Oral evidence: Financial sustainability of Fire and Rescue Services HC 582
Thursday 26 November 2015
Ordered by the House of Commons to be published on 27 November 2015
Watch the meeting: http://parliamentlive.tv/Event/Index/c8930a0c-83b3-49e3-a793-6cbb7d24a5e6
Members present: Meg Hillier (Chair), Mr Richard Bacon, Deidre Brock, Chis Evans, Caroline Flint, Kevin Foster, Mr Stewart Jackson, Nigel Mills, David Mowat, Stephen Phillips, John Pugh, Mrs Anne-Marie Trevelyvan
Sir Amyas Morse, Comptroller and Auditor General, National Audit Office, Adrian Jenner, Director of Parliamentary Relations, National Audit Office, Aileen Murphie, Director, National Audit Office, and Richard Brown, Treasury Officer of Accounts, were in attendance.
Witnesses: Paul Hancock, President of the Chief Fire Officers Association and Chief Fire Officer for Cheshire, Jeremy Hilton, Chair of the Local Government Association Fire Committee, and Sir Ken Knight, former Chief Fire and Rescue Adviser to the United Kingdom Government, gave evidence.
Chair: Good morning, everybody, and welcome to the Public Accounts Committee on this Thursday 26 November 2015. We are here to look at the National Audit Office Report about the sustainability of fire and rescue services. Clearly, it highlights a number of important issues, including, in particular, the fundamental elements of the assurance system for fire and rescue, the robustness of scrutiny by local councillors, the independence and rigour of the peer challenge programme, the lack of comparable local performance targets and—we talked about this beforehand—the Department’s understanding of what is causing reductions in deaths and other outcomes locally, including how the data are collected. So there are a number of issues we want to explore.
I am delighted to welcome, as a pre-panel to our hearing, Paul Hancock, who is the president of the Chief Fire Officers Association, as well as chief fire officer for Cheshire; Ken Knight, who is a former chief fire and rescue adviser to the Government, and who has done a seminal report on this issue; and Jeremy Hilton, who is the chair of the Local Government Association fire committee, and we are interested in the LGA’s review of how budget cuts might have an impact.
The Prime Minister will be speaking at 10.30 am, so we will have a short Adjournment. We aim to finish this panel at 10.25 am sharp. We will then adjourn for 20 minutes and be back here for 10.45 am. I apologise to our second panel for that delay, but I am sure they will appreciate that the Prime Minister is addressing the House on a very important matter, and it is important that Members of the House are there for that.
That sets the pace for our first panel. I want to start by asking Sir Ken, and then Paul Hancock and Jeremy Hilton, how much capacity you think fire and rescue authorities still have to be more efficient. How can you demonstrate the problems or benefits of that to the Government?
Sir Ken Knight: Thank you, Chair. Good morning. It is a mixed picture, as my review and, more recently, the NAO Report have found. I think there is still some capacity, but it has been encouraging to see that despite, and sometimes because of, austerity, huge innovation and change has taken place. There are some very good examples of fire authorities that have taken this head-on, built on the huge success in terms of the reduction of calls, fires, fire injuries and firefighter deaths, applied their capacity in different ways and, indeed, enhanced their performance despite, and sometimes because of, the reductions they have faced head-on on the front line. There is more to do—the NAO Report shows that—and there are some areas that can still be worked on. The professionals in the service today and, indeed, the elected members are now applying their professional forward look on those areas.
Paul Hancock: Good morning, Chair. I concur with a lot of what Sir Ken has said with regard to what we have done thus far since the 2010 financial settlement for fire authorities. We have seen almost £400 million of savings in the fire and rescue service, which has enabled us to look at different ways of working and of delivering the service, particularly in terms of prevention and protection, giving more scope and more opportunities. The devolution of public services reform agenda in particular provides even more opportunities for innovation to take place. It is very clear that the cuts are driving innovation in the sector. We have some fantastic examples across the country of fire and rescue services going above and beyond their normal day-to-day operational response activity.
I think we are in a good place, as the NAO Report suggests, but there is an issue if the cuts continue on the same trajectory—we are still trying to understand the details of yesterday’s announcement with regard to fire and rescue authorities. There will be an impact on how we deliver the service to the public.
Q1 Chair: Jeremy, you at the Local Government Association did a very interesting assessment of options to close the gap. What do you have to say?
Jeremy Hilton: First of all, I do not think that the fire and rescue service throughout the country is a failing service. I agree with the former director of DCLG who said that the fire and rescue service is one of the best public services and that English fire and rescue authorities are the best in the world. We have seen a 28% cut in spending, but the fire services managed to deal with that by reducing the number of staff; also they do not have as many call-outs for fires, but they are dealing with other areas of work. If we take another 25% out of the service, we might then start to see some stresses in the way in which the fire service can deliver its resilience and its support for the people in their area when there is a major emergency.
We need to understand—we agree with CFOA—that the fire and rescue service must be funded on risk and not on demand. It is important that we have that level of capacity to deal with the unknown risk. In Gloucestershire, for example, we needed that capacity in 2007 when we had week-long floods and only recently when we had a big fire at a warehouse. You need that capacity in the system; it is the unknowns that you need to fund.
We have to be very careful if we are going to cut the budget down on account of fewer call-outs for fires and road traffic accidents, because we have to make sure that we cover the other areas of work. For example, in many areas the fire and rescue service is doing co-responding and getting to medical emergencies before the ambulance gets there. In Gloucestershire we do about 1,100 of those a year.
Q2 Chair: Just before I bring in Kevin Foster, the Government have a consultation about having police and crime commissioners being responsible for fire services. Will each of you give a quick reaction to that?
Paul Hancock: The association’s position on that is that there are good examples of collaboration with the police, the ambulance service and other public service organisations. Our view is that the consultation is perhaps too narrow in its focus on police and fire; it needs to be much wider than that, because we bring great value to the public purse by sharing what we have done with regard to reducing our demand on tackling fire, so that we can, for example, assist the NHS by doing our safety and wellness assessments in people’s homes to reduce demand on its services and, thus, the demand on the public purse.
Our position is very clear: we welcome the duty to collaborate, but we are also conscious that when there is a local case for PCCs to take on responsibility for fire and rescue authorities, with the agreement of the public, that should also be put in place—but only when a local case has been made.
Sir Ken Knight: It is an interesting consultation, Chair. It was co-signed by all three Secretaries of State, so it offers opportunities for the Department of Health, the Home Office and of course DCLG. There are already five different models of fire authority in England alone and I think that this offers a further model, and not one that I would fight shy of in the right areas—with the consensus of the local population and where there is a will to do something. The consultation is not about making police officers fire officers, or vice versa; it is about collaboration at a governance level and the important support office level where there are still savings to be made across the services.
Actually, I have seen opportunities, even at a local level, to, for example, ensure the infrastructure remains in place. Where, for example, there have been pressures to close a local retained fire station because the number of calls is very low and there is little business case for it, the case for its retention increases if you add other services to it—for example, co-responding, as we have talked about, or I have even seen fire stations become a community police drop-in station. Those sorts of collaboration offer greater opportunities for savings, efficiencies and, probably more importantly, the service to the public.
Jeremy Hilton: The LGA very much supports collaboration, and that is what has been happening over the past few years. Looking back at my own fire authority, we built the tri-service centre and the tri-service workshops when I was cabinet member 10 years ago, and that was done without any governance changes. It was done by collaborating with the police authority at the time, so the LGA does not think there is any need to transfer the governance of fire and rescue authorities over to the police and crime commissioners, and certainly not if there was an attempt at a hostile takeover. That would cause a lot of damage and would probably damage collaboration. The LGA’s view is that it is not needed, but if it is going to be enabling legislation, it should only be enabling—in other words, it should be such that that can only happen if the police and crime commissioner is happy with it, if the constituent authorities are happy with it, if the local community is happy and there is a very strong business case that it will be a better run service than it is currently. I cannot see in my county that removing the fire and rescue service from the county council to transfer it over to the police and crime commissioner would benefit.
We also need to understand that police and crime commissioners need to concentrate on policing problems, and particularly issues to do with terrorism. They have a very busy agenda, and the great danger is that you are asking one person to run another service when they have a big workload themselves. At the moment, you have councillors keeping an eye on the fire authority itself.
Q3 Kevin Foster: A quick question, in response to what Councillor Hilton just said: I hear what you say about people keeping two services, but it is quite a common model in the United States, and elected mayors in various parts of Europe would have both, so why would it be a particular difficulty for elected members or perhaps an elected mayor in Britain when such difficulties have not been encountered elsewhere?
Jeremy Hilton: It might work. I don’t think the system is broke at the moment, therefore don’t break the system when it is working already. In actual fact, if you look at the consultation, it is very weak on dealing with issues to do with the ambulance service. If I look at my own county, bringing the ambulance service back to Gloucestershire and back to working there would, in actual fact, be better in dealing with public health matters.
Q4 Kevin Foster: It spreads slightly wider than just Gloucestershire, to be fair. Obviously, it is UK-wide. There are authorities where it could work—for example, a metropolitan area like the West Midlands, where the fire authority is coterminous and separate, and the police authority is coterminous and separate. I see a slight nod from Sir Ken.
Sir Ken Knight: You will know, of course, that I have West Midlands experience, as you do; I know that patch fairly well because I was the chief there. You’re right; it has the distinct advantage of the coterminosity of the area, but it is not the only place. There are other places where there is an interest in that work taking place. The important principle for me is that, unlike fire departments in the USA but many of them, there is a separation between the elected mandate of the fire authority and the professional head. All of the FRA models, for me, ensure that the democratic mandate is maintained between those who are responsible for the service and the professional advice to the fire authority.
Q5 Kevin Foster: Looking at page 14 of the Report, it is interesting to note the difference in funding between the authorities. Two appear to have gone up. Do we think the current allocation of fire resources is appropriate, in terms of our purpose of trying to get the most bang for our buck? Does that perhaps indicate funding not being directed in the best way, particularly if two authorities end up getting a rise at a time of overall austerity?
Paul Hancock: As Councillor Hilton said, we are again advocating allocating budgets and funding to the risk profile not just locally but nationally, and those local assets provide the national resilience and response. It is very clear, looking at the funding mechanism and how that impacts on the individual fire authorities, that there are some differentials and some variations. For example, in Cheshire, 45% of my budget comes from Government grant and 55% comes from council tax. In Merseyside—one of my neighbours—the grant from the Government accounts for about 73% and council tax accounts for the remainder. The funding mechanism and its impact on individual fire authorities is different across the 46 authorities.
