PAPER C

Committee:    FULL COUNCIL

 

Date:               21 MARCH 2007

 

Title:                FIRE AND RESCUE SERVICE – OPTIONS APPRAISAL REPORT

 

REPORT OF THE CABINET MEMBER FOR SAFER COMMUNITIES AND FIRE AND RESCUE MODERNISATION

 

 


PURPOSE

 

1.                  To inform the Council of the Options Appraisal Report and other supporting information that has been requested to enable it to reach a decision on the future of the Isle of Wight Fire and Rescue Service.

 

OUTCOMES

 

2.                  This report considers three options with regards to the future of the Isle of Wight Fire and Rescue Service.  They are:

 

·         Option 1 – Status Quo

The Isle of Wight Fire and Rescue Service remains part of the Isle of Wight Council (IWC).  Subsequent to the consultation process and the production of the Appraisal of Options Report (Appendix A), further opportunities have arisen for joint working arrangements between “Blue Light” services and other Public Sector partners on the Island.  This option provides the Chief Executive of IWC with the authority to pursue these opportunities, as any such arrangement would drive further efficiencies and build capacity within the service to deliver modernisation.

 

·          Option 2 – Increased collaboration with Hampshire Fire and Rescue Service (HFRS)

Retain the Isle of Wight Fire and Rescue Service within the Isle of Wight Council, however agree to a formalised structure of collaboration with HFRS.

 

·         Option 3 – Full combination (merger) with HFRS

Commence negotiations with Hampshire Fire and Rescue Service with a view to forming a new combined service.

 

3.                  As a result of the decision taken, the residents and visitors of the Isle of Wight will receive a high-quality service that meets the requirements of the Fire and Rescue Services Act 2004, The Civil Contingencies Act 2004 and The Crime and Disorder Act (Section 17) as directed in the Fire and Rescue Service National Framework.

           
BACKGROUND

 

4.         Appraisal of options for greater collaboration or full merger with Hampshire Fire and Rescue Service.  (Appendix A)

 

            In March 2006, after consulting with the Department for Communities and Local Government (DCLG), the Isle of Wight Council undertook the production of a report that presents three Options for the future:

 

·           Status Quo

·           Increased collaboration with HFRS

·           Full combination (merger) with HFRS

 

5.         A project leader from the Society of Local Authority Chief Executives’

            (SOLACE) was appointed to carry out the research and produce a final report on behalf of the Isle of Wight Council.

 

6.         Following acceptance of the completed report by the Monitoring Board (Department of Communities and Local Government) and the Modernisation Board (Isle of Wight Council) the Council and HFRS embarked upon a 12-week public consultation period commencing 1 November 2006

 

7.         The Council commissioned Opinion Research Services (ORS) to carry out this work on their behalf.  On the conclusion of the Consultation Period (31 January 2007) a report on the results of this consultation was prepared and is attached as Appendix B.

 

8.                  A fact-finding visit to Devon and Somerset FRS, who have agreed to a ‘voluntary combination’, took place on 29 and 30 January and a report on the findings is attached as Appendix C.  In summary, the findings of the report are as follows:

 

·        Both authorities support the scheme as they see it as being mutually beneficial.

·        The Combined Service will commence from 1 April 2007.

·        Population:  Devon 1.1m; Somerset 450,000.

·        Both Authorities are equal partners under a new combination order.

·        Constitutional arrangements are dealt with through a Member Steering Group.  A Shadow Authority has also been established based on electoral roll numbers – Devon 11; Somerset 8; Plymouth 4; Torbay 2.

·        There was no comprehensive public consultation, however DCLG carried out stakeholder consultation.

·        The new combination is being managed via a Project Board with equal numbers of officers from both authorities.  The project has ten workstreams (2 people for each task).

·        Transitional costs are being funded 2:1, Devon:Somerset.  The transitional costs are projected to be £1,054,000.

