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					               AGENDA ITEM 19 - APPENDIX A




ROYAL BERKSHIRE FIRE AUTHORITY

STATEMENT OF ACCOUNTS 2009/10
                                                      CONTENTS

1. Members of the Authority .............................................................................................. 1
2. Officers of the Authority ................................................................................................ 1
3. Auditors ........................................................................................................................ 1
4. Explanatory Forward ..................................................................................................... 2
4.1     The Authority ......................................................................................................... 2
4.2     The Accounts......................................................................................................... 2
4.3     Revenue Spending ................................................................................................ 2
4.4     Capital Expenditure and Financing ........................................................................ 6
4.5     Borrowing .............................................................................................................. 8
4.6     Pensions ................................................................................................................ 8
4.7     FRAML .................................................................................................................. 8
4.8     Royal Berkshire Fire & Rescue (Training) Limited ................................................. 8
4.9     Future Developments ............................................................................................ 9
5. Accounting Policies..................................................................................................... 10
5.1     General Principles ............................................................................................... 10
5.2     Accruals ............................................................................................................... 10
5.3     Contingent Assets ............................................................................................... 10
5.4     Contingent Liabilities ........................................................................................... 10
5.5     Fair Value of Assets and Liabilities carried at Amortised Cost ............................ 11
5.6     Fixed Assets ........................................................................................................ 11
5.7     Government Grants and Contributions (Revenue) .............................................. 12
5.8     Leases ................................................................................................................. 13
5.9     Overheads ........................................................................................................... 13
5.10    Pension Costs ..................................................................................................... 13
5.11    Precepts .............................................................................................................. 14
5.12    Provisions ............................................................................................................ 14
5.13    Prudential Code ................................................................................................... 14
5.14    Redemption of Debt............................................................................................. 14
5.15    Reserves ............................................................................................................. 15
5.16    Revenue Expenditure Funded from Capital under Statute .................................. 15
5.17    Stocks .................................................................................................................. 15
5.18    Value Added Tax ................................................................................................. 15
6. Statement of Responsibilities ..................................................................................... 16
7. Independent Auditor’s Report to the Members of Royal Berkshire Fire Authority ....... 17
8. Glossary of Financial Terms ....................................................................................... 18
9. Core Financial Statements ......................................................................................... 20
9.1     Income and Expenditure Account ........................................................................ 20
9.2     Statement of Movement on the General Fund Balance ....................................... 21
9.3     Statement of Recognised Gains and Losses ....................................................... 22
9.4      Balance Sheet .................................................................................................... 23
9.5     Cash Flow Statement .......................................................................................... 24
10.  Notes to Core Financial Statements........................................................................ 25
10.1    Prior-period Adjustments due to Accounting Policy Changes .............................. 25
10.2    Reconciling Items for General Fund Balance ...................................................... 26
10.3    Publicity ............................................................................................................... 27
10.4    Audit Costs .......................................................................................................... 27
10.5    Pensions Costs.................................................................................................... 27
10.6    Leases ................................................................................................................. 33
10.7   Operating Lease Commitments ........................................................................... 34
10.8   Emoluments......................................................................................................... 35
10.9   Discontinued Operations ..................................................................................... 38
10.10 Members Expenses ............................................................................................. 38
10.11 Related Parties .................................................................................................... 38
10.12 Funding ............................................................................................................... 39
10.13 Net Fixed Assets ................................................................................................. 40
10.14 Capital Expenditure and Financing ...................................................................... 43
10.15 Debtors ................................................................................................................ 44
10.16 Disclosure of Financial Assets and Liabilities ...................................................... 44
10.17 Nature and Extent of Risk Arising from Financial Instruments ............................. 48
10.18 Contingent Assets ............................................................................................... 54
10.19 Contingent Liabilities ........................................................................................... 54
10.20 Post Balance Sheet Events ................................................................................. 54
10.21 Provisions ............................................................................................................ 55
10.22 Government Grants - Deferred ............................................................................ 55
10.23 Unapplied Capital Contributions .......................................................................... 56
10.24 Euro Costs ........................................................................................................... 56
10.25 Revaluation Reserve ........................................................................................... 56
10.26 Capital Adjustment Account ................................................................................ 56
10.27 Usable Capital Receipts Reserve ........................................................................ 57
10.28 Collection Fund Adjustment Account ................................................................... 57
10.29 Appropriations to and from Reserves .................................................................. 57
10.30 Earmarked Reserves ........................................................................................... 58
10.31 Notes to Cash Flow Statement ............................................................................ 59
11.  Financial Statements for Firefighter Pension Fund ................................................. 61
11.1   Financial Arrangements for the Firefighter Pension Schemes ............................. 61
11.2   Pension Fund Account ........................................................................................ 61
11.3   Net Assets Statement .......................................................................................... 62
12.  Annual Governance Statement 2009/10 ................................................................. 63
12.1   Scope of Responsibility ....................................................................................... 63
12.2   The purpose of the governance framework ......................................................... 63
12.3   Review of Effectiveness ...................................................................................... 81
12.4   Significant Governance Issues ............................................................................ 83




                     For further information concerning any items contained in this
                     Statement please write to the Treasurer, Royal Berkshire Fire
                     Authority, 103 Dee Road, Tilehurst, Reading RG30 4FS or telephone
                     0118 932 2251.
1. Members of the Authority
The Authority is made up of 24 Members who are appointed in proportion to the number of
local government electors in each authority area.

Bracknell Forest Borough Council    Slough Borough Council
A Ward                              M Rasib
I McCracken                         R Zarait
C Dudley                            S Wright




Reading Borough Council             The Royal Borough of Windsor & Maidenhead
F Pugh                              C Bateson
P Jones                             K Newbound
C Harris                            J Lenton
P Gittings                          P Bicknell


West Berkshire District Council     Wokingham Borough Council
J Brooks                            A Bradley
P Bryant (Chairman)                 P Bray
O Jeffery                           P Helliar-Symons
E Webster                           C Bowring
A Edwards                           A Ross


2. Officers of the Authority
Chief Fire Officer
Iain Cox QFSM MA BSc(Hons) MCIPD

Clerk & Monitoring Officer
Caroline Redzikowska LLB(Hons) DipLG

Treasurer of the Combined Fire Service Fund
Andrew Vallance MBA MA(Oxon) CPFA

3. Auditors
The Audit Commission
District Auditor – Phil Sharman CPFA NZICA




                                             1
4. Explanatory Forward


4.1 The Authority

Royal Berkshire Fire and Rescue Service provides cover from 19 fire stations across the
county, stretching from Slough and Langley in the east to Lambourn and Newbury in the
west. Its area includes one of Europe’s busiest motorways, busy urban centres, suburban
communities and large rural areas.


4.2 The Accounts

The Accounting Statements which follow form the Fire Authority’s Statutory Accounts for
the year ended 31 March 2010.

The accounts are drawn up in accordance with the Accounting Policies that are set out in
detail in section 5.