Clearly, as we move forward, individual authorities will potentially hit buffers before other fire authorities who are probably better funded. There is an historical context to this as well. It is difficult to understand the impact across the whole fire and rescue service. It is more about the impact locally. The local response also provides that national resilience response, which is a key issue for the country and has been for quite some time.
Q6 Kevin Foster: Part of the commentary is about national duties but local decisions. In particular, an assurance has to be given to Parliament by the Department each year. How will it be judged that those national resilience issues are being met and that we are able to respond, if necessary, to certain incidents?
Sir Ken Knight: I know that time is tight, but may I just go back to the other point made? In my report—I do not have the breadth of auditors that the NAO could muster— it was important to point out, using the words quite deliberately, that it was “inexplicable” that two very similar fire authorities seemed to cost twice as much as each other. I know the NAO said that it could account for 60%[1] of that inexplicability, so I think that is at least one-all. It was a question for me to ask the sector and those responsible for the fire service.
On your second point, it is incredibly important that the fire and rescue service remains interoperable, on not only a local basis—day by day across the borders between fire authorities—but a national basis, in the light of the sort of issues that we plan for in the worst case, as well as major flooding and major fires, when fire and rescue services come together. The processes in place are good for that. There is a very good process for maintaining national interoperability and national resilience. However it requires a standard training, together and collectively. It is important to move from that localism approach to a national response approach because the public expect a seamless fire and rescue service.
Q7 Chair: Are you saying that there should be national standards or just a national approach to response?
Sir Ken Knight: I personally would not move back to standards of fire cover nationally. The integrated risk management plan approach has worked well. It allows fire authorities to make decisions on risk. Some more robustness in the toolkit may be required to ensure comparability, but the interlink between response as a last resort and prevention as a first resort in integrated risk management plans is the right way to have gone and the right way forward.
Q8 Chair: You touch on comparability. One of the key issues in the Report is that the data are not very clear—they are not uniformly collected—and of course there is no inspectorate now. Do you think there is a problem there? What do you think about the lack of an inspectorate across the forces?
Sir Ken Knight: I know there are those who are incredibly wedded to peer review and peer challenge, but I have some concerns. I have raised those concerns—I am on record as saying so—that a review is on the request of the receiver. And, indeed, who they get is determined by the receiver and not by the people doing the auditing. There is no requirement to do it at all; it is entirely voluntary. Also, there is no requirement to publish it so the people who really matter—the public—do not even know the outcome of the review.
For me, the larger failure is the lack of a cross-cutting review, even if it is a snapshot across all services. Peer reviews are undertaken by six professional officers or members, so they are certainly not cost free; they take about a week and it is over a period of three years. I do not think that the Department or even individuals can actually get that snapshot of what is going on across all fire and rescue authorities.
Now, you asked the killer question. I personally would not go back to the old-style inspectorate. I am not sure that it worked that well. There are other models. It is interesting that the ambulance service has an inspectorate, through the Care Quality Commission, and the police have an inspectorate. Every airport in this country has a privatised fire brigade, which has an inspectorate, yet there is none in the fire service in England to provide confidence and coherence. On the model of sharing inspectorates—there doesn’t need to be a new one, because auditing expertise is required—I am more in favour of sharing than not.
Q9 Chair: Mr Hancock, you are an operational chief. What do you think?
Paul Hancock: I am. I have the same view as Sir Ken about the inspectorate. The association’s current position is that we don’t see the need to go back to what we had previously, in terms of the inspectorate. You will be aware that that was withdrawn several years ago as part of the Government’s devolution of powers and responsibilities down to fire and rescue authorities. We worked with the chief fire and rescue adviser and the LGA to develop the operational assessment and peer review toolkit. We have just reviewed it again recently. It has been evaluated by Cardiff University, which has done some work on how effective it is.
It is not an inspection tool for the Government; it is a self-improvement tool that has been developed with professionals and members to look at how individual services can deliver a more effective service against their risk management plans locally. It also looks at how those risk management plans link into the national resilience assessment and planning assumptions, on which we work closely with the strategic resilience board. In the national framework, there are clear parameters and instructions, which say that local fire authorities must engage with the strategic resilience board to ensure that the national response to national incidents is there.
It has been hugely successful. Having done and led a number of peer reviews and been subjected to a number of them over the past five or six years, I personally really value them.
Q10 Chair: But you are saying that they are a completely different thing.
Paul Hancock: Yes.
Q11 Mr Jackson: Can I jump in there, because we are short of time? This is to all of you. Paragraph 3.16 of the NAO Report says that “some had expectations about assurance which were not met”—this is about peer reviews—“with a number saying either that peer challenges needed to be more rigorous or that they should be supplemented by an additional independent process. Several also noted that it is possible for a chief fire officer to influence the composition of the team and specify which areas they should examine. In addition, the outcomes of challenges are not always made public.” You are marking your own homework, aren’t you? The police and the NHS are carefully scrutinised and there is proper oversight. Your colleagues are spending £2.1 billion of public money from council tax or direct grants, yet we have no proper independent scrutiny, no national framework for scrutiny and—I add anecdotally—a sometimes overly cosy relationship between chief fire officers, principal officers and the fire authorities. Do you agree?
Paul Hancock: No, I don’t, frankly. From my personal experience of leading a number of peer reviews and having been subject to them, yes, the chief fire officer and the chair of the fire authority have some say about the composition of the team and the skills sets that are needed for the particular focus. But I repeat what I said: this is a self-improvement tool.
Q12 Mr Jackson: But you are spending public money. You are accountable to the public for the money you spend in discharging a public service. You are not a management consultancy company doing a 360-degree appraisal. You are responsible for public money. That is the issue.
Paul Hancock: I accept that. The financial sustainability of fire and rescue authorities is picked up by external audit in conjunction with internal audit. Every year, fire authorities are subjected to an assessment of value for money, economy, effectiveness and efficiency through an external audit, which is signed off by the fire authority as part of its statement of assurance. It is also—
Q13 Chair: I don’t want to interrupt you, but I am aware of time. I think Mr Jackson’s point is a slightly different one. He is talking about not the financial side, but the performance side. I know that Councillor Hilton wants to come in. I don’t know whether Deidre Brock wants to come in as well. Councillor Hilton, do you want to answer that point?
Jeremy Hilton: We need to understand that the peer review is not an inspection. The first thing we say when we go to see fire authorities is that it is not an inspection. On the reviews that I’ve been on, I don’t believe that there has been any less rigorous questioning and analysis.
Q14 Chair: So would you dispute Mr Jackson’s point that it is a cosy relationship?
Jeremy Hilton: Yes. I have been on peer reviews and it is not a cosy relationship. There is vigorous questioning and deep analysis. All fire and rescue authorities have participated. Ken might say it is voluntary, but it does not make any difference whether it is voluntary. Every fire authority has published a report, but it is not an inspection.
Chair: We have got that point.
Q15 Mr Jackson: Can I invite you to agree or disagree with the idea that, since we no longer have the Audit Commission and we therefore no longer have annual assessments of the efficacy of the policies and performance of fire and rescue services, combined authorities and county services—that is the theme of this Report—we are not in a position to make a meaningful judgment about one authority’s performance against the other? Peer reviews are really not an adequate replacement in respect of making those comparisons as we did in the past.
Jeremy Hilton: It might not be better in inspection terms, but, in performance improvement terms, in my opinion, having been on the Audit Commission CPA inspections, this is a better way of delivering continued improvement in fire and rescue services.
Sir Ken Knight: For all those reasons, it does not do what you are asking. It does not give external scrutiny and independence to either Parliament or the public, and there is no comparison between FRAs, so it cannot do that. There were good examples in the Olympic period when a joint inspectorate was formed to ensure the readiness of the blue light service collectively. It was not a replication of that effort, but joint teams were used to ensure that those services could work effectively. I think the collaboration should not just be at fire and rescue and blue light services level; it could happen at other levels to maintain the efficiencies and effectiveness for the future.
Chair: Thank you. That is a very interesting thought that we will take on board.
Q16 Deidre Brock: I have a question for Mr Hilton. In Scotland we have seen a merger of eight services into one. In 2012, the Accounts Commission reported on the eight oversight committees of those former fire and rescue services. They noted that the councils and the boards had not genuinely provided strong strategic leadership to the former services and had not challenged them strongly enough. It is apparent from a number of the NAO’s case studies that members have lacked independent technical support in delivering the scrutiny function, and also there is a suggestion that they are possibly open to influence from chief officers and others, more than has been the case in Scotland.
Audit Scotland has reported that the creation of the national board in Scotland has led to a greater level of scrutiny and challenge. What are your thoughts on that?
Jeremy Hilton: I cannot comment too much on the Scottish fire and rescue service. We do not represent the Scottish service. It might be that you feel strategic level scrutiny has improved at a national level in Scotland, but it might be that local level scrutiny and performance in the local areas have not improved. It might be weaker than it was before. I cannot comment on it. All I can say is that, as far as I and the LGA are concerned, the English fire and rescue service is not a failing service. It is working exceptionally well. It is delivering what it says on the tin.
Q17 Deidre Brock: That is certainly not what I am suggesting. I am simply saying we have merged eight services into one. There are surely lessons to be learnt. They have led to big savings; we have had a reduction in deaths—I think we have the lowest on record since the Scottish Government began. We have had no compulsory redundancies over that time; we have had no fire station closures since 2010; performance has exceeded targets since the mergers happened; and we have more effective scrutiny according to Audit Scotland. Of course, it is still being audited and we still have an external inspectorate. What lessons do you plan to take from the Scottish experience?
Jeremy Hilton: We also take lessons from the Welsh experience. They kept the three fire and rescue authorities and have worked to create a virtual fire and rescue authority. In other words, a number of the back-office services are provided by one fire authority. One leads on the other, so there is another way of looking at it.
Sir Ken Knight: I just want to make a point about scrutiny, because it is incredibly important for public confidence and for Parliament. The combined fire authority, the CFA, is a bit of a hybrid authority, but it is one of the few local authorities where there is no requirement to have a scrutiny committee. Although one is required in a county council or a London borough, the combined fire authority does not have to have one. I think that is a failing in terms of scrutiny of a fire authority
Q18 Mr Jackson: Just a quick one to you, Sir Ken. We have known each other for many years, so I know you will give me a straight answer. In your very good review in 2013, you mention the section 25 aspect of scrutiny. You say: “The…Framework requires that fire and rescue authorities must hold their senior officer to account…The evidence that this is happening was patchy.” What do you suggest the Department or fire authorities do to address that criticism?
