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Chamber and committees

Finance Committee, 14 Sep 2004

Meeting date: Tuesday, September 14, 2004


Contents


Fire (Scotland) Bill: Financial Memorandum

The Convener:

Item 1 on the agenda is further consideration of the Fire (Scotland) Bill. Last Thursday, we took evidence from the Convention of Scottish Local Authorities on the financial memorandum to the bill. Today, we have with us officials from the Scottish Executive: Ian Snedden, head of the fire services division; Jill Clark, Fire (Scotland) Bill team leader; and John Nicholls, from the fire services division. I welcome all of you to today's meeting. If you wish, you may make a brief statement. If not, we will move straight to questions.

Ian Snedden (Scottish Executive Justice Department):

I had not planned to make a statement. I am happy to move straight to questions.

Dr Elaine Murray (Dumfries) (Lab):

The financial implications of the bill are greatest for control rooms. I accept that we do not yet know what the shape of the control room structure will be and that the matter is subject to consultation, but some fire brigades, including my local brigade, have expressed concern that some of the functions that are currently carried out by control rooms will not be transferred to the one or three proposed control rooms. They thought that the bill might have financial implications in relation to the transfer of staff and the fact that the brigades might have to undertake some of the functions to which I refer. That information is not included in the financial memorandum. What is your reaction to the concerns that have been expressed?

Ian Snedden:

We engaged the consultants Mott MacDonald, who are very experienced in the area of control rooms, to examine the situation in Scotland. In their comprehensive report, they identify the fact that control room operators perform various tasks in addition to answering 999 calls and dispatching resources. They carry out tasks such as data collection, performance management and statistical analysis, as well as some crewing activities. Whether the number of control rooms is reduced, those functions, which are brigade functions, have to be continued. In their report, the consultants indicated that probably about 20 per cent of staff would be required for that purpose. We would expect brigades to be able to deploy staff to carry out the tasks. Because the tasks are being carried out at the moment, the costs would not change.

Is the maximum saving of £3.3 million an annual saving from having one control room?

Ian Snedden:

The consultants worked up a model of costs, based on the study that they carried out. They have also conducted studies of control rooms in other areas, including in England. The model that they used when producing their report is obviously a snapshot in time. The amount of money saved depends on the option for control rooms that is chosen. If the recommendation of one control room were accepted, the maximum amount of savings would be released. The figure of £3.3 million comes from the consultants' report.

Is the basis for calculating that figure made explicit in the consultants' report?

Ian Snedden:

No. There is detail about it, but not precise detail.

The Convener:

It might be helpful for us to have some indication of how the figure was arrived at.

According to the financial memorandum, the integrated risk management plans could have an impact on the formula that is currently used to calculate funding for the fire service. To what extent do you think that that is likely? What would be the implication of any change?

Ian Snedden:

I will explain the current system first, which may help members to understand the changes that are likely to happen as a result of the introduction of integrated risk management plans.

At the moment, almost all the funding for the fire service is predicated on the existing standards of fire cover, which determine the number of vehicles and firefighters that brigades send out in response to emergency calls. There are four categories. Category A relates to inner-city areas that include places of entertainment, offices and so on. Category B includes housing. The standards of fire cover for those areas determine how many vehicles are needed. For example, in category A areas three trucks must be sent to each incident, whereas in category B areas two trucks must be sent. Because the vehicles have to be crewed 24 hours a day, 365 days a year, the number of vehicles that need to be sent determines how many firefighters are required. That produces the figure for each brigade, which is based totally on the existing standards of fire cover.

The standards of fire cover date back to just after the war; there has been no change to them since then. An integrated risk management plan will be a much more flexible way of determining brigades' response, as it will be all about identifying risk. Some areas will still get the maximum response of three vehicles, but responses will be much more closely related to the risk in fire authority areas and will not be predetermined by the standards of fire cover.

You are saying that the introduction of integrated risk management plans may bring greater flexibility and less rigidity to the mechanism that is used to calculate funding.

Ian Snedden:

Absolutely.

The Convener:

I want be clear that you are not necessarily assuming that efficiency savings will be tied in with the introduction of integrated risk management plans in Scotland and that an overall reduction either in manpower or funding will not be associated with that.

Ian Snedden:

That is certainly not the intention. The intention is to produce a more flexible system. If that results in a better, more efficient system, savings may flow from that. Fire authorities will be able to use savings to reduce response times under the existing standards of fire cover or may invest them in, for example, greater prevention activity, which we think would be much more beneficial.

So no efficiency target is tied in with the measure.