A description of the core financial statements is given below:

a)    The Income and Expenditure Account summarises the resources that have been
generated and consumed in providing services and managing the Authority during the last
year.

b)     The Statement of Movement on the General Fund Balance summarises the
differences between the outturn on the Income and Expenditure Account and the General
Fund Balance.

c)    The Statement of Recognised Gains and Losses brings together all the recognised
gains and losses of the Authority during the year and shows the aggregate increase in its
net worth.

d)    The Balance Sheet shows the Authority’s position as a whole and summarises its
assets and liabilities.

e)     The Cash Flow Statement summarises the in-flows and out-flows of cash arising
from transactions with third parties for revenue and capital purposes.



4.3 Revenue Spending

Revenue budgets and expenditure for 2009/10 are shown in the tables below.




                                              2
                                                           Latest    to Mar 10
                                                                                  Variance     Notes
                                                          Budget       Outturn
                                                            £'000        £'000        £'000
EMPLOYEE COSTS
Uniformed                                                 20,668       20,061        (607)      (1)
Non-uniformed                                              4,983        4,771        (212)      (2)
Training                                                     661          650         (11)
Other                                                        164          236           72      (3)
                                                          26,476       25,718        (758)
PREMISES
Repairs and Maintenance                                       609         674            65     (4)
Rates                                                         378         384             6
Cleaning                                                      195         196             1
Utilities                                                     335         298          (37)     (5)
                                                            1,517       1,552            35
SUPPLIES
Insurance                                                     322         284         (38)      (6)
Equipment                                                     969         893         (76)      (7)
Clothing                                                      173         173            0
Communications                                                630         642           12
Occupational Health                                           179         168         (11)
Print/Stationery/Publications/Surveys                         155         160            5
Hydrant Repairs                                               116         116            0
Community Fire Safety Supplies                                233         197         (36)      (8)
Other *                                                       613         635           22
                                                            3,390       3,268        (122)
CONTRACTS
Administration Contracts                                      110         127           17
Other                                                         400         476           76      (9)
                                                              510         603           93
TRANSPORT
Vehicle Running Costs                                         857         951           94     (10)
Transport Leasing / Hire Charges                              271         270           (1)
Travel                                                        319         330           11
                                                            1,447       1,551          104
FIREFIGHTER PENSION COSTS                                     635         230        (405)     (11)
INCOME
Fees & Charges                                              (135)        (112)          23     (12)
Other                                                       (929)        (900)          29     (13)
                                                          (1,064)      (1,012)          52
NET COST OF SERVICES                                      32,911       31,910       (1,001)
DEBT CHARGES
Interest                                                      353         353             0
INVESTMENTS
Interest                                                     (49)         (22)          27     (14)
NET OPERATING EXPENDITURE                                 33,215       32,241        (974)

REVENUE FUNDING OF CAPITAL                                    118         299          181     (15)
APPROPRIATION TO/(FROM) RESERVES                            (247)          89          336     (16)
MINIMUM REVENUE PROVISION                                     407         316          (91)    (17)
CORPORATE UNDERSPEND                                        33,493      32,945         (548)
* The different types of expenditure contained within this line are shown in the table below


                                                              3
                                             Latest    to Mar 10
                                                                   Variance   Notes
       SUPPLIES - Other                     Budget       Outturn
                                              £'000        £'000      £'000
       Regional Control & Collaboration        209          224         15
       Laundry                                  26           22         (4)
       Strategic Misc                           17           12         (5)
       Catering                                113          122          9
       Postage                                  28           18        (10)
       Performance & Review                     10           14          4
       LGA Subscription / Conferences           30           45         15
       Precept Leaflet                          14           13         (1)
       Fit for Duty                             10            0        (10)
       Medical Costs                            17           19          2
       Health & Safety Misc                     10            6         (4)
       Financial Services                          9         15          6
       Equal Ops                                   6          3         (3)
       Business Continuity                         3          0         (3)
       Other Misc                              111          122         11
                                               613          635         22


Explanation of Major Revenue Budget Variances

  1.   The pay increase for uniformed staff was agreed at 1.25% whereas the budget
       assumed an increase of 2.5%. Therefore, savings from when the pay award
       became effective to the end of the year amounted to about £200,000. Retained
       firefighter costs were £475,000 below budget. The adverse weather conditions in
       both December and January led to increased expenditure on overtime and officer
       recall payments, resulting in increased costs of about £75,000.
  2.   Non-uniformed staff costs were £212,000 below budget for two main reasons. The
       actual pay increase of 1% was below the budgeted increase of 2.5%. There were
       also a number of vacancies within Fire Safety during the year due to difficulties in
       recruitment.
  3.   A provision of £74,000 has been made to cover compensation to retained
       firefighters as a result of the outcome of the test cases brought under the Part-time
       Workers (Prevention of Less Favourable Treatment) regulations.
  4.   Unbudgeted buildings maintenance expenditure consisted of £38,000 attributed to
       avoidable accident damage (predominantly appliances hitting bay doors) and
       £29,000 for urgent asbestos works.
  5.   Utilities expenditure was below budget due to a steep fall in the unit price of gas
       paid by the Authority.
  6.   The Treasurer was able to secure additional reductions in the cost of insurance
       cover in a soft market.




                                               4
7.   The underspent budget on equipment will be carried forward to 2010/11 to pay for
     items that could not be purchased in 2009/10.
8.   The Community Fire Safety budget was underspent due to delays in tendering for
     advertising contracts.
9.   There are several reasons for the overspend against the Contracts – Other budget.
         During 2009/10 there was a change to the normal condition survey process,
          normally 25% of the Authority’s buildings are surveyed each year but in order
          to prepare the five-year premises plan all sites were surveyed at a cost of
          £35,000 (against a budget of £9,000).
           Reviews were undertaken of the Authority’s asbestos and legionella
            processes, costing £15,000.

           There were an unusually high number of telecommunication mast lease
            renewals and rent reviews carried out during 2009/10, resulting in a budget
            overspend of £40,000.

10. There are a couple of reasons for the overspend on vehicle running costs. The
    increasing cost of fuel during 2009/10 has resulted in additional costs of £40,000.
    There have also been some major repairs and refurbishment to the existing fleet
    due to delays in procuring new vehicles.
11. Pension costs are below budget due to there only being one ill-health retirement
    during 2009/10. The cost to the Authority of each ill-health retirement is spread over
    three years.
12. Cross-border income from Buckinghamshire Fire & Rescue Service was £16,000
    less than budget.
13. Mast income was £27,000 below budget due to delays in agreeing contracts.
14. Investment income was £27,000 below budget due to historically low interest rates.
15. As part of the 2009/10 Budget the Fire Authority agreed to fund £180,000 of capital
    expenditure from reserves.
16. £336,000 was added to reserves and £247,000 was taken from reserves during
    2009/10, resulting in a net addition to reserves of £89,000
17. The minimum revenue provision was below budget due to increased funding of
    capital from revenue resources in the previous year as well as slippage in the capital
    programme in 2008/09.