·        Complete re-branding of the service costing £200,000 will be undertaken.

·        A consultant has been engaged to assist in identifying critical tasks in order to meet the target date.

·        Main benefits for Somerset stated as increased managerial capacity and release of potential in retained stations; there are currently insufficient funds available from the Council to complete modernisation agenda.

 

STRATEGIC CONTEXT

 

9.         The Isle of Wight Council is the only Unitary Council in England that is responsible for its Fire and Rescue Service.   Grant funding allows for this and any shortfall is funded through council tax receipts.

 

10.      The Fire and Rescue Service, as a department of the Isle of Wight Council, currently contributes to the achievement of the Island objectives contained within the Corporate Plan and the Local Area Agreement.  The Fire and Rescue Service clearly makes a contribution to all 5 corporate objectives.  Some examples of this contribution are:

 

Sustainable regeneration and development of the Island – through its environmental protocols and memoranda of understanding with the Environment Agency.

 

Improving the health and well-being of Island communities – through its work on the Injury Prevention Forum, Co-Responder Scheme, etc

 

Creating safer and stronger communities – through its prevention, protection and response policies, Integrated Risk Management Plan (www.iwfire.org) , work with other Island organisations and agencies and the emergency services.

 

Improving outcomes for children and young people – through its school safety education programme, Young Firefighters’ Scheme, work with other agencies to reduce incidences of arson and malicious false alarms, LIFE Scheme, etc

 

Being a high-performing, cost effective council – through efficiency savings and reductions in revenue budget, improved value for money initiatives and highly-regarded financial management processes.

 

11.                              The Fire and Rescue Service National Framework sets out the requirements under modernisation and is the basis of the Integrated Risk Management Plan that is updated annually following a robust period of consultation. 

 

12.       As part of the IWC, the FRS contributes towards Gershon efficiency savings and strives to improve value for money.  However, the FRS undergoes separate performance assessments by the Audit Commission and the recent Use of Resources and Direction of Travel Assessment score will be announced in April.  The FRS has the added advantage of sharing best practice within the IWC, whilst also gaining capacity and expertise through its association with the Fire and Rescue Service’s South East Regional Management Board (RMB).

           

 

 

OPERATIONAL IMPACT

 

13.       The Operational Case forms part of the Options Appraisal Report (Appendix A) and is detailed on pages 22 – 32. 

 

14.       The Options Appraisal Report illustrates potential benefits from the option of a
merger, however also states that the status quo continues to provide assurance that front line services deliver an adequate emergency response.  The Audit Commission has recently assessed the Isle of Wight Fire and Rescue Service as performing adequately.  This is based on two elements, operational assessment of service delivery (performing adequately) and performance information (performing well).  Performing adequately is an improvement on the 2005 rating of “poor”.

15.       As stated previously, further opportunities for improving the capacity of the Isle of Wight Council Fire and Rescue Service for modernisation, whilst delivering efficiency savings, have arisen since the final draft of the Options Appraisal Report was delivered in September 2006.  This has the effect of making a number of the conclusions in the report with regards to the status quo option obsolete. 

 

16.       Of paramount importance to a Fire and Rescue Service is operational safety through service delivery.  Neither the Isle of Wight Fire and Rescue Service nor the Hampshire Fire and Rescue Service are prepared to allow deterioration in service delivery as a result of the selected option.   

 

CONSULTATION

 

17.       A comprehensive and robust process of consultation was undertaken over 3 months from 1 November to 31 January and was conducted by the Fire Services Consultation Association’s contracted provider, Opinion Research Services (ORS).

 

18.             The full report is published on the Council’s website and has been distributed to all Libraries.  Regular notices were printed in the County Press to inform residents and businesses of the issues being considered and the meeting dates.

 

19.             Invitations were sent out to 208 named stakeholders and the Chamber of Commerce and Tourist Board sent notices to their Island members via email newsletters.

