September 19 2014 Latest news:
Tuesday, August 12, 2014
Essex Fire Authority will use reserves to pay a £15million bill to the Government caused by a change in the way pensions are funded.
A shortfall of £1.8m a year has been building up since 2006 when fire authorities became responsible for injury payments to retired firefighters.
The discrepancy was missed every year by the fire authority, independant auditors and the Department for Communities and Local Government.
An independent external enquiry, to be carried out by the treasurer and finance director of Kent Fire Brigade, has been launched by acting chief fire officer Adam Eckley.
A predicted underspend of £1.8m in this year’s budget will allow the Essex Fire Authority to pay the bill this year and in coming years.
However repayment of the debt, and potential interest, will use much of its reserves and could mean a review of future spending plans which had been cushioned from cuts.
Mr Eckley, who has also recorded a statement to the media, said: “Because of our prudent financial management over the last few years we have built up significant reserves and we are in a healthy financial position and able to wipe out this debt immediately. This is a significant burden but unlike other fire and rescue services that will likely face a similar financial challenge, the Fire Authority has the cash to pay while remaining financially sound.
“We had already set the target of delivering £5.9m of savings over the next few years, we now have to look for £7.7m. As an organisation, we are geared up for transformation and although this presents an additional challenge, Essex is still far better off than many fire authorities nationwide who have already had to look to job cuts and station closures to balance their books.
“This year’s underspend has been the result of the organisation pulling together to deliver more with less and we are confident through our innovative and progressive approach, we can continue to keep Essex safe while meeting budgetary demands.
“We have reviewed our governance arrangements and believe that no individual is to blame. While the treasurer and finance director is clearly accountable, we are not looking for any scapegoats.
“This was a genuine oversight by a number of parties and was brought to the fire authority’s attention as soon as it was discovered.
“We will now move forward and put this behind us while we concentrate on preparing for an uncertain future with cuts in government funding expected to continue after 2015/16.”
The payments relate to firefighters who have left the Essex County Fire and Rescue Service since 1992 and have been given early access to their pensions because of an injury in service, which attracts an additional pension.
In Colchester 12 firefighter posts are being axed next year, more here