                                           5
4.4 Capital Expenditure and Financing

Capital expenditure in 2009/10 was £2,425,000 against a budget of £3,422,000 (including
budgets brought forward from the previous year and budgets that have been grant or
revenue funded).

                                                     Latest           to Mar 10     Variance
                                                    Budget              Outturn
                                                      £'000               £'000        £'000
   Premises                                          1,681                  725         -956
   Equipment                                            271                 221          -50
   Vehicles                                          1,470                1,479            9
   Total                                                3,422            2,425             -997


The tables below give a breakdown of capital expenditure by project.

                                              Latest       Mar 10      Variance     Notes
                   PREMISES                  Budget        Outturn
                                               £'000        £'000         £'000



   Maidenhead Stn Washroom                        23            25            2   Completed
   Wokingham Rd Stn Rewire                         2             2            0   Completed
   Newbury Stn Rewire                              2             2            0   Completed
   Unallocated Premises Works Budget              90                        -90      (1)
   Environmental Projects                         15                        -15      (2)
   Extension to Wokingham Fire Station           819            32         -787      (3)
   Dee Rd Stn Staircase                           10            10            0   Completed
   Maidenhead Station Windows                     36            39            3   Completed
   Newbury Station Washroom                       13            15            2   Completed
   Langley Stn Electrical Works                  100            93           -7   Completed
   Ascot Heating                                   2             2            0   Completed
   Bracknell Stn Windows                          37            37            0   Completed
   Bracknell Stn Rewire                           65            62           -3   Completed
   Bracknell Stn Heating                          23            25            2   Completed
   Bracknell Stn Washroom                         58            57           -1   Completed
   Newbury Stn Remaining Washrooms                60            52           -8   Completed
   Newbury Stn Heating Controls                   40            26          -14   Completed
   Maidenhead Stn Electrical Works               120            103         -17   Completed
   Slough Stn Electrical Works                    86            73          -13   Completed
   Bracknell Stn Roof                             56            55           -1   Completed
   Windsor Fire Alarm                             24            15           -9      (4)
   Total                                        1,681           725        -956



                                            6
1. The total premises works budget has been allocated to individual projects with the
   exception of £90,000. This unused budget is due to the actual costs of projects
   being lower than the initial pre-tender estimates.

2. All premises projects take into account the need to reduce energy consumption with
   the result that a specific budget for environmental projects was not required during
   2009/10.

3. This project is on-going and the remaining budget will be carried forward to
   2010/11. Tenders for the demolition works and pre-qualification questionnaires for
   the new building works will be analysed in June 2010.

4. The remaining budget needs to be carried forward to 2010/11. It is estimated that
   the project will be completed by the end of June 2010.



                                                   Latest   Mar 10     Variance          Notes
                        EQUIPMENT                 Budget    Outturn
                                                    £'000    £'000        £'000



CIU Equiptment                                         5         5           0         Completed
Breathing Apparatus Cylinders                         66        66           0         Completed
Data Recorders                                        20        17           -3        Completed
Cutting Equipment                                     48        45           -3        Completed
Breathing Apparatus Communication Equipment           15        17           2         Completed
IT Hardware                                           40        58          18         Completed
PC Monitors                                            7         7           0         Completed
Server Virtualisation                                 70         6          -64           (1)
Total                                                271       221          -50


1. This project was phased over two years. The unspent budget will be carried forward
   to 2010/11.


                                                   Latest    Mar 10     Variance          Notes
                        VEHICLES                  Budget     Outturn
                                                    £'000     £'000         £'000



Rescue Support Vehicle                               151        169           18        Completed
Water Tenders                                      1,224       1,215              -9    Completed
Light Vehicles                                        95          95              0     Completed
Total                                              1,470       1,479              9




                                              7
4.5 Borrowing

During 2009/10 the Authority took out a loan of £800,000. All of the Authority’s loans are
with the Public Works Loan Board and are used to fund capital expenditure. Total
borrowing at 31 March 2010 amounted to £8,842,000.



4.6 Pensions

The 1992 Firefighters Pension Scheme was closed to new members from April 2006.
From this date new members and retained firefighters had the option to join the 2006
Firefighters Pension Scheme. Both schemes are unfunded. The negative net values reflect
the unfunded liability facing this Authority (other fire authorities face similar liabilities). The
Authority is not currently required to make any financial provision for these future
commitments, and there is no effect on Council Tax.

From April 2006, the Authority has had to pay employer contributions into a pensions
account. These contributions consist of a flat rate contribution and an ill-health charge. Ill-
health charges are spread over three years. Contributions are used to pay pensions and
any shortfall is made up by the Government.

4.7 FRAML

The Court of Appeal ruled against the London Authorities’ Mutual Limited (LAML) in June
2009, stating that participation of local authorities in an insurance mutual was beyond their
statutory powers. The Supreme Court is due to hear the latest appeal in the case of RMP v
LAML and the London Boroughs of Harrow and Brent in late 2010.The nine member
authorities of the Fire and Rescue Authorities’ Mutual Limited (FRAML) set up a consortium
to purchase insurance while FRAML was unable to trade. FRAML is now in the process of
being wound up, and the Authority’s capital contribution was returned in January 2010. The
Local Democracy, Economic Development and Construction Act 2009 received Royal
Assent on 12th November 2009. This Act specifically enables local authorities, including fire
authorities, to form mutual insurance companies. Preliminary work is on-going to see
whether a new mutual company should be set up for fire authorities.



4.8 Royal Berkshire Fire & Rescue (Training) Limited

Royal Berkshire Fire & Rescue (Training) Limited was set up by the Authority to ensure the
continued provision of fire safety training on a commercial basis. The company is a wholly-
owned subsidiary of the Authority and started trading on 1 January 2009. Prior to this date
the courses were run by a training team within the Authority. The company made a profit
of £7,500 before tax during 2009/10 in difficult trading conditions. During this period, the
Authority charged the company £37,000 for accommodation and provision of services
(mainly officer time), most of which is income that the Authority would not otherwise have
received.




                                                 8
Group accounts have not been produced as the revenue generated by the company
during 2009/10 is immaterial compared to the size of the Authority’s budget.


4.9 Future Developments

The Authority has adopted a Corporate Plan containing the Strategic, Best Value
Performance and Community Safety Plans intended to shape the direction and future
resource needs of the Service and against which performance is measured. Proposals for
budget growth or contractions incorporate a defined link to Strategic Plan priorities.

Future developments will include the transfer of the Fire Control function to a regional
company part-owned by the Authority.

Andrew Vallance MBA MA(Oxon) CPFA
Treasurer to the Royal Berkshire Fire Authority




                                             9
5. Accounting Policies


5.1 General Principles

The Statement of Accounts has been prepared in accordance with the Code of Practice on
Local Authority Accounting in the United Kingdom 2009: A Statement of Recommended
Practice (SORP) published by the Chartered Institute of Public Finance and Accountancy
(CIPFA).


5.2 Accruals

All material revenue income and expenditure in the accounts has been accounted for on
an accruals basis. This requires the non-cash effects of transactions to be reflected in the
financial statements for the accounting period in which those effects are experienced and
not in the period in which any cash is received or paid.