Sir Ken Knight: A chief fire officer’s relationship with the elected members is entirely the same as in local government. There needs to be a certain amount of clear water. One is the professional adviser, one is the head of service and one has the political responsibility. A good deal has been done through CFOA and continuous professional development, but I think there is a continuing role to ensure that both elected members and chief fire officers know those important respective roles that each other play. It is not unhealthy or improper to be close, but it does mean that you blur the lines on properly being held to account. I always remind myself and others that a chief fire officer is still an employee of the fire authority, and it is an important point. It is the fire authority that has the responsibility, and indeed the legal status, not the fire and rescue service.
Q19 Mr Bacon: I am looking at the Cheshire fire authority financial statements. Mr Hancock, can you just tell us what your total salary is each year?
Paul Hancock: About £148,000.
Q20 Mr Bacon: It says £146,884 and that £31,105 on top of that is pension. Is that right?
Paul Hancock: That is correct.
Q21 Mr Bacon: So it’s £2,592 per month pension contribution each year.
Paul Hancock: If that is the calculation, yes.
Q22 Mr Bacon: Is that correct?
Paul Hancock: Yes, it will be.
Q23 Chair: One final quick question from me. We are seeing squeezes in Government spending. At what point would further spending reductions mean that you could no longer deliver, Mr Hancock?
Paul Hancock: As I said in response to one of the earlier questions, this will impact on fire authorities at different times because of the funding differences. Thus far, £400 million or thereabouts has been saved. If the cuts continue on the same trajectory—we expect they will, although we do not know the detail of the announcement yesterday and we won’t know that for about another two or three weeks—that will start to have an impact on individual fire authorities. The way we deliver the service or how we deliver the service will have to change. I suppose a bigger concern for the Committee is to recognise that that will have an impact on how we, as local authorities, provide national resilience to the country. This is about public safety. This is about ensuring we have the right resources in place to deliver an effective response—not just the operational response, but the prevention work that we do to reduce the demand on our services.
Chair: We have some very good evidence—I am sorry we can’t hear it from you orally, but you have provided it to us in writing—about some of those challenges, so we will take that into account as well. I am sorry that we have to cut the session a bit shorter than we would normally like, but we now need to adjourn so that we can go down to the Chamber. Thank you very much for being so brisk in your answers and for your patience with us.
Committee suspended.
On resuming—
Witnesses: Melanie Dawes, Permanent Secretary, Department for Communities and Local Government, Peter Holland, CBE, Chief Fire and Rescue Adviser, Department for Communities and Local Government and Neil O'Connor, Director of Fire Resilience and Emergencies, Department for Communities and Local Government, gave evidence.
Chair: Welcome back to the Public Accounts Committee, looking at the sustainability of fire services. We thank our second panel for their patience, but I am sure that they appreciate why we had to adjourn for the Prime Minister’s important statement about Syria. We have Peter Holland CBE, the current chief fire and rescue adviser for the Department for Communities and Local Government, Melanie Dawes, permanent secretary at the Department for Communities and Local Government—welcome back—and Neil O’Connor, the director of fire resilience and emergencies at the Department for Communities and Local Government. Welcome to you all. Apologies again, but a couple of Members will have to leave for a Bill Committee. It’s a busy morning in Parliament, with Members stretched in different directions.
Q24 Mr Jackson: Thank you, Chair. With her leave, my question will be a bit longer, because you were all here for the previous session and I think you understand that there is concern—I will not read out all the parts of the Report that indicate it—about the potential lack of scrutiny and oversight. It just so happens I have a very clear example, which I think tests what I am presuming you will say, in that you are happy with overview and scrutiny; and that is the situation which both myself and my colleague Steve Barclay MP, who is formerly of this Committee, brought up in Cambridgeshire. That goes to the heart of scrutiny, a national framework and what I think is sometimes a lack of proper oversight by the fire authorities with regard to, particularly, principal officers.
Ms Dawes, you will know, no doubt, that in October 2013 the then fire Minister, Brandon Lewis, had cause to write to Cambridgeshire and Peterborough Fire Authority about the case of Graham Stagg, who was the fire chief who had a package at that time, in 2012-13, of £204,585—a £156,000 salary, a £12,000 bonus, and a £35,000 pension pot. He retired, was paid a lump sum from his pension and protected benefits, and one month later was rehired by the authority. This was in contravention of Government guidelines and outside the spirit of even the authority’s policy, in that it was a draft pay policy that had not been properly scrutinised. It had not been taken through any proper oversight procedures in terms of a vote by the fire and rescue authority.
If that is not bad enough, it also happened again, with the assistant director of fire and rescue. Incidentally, Graham Stagg has just announced he is leaving—one assumes permanently—Cambridgeshire Fire and Rescue Service. My concern, if I can summarise it, on this, given that you are responsible as the accounting officer for public value for money, is that we have in place redundancy and re-engagement policies which allow this to happen. We have a situation, as in Cambridgeshire, where principal officers’ salaries are tied to each other, which is very unusual in the private sector. We have a situation where bonuses are paid without proper links to any demonstrable performance indicators; and we have a situation in the case of Cambridgeshire—and I will write to the Comptroller and Auditor General about this situation—where you still have confidentiality agreements signed off by the chief fire officer for his principal officers when they are paid off with public money. We have other issues of inappropriate expenditure, which are not subject to scrutiny.
I will be writing to you about this, because I do not think Mr Lewis received a satisfactory reply from Sir Peter Brown, the chair of the authority—they did undertake, incidentally, to begin a pay review, but we don’t know what happened to that pay review—and his predecessor Councillor Roy Pegram. I will write to you about it. It is a somewhat convoluted example because it goes to the heart of the idea that there is proper overview and scrutiny of public expenditure that you are presiding over.
I would like you to give me your view on whether those policies are appropriate and perhaps how you intend to address that issue.
Melanie Dawes: Thank you very much, Mr Jackson, and good morning. As you said, Brandon Lewis did write to the authority on that episode in Cambridgeshire and essentially shared your view, Mr Jackson, that this was not acceptable and, as you say, it was not compliant with the rules. I think we will be very interested to hear of your further concerns, if you are planning to write to us.
In the end, it is for local areas to determine their salaries, but we announced yesterday in the spending review that Ministers wish to improve the guidance to local government on salaries, particularly for senior officials, and also to encourage them to continue to make efficiencies, recognising that they have made many efficiencies already—but particularly on the salary issue. That is explicit in the spending review document.
I think constant concern in this area is appropriate, and we are glad that you raise these issues.
Q25 Mr Jackson: That is interesting, but let us put this into context. Cambridgeshire Fire and Rescue Service has 683 staff. By comparison, Cambridgeshire County Council has 5,500, and its chief executive is paid significantly less. I will find the figure in a minute. Even in the last year, there has been an increase in the number of employees earning £50,000 or more in a period, allegedly, of austerity—although not, it seems, for principal officers. Twelve of them are earning more than £50,000, and this current year, 2014-15, it has gone to 19. The number of those earning between £55,000 and £60,000 have gone from seven to 10, and they are still getting bonuses. The chief fire officer got a £12,500 bonus. The director of communications and strategy—this is not a firefighter—has a basic salary of £128,000 and a bonus of £7,532, and total contributions, with pension, £133,614 plus £27,883 pension contributions.
That is without looking at issues other than capital expenditure—the money they have got in reserves and so on. This is not front-line services; this is gouging the public purse, frankly, and it is unacceptable, in my opinion. It just so happens to be my local fire and rescue service. When I go to Dogsthorpe or Stanground fire stations and I meet firefighters—I am no friend of the FBU, and I know it can be a pain in the backside sometimes, to be quite honest with you—
Chair: Can you keep to the question?
Mr Jackson: Yes. I have an enormous amount of sympathy for those guys on the front line when they see this sort of gouging of the public purse by principal officers. I hold you responsible for at least looking into it, and giving the Committee—I would like a full note on this situation, because I do not think that the system of accountability, oversight and scrutiny is working properly, not least because there is an unhealthy relationship, in my humble opinion, between senior fire authority elected members and chief fire officers. That is not good for the taxpayer.
Melanie Dawes: We would be very happy to give you a note, perhaps in response to your letter. That might make sense, so that we know the full details that you are worried about. Basically, we think you are quite right that every part of the public sector needs to be very vigilant on back-office costs such as those you describe—I do not want to comment on any individual salary, because you are never quite aware of the weight of someone’s responsibilities and so on—and on corporate salaries and should be reducing costs. In the fire and rescue service, those costs have come down by more than other costs, but I would be very happy to send you a note on those particular examples in Cambridgeshire. If I could just comment more generally on scrutiny—
Chair: On the point about the note, Mr Jackson will be writing to you and the Comptroller and Auditor General and we will get some information back. So next time you appear before us on another matter, we are likely to come back on this issue, depending on what those notes tell us. That is just to give you some advance warning. We will park that one for now, but it is not that we do not think that it is a serious matter. Melanie Dawes, I will be indulgent and let you give a little bit more information about the wider scrutiny picture.
Q26 Mr Jackson: Can you address the policy issues of, say, devolving the big responsibility of giving bonuses without proper understanding of what has been earned in terms of receiving a bonus, what is approved in expenditure, and whether a pay policy should include confidentiality agreements?
Melanie Dawes: We are certainly happy to get back to you on those detailed questions, but it is for local authorities and local fire authorities to determine the appropriate packages, and we would not want to be trying to control that from central Government.
Chair: Mr Jackson, could you be clear about what you want in the note, and then—
Q27 Mr Jackson: No, it is not about the note. I am assuming that you will respond with a note, and thank you for that. I am specifically asking whether you are content, as the accounting officer and permanent secretary, for fire and rescue authorities—combined authorities and others—to be routinely giving bonuses, having confidentiality agreements and having these policies that allow them to make someone redundant and, on the same pay, bring them back. What is your official position on that? It is an issue aside from Cambridgeshire and Peterborough.
Melanie Dawes: The question of what are appropriate packages, including whether bonuses should be paid and so on, is a policy question, and Ministers have said that they want to tighten up the guidance. So I think we can expect to hear further views from central Government very shortly on what local government should do.
As accounting officer, I think it is my concern if local authorities or local fire authorities are not abiding by the rules that they are required to abide by. That is why your raising those concerns about Cambridgeshire a little while back was extremely helpful. And as well as responding on that individual issue, I think it is right, and we will look at this, that we reassure you and indeed reassure ourselves that we have the right oversight of the system, to ensure that where the rules exist people are abiding by them.