 

20.             When the assessment score for the FRS Operational Delivery was announced, this was published as widely as possible on the instructions of the DCLG.

 

21.             A total of 17 meetings were held and 3,500 letters were submitted to the Council.

 

22.             50,000 questionnaires were printed, 45,000 of which were inserted into the County Press. An online version was made available on the website together with a download facility.  Hardcopies were issued on request.  All questionnaires had a Freepost address directly to ORS Ltd.

 

23.             A full report, setting out the process and the results, accompanies this paper as Appendix B.  

 

24.             The conclusions of the report are as follows:

 

“The extensive public consultation process:

 

Overwhelmingly rejected the prospect of a merger of the Isle of Wight and Hampshire FRSs.  Reasons quoted were:

 

·        Fear of the loss of local democratic control

·        Consider an extra £24.77 per year (Band D) to be a reasonable additional cost for keeping the Island’s own FRS

·        Believe that transitional costs will be substantial

·        Fear a merger would lead to service cuts and redundancies on the Island

·        Blame the police forces merger for a deterioration in services to the Island

·        Fear that loss of the IWFRS might be a precedent for the loss of other services

·        Do not want to be part of a greater Hampshire

 

Overwhelmingly endorsed the status quo as the only worthy option, while recognising the IWFRS has room to improve its management and value for money.  In addition to the points above, consultees added the following points:

 

·        Feel the IWFRS deserves the chance to put its house in order

·        Believe it has the capacity and commitment to do so following management changes

 

Considered collaboration to be preferable to a merger – but to be so far behind the status quo that it was not considered a practical possibility.  Consultees quoted the following regarding this option:

 

·        Consider collaboration to be a back-door to future merger

·        Believe it will bring few, if any, tangible benefits

·        Felt the Options Appraisal report is very vague about how any formal arrangement would work in practice

 

In summary, this large and detailed public consultation exercise has demonstrated almost unanimous views in the responses.  While the focus groups showed that opinion on the Island is more diverse than the forums, public meetings and opinion survey would suggest, there still remains no doubt that Island opinion is against a merger and strongly in favour of the status quo (subject to making necessary improvements) – while largely ignoring (or dismissing) collaboration as at best ambiguous and at worst a back-door route to merger.”


Results:

 

3,482 completed questionnaires

2,510 (75%) chose Status Quo as ‘best option’

577 (17%) chose Collaboration

242 (7%) chose Combination/Merger

 

34 people attended 4 focus groups

Overall more people favoured the Status Quo, with Collaboration a close second.  There was no support for Merger.

 

344 people attended 11 public meetings

All the meetings showed overwhelming support for the status quo – while acknowledging, in some cases, that the service should improve.

 

68 people attended 3 stakeholder forums

The business, voluntary and statutory sector stakeholders expressed overwhelming support for the status quo – whilst acknowledging in many cases that the service had to demonstrate the capacity to improve and should be ready to collaborate informally with whoever can assist.

 

56 people attended 2 employee forums

The staff forums were unanimously opposed to the prospect of a merger with Hampshire and saw no advantages in formal collaboration.  The status quo was their preferred option.

 

Representations

 

3,318 standardised letters (treated as a petition) were received in favour of the Status Quo

 

41 members of the public wrote to support the Status Quo

 

19 organisations from across the Island reported the views of their members as representing the view of their communities.  All supported the Status Quo option.

 

Andrew Turner, MP wrote to express his concern over the loss of democratic control of the service and acknowledged the “significant improvements that have been made recently”.

 

A submission was received from the Fire Brigade Union stating support for the IWFRS remaining as a “stand alone FRS under local democratic control, modernising and generating efficiency to progress and develop the service”.

 

25.             In addition to the above, Hampshire Fire and Rescue Authority conducted their own consultation exercise, the results of which were provided to the Isle of Wight Council on 14 February 2007 and are attached as Appendix D.  The summarised findings of this exercise are that Hampshire Fire and Rescue Service would not support formal collaboration, however they would be prepared to enter into negotiations on the option of merging the two services, only if the Isle of Wight Council wished to pursue this option. 