The only exceptions to this are that:

a)     Public utility payments are charged at the date of meter reading, and are not
apportioned on a time basis.

b)    Salaries and wages are paid in arrears, and amounts charged correspond to the
income tax year.

The effects of these policies are not considered to be material, as they are applied
consistently each year.

The capital accounts are also prepared on an accruals basis in accordance with ACOP.

The cashflow statement, in accordance with requirements, is prepared on a receipts and
payments basis.

Accrued interest is added to temporary investments rather than debtors on the balance
sheet.

5.3 Contingent Assets

Contingent assets are not recognised in the accounting statements. Instead they are
disclosed by way of notes if the inflow of a receipt or economic benefit is probable.


5.4 Contingent Liabilities

Contingent liabilities are not recognised in the accounting statements. Instead they are
disclosed by way of notes if there is a possible obligation, which may require a payment or
transfer of economic benefits.


                                             10
5.5 Fair Value of Assets and Liabilities carried at Amortised Cost

Where an instrument has a maturity of less than 12 months or is a trade or other
receivable the fair value is taken to be the principal outstanding or billed amount.

The differences between the carrying amount and the fair value of PWLB debt are due to
the fixed rate of interest on the loans being different from the prevailing rate at 31 March.


5.6 Fixed Assets

i        Recognition

Expenditure on the acquisition, creation or enhancement of fixed assets is capitalised on
an accruals basis in the accounts. Expenditure on the acquisition of a tangible or intangible
asset, or expenditure which adds to, and not merely maintains, the value of an existing
asset, is capitalised and classified as a fixed asset, provided that the fixed asset yields
benefits to the authority and the service it provides is for a period of more than one year.
Expenditure on routine repairs and maintenance is charged direct to the revenue account.

ii       Measurement

Assets are initially measured at cost, comprising all expenditure that is directly attributable
to bringing the asset into working condition for its intended use. Assets are then carried in
the balance sheet using the following measurement bases:

        Investment properties and assets surplus to requirements – lower of net current
         replacement cost or net realisable value
        Other land and buildings, vehicles, plant and equipment – lower of net current
         replacement cost or net realisable value

Net current replacement cost is assessed as:

        Investment properties and surplus assets – market value
        Operational properties – depreciated replacement cost
        Vehicles, plant and equipment – depreciated historic cost

Revaluations of land and buildings are carried out by a qualified valuer and valuations are
carried out every five years.

Increases in valuations are matched by credits to the Revaluation Reserve to recognise
unrealised gains. Exceptionally, gains might be credited to the Income and Expenditure
Account where they arise from the reversal of an impairment loss previously charged to a
service revenue account.

The Revaluation Reserve contains revaluation gains recognised since 1 April 2007 only,
the date of its formal implementation. Gains arising before that date have been
consolidated into the Capital Adjustment Account.




                                              11
iii   Impairment

The values of each category of assets and of material individual assets are reviewed
annually.


iv    Disposals

Gains and losses on the disposal of fixed assets are recognised in the Income and
Expenditure Account.

Receipts from the disposal of fixed assets are credited to the usable capital receipts
reserve and accounted for on an accruals basis. The de minimis level for capital receipts
is £10,000.

v     Depreciation

Assets, other than land, are being depreciated over their useful economic lives. Property is
depreciated using the straight-line method using the estimated lives given by external
valuers. Equipment is depreciated over its useful life using the straight-line method.
Vehicles are being depreciated using the reducing balance method (assumed useful lives
as follows: cars 5 years, vans 7 years and fire engines 10 years). Non-operational assets
are not depreciated.

vi    Amortisation of Intangible Assets

The Authority’s intangible assets consist of software licences, which are amortised over
the life of the licences.

vii   Charges to Revenue

General Fund service revenue accounts incur a capital charge for all tangible and
intangible fixed assets used in the provision of the service. The charge covers the annual
provision for depreciation and amortisation.

Capital charges are reversed out when calculating the amounts required to be raised from
local taxation.


5.7 Government Grants and Contributions (Revenue)

Government grants and third-party contributions are recognised as income at the date that
the Authority satisfies the conditions of entitlement and where expenditure for which the
grant is given has been incurred. Revenue grants are matched in service revenue
accounts with the service expenditure to which they relate. Grants to cover general
expenditure are credited to the foot of the Income and Expenditure Account after Net
Operating Expenditure.




                                             12
5.8 Leases

Rental payments are charged to revenue on the basis of payments due, as this is
approximately equivalent to charging on a straight-line basis over the term of the lease.


5.9 Overheads

All support service costs have been recharged on an appropriate basis to the services
provided by the Authority or shown as Corporate Costs in accordance with the CIPFA Best
Value Accounting Code of Practice.


5.10 Pension Costs

Pension costs have been provided for in accordance with relevant Government regulations
and in accordance with FRS17 Retirement Benefits. This is in accordance with ACOP.

FRS 17 is based on the principle that an organisation should account for retirement
benefits when it is committed to give them, even if the actual giving will be many years into
the future. Inclusion of the attributable share of the fund assets and liabilities does not
mean that legal title or obligation has passed from the trustees to the employer. Instead it
represents the employer’s commitment to increase contributions to make up any shortfall
in attributable net assets, or its ability to benefit (via reduced contributions) from a surplus
in the scheme.

The Fire Authority participates in three pension schemes, which provide members with
defined benefits relating to pay and service. The 1992 Firefighters’ Pension Scheme has
been closed to new members since April 2006. Recruits and retained firefighters can
instead join the new 2006 Firefighters Pension Scheme.

i      Uniformed Firefighters

The two firefighter pension schemes are unfunded.

In previous years Fire Authorities have suffered budgetary volatility due to fluctuations in
the number of Firefighters retiring in any given year. To overcome this problem, Central
Government has decided that Fire Authorities must keep a separate Pensions Account
from which pensions will be paid. On the income side, employer and employee
contributions are paid into the account. Transfer values for firefighters that transfer into
and out of the scheme are also posted to the account. If the account is in deficit at the end
of the financial year, the Government will provide a top-up to bring the account into
balance.

The pension costs have been assessed in accordance with the advice of a professionally
qualified actuary. The latest formal valuation was as at 31 December 2009.




                                               13
ii     The Local Government Superannuation Scheme

All administrative staff, subject to certain qualifying criteria, are eligible to join. The pension
costs that are charged to the Authority’s accounts in respect of these employees are equal
to the contributions paid to the funded pension scheme for these employees. Further costs
may arise in respect of certain pensions paid to retired employees on an unfunded basis.
The pension costs have been assessed in accordance with the advice of a professionally
qualified actuary. The latest formal valuation was as at 31 March 2007.


5.11 Precepts

From 1 April 2009 precepts included in the Income and Expenditure Account must be
accrued income for the year. This contrasts with previous accounting treatments where
precepts included in the Income and Expenditure Account were amounts paid from the
Collection Funds of the six Berkshire Unitary Authorities to the Fire Authority. There is no
effect on the General Fund as the balance is written off to the Collection Fund Adjustment
Account.