Q28 Chair: Can we ask about this revolving door? We have touched on this a lot now on this Committee. So, somebody leaves and then they get re-employed. Is that currently acceptable to you as an accounting officer and to DCLG?
Melanie Dawes: It’s certainly not something that is allowed in the civil service and Ministers have got quite strong views on it across the public sector as a whole. It is quite difficult for us to enforce a rule where the revolving door is from one part of the public sector to another, but Ministers have set out some quite strong views on this in the past—
Q29 Chair: Sorry, we are not talking here about moving from one part of the public sector to another. We are talking about somebody leaving—retiring—from one job, and going back to the same job.
Melanie Dawes: That’s certainly not allowed in the civil service and in most parts of the public sector—
Q30 Mr Jackson: But what you are doing about it?
Melanie Dawes: I personally don’t think it’s acceptable, no.
Q31 Mr Jackson: It’s all very well saying that, but from my information and from the media reports at the time, Mr Lewis wrote to Sir Peter Brown, I think, who was then the new chairman of the fire authority, and effectively said, “You have not abided by your own policy.”—it was a draft pay policy—“You’ve had no vote at the authority. You’ve breached the spirit and even the letter of government policy. I want to know how you came to this decision.” And he didn’t have a satisfactory reply.
Frankly, it’s not good enough for you to say, “Well, we’ve devolved it out”. This is the public purse. I want to know that you’re taking this seriously, not just for Cambridgeshire and Peterborough, which I understand is not an isolated example. And I want to know that you will be working with Ministers to make sure this does not happen, because it’s not a policy issue—it’s a scrutiny issue.
Q32 Chair: Ms Dawes, as accounting officer have you picked up the telephone to anyone to say that you’re not happy about this, for example?
Melanie Dawes: I have not myself picked up the telephone to Cambridgeshire; my Ministers certainly have. And some of this happened before I arrived.
On the specific issue of Cambridgeshire, we will give you a response. As I said, where authorities are not following the rules that they should be following, that is a matter of concern to me as accounting officer. What those rules should be is a slightly broader policy question, and something that I think the Government will address.
Q33 Chair: I will just drive home Mr Jackson’s point on this issue, and then he will ask you some broader questions. You’re concerned, but your being concerned probably doesn’t frighten—dare I say?—fire chiefs in Cambridgeshire; clearly, it wasn’t you at the time but the person in your position. So what does that concern practically do? What can you practically do? Ministers phoned up, but what can you do? Short of changing the law and the policy, I would hope that you still have an authority as accounting officer. What would you do if the situation arose again? Perhaps that is a good question.
Melanie Dawes: At the heart of the whole system here is local accountability and local scrutiny. So, making sure that these issues come into the public domain and ensuring that the oversight bodies are informed—that is all extremely helpful in putting the right pressure on the right people to do a better job.
Q34 Chair: Would you like to have more powers over issues such as this?
Melanie Dawes: At the moment, the framework is a devolved one, whereby—subject to national rules, and there are clearly some of those, although in this case people didn’t follow the rules that they should have done—we have a power to intervene, and that is something that the Secretary of State can always consider.
Q35 Chair: But it seems to me that they’ve got away with it and there is not really much change. I will just bring in the Comptroller and Auditor General.
Sir Amyas Morse: Is there any realistic prospect of some of this money being disgorged?
Melanie Dawes: Disgorged in what sense?
Sir Amyas Morse: You are expressing exactly the views that the Committee is expressing to you, but I’m curious to know if there’s any meaningful pathway whereby this specific decision can be reversed, as opposed to saying, “Well, we’ll take account of it when setting future policy”, and things such as that? Is it just not practicable?
Melanie Dawes: Why don’t we come back to the Committee on that specific point about the actions that we could take? I don’t want to commit Ministers to that today.
Q36 Mr Jackson: Two very quick points, if I may. I promised that I would let you know this figure. Mark Lloyd, who was then Cambridgeshire County Council’s chief executive and in charge of 5,586 employees, was paid £187,000; Mr Stagg had 683 employees and was paid a package of £205,000. I understand what you are saying, but the other thing I would say, and this is barely credible and believable, and it is a serious issue for Sir Peter Brown, is that five months after receiving Brandon Lewis’s letter, the assistant chief fire officer, Neil Newberry, retired on the same basis as Mr Stagg and—surprise, surprise—was reappointed in May 2014, two months later. Having received a letter from the Minister saying “Your conduct and your practices are offending the spirit and perhaps the letter of Government policy,” the Cambridgeshire fire and rescue authority effectively took no notice, stuck two fingers up at the Minister and did the same thing with the assistant chief fire officer, who was on a very good salary that was set at 75% of the chief fire officer’s salary. My point is that letters don’t work; as the Comptroller and Auditor General said, you have to take definitive action in order to deter other people from gouging the taxpayer in the way that has happened here.
Chair: Thank you, Mr Jackson. I think you have a clear message about the Committee’s view on this, Ms Dawes. We may comment on it in our report, we will see. Mr Foster, who is patiently waiting, will be leading for us on the mainstream part of the Report. Over to you, Kevin.
Q37 Kevin Foster: No problem. Our diary for this hearing has been somewhat altered by other events beyond any of our control. The first thing I wanted to ask the witnesses is whether they see the current monitoring as effective, given that there is no inspectorate like the CQC, which looks at the NHS, or the police inspectorate, which looks at the police, yet in many ways the fire service does a similar job. The fire service responds to critical situations and, ultimately, is a key national resilience service. Do you believe that the current system is effective in reassuring you that local fire services are delivering not just value for money but the service that they need to deliver?
Melanie Dawes: The context of this is the very good performance of the fire and rescue services, with very impressive improvements in outcomes over the last decade or so—I just want to put that on record—which reflects their professionalism and expertise.
Q38 Kevin Foster: Might it not reflect, for example, changes in fire safety regulations back in the 1980s and the fact that very few of us smoke and use chip pans anymore?
Melanie Dawes: Well, it reflects those things as well. It is quite a complicated picture, but it also reflects significant improvement and constant development of the way fire services operate locally. On your question about whether the current scrutiny arrangements are sufficient, the NAO makes a number of quite important suggestions, particularly about peer review, and you heard Sir Ken Knight say earlier, as he did in his report, that there are some areas where perhaps the system could be strengthened, such as requiring peer reviews, requiring the publication of peer reviews—not all of them are published at the moment—and not allowing fire and rescue authorities to choose their own reviewers. Those are things on which our Ministers have an open mind. As we do not have an inspectorate, it is clearly very important that the rest of the system operates extremely effectively.
Peter Holland: You heard from Sir Ken Knight earlier, and I entirely agree with his views on the current peer review. You also heard Paul Hancock, the president of the Chief Fire Officers Association, saying how they are going to bolster the peer review. My team and I have been involved in supporting some of that work with the Chief Fire Officers Association in order to strengthen it, but the point needs reasserting that it is an improvement tool and not a Government reassurance tool. That is the key element here. It is a question of whether the Government want more reassurance than they are currently getting. The peer review will be better. A couple of pilots have been run based on the academic work by Cardiff University on how the peer reviews could be strengthened, including—importantly for this Committee—on financial sustainability and future viability. So, it will be better, but there is a question for the Government on that assurance angle.
Q 39 Kevin Foster: You say it could be better. If, as chief fire and rescue adviser to the Government, you felt that there was an authority that was potentially going to fail in its duty and did not seem to wish to participate in a peer review, how would you advise a Minister and the permanent secretary to go about dealing with that, in the current climate?
Peter Holland: I would raise it with the Minister. Clearly, it would depend on the circumstances of the case and how serious it was. We have had occasions since I have been in post—almost three years—when we have had discussions about things that have happened in services. Quite recently, an expert panel has gone in to assist Essex Fire and Rescue Service, and the Secretary of State actually wrote to that service, saying that if things did not change very quickly there would be intervention.
Q40 Chair: How would the Department know that there is a problem? The Secretary of State tells Parliament every two years that everything is fine, but on the basis of assurances from the fire authorities themselves. Are you confident that you would know that there was a problem if the fire authority or the chief fire officer did not tell you themselves?
Peter Holland: A key part of my role is keeping my finger on the pulse of what is happening in fire and rescue services. We get information about the performance of fire and rescue services on a six-monthly basis—
Q41 Chair: But that is their information.
Peter Holland: That is the information that they are providing, but a lot of it is based on the incident recording system, which is provided by central Government, so those figures are our figures and we can check against those. It is more likely that issues will be raised through the media or letters to Parliament, or complaints, although in the Essex case the fire authority itself made contact with me and explained what it was doing and how it was proceeding.
Q42 Chair: It is wonderful to have a free press and a media that pick up on these things, but I am a little alarmed if information from the media is what triggers an issue rather than detailed knowledge.
Peter Holland: That was one example. Chief fire officers maintain regular contact with me, and I speak to two or three a day about issues that are going on in services. It is almost inconceivable that they would not tip off me or the chair of a fire authority if they had concerns.
Q43 Kevin Foster: Let us look at the role of national resilience. We can imagine that certain facilities in individual authority areas present significant risk and would require a very significant fire response were there to be an incident—the Buncefield oil depot incident, for example. How do you reassure yourself that you can advise the Minister that they can reassure Parliament that the provisions in place are effective enough, given local decision making on integrated risk management plans? For risks like that, can you genuinely be assured that Parliament and, through Parliament, the public can be assured that the fire service has the capability to respond adequately to such incidents?
Neil O'Connor: Perhaps I could answer that one, if you will allow me. I have been chairing the strategic resilience board for the fire and rescue service, which includes members of the service, political members of the fire authorities and other Government Departments. That board oversees national resilience as a whole. There is a process for assessing national risks and the capabilities required. There is a process for setting out planning assumptions against those risks and the capabilities needed against them. At a local level, fire and rescue authorities are required, through their integrated risk management plans, to take account of incidents, particularly risky facilities and so on, and how they would deal with them through their own resources and those available to them from surrounding authorities.
Q44 Kevin Foster: You will have noted the comments going through the NAO Report that effectively say that there isn’t a particularly robust way of doing that at the moment, and in some cases it is almost self-assurance of information coming from the authorities that they are meeting what they say they are meeting. How would you react to that idea, and how do you think that could be improved or be better? We have touched on what would happen if there was a failing authority, and I accept that that is probably an exceptional case. This is more about the fact that people are building a national capability through local decisions. How do you think that that process could be improved or strengthened?
