North Wales firefighter pay increase sparks £2.4m budget worries

North Wales Fire and Rescue Service needs to find £2.4m in savings to plug a hole in its budget.

Chief fire officer Dawn Docx gave an update to the service’s Executive Panel at its March meeting, which welcomed the pay increase for firefighters that has seen strike action called off.

A seven per cent back-dated pay rise to last year and a five per cent pay rise from this year has been agreed.

But the authority is having to find the funds to finance this itself with no further support from the UK Government or Welsh Government, which adds pressure to an already stretched budget and will see the service dipping into its reserves.

And if the situation worsens, local authorities could be hit with an additional levy.

Addressing members, Ms Docx said: “I’m pleased to be able to announce there has been a settlement of that aspect of the dispute.

“We very much welcome a settlement which avoids industrial action and gives our firefighters a much-needed pay rise.”

“Unfortunately it should be noted there was no additional funding for this in Wales and it means we will have to meet the cost of this from within our own budget.”

She added that there was a balance to find between the provision of robust emergency cover and a sustainable budget.

The budget, agreed in January, saw an increase of 9.9 per cent in the precept collected through council tax, with the fire service still needing to make £1.4m in savings.

But pay award settlements being higher than expected means an additional £1m is being added to that, coming to a total of £2.4m the service now needs to find.

Assistant chief fire officer Helen McArthur said it puts the authority in a “difficult and challenging position.”

She said: “Clearly this puts us in a very difficult position and it is proposed the cost pressures arising from the settlement of the firefighters pay dispute should be addressed via the use of reserves during 2023-24.”

“This avoids the use of a supplemental levy at this time but is noting that we need to be cognisant of other ongoing challenges and other cost pressures across all of our expenditure heads.”

“It is worth noting that the use of reserves is not sustainable and coupled with those additional pressures we now have an underlying deficit of £2.4m.”

“This will have unavoidable implications for future service delivery options and also the levy for 2024-25 onwards.”

Service delivery review options will be presented to members in the coming months, while local authorities are being kept informed.

The authority’s treasurer Dafydd Edwards said the service is short of where it wants to be in terms of ability to spend.

It is already using reserves, and it is “nip and tuck” to avoid an additional levy in the middle of the year.

He said: “We do have sufficient reserves for us to manage going forward without an additional levy this year as long as nothing else from leftfield comes our way.”

“If something big were to come our way and hit us in the middle of the year then we would have to go for an additional levy.”

“We can cope this year by using reserves and having used reserves in the current financial year and in the next year they will become rather scarce by the end of the year, and you can only use reserves once.”

Mr Edwards added that the prospect of a higher levy being imposed on the six councils in North Wales next year would be communicated to them as early as possible.

By Rory Sheehan – Local Democracy Reporter (more here).