Ian Snedden:

No efficiency target has been set, but it was made clear that the most recent pay agreement for the fire service would be self-financing. The fire authorities and the Fire Brigades Union signed up to the deal on that basis. Obviously, fire authorities will have to consider how they finance the pay deal.

I return to the issue of control rooms. Have you considered the experience of Lothian and Borders police's force communications centre, where the lack of robustness of the initial business plan has imposed considerable additional costs?

Ian Snedden:

I am aware of the situation with Lothian and Borders police, who are reducing the number of control rooms from seven to one. From what I have read about that experience, it is clear that the force is having some problems. No decisions have been taken about control rooms. As members know, the consultants' report is out to consultation and we have not yet received all the responses. We are anxious that, if changes are made to the control rooms, they should be introduced on a consensual basis. We must take the fire authorities with us. I accept fully that the funding streams that are mentioned in the consultants' report relate to a snapshot in time—the point at which the study was carried out. There would have to be a rigorous analysis of the funding requirements of any change. We would, of course, be mindful of the problems that the police have experienced.

Would it be useful for you to speak to Lothian and Borders police?

Ian Snedden:

Yes, it would be. If the change goes ahead, we will obviously need to set up a project board and involve all the fire authorities and all the other stakeholders. We will also need to examine the experiences of other agencies that have moved in the same direction.

I have two other questions, convener, but they are not on control rooms.

Ask them quickly.

Jeremy Purvis:

The financial memorandum mentions the firelink project, which is United Kingdom-wide. On the costs that are associated with that, you have said that there are two funding options, one of which is

"a Scottish contribution of around £26m".

Is that as a share of the UK purchase of the system? If so, what would be required for maintenance and renewal of the system and how long would it last? What would the mechanism be for the Scottish share?

Ian Snedden:

The background to that project is that fire services all have their own existing radio systems, some of which are around 20 years old, and fire authorities throughout the UK were moving in different directions on acquiring new systems. The events of September 2001 made interoperability between the fire authorities and the police and other emergency services critical, so it was agreed that we should proceed with a UK project for replacing the radio system.

In going out to tender, we asked bidders to submit costs based on a UK-wide model and based on separate models for England and Scotland. At the moment, the process is still continuing. The bidders are in negotiation with the project team and we expect their best and final offers within the next few months.

What is the system's expected lifetime?

Ian Snedden:

At the moment, it is based on 10 to 15 years. The contract would involve maintenance of the system over that period.

That compares with £75 million for the managed service provider contract over the same period.

Ian Snedden:

Yes. At the moment, we do not know what costs the bidders will come up with; we will clearly need to have discussions with them once we see their best and final offers. There is obviously an affordability issue: we do not want to pay a lot more in Scotland than is paid for the same service south of the border. Those issues will all need to be taken into account as we progress with the process.

Jeremy Purvis:

When will you know the costs? We are scrutinising the financial memorandum of a bill and it is useful to have the options presented to us—we appreciate that the situation is quite open—but how can we scrutinise the final costs? They could be £75 million or they could turn into £150 million.

Ian Snedden:

We might have a figure before Christmas, but it might be into the spring of next year before the process is completed and a contract is signed. That is my best estimate of when we will have an outcome.

I am not sure about how we scrutinise that, but we can deal with that matter later on in the agenda.

Jeremy Purvis:

On the statutory duty of fire safety, the financial memorandum mentions that between £100,000 and £150,000 will be necessary to promote the new legislation. However, that does not cover the senior staff time or staff time for attending meetings of community councils or community groups or for responding to requests for advice on fire prevention and safety. Responding to such requests will become a statutory duty for fire authorities and that will definitely entail a cost, so why is that cost not listed in the financial memorandum?

Ian Snedden:

I ask my colleague Jill Clark to respond to that.

Jill Clark (Scottish Executive Justice Department):

Are you talking about fire safety in the workplace, rather than community fire safety?

I am talking about section 7, which is headed "Fire Safety" and talks about each authority

"promoting fire safety in its area."

Jill Clark:

Do you mean section 7 of the financial memorandum?

No, sorry, I mean section 7 of the bill. It is covered in paragraph 122 in the financial memorandum.

Ian Snedden:

That is about community fire safety.

Jill Clark:

That duty is not new as such, because most brigades already carry out community fire safety activities to some degree. Section 7 puts the existing duty on a statutory footing and recognises the move towards prevention—rather than intervention—and trying to drive down the risk. No new costs should be attributable to that, because brigades already go out into their communities and speak to people about how they can reduce the occurrence of fires in domestic premises, for example.