Neil O'Connor: The National Audit Office Report says that we have strong assurance around the national capabilities in relation to national risks. It draws attention to chiefs who have said that they are concerned that the capability to respond to major incidents may be denuded with further reductions in funding. From the evidence that we have seen so far, that does not appear to be happening. There is plenty of resource available. We have seen several major incidents—Peter has been present at some of those—where the number of appliances sent in to deal with them has been more than sufficient: specialist capabilities, normal fire engines, fire engines from neighbouring authorities and so on. The fire service has coped admirably and excellently with all major incidents in recent times.
Peter Holland: We have something called the national co-ordination framework, which I head up and which is responsible for all the national resilience assets—the ones provided by central Government post 9/11. I work very closely with the Fire Officers Association’s national resilience team to make sure they are readily available and resourced for response within an agreed time based on the planning assumptions you heard about earlier, particularly for high risk urban search and rescue, mass decontamination and so on.
I am made aware of every deployment of any of those assets and also of any major incidents. Fire and rescue services inform the fire and rescue service’s national co-ordination centre, which is in the London fire brigade, of those. I have four duty officers who pass that information through to me so I am well aware of every major incident that is occurring, and if concerns are being flagged up, I would certainly be on to them.
Neil O'Connor: The national framework for the fire and rescue services places a duty on authorities to tell us if they feel there is a risk that they would not be able to meet their national resilience requirements. The strategic resilience board I chair with the sector is the forum in which those concerns can be addressed.
Q45 Kevin Foster: How do you satisfy yourself that the authorities are delivering value for money? In one of the diagrams of the change in spending—I think it was on page 17—some had gone down significantly and two had gone up. In an age of austerity, it seems strange for two to go up, and to have any funding formula that produces an increase and does not give the same sort of challenge. Are you satisfied that the sector is providing value for money and that the funding has been allocated in a way that will deliver that?
Melanie Dawes: Yes. We look at a number of different data sources through a number of different lenses so, first and foremost, we keep a very close track of overall outcomes, and those are not just the final outcome, such as fire deaths, injuries and so on. They are also response times and how many firefighters are deployed in particular areas by local fire and rescue services. We keep track of those data and publish them regularly. We also commissioned the Knight review to understand the scope for efficiencies. That is the cornerstone of our approach to efficiency for the future as well.
Q46 Kevin Foster: It seems strange in an age of austerity to be putting up a couple of authorities’ budgets. It seems a strange way of going about things.
Melanie Dawes: I don’t know whether Neil can comment on the specific example.
Neil O'Connor: The chart in the National Audit Office Report shows spend and it is saying that two counties between 2010-11 and 2014-15 spent more at the end than at the beginning. I am not sure which authorities those are because the chart is anonymised, but from looking at authorities’ expenditure figures they are likely to be very small. It may be the Isles of Scilly whose spend is minute and it could be explained by a large transaction such as buying a fire engine in that year. I think the other is a larger county and again I am not sure what caused its spend to go up, but it may be explained by unusually large expenditure on a building or something during that year. I agree that it looks odd.
Q47 Chair: May I check back with you, Melanie? You raised the issue of data coming in and watching them, but they are not standardised by local fire authorities. It is unclear how you can measure for sure what is really happening.
Melanie Dawes: We have standardised data. We don’t require authorities to set their own targets in a uniform way across the country, but we require certain forms of data from everyone so that we can look across the piece. If they haven’t got a target, we cannot necessarily get the same measures of performance for everyone.
There is always scope for us to improve on this. We recognise that, particularly as we go into a further round of reductions in overall budgets, we need to take account of what we believe is a very good report by Sir Ken on the overall scope for efficiencies and improve our understanding of how that applies in individual fire authorities and, indeed, how far each authority has gone in making those efficiencies. That is something we need to deepen.
Q48 Chair: Sir Amyas?
Sir Amyas Morse: As I listen to the witnesses, they are producing arguments about required resource levels, based on one national emergency.
Notwithstanding what you say, they are clearly producing those arguments and assertions about gapping in local resources. That is not wrong of them, but that is going to mean that you need good evidence about where we are approaching limits. As you come in to reduce resource further, you are going to need to know where the bottom is and how to work that better.
That is why I come back to the point that we carefully tested what Sir Ken’s report said about substantial differences between comparable authorities. Even with that careful testing, we did not bridge the gap. There is still a substantial amount of unexplained expense. Notwithstanding that you have got some good data, considering the change process that is going on and the elements that are unexplained, what we know is too fuzzy for you to be able to make the best judgments, both for the local authorities and nationally.
We are really pushing you towards saying that we think the local fire authorities need to work with you to have better information in this time of change. It may have been fine back in the days when things were not changing, but now they really are changing big scale, and you do not have quite enough understanding to let you judge where the bottom is on that.
Melanie Dawes: That is a fair comment for us, but I would like to reassure you that I think we have got more information since Ken Knight’s review was published. We have done a number of things to get more granular understanding, both at the national level—we have done the Thomas review of terms and conditions and so on—to drill more deeply into some of those specific aspects. We have also just done a survey. We have asked all fire and rescue authorities to report to us on their progress in making efficiencies, so we have begun to get that data for each authority, and we are still looking at the results of that, but I think we need to do more in this area.
Q49 Chair: Will that efficiency data be standardised, or are they just writing a report about how they have done it their own way?
Neil O'Connor: It is systematised as such. It is asking a common set of questions and for common sets of information, but large parts of it will be narrative, and they will be about fire and rescue authorities’ experience in delivering improvements, for example, through collaboration. We are doing that in conjunction, by the way, with the Fire Finance Network, which is a cross-authority organisation. That will tell us more.
We also have a transformation fund for fire, which is funding a number of projects. We are also monitoring those projects to see how they fare and the results they produce to see what works essentially. We will be commissioning a formal evaluation of those projects to inform our understanding further. This is an onward journey we are taking. As reductions in funding happen, as fire services respond and reform, we are watching that and seeing how we can learn what is making the most impact and delivering the best outcomes with the fewest resources.
Q50 Chair: I think we understand that the narrative has a role. The Local Government Association has produced some narrative about risks if there are mergers and so on, but the figures are very important, too. We have been concerned, looking at the NAO Report, and hearing from you I am not massively reassured that there is a grip in the centre on the figures, to hold feet to the fire—I shouldn’t use “feet to the fire” in this context—to hold those local fire authorities to account for their spending, for which you do have a role as accounting officer. I know there is local accountability and that is very important. Can you give us a bit more? You have given us a lot of words but I am not clear how you are going to be standardising the data and ensuring that what you are getting from fire authorities is really challenged in the centre.
Melanie Dawes: To confirm: I do agree that it is our responsibility, and my responsibility as accounting officer, to ensure we have sufficient understanding, so that we can do the right kind of resource allocation, and also so that we can ensure that we are getting value for money from the services.
We acknowledge that the national level analysis we have done needs to continue to be deepened at the individual fire and rescue authority level and that the numbers are really important. There are five or six threads from Sir Ken Knight’s report for efficiency, and it is not just things like shift patterns and so on. It is also things like procurement and collaboration.
We are following up each of those with action in each area, and that is at the heart of the survey that Neil talked about, which we have commissioned from each fire and rescue authority. What I would like us to have—I think we are already some way towards this—is a more granular understanding of where each authority is and what further scope they have. The peer reviews are drawing this out as well, that’s the other thing to add: they contain a good financial element, which will be strengthened with the improvements that the LGA has made to the peer review with CFOA recently.
Q51 Chair: We like the word “granular” on this Committee. Mr O’Connor, do you want to come in on that?
Neil O'Connor: Just to add to that, I sense some concern from you about the standard of the data. All the data we collect and publish are fully standardised. They are produced to National Statistics standards, which are demanding. The data are published for every single fire and rescue service in the country and go into minute detail. They cover the number of incidents, the types of incidents and the outcomes from those incidents in terms of casualties, injuries and fatalities. We also have detailed information on staffing levels, the number of fire stations and the number of appliances, as well as detailed expenditure figures. So we have a full range—a very wide range—of detailed information on every fire and rescue service that is produced regularly and is public.
Q52 Deidre Brock: At paragraph 3.24 in the Report, the NAO says that “finding information on response standards in the first place is difficult: we found information for only 33 out of 46 authorities.” Will you comment on that?
Neil O'Connor: Perhaps I can explain that. It is probably a problem of interpretation. The difference there is in the response standards that the NAO was trying to find on fire and rescue services’ websites. Standards are different from data on performance. The data on performance say what fire authorities actually did—how many fires they attended, how many fatalities occurred, and so on. The standards are their aspiration—for example, the number of minutes within which they would aim to respond to a fire call.
Q53 Deidre Brock: Shouldn’t they still be available?
Neil O'Connor: Yes. Outcome standards are generally available from fire and rescue services, but we do not require them to set standardised standards, if you understand what I mean by that.
Melanie Dawes: We don’t require them to set targets, which is why the NAO did not find targets. I think that is what you meant by standards.
Q54 Chair: That is one of the things about which I asked the NAO how they came by the information. It was quite a detailed web search, and they will do more work. In fact, perhaps Aileen would like to explain what they did, because it is interesting and instructive.
Aileen Murphie: The point we were making is that the response standards are not comparable because they are drawn up in different ways. That makes it very difficult to look across the piece to say, “Authority x is like authority y,” and compare them in that way. Secondly, we looked on authorities’ websites to see whether we could find them, looking from the perspective of what you might call the armchair auditor, and we found only 33 out of 46 easily. We did spend quite some time trying to do it.
Q55 Chair: “Easily” for the NAO is a bit more work than most ordinary taxpayers might put in.
Aileen Murphie: The Department does have a lot of information, which is why we have the graphs on outcomes and whatnot in the Report, but it does make it more difficult to draw comparisons, and to do VFM-type comparisons locally.
Sir Amyas Morse: What is missing here is a bit more rigorous, objective assessment. We are not criticising you for the quality of your information, but what we want to see done with it is a bit different.
Q56 Kevin Foster: Ms Dawes, you touched on resource analysis. I am always interested to see what processes are in place to ensure that the right decisions are being taken, although obviously it is for local authorities to make particular decisions. In the time I was involved in a fire authority I was always being told that incidents are dealt with by firefighters and fire pumps, although perhaps not as many pumps as people might think are actually needed, yet on page 18, the smallest reduction overall, in terms of giving quite a significant reduction in resource, is the one thing I was always told didn’t actually put out a fire, which is a fire station. Is that a sign that the right decisions are being taken about the prioritisation of resources? How are you satisfying yourself that the right decisions are being taken?