 

FINANCIAL IMPLICATIONS

 

26.             The financial case forms part of the Options Appraisal Report (Appendix A) and is detailed on pages 16 – 22.

 

In summary:

 

27.             Under Option i, any efficiency savings as a result of a modernised service could be utilised by the Council, either by reinvesting in their Fire Service or other priority service areas.  During the 2005/2006 and 2006/2007 financial years, the Isle of Wight Fire and Rescue Service contributed savings of £600,000 to IWC budgets.

 

This option provides authority for the Chief Executive of the Isle of Wight Council to pursue the opportunity of joint working arrangements between “Blue Light” services on the Island and Public Sector partners.  Any such arrangement would drive further savings in the service whilst also building capacity to deliver modernisation.

 

28.             Under Option ii, formalised collaboration with Hampshire FRS, the savings are not clear as this would depend on the collaboration issues and the effects on the council of services currently delivered by them being provided by HFRS or Hampshire County Council.  This option could lead to savings in staff costs for both the FRS and the Council if current back-office services are provided by Hampshire as a consequence of compatible requirements.  An example of this could be the administration of the Fireman’s Pension.   The opportunities for any Service Level Agreements pursued under this option will be assessed under best value principles, although it is recognised that the governance of Service Level Agreements could be complex.  Hampshire Fire and Rescue Authority have no wish to pursue this option.

 

29.             Under Option iii, the case for a combined scheme explains that, whilst it is not possible to forecast full transitional costs at this stage due to lack of information on final structure in the case of a combined service, it has been calculated to produce savings of £24.77 on Band D council tax per household as a result of the re-distribution of budget costs over a far higher population (Hampshire and the Isle of Wight).  These savings are based on 2006 / 2007 budgets.  A merger would only be implemented in April 2008, by which time the savings stated above would not be current.  This introduces further uncertainty as to the level of savings that will be achievable.  It should also be noted that, once the services had merged, any future savings would be apportioned between the two authorities with a minimal percentage being attributable to IWC.

 

The arrangements for future funding of IWC (currently the Revenue Support Grant including Area Cost Adjustment) in a merger situation are still to be clarified by the Government therefore the net effect this might have in future years cannot be estimated.  The implications of this are that any potential savings to the Isle of Wight Council generated by a merger could be offset by a reduction in Revenue Support Grant from the Government.  

 

 

LEGAL IMPLICATIONS

 

30.             Whilst the Government has encouraged the production of this report, the final decision is the responsibility of the Isle of Wight Council. The Fire and Rescue Services Act 2004 states:

 

2.                  Power to create combined fire and rescue authorities

 

(1) The Secretary of State may by order make a scheme constituting a fire and rescue authority for the combined area of two or more existing fire and rescue authorities.

 

(2) A scheme under this section may be made only if it appears to the Secretary of State that, in the interests of-

 

                        (a) economy, efficiency and effectiveness, or

                        (b) public safety,

 

 there should be a single fire a rescue authority for the combined area.

 

            (3) A scheme under this section may be made by the Secretary of state-

 

            (a) to give effect to a draft scheme submitted to him by the existing authorities in question, or

                       

                                    (b) on his own initiative.

 

(4) A scheme under this section made as mentioned in subsection (3)(a) may include any modification to the draft scheme which seem appropriate to the Secretary of State after consulting the existing authorities in question.

 

(5) Before making a scheme under this section as mentioned in subsection (3)(b) the Secretary of State must consult-

           

(a) the existing authorities in question,

            (b)any local authority all or part of whose area forms part of the combined area, and

(c) any other person he considers appropriate……

 

SUMMARY

 

31.       This report considers the three options being presented in light of operational impact, financial implications and consultation.