Ian Snedden:

On activity with other groups that are involved in broader community safety, the Local Government in Scotland Act 2003 provided powers for the fire service to be involved in community planning. A lot of community planning activity is about considering safety across the board in an area and the fire service was keen to be involved in such discussions.

In the evidence that we received from COSLA last week, a distinction was made between current practice and a statutory responsibility.

Ian Snedden:

A lot of the bill is about providing a statutory footing for functions that the fire service has been carrying out for many years, such as promoting community fire safety, attending road traffic accidents, attending chemical spills and helping to rescue people when there is flooding. Therefore, a lot of the bill is about saying to the fire service that we recognise that it is carrying out such activities and that we think that it needs to have the statutory powers to underpin what it does. There are powers in the bill to add duties and, if we were to place new duties on the fire service, we would obviously have to consider the funding implications of doing so.

Mr Ted Brocklebank (Mid Scotland and Fife) (Con):

When Jeremy Purvis spoke about extra duties, he touched on some of the matters about which I will ask. When we questioned the witnesses from COSLA last week on core duties generally, they expressed concern that their views had not been taken into account. They also felt that the views of member authorities had not been taken into account. In their written submission, they went so far as to say:

"It is completely unacceptable that new burdens were not funded".

They also stated that to say that those new burdens are simply a

"formalisation of the role which the Service currently undertakes"

is absolutely wrong. Will you give some clarification on that?

Ian Snedden:

I am surprised that that is the response that COSLA gave. When we drew up the proposals for the bill, we went out to consultation. However, before we even went out to consultation, we had pre-consultation with COSLA about the powers that we proposed to put in the bill and about the functions that we expected fire authorities to undertake, which, as I have said, they currently undertake. At that stage, we had no suggestion from COSLA that it found all that unacceptable. There were obviously issues about which we disagreed—such as the additional ministerial powers under the bill, which COSLA did not like—but I do not recall having problems with COSLA saying that it needed more money to enable the fire authorities to carry out the statutory duties, because they carry those duties out at the moment.

Mr Brocklebank:

That is surely fundamental. You say that COSLA did not make any claims to that effect during the pre-consultation, but COSLA representatives have said to the committee that the introduction of the duties is totally unacceptable. There is clearly a chasm there—there is clearly a misunderstanding on somebody's part—and who knows whether the extra cost that COSLA says will be incurred is accurate?

Ian Snedden:

COSLA has a particular position that it wants to put forward and there is healthy tension between us and COSLA when we talk about money. We talk about money for pensions and we talk about the grant-aided expenditure settlement in spending reviews, for example. There is a healthy tension between us about what COSLA thinks that local authorities need and what we believe that they need. As far as the bill is concerned, all I can say is that we consulted COSLA and I do not recall it asking for lots more money if we were going to give fire authorities further powers.

Is it a case of COSLA posturing in front of the committee?

Ian Snedden:

It is not for me to say that; I can only say that we consulted COSLA. The situation reflects its concerns about the fire service generally and our belief that we are giving fire authorities a statutory underpinning for the work that they carry out.

To be fair, we are talking about a general argument that COSLA put and that was then applied in this instance. It is an argument that we have heard before.

Jim Mather (Highlands and Islands) (SNP):

I am keen to go back to the issue of control rooms. What efforts are being made to identify and quantify the likelihood of slower response times in certain rural areas, which might result in increased damage and loss of life, in higher insurance premium costs and perhaps in a reduction in investment in those areas? Is any thinking being done on that?

Ian Snedden:

I do not see that that should necessarily be a problem. The consultants' report makes it perfectly clear that there is the technology and experience that is needed to handle all Scotland's fire control room calls from one centre. The number of control rooms in Strathclyde came down from five to one in 1985 and that has worked perfectly successfully—there have not been lots of problems in responding to calls. Audit Scotland has given good reports on the Strathclyde fire control room and Her Majesty's fire service inspectorate has made complimentary remarks about the way in which the control room handles incidents in Strathclyde.

The fire service already has experience of being able to handle lots of incidents from one control room. Strathclyde handles something like 60,000 incidents a year, which is half the total in Scotland—about 122,000 incidents a year have to be handled by control rooms and one control room in Strathclyde already handles half of them.