Melanie Dawes: I’m sorry, are you querying it because you would expect to see more reductions in fire stations?
Chair: Sorry, can we be clear about which page we’re discussing?
Q57 Kevin Foster: It is figure 5 at the top of page 18. I am saying that we have seen a significant reduction in funding. Let’s say for the sake of argument that 10% was coming out of funding; you would then expect to see some differences, within degrees of that 10%. For example, as I see from figure 5, you would expect back-office functions to take more of a reduction than the frontline. We see that in terms of firefighters as a group being lower than the number of back-office staff coming out. That probably makes eminent sense, but it is quite marked that the number of fire stations is still significantly lower. It is effectively still the same as it was before the reduction. Are we satisfied that that represents the best use of resources at a local level, given that the station itself does not go out and respond to the incident; the firefighter and the fire appliance do?
Melanie Dawes: Neil may want to say something about this, but my observation would be that we are gradually seeing fire and rescue authorities begin to consider the more ambitious savings and efficiencies that they can think about. Often, that is about collaboration across areas. That is where being able to close fire stations because one can cover across a county boundary, for example, in a way that is definitely more efficient than if each county has their own station close to that boundary—I think some of those are beginning to become more on the table. That is certainly something that Sir Ken’s review suggests is an opportunity. I think this is partly about where we are on the journey.
Q58 Kevin Foster: I was thinking more about opportunities for services to cross over. For example, if there is a separate police and fire station, in theory the number of stations reduces but actually those are combined, perhaps, with ambulances—
Melanie Dawes: Exactly. What I am saying is that we are getting more into transformation, and that is when I expect we will see some of the things on the right hand side of this chart beginning to come more into play. Neil may want to comment.
Neil O'Connor: That is the one thing that this graph probably masks a little bit; you do not see changes within stations there. Is there scope to reduce the number of fire stations? Probably, given the dramatic fall in demand, but what this does not display is whether more of those stations are being used for ambulance or police services, for example, or where the crewing arrangements have been changed, for example from being a whole-time station to a retained station, or a more flexible crewing, or not a 24-hour station, and so on. There have been those types of changes as well, and this does not quite bring those out. I think we understand those, if I may be cheeky, a bit better than the graph shows.
Peter Holland: Neil is absolutely right. What has also happened is that there has been quite a lot of what were two-fire-engine stations that are now one-fire-engine stations. Clearly, services are probably looking at their response times. If you close a fire station, you have got to explain to your public what you are doing, and trying to reassure them about response times is clearly an issue. If you have still got your local fire station there, you can get that first fire engine there very quickly. That will certainly explain that, as well as the flexibility that was in Sir Ken Knight’s review, which needed to change. More work needed to be done on that, and that is what has happened. You have got things like four firefighters riding on a fire engine instead of five, and different duty systems.
Q59 Kevin Foster: Going back to Sir Ken Knight’s review and looking at that graph, if I recall correctly, there was a part in the review about: if there were more retained rather than whole-time, that would potentially allow a larger saving. Yet, as we see, the retained number has dropped as well as the whole-time. Are you satisfied that that is representative of local decisions being taken that the best option was to retain whole-time? Or has that perhaps touched on the fact that more obvious savings decisions are not being taken at a local level?
Peter Holland: In the suburban areas, there is more room for retained in several areas around the country. There are arguments about the difficulty of recruiting and retaining retained, but they are not insurmountable problems, and there are services that are very successful from both those perspectives. So a little bit more sharing about what is going on in services would certainly eat into that and still provide people with a very professional fire service. Retained firefighters, retained on call or whatever individual services call them do a first-class job. As far as the public are concerned, they see a firefighter coming through the front door and they do not care what duty system they are working.
Q60 Kevin Foster: In terms of the discussion at the moment about merger, in the past we had the somewhat disastrous project on the potential merger of fire controls into regional fire controls. That has been aired a number of times, and we probably do not need to go back over that again today. How do you see the prospects for mergers working together? I note from page 18 of the Report that there has been one merger of a fire authority planned since austerity, and I think there was one between Devon and Somerset several years before that. Is this a process that should be more considered? Is this process being monitored? In particular, are we satisfied that some of the smaller authorities are still viable, given the scale of financial challenge some of them face?
Melanie Dawes: We are not going to tell any area that they should merge, but we would expect to see this more on the table for fire and rescue authorities to be considering. Indeed, I know some of them are. After several years of collaboration they are reaching the point where perhaps this more difficult decision of merger is something they might be contemplating. We will support that where local areas want to do it.
There certainly are efficiency savings that can be realised, but quite a lot of the efficiency savings can be realised through collaboration across boundaries. I would not want to say that a gradual journey towards this is the wrong thing to do. It might well be the right thing to do in order to make a merger a sustainable and practical option. It may be right to take some time before moving there, but I am sure there is going to be more of this.
Q61 Kevin Foster: What process is there for sharing best practice? I can think of the ultimate example of merger in Hayle in Cornwall—I can see the nods—where one person is firefighter—
Peter Holland: —retained firefighter, first responder, community support officer and police.
Q62 Kevin Foster: Do we see that model as one that could spread, given that one of the issues with retained firefighter equipment and the change of employment patterns means that fewer people live and work close to a fire station or are in a job where they could turn out when a fire alarm goes?
Peter Holland: Certainly, in remote rural areas it does make absolute sense. There are not many calls. I attended the opening of Hayle fire station, which is how I know so much about it. That person is very well integrated into that community and highly thought of and respected. It makes a lot of financial sense. There is another service that is piloting that—I cannot remember the name now.
Neil O'Connor: Durham and Darlington.
Peter Holland: It will grow, but that will be in the more remote rural areas rather than denser urban areas.
Neil O'Connor: As Sir Ken was saying earlier, a number of authorities say it is hard to increase their number of retained firefighters because of recruitment and retention difficulties. This is partly an answer to that. It gives more weight and attraction to the role. Authorities that are exploring it are finding that is a benefit and possibly a way forward to increase the proportion of retained firefighters in the service.
Q63 Kevin Foster: Very briefly, there is also an issue about ensuring that retained firefighters actually maintain the experience of going out to incidents, which can be a real issue if they are then presented with a very challenging one. I am conscious that is drifting off more into a policy area.
Peter Holland: It is a good point because some of the more enlightened services are using retained firefighter to cover for crewing absences of whole-time staff, so they are giving them that added experience. More of that going on is not a bad thing.
Q64 Kevin Foster: There has some debate about governance structures and the possibility of police and fire being merged. Without getting into the policy of it—that’s for another time—how do we see the monitoring of that in terms of decisions to see what would deliver value for money, that is, bluntly, not just changing signs outside police and fire stations? How do we understand that as a means of delivering value for money, as opposed to the current system? I accept it is not proposed that it be imposed on anyone, but how do we ensure, bluntly, that it is not just about giving someone a grander title as police and fire commissioner but about genuinely delivering value for money and transformative services that deliver for the public?
Q65 Chair: As Sir Ken helpfully pointed out, your name is on the consultation document—your Department’s name.
Melanie Dawes: Yes, that’s right, it was a consultation document from the Department of Health, the Department for Communities and Local Government and the Home Office, reflecting the cross-cutting nature of this.
The question about value for money is a very good one, as to how we ensure that the oversight of two services under one overall police and crime commissioner works. I cannot give you an answer now as to how exactly that should work. There are many differences in the services. As you were saying, the proposal is that they would not be fully merged services. The proposal is to align the overall oversight.
There are many strengths of the police system, and there are some strengths of the fire system that can be brought to bear. The key will be, particularly on the fire side, to ensure that the local scrutiny is as good as it possibly can be. The opportunity of having the oversight of an elected police and crime commissioner could improve that.
In our consultation document we have also suggested that, where such a change does happen, it is possible that HMIC could perform some inspectorate role on the fire service, so again that presents some opportunities. As yet, the precise model is something that we will be working on.
Q66 Chair: May I just ask something before Kevin carries on, because it is pertinent to this point? There is also talk about possible linking up with the ambulance service. In London you can have an ambulance station five minutes from a fire station with similar needs and with a reduced number of appliances now in London, there is potential there. Why is this a Home Office and police-driven consultation, rather than one looking just at what works best and might be most efficient?
Melanie Dawes: It does also reflect the health service. They are part of the consultation, so it is not just the police and fire. It is also the ambulance services.
Q67 Chair: So there is a real potential to—
Melanie Dawes: Yes, there is, and indeed, some of our transformation projects look into precisely this type of collaboration. That is partly to make sure that we understand the opportunities. It is also because, as the NAO Report points out, the fire service are thinking quite creatively about how they can use time, particularly of whole-time firefighters, as we must inevitably retain some capacity to respond to infrequent incidents.
It is the right thing for us and for fire services to be thinking about how to use that time; what we would not want is for helping out other public services to become just a justification for that resource staying in place. The transformation fund will specifically help us in a number of areas to unpack that and work out where there really is value. There are some good examples, including in ambulance and fire. Then we will be able to disseminate best practice in guidance, and what we expect to see.
Q68 Kevin Foster: It would also be interesting to look at some of the value for money we achieved out of changes in regulations in the past, and at potential changes in regulation, for example on sprinkler systems, that would tackle some of those threat issues, particularly at times when we are covering one large fire risk drawing a large amount of resource. However, I am conscious that is more for a policy day.
Looking ahead, how do you factor in the impact on value for money of where the fire service gets involved in other areas of work, for example health and wellbeing work? I remember a few years back when Merseyside fire and rescue authority was a beacon authority for providing that. There is also health and social care work in which firefighters are the people who can connect with communities or individuals who, bluntly, would not let someone from the council or police service through their front door. How do we monitor and value the effectiveness of that money?
Melanie Dawes: A number of projects in the transformation fund are doing just this. As you say, it might well be a very good way of delivering a service, but it might be quite an expensive way to use a firefighter to perform what is essentially social care work, for example. There are examples. I can think of one in the West Midlands where the fire and rescue service has been commissioned by the NHS to give flu jabs as they go out to do fire safety checks, recognising that increasing numbers of those checks are now geared towards premises where there is somebody with a disability or somebody over the age of 65; we know that the risks are much greater for people in those groups.
So there is a good synergy there with the work that the NHS needs to do, but whether or not it is value for money is something that we have got to work through, because these are very skilled people being paid, obviously and rightly, high salaries for their particular skills. It does not necessarily mean that the right thing is for them to deliver social care services, but it might—
Q69 Kevin Foster: I can remember from my time being involved with fire authorities that there was a demographic, and you could almost predict where the next accidental fire death was going to come from. It was tragic that you could almost section out a couple hundred people in your area.