5.12 Provisions

i      Bad and Doubtful Debts

The carrying amount of debtors is adjusted for doubtful debts, by providing a provision for
doubtful debts, providing this is material. Known uncollectible debts are written off.

ii     Provisions – Other

Provisions are made where an event has taken place that gives the Authority an obligation
that probably requires settlement by a transfer of economic benefits, but where the timing
of the transfer is uncertain. Provisions are charged to the appropriate service revenue
account in the year that the Authority becomes aware of the obligation, based on the best
estimate of the likely settlement. When payments are eventually made, they are charged
against the provision in the balance sheet.


5.13 Prudential Code

The 2009 SORP incorporates the Prudential Code for Capital Finance in Local Authorities.
The Authority has fully implemented this code since its introduction on 1 April 2004.
Capital expenditure has been financed in accordance with the Code.


5.14 Redemption of Debt

In accordance with Government regulations the Authority is required to make a Minimum
Revenue Provision which is charged to the revenue account and which can only be used
to repay outstanding debt. The charge is based on the statutory requirement of 4% of the



                                                14
Authority’s Capital Financing Requirement for supported borrowing. The charge for
unsupported borrowing is based on the asset life method.


5.15 Reserves

The Authority sets aside specific amounts as reserves for future policy purposes or to
cover contingencies. Reserves are created by appropriating amounts in the Statement of
Movement on the General Fund Balance. When expenditure to be financed from a reserve
is incurred, it is charged to the appropriate revenue account. The reserve is then
appropriated back into the General Fund Balance statement so that there is no net charge
against council tax for the expenditure.


5.16 Revenue Expenditure Funded from Capital under Statute

This type of expenditure is treated as capital expenditure for financing purposes although it
appears in the Income & Expenditure Account. The cost is then reversed out through the
Statement of Movement on the General Fund Balance.


5.17 Stocks

Stocks are reflected in the balance sheet at average historical cost. This is not consistent
with SSAP9, which requires stock to be valued at the lower of cost or net realisable value.
However, net realisable value would significantly understate the value to the Authority of
the assets held, due to the specialised nature of the stock items. Certain immaterial stocks
are treated as current expenditure and charged directly to revenue.



5.18 Value Added Tax

The Authority does not include VAT as part of income or expenditure, whether of a capital
or revenue nature, except where it is not able to recover VAT, in common with the
requirements of SSAP 5.




                                             15
6. Statement of Responsibilities
The Fire Authority is required:
    to make arrangements for the proper administration of its financial affairs and to
      secure that one of its officers has the responsibility for the administration of those
      affairs. For the Fire Authority, that officer is the Treasurer;
    to manage its affairs to secure economic, efficient and effective use of resources
      and safeguard its assets.

Treasurer’s Responsibilities

The Treasurer is responsible for the preparation of the Authority’s statement of accounts
which, in terms of the CIPFA/LASAAC Code of Practice on Local Authority Accounting
(“the Code”), is required to present a true and fair view of the financial position of the
Authority at the accounting date and its income and expenditure for the year ended 31
March 2010.

In preparing this statement of accounts, the Treasurer has:
     selected suitable accounting policies and then applied them consistently;
     made judgements and estimates that were reasonable and prudent;
     complied with the Code of Practice.

The Treasurer has also:
    kept proper accounting records which were up to date;
    taken reasonable steps for the prevention and detection of fraud and other
      irregularities.

Treasurer’s Certificate

I certify that the statement of accounts, set out on pages 20 to 62, presents a true and fair
view of the financial position of the Authority for the financial year 2009/10 and was
prepared in accordance with the accounting policies stated on pages 10 to15.




Andrew Vallance MBA MA(Oxon) CPFA
Treasurer to the Royal Berkshire Fire Authority               30 June 2010

Approval of the Accounts

I hereby confirm that these accounts were approved by the Fire Authority at its meeting on
30 June 2010.




Dr P Bryant
Chairman of the Fire Authority                                30 June 2010


                                             16
7. Independent Auditor’s Report to the Members of Royal Berkshire
   Fire Authority
The Accounts will be audited in August 2010.




                                           17
8. Glossary of Financial Terms

Accounting Standards                                Capital Expenditure

Financial Reporting Standards (FRS) and             The acquisition of fixed assets which will
Statements of Standard Accounting                   have a long-term value to the Authority
Practice (SSAP) refer to the accounting             e.g. land, buildings, vehicles. See also
practice that must be adopted in the                Fixed Assets.
preparation of accounts.
                                                    Capital Receipts
Accruals
                                                    The proceeds from the disposal of land or
The concept that income and expenditure             other fixed assets. Capital receipts can be
are recognised as they are earned or                used to finance new capital expenditure,
incurred, not as money is received or               within the rules laid down by the
paid.                                               Government. They cannot be used to
                                                    finance day-to-day spending.
Amortisation
                                                    Contingency
The measure of the consumption of an
intangible asset over its useful life.              A condition which exists at the balance
                                                    sheet date, where the outcome will only
Balances                                            be confirmed on the occurrence or non-
                                                    occurrence of one or more uncertain
The surplus or deficit on any account at            future events.
the end of the year. Also referred to as
reserves.                                           Depreciation

Best Value Accounting                               The measure of the wearing out,
                                                    consumption, or other reduction in the
A methodology for presenting service                useful life of a fixed asset.
expenditure of the Authority in a way
which identifies the total cost of each             Fair Value
main operational activity (including an
apportionment of capital charges and                The value of investments or loans based
support     service    overheads).    All           on the prevailing interest rate rather than
Authorities are expected to adopt the               the rate payable or receivable.
accounting principles set out in the Best
Value Accounting Code of Practice, in               Finance Lease
order to facilitate comparison of costs
between Authorities.                                A lease that transfers substantially all of
                                                    the risks and rewards of ownership of a
Capital Charge                                      fixed asset to the lessee. Such a transfer
                                                    of risks and rewards may be presumed to
A charge to service revenue accounts to             occur if at the inception of the lease the
reflect the cost of fixed assets used in the        present value of the minimum lease
provision of services.                              payments, including any initial payment,



                                               18
amounts to substantially all of the fair           Provisions
value of the leased asset.
                                                   Provisions are amounts set aside to cover
                                                   liabilities or losses, which are likely or
Financial Reporting Standards                      certain to be incurred but there is
                                                   uncertainty as to the amounts or the
These     are    accounting   standards            dates on which they will arise.
developed by the Accounting Standards
Board which set out the correct                    Prudential Code
accounting    treatment   for   financial
transactions.                                      The purpose of the Code is to ensure that
                                                   capital investment plans of local
Fixed Assets                                       authorities are affordable, prudent and
                                                   sustainable.
Intangible and tangible assets yield
benefits to the Authority for more than            Reserves
one year. The only intangible assets that
the Authority holds are software licences.         See balances.
See also Capital Expenditure.
                                                   Revenue Expenditure
Gross Expenditure
                                                   This is expenditure on day-to-day running
The total cost of providing the Authority’s        costs and consists mainly of salaries and
services before taking into account any            general running expenses. Sometimes
income from specific government grants,            abbreviated simply to “revenue”.
fees and charges.
                                                   SSAPs
Intangible Fixed Assets
                                                   These     are    accounting     standards
Non-financial fixed assets that do not             developed by the Accounting Standards
have physical substance but are                    Board which set out the correct
identifiable and are controlled by the             accounting      treatment      for     an
authority.                                         organisation’s    financial transactions,
                                                   some of which have been superseded by
Net Cost of Service                                Financial Reporting Standards (FRS’s).