                                   
It is clear from the consultation process that public opinion on the Island is largely in favour of retaining the Fire and Rescue Service as part of the Isle of Wight Council.  Whilst the analysis of the financial implications has indicated that there is the potential for savings to be generated from the option a merger, it is clear that there are uncertainties as to both the level and deliverability of these savings.  The Isle of Wight Fire and Rescue Service recognises the need to change and to modernise the service.  Whilst a number of improvements have been made, it is accepted that there is far more to achieve. 

 

OPTIONS

 

32.       The Council can decide to:

 

i.                    Retain the ‘Status Quo’ so that the Isle of Wight Fire and Rescue Service remains part of the Isle of Wight Council.  This option provides the Chief Executive of IWC with the authority to pursue the opportunity of joint working arrangements between “Blue Light” services and other Public Sector partners on the Island.  Any such arrangement would build capacity within the service in order to deliver modernisation of the Isle of Wight Fire and Rescue Service and drive efficiencies across the service.

 

ii.                  Retain the Isle of Wight Fire and Rescue Service within the Isle of Wight Council but agree to a formalised structure of collaboration with Hampshire Fire and Rescue Service.

 

Hampshire Fire and Rescue Authority have indicated that they would not support this option.

 

iii.                Commence negotiations with Hampshire Fire and Rescue Service with a view to forming a new combined service.

 

RISK MANAGEMENT         

 

33.       Each option has been assessed according to its contribution to the outcomes           described in 2 above, with consideration given to how cost effective and affordable each option is and what risks are associated with each option.

 

34.       Option i (‘Status Quo’)

 

            The risk that the status quo would not realise a high quality service and therefore not meet statutory duty is unlikely.

 

The Service continues to modernise and improve and this is reflected in the recent performance score, which completes the overall Service Assessment score made available by the Audit Commission.

 

However, should the Service fail to continue to modernise or improve, the impact could be high regarding the effect on service delivery, reputation, meeting legal obligations and financial impact.

 

35.       Option ii (Formalised collaboration with HFRS)

 

The risk to this Authority, that the failure to agree a formalised structure of collaboration with Hampshire Fire and Rescue Service is very likely.

 

The evaluation of the Hampshire Options Review indicated that in their view, greater collaboration with its complexity of contractual and governance arrangements, for no tangible operational benefit and marginal improvement in achieving their strategic objectives, held little attraction.

 

The impact on this Authority and the effect on service delivery, should formal collaboration only with Hampshire fail, would be high.

 

36.       Option iii (A combined service)

 

From the experience gained in assessing the current Devon and Somerset voluntary merger, a key element in the success of such projects, is a positive commitment of both parties to the chosen outcome.  The risk of failure rises considerably if there are unwilling partners.

 

The impact of the effect on the Service will be high, if insufficient detailed analysis is not undertaken of the strategic, operational and financial implications of being part of a new combined Service.  Similarly, there is a high risk to continuity of service delivery, during any transitional period, especially regarding critical incident command of the Island Service.

 

The impact on this authority and the effect on service delivery should the combination option fail, would be high.

 

RECOMMENDATIONS

 

37. Council Members are invited to make their recommendation.

 

 

BACKGROUND PAPERS

 

There are no background papers.

 

­APPENDICES

 

Appendix A    – Options Appraisal Report

Appendix B    – Consultation Report

Appendix C    – Report of Visit to Devon and Somerset FRSc

Appendix D - Hampshire Fire and Rescue Authority Options Review: Results of Consultation

 

Contact Point: Stuart Love, Director of Environment and Neighbourhoods, tel: 01983 821000 ext. 3633, email: [email protected]

                                                 

   Paul Street, Acting Chief Fire Officer, tel: 01983 821000 ext. 8196    email: [email protected]

 

STUART LOVE                                             COUNCILLOR BARRY ABRAHAM

Director of Environment and                        Cabinet Member for Safer Communities

Neighbourhoods                                           and Fire and Rescue Modernisation