The other thing that I have always questioned is how we ensure that an authority or service that is doing very strong prevention work does not end up getting penalised. Clearly, if the prevention work is effective, demand and fire deaths should go down, yet a lot of our funding formula is usually based around the demand on the service for emergency call-out. How do we see that being done, particularly if, in some areas, effective prevention work reduces fires and fire deaths?
Melanie Dawes: We updated our needs assessment a few years back, and we always need to keep that in view. We do not just look at simpler measures such as demography and population; we do look at actual incidents. You are quite right that where prevention is higher, we could find that some authorities are ahead of the curve in having reduced the number of incidents, but if they are managing to deliver more value for money, that is the right thing to continue with.
We will not update our needs assessment formulae very regularly—the business rates formulae, for example, have been set for this Parliament and will not be reopened until the beginning of the next one, to give some certainty—but it is the sort of thing that we need to keep in view. It is a constant balance, with this service, between recognising the ongoing demand need day by day to respond to a regular flow of incidents and needing to make sure that there is capacity to respond to infrequent but more serious incidents. That is what we have to balance in the funding formulae.
Q70 Kevin Foster: For me, it is, bluntly, more about the simple thing of not having a perverse incentive to fail. That is, if your prevention work is abysmal and you get more demand, you will get more funding, when the best way to prevent a fire death is to prevent the fire in the first place.
Neil O'Connor: That has been addressed. Fire and rescue authorities now have a statutory duty to prevent fires. That was introduced in the first decade of this millennium and they have increased their attention to prevention. The NAO reports a slight drop-off in prevention activities but our view, confirmed by discussion with fire and rescue authorities and the data to a certain extent, is that that is a reflection of fire services targeting their activities more on clients they know are at risk. Checks on households such as those with vulnerable older people and people with disabilities has increased. We have worked with CFOA and others to give fire services access to NHS “Exeter” health data, which are data from GPs on households with over-65s, so that they can continue to know which households to go to to do prevention work more effectively.
Peter Holland: I would like to add something relating to your previous question, but which is linked to this one: the return on investment of doing work for other parties. Greater Manchester Fire and Rescue Service, in conjunction with the health people there, has established community reduction intervention teams, which may go in when someone has collapsed in the home. That is a big burden on the ambulance service, which is overstretched, and there is capacity for the fire service to do something on that. It reckons that the return on investment is 1:13. I have not validated that and it is local work, but there is obvious benefit. If it is as high as that and even if it were 1:4, it would still be worth considering. There is more and more work like that going on, particularly on health.
Q71 Deidre Brock: To return to mergers, you mentioned that with collaboration and integration there have been a couple of smaller mergers and shared service schemes. You may be aware that up in Scotland we have had a significant change to the service with a merger of eight services into one. The FBU’s comments on this surprised me because the Scottish branch of the FBU has been largely positive about these changes, has recognised the need for them and worked collaboratively with the Scottish Government and other stakeholders. Regardless of its comments, what are your views on that, what contact have you had with the Scottish Government and civil service up there in terms of learning from the lessons, and what lessons can you take from the Scottish experience that you might be able to apply down here?
Q72 Chair: Is that for Neil?
Melanie Dawes: Yes. Neil has had a lot of contact with the Scottish service.
Neil O'Connor: We have had contact, as has Peter with his professional opposites in Scotland. We have been talking to the Scottish fire service and the Scottish Executive about this and we have seen presentations. They have delivered presentations in England to us and other fire services about their journey in undertaking this integration. We understand what they have done. The lessons to learn are primarily for fire and rescue services considering mergers in England and there has been a great interest in that. Dorset and Wiltshire fire services will merge from 1 April and have looked closely at that to understand the business case for integration.
There are scale questions when comparing England with Scotland. I think the Scottish fire service is now the largest fire service in the UK in terms of the number of employees and has overtaken London. The scale is probably too large for a single service to work in England.
Q73 Deidre Brock: But surely there are fairly clear geographic distinctions in some areas of England that might be able to make that work.
Neil O'Connor: Possibly. The Scottish model is interesting in that respect because it combines some very urban areas with some extremely rural areas, and there may be some strength in the Scottish Fire and Rescue Service and the capability of urban and rural areas to complement each other. You get that in England where plenty of county fire authorities cover mixed urban and rural areas. The Bedfordshire Fire and Rescue Service is a small but good example of that; you have Luton, which has all the characteristics of an urban area, and then surrounding areas that are not so densely populated.
Q74 Deidre Brock: I had hoped to hear that you were doing a bit more than having chats to them about it, although I am glad you are getting some presentations. The Audit Scotland Report that came out in May this year was broadly very favourable about the whole process. They said that it was “managed effectively” and that the SFRS had maintained effective local engagement with communities during that process. It said: “The creation of the SFRS had no impact on the public and its performance is improving.” I accept that there are always challenges, but by and large, it has been successfully managed and I hope that you will take lessons from that for the management of the English service.
Melanie Dawes: May I reassure you that we do? In the end, Ministers have not decided that they want to push mergers at a national level, but we remain supportive of them and bringing the Scottish evidence to bear in support of that is something that we have done actively, as Neil says.
Q75 Deidre Brock: Do you think those mergers will happen, though? In my experience of a local authority—I was a councillor for eight years—there was always talk about trying to merge back-office functions. It was something that everyone talked about and thought was very desirable, but in the end it just didn’t happen. I think what is needed is very strong leadership if you are serious about making these sorts of changes. Whose job is that? Is it the Minister’s? Is it yours?
Melanie Dawes: In the end, it is a policy decision as to whether, at a national level, we want to require local government in general or the fire and rescue authorities specifically to change their overall structures. Ministers have concluded that they do not wish to do that in either case, but at the same time, particularly as we go into another round of efficiencies, we recognise that this can be a very good way to reap efficiencies. But it will not work, of course, unless at a local level, people want to do it, and there is so much evidence that if we force these sorts of things on people, they are less likely to succeed. That is weighed in the balance in the policy decision.
Q76 Deidre Brock: It does require a lot of collaboration and a consultation with local communities.
Kevin Foster: Is that a lesson learnt from the FiReControl project?
Melanie Dawes: Yes, frankly, it is. It was not a success story and one of this Committee’s and the NAO’s clear recommendations was that if we did not have a plan that engaged local authorities, it was not going to succeed. We have taken that to heart to some extent.
Q77 Chair: Deidre Brock makes some very clear points that it can be done, but there are issues, certainly in other parts of the UK where there are different levels of council tax precept, which would have to equalise over time if two authorities merged. That is a real challenge, as the Local Government Association has pointed out very clearly. What would the Department do if two authorities tried to merge and that was an issue?
Melanie Dawes: We would be happy to discuss that with them, I think. I cannot give you a detailed answer on that. More generally, in terms of the funding system, as you will be aware, at the beginning of the next Parliament we will have a system of 100% devolved business rates, which will mean that the grant to local government will almost certainly have been phased out by then. So we are going to need to consider the whole question of distribution of funding across local government, including in fire and rescue services, and we will be starting consultation on that in the new year. We will need to look at quite how these local revenue-raising systems will work.
Chair: We will come back to you on that, actually.
Neil O'Connor: We did help Dorset and Wiltshire with the process that they have been through to agree a merger, and we addressed council tax equalisation in that. They are allowed to do that over a number of years. The Government generally expect that that can be achieved over five years, but ultimately, fire and rescue services that are merging have to consider all those issues and stack up a business case for doing it. In the case of Dorset and Wiltshire, it works for them. They estimate that they will be saving £4.5 million a year as a result of the merger across the two former authorities.
Chair: I will come back to some of the other Local Government Association points, because they are quite clear on some of the challenges, but first, Nigel Mills wanted to come in.
Q78 Nigel Mills: It is on the same topic. I suppose I am a candidate for the Secretary of State’s pearl-handled revolver, if that is still sitting in the top drawer following the change. I am not sure you can keep reducing funding and expect these things to happen organically without giving some pretty clear direction that forces of a certain size just will not be viable, and the top slice of chief fire officer and fire authority costs will just mean that the service cannot be run. At some point, there might need to be central policy guidance that says, “Actually, you are going to need to look at this very seriously, otherwise we don’t think you are sustainable.” I am not sure that I would argue for mandating, but are you tempted at all to issue some pretty clear guidance that says, “Come on boys, you need to think about this now.”?
Melanie Dawes: I think that is a very fair question. It is a policy question. We are at the start of a new Parliament. The spending review was announced yesterday, and we now have to go through the process of determining individual budgets for next year for individual local authorities and fire and rescue authorities. Those questions are very good ones. It is an important tension, but we recognise it in DCLG. It is very tempting to think that you can just mandate it from the top. I think everybody thinks that there are too many fire and rescue authorities in England overall. I have heard that from everybody in the fire service I have spoken to, as well as from anybody in Whitehall. How we get there, however, is a question that we should keep asking ourselves. That is why I think you are right to raise it.
Q79 Nigel Mills: But we don’t want to get there by some fire authorities falling over and ceasing to be sufficiently resilient or to provide a good enough service and then having to go and do rescue mergers. That would be the worst case, wouldn’t it?
Melanie Dawes: Yes. We wouldn’t want to reach that point. Although there are a lot of fire and rescue authorities, 46 is not that large a number. We feel that the engagement that Peter and Neil and others in the Department have daily with each authority means that we are quite well placed to have those conversations and to understand what is going on. It is not a hands-off relationship at all. My observation is that it is actually pretty hands-on, but those questions are the right ones and they are the right policy questions in my view.
Q80 Nigel Mills: But you must come to a point where you think that if we had somewhere south of 46 fire authorities, the level of saving that could be sustained would be higher than if we tried to maintain what I guess will be 45 forces from next April. Does that not come into your mind when you’re thinking about how you allocate your spending reductions?
Melanie Dawes: We are also thinking about the opportunities for collaboration across different blue-light services. It is not so straightforward as looking at fire services in isolation. As I said, a clear policy decision has been taken so far that we won’t mandate this. Your question as to how we can encourage it more actively is the right one.
Q81 Nigel Mills: But you will have to think about this a bit, because when you tell Derbyshire’s fire and rescue service what its funding will be for the next three years, you will have had to think about what you can realistically expect it to reduce. I do not think that you can say, “Oh well. We’ll do it all in the round and it will all happen.” You must think that there is a level below which they cannot be expected to go.