Jim Mather:

You will understand my concern, given the recent experience of Lothian and Borders police, where the plumbing of the operation seems to have created a bottleneck. The thing that is worrying me is that that plumbing bottleneck may be exacerbated by a loss of local knowledge. I find it disconcerting that that has not led you to consider the wider implications of the cost savings. Although a £3 million saving is a significant sum of money in control centre terms, it is not so significant in terms of the overall Scottish economy. What worries me is that you might leave yourselves open to a higher incidence of negligence claims, more hoax calls or more confusion, because people do not know which location is which. Over the piece, you might throw an important baby out with the bath water, because it might be easier to retain staff in a remote area—with lower recruitment and training costs—than to have them in one central area.

Ian Snedden:

You make a perfectly fair point about recruitment and training. The consultants certainly expect that, if we reduce the number of control rooms, a number of staff will stay with the service but other staff will need to be recruited and trained, perhaps because of where the control rooms are to be located. That is a perfectly fair point and one that we will clearly have to take into account as we develop the models.

In general, comparing the police and the fire service is not comparing like with like. The Lothian and Borders police control room currently handles around 45,000 calls a month, with 999 calls on top of that. The Lothian and Borders fire control room handles only 22,000 calls a year, so there is an issue of scale. Similarly, Strathclyde police, who handle something like 9 million calls a year, are proposing to reduce their number of control rooms from nine to three. Because of technology and because of the kind of tracking systems that we use, the consultants believe—and the evidence in the report also points in this direction—that the concerns that you have outlined should not be a problem. However, we understand those concerns.

Jim Mather:

I accept your point about volume, but, in relation to the Gaidhealtachd, a control room operator will have to deal with Gaelic place names and different accents. Numerous place names are the same, such as Tarbert, and that creates a problem. Do you currently maintain and publish statistics on the incidence of fires and road traffic accidents by area—and the response times—on a comparative basis and will you do so after the bill is implemented so that we can count the score and see what is happening?

Ian Snedden:

A lot of information and data are published, including the information in the chief inspector's annual report, which looks at the number of calls and incidents and subdivides the information by the kind of fires and by the fire brigade areas. Audit Scotland produces an annual report showing the response times and targets for various brigades. We would certainly be looking at that information in relation to the integrated risk management plan. We are already in discussion with Audit Scotland about the kind of targets and performance measures that we will try to put in place when we move away from the current standards of fire cover.

The £3 million saving is a gross saving within the fire service. It is possible that other costs could be accrued, either to the fire service or to the wider Scottish economy, as a result of that move.

Ian Snedden:

I take that point, which is perfectly fair.

John Swinburne (Central Scotland) (SSCUP):

How did you calculate the figure of £100,000 to £150,000 for a publicity campaign? In a television campaign, a 20-second film shown four or five times can use up £100,000. Are you just paying lip service, or will there be a serious publicity campaign?

Ian Snedden:

We may have misled you slightly in that regard. A new fire safety regime will be introduced under the new legislation. In England, the new fire safety regime will come in under a regulatory reform order. Guidance documents will be issued about the new regime, about the new arrangements and about carrying out risk assessments. The £150,000 relates to the costs that we expect to incur in the preparation of guidance documents. We have not yet put a figure on the publicity campaign, but we will have a campaign. That will be important, particularly for those voluntary organisations that have not had the fire safety certificate regime imposed on them under the current legislation.

Have you given any thought to a ballpark figure for how much it might cost?

Ian Snedden:

I would not want to commit myself to that at this stage. Our colleagues south of the border are talking about something like £3 million for a publicity campaign, so if we take the usual 10 per cent for Scotland we would probably be looking at a sum in excess of £200,000. We have a national fire safety television campaign in Scotland at the moment called "Don't give fire a home". We have been spending about £400,000 to £500,000 on that.

Some fire brigades suggested that the removal of the requirement for a fire certificate could result in a loss of income rather than a gain through savings. Could you comment on that?

Ian Snedden:

It is absolutely true that fire brigades will lose some income, but it is de minimis in relation to the total expenditure on the fire service. The estimates that we have received from brigades about loss of income in the current financial year are in the region of £165,000—that is the total amount that fire brigades would expect to take in from fire certificates this year. It is not a huge amount of money. Of course, that income relates only to the administrative work that is carried out for the fire certificate; staff will be freed up from carrying out that work when they do not have those functions to perform, so we think that one will balance out the other.

The Convener:

On behalf of the committee, I thank the witnesses for coming along this morning. The clerks have taken a note of the issues that members have raised. If members have any other specific points, perhaps now is the time to mention them. I would just like to make a point that has been mentioned before in relation to other bills—the problem of costs being introduced at a later stage through subordinate legislation. I think that we should raise that point in our response to the subject committee.