Uncertainty about the size of the pay settlement that would put an end to the bitter fire services dispute is threatening to hold up local authority finance directors' efforts to draw up draft budgets due by the end of this week.
Link: Green Budget: Brown slams fire fighters’ demands
The widening impact of the strike and the confusion surrounding it became clearer this week as the deadline for completing local authority budgets moved closer. Local authorities are due to complete draft budgets by the end of November, but confusion reigns over the actual costs of any pay and reform proposals that would achieve a settlement.
Accountancy Age also learned that plans by the employers’ side to involve the Audit Commission in monitoring the pay-for-reform deal the government is desperate to secure has not yet been discussed with the commission.
Local authority FDs are under pressure to complete draft budgets this week as these will play a part in determining their annual financial settlement due to be announced by the government on 5 December.
Anne McMeel, FD of the Greater London Authority, which controls the £373m budget of the London Fire and Emergency Planning Authority, admitted her draft budget would contain uncertainties. ‘The provision for pay will be kept under review until final budget decisions have to be reached in February,’ she said.
A local Government Association spokesman admitted: ‘Things are a bit up in the air at the moment.’ It also emerged this week that the employers body failed to inform the Audit Commission of its reform plans, even though it has named the commission as the organisation that would monitor reforms to ensure savings can fund pay rises. But a commission spokeswoman said it was unaware of any potential responsibility and had not budgeted for any related work. ‘We haven’t been formally approached to monitor reforms,’ she said.
A 16% pay rise put forward by the employers’ organisation that has conducted negotiations with the fire fighters was withdrawn. The Fire Brigade Union is sticking with its original proposal of 40% pay rise, which it believes will cost £450m. The employers have argued this proposal would be unaffordable, arguing the FBU had not included related pension costs, which would take the total cost to £520m.
Even if a settlement is reached, FDs are likely to face further budgetary confusion. It is unclear whether the settlement would be funded through council tax, or as the union has argued, through a government grant.