes.

Recommendation: The Home Office should take a rigorous approach to gathering information on the quality and sustainability of fire and rescue services, doing this in time to provide substantive support for the next statutory assurance report to Parliament, in summer 2016.

© Parliamentary copyright 2015

Prepared 15 February 2016