Gross Revenue Expenditure less service             CIPFA(Chartered Institute of Public
income such as fees and charges.                   Finance and Accountancy)

Operating Lease                                    The accounting body which provides
                                                   accounting guidance to the public sector.
A lease other than a finance lease                 The guidance provided by CIPFA is
                                                   defined as ‘proper practice’ and has
Operational Assets                                 statutory backing.

Fixed assets held and occupied, used or            Minimum Revenue Provision (MRP)
consumed by the Authority in the direct
delivery of those services for which it            The minimum amount of the authority’s
either has a statutory or discretionary            outstanding debt which must be repaid by
responsibility.                                    the revenue accounts in the year.


                                              19
  9. Core Financial Statements

  9.1 Income and Expenditure Account

  The Income and Expenditure Account summarises the resources that have been
  generated and consumed in providing services and managing the Authority during
  the last year. It includes all day-to-day expenses and related income on an accruals
  basis, as well as transactions measuring the value of fixed assets actually consumed
  and the real projected value of retirement benefits earned by employees in the year.

  Restated                                                         Gross      Gross        Net Notes
Expenditure                                                   Expenditure    Income Expenditure
    2008/9                                                       2009/10    2009/10    2009/10
      £000                                                          £000       £000       £000
              SERVICE EXPENDITURE
              Community Fire Safety
     4,658     Prevention and Education                            5,904       -629      5,275
     1,747     Statutory Inspection                                1,770        -12      1,758
          Fire Fighting and Rescue Operations
     1,970 Communications and Mobilising                           2,439       -231      2,208
    23,670 Operational Response                                   24,133       -299     23,834
       215 Securing Water Supplies                                   272                   272

        67 Fire Service Emergency Planning                            44                    44

              Corporate & Democratic Core
       216     Corporate Management                                  265                  265
       581     Democratic Representation & Management                567                  567


        73 Non Distributed Costs


    33,197 NET COST OF SERVICES                                   35,394     -1,171     34,223

         -2 (Profit) / loss on the disposal of fixed assets                                -17
       298 Interest payable and similar charges                                           353
      -166 Interest and investment income                                                  -32
    10,193 Pensions interest cost and expected return on                                10,828 10.5ii
           pensions assets
    -2,369 Gain in relation to Government grant payable to                              -2,445 11.2
           the Pension Fund on the Authority's behalf

    41,151 NET OPERATING EXPENDITURE                                                    42,910

    -17,153 Precepts                                                                   -18,100 10.12
     -1,866 General Government Grants                                                   -2,878
    -13,404 Non-Domestic Rates Redistribution                                          -12,468

     8,728 (SURPLUS) / DEFICIT FOR THE YEAR                                              9,464




                                                       20
9.2 Statement of Movement on the General Fund Balance

The Income and Expenditure Account shows the Authority’s actual financial
performance for the year, measured in terms of the resources consumed and
generated over the last 12 months. However, the Authority is required to raise
council tax on a different accounting basis, the main differences being:

       Capital investment is accounted for as it is financed, rather than when the
        fixed assets are consumed.
       Retirement benefits are charged as amounts become payable to pension
        funds and pensioners, rather than as future benefits are earned.

The General Fund Balance compares the Authority’s spending against the council
tax that it raised for the year, taking into account the use or reserves built up in the
past and contributions to reserves earmarked for future expenditure.

This reconciliation statement summarises the differences between the outturn on the
Income and Expenditure Account and the General Fund Balance.


   Restated                                                                              Notes
    2008/09                                                                    2009/10
       £000                                                                       £000

       8,728 Deficit for the year on the Income and Expenditure Account          9,464

              Net additional amount required by statute and non-statutory
       -9,079 proper practices to be debited or credited to the General Fund   -10,020   10.2
              Balance for the year

        -351 Increase in General Fund Balance for the year                        -556


        -500 General Fund Balance brought forward                                 -851


        -851 General Fund Balance carried forward                               -1,407



The comparatives for 2008/09 have been restated to account for the fact that
precepts are accounted for on an accruals basis (£21,000). There has also been an
adjustment to the comparatives relating to the backdated pension commutation
payments as described in section 10.5 ii (£244,000). There is no effect on the
General Fund Balance brought forward.




                                                  21
9.3 Statement of Recognised Gains and Losses

The Statement of Recognised Gains and Losses brings together all the gains and
losses of the Authority for the year and shows the aggregate increase in its net
worth. In addition to the surplus generated on the Income and Expenditure Account,
it includes gains and losses relating to the revaluation of fixed assets and re-
measurement of the net liability to cover the cost of retirement benefits.

   Restated
    2008/09                                                                     2009/10   Notes
       £000                                                                        £000
              (Surplus) / Deficit for the year on the Income and Expenditure
      8,728                                                                       9,464
              Account


       176 Surplus arising on revaluation of fixed assets                        -2,086   10.25


       -995 Actuarial (gains) / losses on pension fund assets and liabilities    67,727   10.5iii


      7,909 Total recognised losses / (gains) for the year                       75,105




                                                  22
9.4    Balance Sheet

      Restated
       2008/09                                          2009/10    Notes
          £000                                             £000

             FIXED ASSETS
          112 Intangible Assets                              54    10.13iv
       22,827 Land and Buildings                         24,749    10.13 i
        1,774 Vehicles, Plant and Equipment               1,413    10.13 i
             Non Operational Assets
          539 Investment Properties                         539    10.13iii
          284 Work in Progress                            1,566

          131 Long-term Investment
       25,667 TOTAL LONG TERM ASSETS                     28,321

              CURRENT ASSETS
           136 Stock and Work in Progress                   173
         2,878 Temporary Investments                      2,840
         1,261 Cash and Bank                              4,152
         3,194 Debtors                                      902    10.15
           762 Prepayments                                  901
         8,231 TOTAL CURRENT ASSETS                       8,968

                 LESS: CURRENT LIABLITILES
        -2,456    Creditors                               -2,499
        -1,001    Income in Advance                       -1,200
       30,441 TOTAL ASSETS LESS CURRENT LIABLITLIES      33,590

        -8,042 Long-term Borrowing                        -8,842   10.16i
          -282 Provisions                                   -357   10.21
          -396 Government Grants - Deferred                 -998   10.22
           -11 Unapplied Capital Contributions               -10   10.23
      -157,820 Pensions Liability                       -234,598   10.5iii
      -136,110 TOTAL ASSETS LESS LIABLITIES             -211,215