Melanie Dawes: Sir Ken Knight’s review set out a lot of scope for efficiency, which is way short of merger, so we are progressing all of that quite actively at a national level in a number of different ways. We have already discussed some of that, such as terms and conditions. We have not mentioned it yet, but the legislation to require smoke alarms in the private rented sector should—we have done research on this—drive further reductions in incidents. There are a lot of other things going on that we will be actively pushing. As I have said, we need to improve our granular understanding, authority by authority, of how far the measures can reach in terms of efficiency. That will get us a long way before merger becomes necessary. For some authorities, however, merger will be something that they need and want to do sooner.
Neil O’Connor: Some are considering it. One merger is happening, and we know that more authorities are considering it. Whether they go ahead with it will depend on their own assessment of the business case. When I started this role in 2011, as the first spending reductions kicked in, I went out and visited over half the fire and rescue to talk to them about how they were going to cope with the period ahead. Without fail, the first thing that every one of them wanted to talk about was how they were planning to deal with the budget reductions, and they all had credible and convincing plans. There is a process for us to go through again to re-engage with them for the next few years and to look again at how they are doing on the things that they are already changing, what more they are going to do and how they are going to cope. That will allow us to have sensible discussions with them about whether they are exploring all the right options without forcing them to take a particular route.
Q82 Chair: But Mr Mills’ point is the elephant in the room. You say that there is no policy decision on mergers and yet there is a big expectation for more efficiencies and a reduction in costs in fire authorities. It’s a kind of circular thing, and you must have had serious discussions. The Local Government Association carried out an assessment called “AnyFire” that was based on a typical, single-purpose fire and rescue authority, which could be involved in blue-light mergers, as mentioned earlier. It points out that even if you used reserves to fill a gap, that would obviously only close it for one year, so that would be an issue. The council tax precept, it estimated, would have to rise by “just over 10% every year until the end of the decade just to maintain the same funding level in cash terms.” Obviously that varies depending on the exact balance or authority spending.
It also mentions the need to “Reduce salaries of existing frontline staff”. We have obviously talked a bit about staffing, but they would have to be reduced by somewhere between 25% and 30% from current levels to retain the savings required. So, in requiring savings, you must have had some thought about the savings linking to the policy and the policy linking to the savings—they are not completely separate issues.
Melanie Dawes: No, you are right. We have taken all of the Ken Knight proposals, and indeed some others, and worked through and done that analysis as part of the spending review on this service as we have on other services delivered by local government. As you know, my role is both for the system as a whole and then specifically for this service. We have done this in DCLG for the overall local government system and fed all that analysis as best we could into the spending review. That includes data on the scope for efficiencies and data on the pressures, for example, in social care, and with the demographics those are definitely increasing pressures. We have brought all of those things to bear as part of this spending review. What we have now got to do is the detailed budget allocations.
It is probably worth saying that overall the numbers for spending for local government as a whole that were in yesterday’s spending review announcements are just under a 7% real-terms reduction in expected spending over the four years of the spending review. That is the OBR forecast. That compares with a 14% equivalent figure from the OBR last time.
Q83 Chair: I am just a bit anxious about bandying figures around, because that is not quite how I read it, though I do not have the figures to hand and they are not in the NAO Report.
Melanie Dawes: Those are the overall figures including business rates, council tax—
Chair: I think we have got to be careful. You were preparing for the spending review, Melanie Dawes, so you have had time to analyse it.
Q84 Nigel Mills: I think it is important to ask this. I guess that you think that the fire and rescue service reduction will be higher than the average for your Department, don’t you?
Melanie Dawes: We have got to work through those figures now. That was not the pattern in the last spending review, so we will just have to work that through.
Q85 Chair: Much as I want to pursue this, it is the day after the spending review and, even though we have got Melanie Dawes here who must know more about it than most of us, we have not had a chance to digest it. The NAO will no doubt look at it.
I want to touch on the other work being done. You have talked about the transformation fund, but there are some very interesting examples. Kent firefighters are working to support people with dementia and to help identify people with the conditions and help them on fire safety. In Wigan, firefighters have become health champions, working with 20 agencies to promote healthy messages. Fire crews in Norfolk and Suffolk are working with local NHS teams to help tackle child obesity. Bolton Council and Greater Manchester Fire and Rescue Service have focused on keeping babies and toddlers safe: they are distributing cots and Moses baskets by fire appliance. And in Bury and Salford—these are just some of the examples we have come across—they are identifying people likely to fall and giving advice and training on falls. These are interesting initiatives and the beneficiary in financial terms is often the NHS as well as the fire authorities. Are you having any conversations across Whitehall about other funding for firefighters, if they are going to be taking on these sorts of roles?
Melanie Dawes: We certainly are, yes, and we are evaluating all of these individual proposals[2]. As far as possible, if a fire and rescue is performing a service for another part of the public sector, some kind of charging or explicit recognition of that will help a great deal to pull out the value-for-money issues and ensure that it is not just a free ride for that other service that no one can see transparently. That is a very important point and the evaluation will help us.
Q86 Chair: But it is also about measuring outcomes, isn’t it? If firefighters on downtime are stopping older people falling over a rug or a fire starting somewhere, there are metrics for the fire example, but the other things are quite difficult to analyse and cross-charging can be very expensive, so you will get into quite a mire of challenge.
Melanie Dawes: Yes. This is a very common problem for any kind of preventive work: it is very hard to analyse the impact and, even when you have done that, it is very hard to make it cashable, which is the term the Treasury like to use for savings of this type. Recognising those challenges, we are having a go at looking at that in our evaluation of the transformation fund. Some things like the flu jab example I gave earlier will be much easier, because it is a much more quantifiable output that the service is delivering. In other areas, it is a much longer-term benefit. I should add, though, that local authorities are very good at commissioning this kind of cross-cutting, integrated service, particularly around vulnerable users. So there is a lot of expertise out there for quantifying and recognising—
Q87 Chair: Will you be doing a clear assessment from the centre? You will be strongly advising or suggesting what works? How will you ensure that is rolled out? If something is saving lives in Norfolk and Suffolk—perhaps that’s not the best example—or in Wigan, how are you going to ensure that is happening across the country?
Melanie Dawes: We will do a very rigorous analysis of what is VFM as part of the evaluation of the transformation fund. When we have worked out the right or possible answers, we will do everything we can to disseminate that and get it picked up.
Q88 Chair: Peter Holland, you are the uniformed chief in charge of this, making sure that your colleagues out there, also firefighters, are taking this up. Have you met any resistance out there for this sort of proposal, to extend the role of the firefighter?
Peter Holland: No, on the contrary. Chief fire officers and firefighters are very keen to help people. That is what they join the fire service for in the first place. The point you make is clearly a good one: who is going to pay for it if there are additional costs? Clearly, firefighters are already on duty and you are paying the salaries anyway. In some cases it is probably the cost of some diesel in getting there. If you are using retained firefighters there is clearly an additional cost. That is up to local chiefs to negotiate locally, and that is what is being done. You get this issue with co-responding where they are turning out to 999 calls where somebody has had a heart attack or whatever.
Q89 Chair: Will it require a different training regime for firefighters over time?
Peter Holland: For all of it, but to a lesser or greater extent depending on what they are getting into. Things like first aid and use of the defibrillator are very straightforward and do not take a lot of time at all. If you are getting into other areas, particularly where slips, trips and falls are concerned, there would clearly be some additional training there.
Q90 Chair: Would that be done locally or would you suggest nationally?
Peter Holland: Well, I know in Manchester that has been done by the ambulance service. They have supported that because they are the beneficiaries of it because it reduces their ever-increasing workload.
Q91 Chair: This sounds as if it is still a work in progress. I am aware of time. We touched earlier on the peer reviews. Do you have any views about inspection, given that there is now no inspection service? Melanie Dawes, you reacted to the comments made by the first panel. Would you put on the record what your views are on how inspections should happen to ensure we know what is going on?
Melanie Dawes: As I said earlier, in the absence of an inspectorate, it is important that the rest of the system works effectively. At the heart of the system is local accountability. I believe that the points that Ken Knight made about strengthening peer review are very helpful.
Q92 Chair: A peer review takes place over a longer period of time. We heard clearly from those first witnesses that peer review is different from inspection, which is something we would accept to a point. It is not the same as inspection.
Melanie Dawes: It could still work harder for us, though. The LGA have improved it and made some technical changes with CFOA recently. Sir Ken was also suggesting that we make peer reviews compulsory, that we always require them to be published and that we do not allow people to choose their own reviewers. Those are all helpful suggestions that we will think about.
On the question of an inspectorate, that is a policy decision. I go back to what I said earlier, that we have a proposal out there to use HMIC where governance is aligned under the police and crime commissioner. That is one option. There is not a proposal on the table yet to reintroduce an inspectorate. The experts do say that we do not want to go back to where we were. There is a lot we can do picking up the NAO’s recommendations to improve the data, the analysis and to make the existing system work harder.
Q93 Chair: Sir Ken talked about using existing inspectorates more.
Melanie Dawes: Yes, that is another interesting option and with collaboration it is a natural improvement.
Q94 Chair: I am aware that time is marching on. You are considering these options. When will you be able to tell the taxpayer—us—what you are going to be doing about the things that you consider interesting? When will you have made decisions?
Melanie Dawes: Now that the spending review has concluded, these are the sorts of issues that we can turn to, so in the new year—
Q95 Chair: Six months, in the new year?
Melanie Dawes: Yes, within the next six months.
Q96 Chair: Thank you. I thank the panel very much indeed. Apologies for the hiatus in the middle. The uncorrected transcript will be up in the next two or three days and our report is likely to be out in January, just because of where we are in our schedules.
Apologies, I had this on my list and forgot to ask. Melanie Dawes, forgive me, and if Nigel could just stay for a second. At a previous hearing, the Comptroller and Auditor General asked for an update on business rates, taking out grant from local authorities. There are assumed savings. You touched on it earlier when talking about business rates. I wondered when we are going to get your response on that. You said it would be after the spending review and that has happened. Can you give us a date on when we will get that response back?
Melanie Dawes: We will get back to you with a date as soon as we can.
Q97 Chair: Next week? Two weeks? A month? Before Christmas?
Melanie Dawes: I can certainly get back to you with a date before the end of this week.
Chair: Okay, we will chase you again on that. Thank you.
Oral evidence: Financial sustainability of Fire and Rescue Services, HC 582 1
[1] Correction: This should be “49%”
[2] Note from witness: This refers to evaluation of all Fire Transformation projects proposals, not just those given by the Chair.