                 FINANCED BY:
           437     Revaluation Reserve                     2,522   10.25
        17,391     Capital Adjustment Account             16,374   10.26
             -     Usable Capital Receipts                     7   10.27
      -157,820     Pensions Reserve                     -234,598   10.5iii
           -18     Collection Fund Adjustment Account        -65   10.28
         3,049     Specific Reserves                       3,138   10.30
           851     General Fund Balance                    1,407
      -136,110 NET WORTH                                -211,215




                                                  23
9.5 Cash Flow Statement



     2008/09                                                                   2009/10 Notes
        £000                                                                      £000
            REVENUE ACTIVITIES
             Cash Outflows
      27,682 Cash paid to and on behalf of employees                           28,549
       7,402 Other operating costs                                              6,693
             Cash Inflows
     -32,444 Precepts / General Government Grants                              -33,494
      -2,274 Specific Revenue Grants                                            -4,448 10.31 v
        -770 Other revenue cash income                                            -839
        -404 Net Cash Outflow / (Inflow) From Revenue Activities                -3,539 10.31 i
            RETURNS ON INVESTMENTS AND SERVICING OF FINANCE
             Cash Outflows
         298 Interest paid                                                        353
             Cash Inflows
        -102 Interest received                                                    -80
        196 Net Cash Outflow from Servicing of Finance                            273
            CAPITAL ACTIVITIES
             Cash Outflows
       1,667 Purchase of fixed assets                                           1,997
             Cash Inflows
          -2 Sale of Assets                                                       -19
          -5 Capital Grants Received                                             -684
       1,660 Net Cash Outflow from Capital Activities                           1,294
            ACQUISITIONS AND DISPOSALS
             Cash Inflows
           - Disposal of FRAML                                                   -129
           0 Net Cash Outflow from Acquisitions and Disposals                    -129
       1,452 Net Cash Outflow / (Inflow) before Financing                       -2,101
            MANAGEMENT OF LIQUID RESOURCES
             RESOURCES
             Cash Outflows
          72 Short term deposits made                                              10
             Cash Inflows
        -584 Repayments of amounts borrowed
        -512 Net Cash Outflow / (Inflow) from Management of Liquid Resources       10
            FINANCING
         403 Cash Outflows
              Repayment of amounts borrowed
             Cash Inflows
      -1,750 New loans raised                                                    -800
      -1,347 Net Cash Outflow / (Inflow) from Financing                          -800
        -407 NET (INCREASE) / DECREASE IN CASH                                  -2,891



                                                 24
10. Notes to Core Financial Statements

10.1 Prior-period Adjustments due to Accounting Policy Changes


i      Change in Accounting Policy for Precepts

From 1 April 2009 precepts included in the Income and Expenditure Account must
be accrued income for the year. This contrasts with previous accounting treatments
where precepts included in the Income and Expenditure Account were amounts paid
from the Collection Funds of the six Berkshire Unitary Authorities to the Fire
Authority. The Income and Expenditure Account comparatives for 2008/09 have
been re-stated to reflect this.

The Statement of Movement on the General Fund Balance has been re-stated for
2008/09, the change in the Income and Expenditure Account surplus / deficit for the
year being exactly matched by the inclusion of an additional reconciling item in
respect of the transfer to or from the Collection Fund Adjustment Account.

In the re-stated Balance Sheet for 2008/09, the Authority has to recognise its share
of Council Tax debtor and creditor balances and impairment allowance for doubtful
debts. The Authority also has to recognise a debtor in its re-stated Balance Sheet
for its attributable share of net cash collected by the billing authorities but not paid
over to it by the Balance Sheet date or a creditor for cash received by the Authority
in advance of the billing authority receiving the cash.




                                           25
10.2 Reconciling Items for General Fund Balance
   Restated
    2008/09                                                                           2009/10
       £000                                                                              £000
              Amounts included in the Income and Expenditure Account but
              required by statute to be excluded when determining the movement on
              the General Fund Balance for the year
        -58 Amortisation of intangible fixed assets                                       -58
     -1,214 Depreciation and impairment of fixed assets                                -1,668
            Reversal of Profit / Loss on Disposal                                          18
        -21 Accrued Collection Fund Income                                                -47
         73 Government grants deferred amortisation                                        83
    -15,045 Net charges made for retirement benefits in accordance with FRS 17        -15,060
            Gain in relation to Government grant payable to the Pension Fund on the
      2,369                                                                             2,445
            Authority's behalf
    -13,896                                                                           -14,287

              Amounts not included in the Income and Expenditure Account but
              required to be included by statute when determing the movement on
              the General Fund Balance for the year

        260 Minimum revenue provision for capital financing                              316
        361 Capital expenditure charged in-year to the General Fund Balance              299
            Employer's contributions payable to the Pensions Account and retirement
      3,511                                                                             3,563
            benefits payable direct to pensioners
      4,132                                                                             4,178

           Transfers to or from the General Fund Balance that are required to be
           taken into account when determining the movement on the General
           Fund Balance for the year
       685 Net transfer to or from earmarked reserves                                     89
       685                                                                                89
              Net additional amount required to be credited to the General Fund
     -9,079                                                                           -10,020
              Balance for the year

The figures for 2008/09 have been restated in line with the changed SORP guidance
to account for accrued collection fund income as well as for the pension adjustment
as described in section 11.2.




                                               26
10.3 Publicity

Section 5 of the Local Government Act 1986 requires the Authority to keep a
separate account of its expenditure on publicity.
                                                         2008/09   2009/10
                                                            £000      £000
              Staff Recruitment Advertising                   28        44
              Community Fire Safety                          55        34
              Other Publicity                                15         2

                                                             98        80


10.4 Audit Costs

Fees relating to external audit and inspection are detailed below. The fees cover a
financial statements audit, a use of resources audit and a whole of government
accounts audit.

                                               2008/09   2009/10
                                                  £000      £000
                 Audit Fees                        81         82



10.5 Pensions Costs

i     Participation in Pension Schemes

As part of the terms and conditions of employment of its officers and other
employees, the Authority offers retirement benefits. Although these benefits will not
actually be payable until employees retire, the Authority has a commitment to make
the payments that needs to be disclosed at the time that employees earn their future
entitlement.

The Authority participates in three pension schemes:

The Royal County of Berkshire Pension Fund is for non-uniformed employees and is
administered by the Royal Borough of Windsor and Maidenhead under the
regulations governing the Local Government Pension Scheme. This is a funded
scheme, meaning that the Authority and employees pay contributions into the fund,
calculated at a level intended to balance the pension liabilities with investment
assets.

In addition to the 1992 Firefighters Scheme (now closed to new recruits) a new
scheme was set up in April 2006. The new scheme has different contribution rates
for employees and employers. Both firefighter pension schemes are unfunded,
meaning that no investment assets are built up to meet the pension liabilities, and
cash has to be generated to meet actual pension payments as they eventually fall
due.


                                              27
ii     Transactions Relating to Retirement Benefits

The costs of retirement benefits are recognised in the Net Cost of Services when
they are earned by employees, rather than when the benefits are eventually paid as
pensions. However, the charge we are required to make against council tax is based
on the cash payable in the year, so the real cost of retirement benefits is reversed
out in the Statement of Movement in the General Fund Balance. The following
transactions have been made in the Income and Expenditure Account and
Statement of Movement in the General Fund Balance during the year:

                                                         Local Government
                                                                                  Fire-fighters Scheme
                                                          Pension Scheme


                                                         2008/09     2009/10       2008/09      2009/10
                                                            £000        £000          £000         £000
Net Cost of Services:
- current service cost                                       780            628       4,000        3,600
- past service cost                                           63              -           -            -
- impact of settlements and curtailments                      10              -           -            -
Net Operating Expenditure:
- interest cost                                              853         835         10,100      10,500
- expected return on assets in the scheme                   -760        -507
Net Charge to Income and Expenditure Account                 946            956      14,100      14,100
Statement of Movement in the General Fund
Balance
Reversal of net charges made for retirement
                                                            -946        -956        -14,100      -14,100
benefits in accordance with FRS 17


Actual Amount Charged for Pension in the Year:

- employer’s contributions payable to scheme                 657            676
- retirement benefits payable to pensioners                                           5,761        5,845
- net transfers                                                                        -294         -142
Backdated commutation government grant                                                 -244         -371
- government grant payable to the Pension Fund on
                                                                                     -2,369       -2,445
behalf of the Authority
                                                             657            676       2,854        2,887


In addition to the recognised gains and losses included in the Income and
Expenditure Account, actuarial losses of £67.7 million (£994,000 gains in 2008/09)
were included in the Statement of Total Recognised Gains and Losses. The
cumulative actuarial gains / (losses) for all schemes recognised in the Statement of
Total Recognised Gains and Losses amount to £71.6 million.




                                                    28
iii       Assets and Liabilities in Relation to Retirement Benefits

Reconciliation of the present value of the scheme liabilities is shown below.
                                            Local Government Pension     Fire-fighters Pension Schemes
                                                    Scheme
                                                                              Restated
                                                   2008/09     2009/10         2008/09        2009/10
                                                     £000        £000            £000           £000
1 April                                             12,541      12,183         147,299        153,404
Service Cost                                          782         632            4,000          3,600
Interest Cost                                         854         837           10,100         10,500
Actuarial Losses / (Gains)                          -2,141       7,670           -2,771        62,215
Losses / (Gains) on Curtailments                       10
Benefits Paid                                         -180        -245           -6,974         -6,941
Past Service Cost                                      63
Contributions by Scheme Participants                  255         269             1456           1467
Net Transfers                                                                      294            142
Unfunded Pension Payments                               -1          -1
31 March                                            12,183      21,345         153,404        224,387



Following discussions with Hymans Robertson who produced the actuarial valuation
of the Firefighter Pension Scheme, it has become apparent that backdated
commutation payments to retired firefighters do not reduce the firefighter pension
fund deficit. The effect of this change is that the firefighter pension scheme deficit at
the end of 2008/09 has been revised to £153.4 million, an increase of £244,000.

Reconciliation of the fair value of the scheme assets:

                             Local Government Pension Scheme
                                                                2008/09           2009/10
                                                                   £000              £000
1 April                                                          10,163             7,766
Expected return on Scheme assets                                    760               509
Actuarial (losses) gains                                         -3,917             2,158
Contributions by employer                                           658               678
Contributions by Scheme participants                                254               269
Benefits paid                                                      -181              -246
31 March                                                          7,737            11,134


The expected return on scheme assets is determined by considering the expected
returns available on the assets underlying the current investment policy. Expected
yields on fixed interest investments are based on gross redemption yields as at the



                                              29
Balance Sheet date. Expected returns on equity investments reflect long-term real
rates of return experienced in the respective markets.
The actual return on scheme assets in the year was £2,656,000 (2008/09 -
£3,157,000)


                                            2005/06   2006/07    2007/08    2008/09    2009/10
                                               £000      £000       £000       £000       £000
Present Value of Liabilities
 - Local Government Pension Scheme          -12,607    -13,024    -12,511    -12,150    -21,345
 - Firefighter Pension Scheme              -175,700   -173,900   -147,299   -153,404   -224,387
Fair Value of Assets in Local Government
                                              8,975    10,113     10,163      7,737     11,134
Pension Scheme

Surplus / (deficit)
 - Local Government Pension Scheme           -3,632     -2,911     -2,348     -4,413    -10,211
 - Firefighter Pension Scheme              -175,700   -173,900   -147,299   -153,404   -224,387
 - Total                                   -179,332   -176,811   -149,647   -157,817   -234,598



The liabilities show the underlying commitments that the Authority has in the long run
to pay retirement benefits. The total liability of £234.6 million has a substantial impact
on the net worth of the Authority as recorded in the balance sheet, resulting in a
negative overall balance of £211.2 million. However, statutory arrangements for
funding the deficit mean that the financial position of the Authority remains healthy:

           -   the deficit on the Local Government Scheme will be made good by
               increased contributions over the remaining working life of employees, as
               assessed by the scheme actuary;
           -   finance is only required to be raised to cover firefighters’ pensions when
               the pensions are actually paid.

Contributions expected to be made to the Local Government Pension Scheme by the
Authority in the year to 31 March 2011 amount to £717,000. Contributions to the
Firefighters pension schemes are expected to be £2.9 million.




                                              30
 iv        Basis for Estimating Assets and Liabilities

 Liabilities have been assessed on an actuarial basis using the projected unit method,
 an estimate of the pensions that will be payable in future years dependent on
 assumptions about mortality rates, salary levels, etc. These have been assessed by
 Barnett Waddingham and Hymans Robertson, independent firms of actuaries.

 The main assumptions used in their calculations are shown in the table below.
                                                    Local Government          Firefighters
                                                     Pension Scheme         Pension Scheme
                                                        2008/09   2009/10   2008/09    2009/10
Long-term expected rate of return on assets in
the scheme:
Equities                                                 7.40%     7.90%
Gilts                                                    4.00%     4.50%
Bonds                                                    6.50%     5.50%
Property                                                 5.50%     6.00%
Cash                                                     3.00%     3.00%
Alternative Assets                                                 5.00%
Mortality Assumptions:
Longevity (at age 65 for LGPS members and at
age 60 for Firefighter Scheme members) for
current pensioners:
- Men                                                     21.27     21.27     27.60      27.60
- Women                                                   24.33     24.33     31.00      31.00
Longevity (at age 65 for LGPS members and at
age 60 for Firefighter Scheme members) for
current pensioners:
- Men                                                     22.21     22.21      29.2          29.2
- Women                                                   25.26     25.26      32.7          32.7


Rate of Inflation                                        3.00%     3.90%     3.10%      3.80%
Rate of increase in salaries                             4.50%     5.40%     4.60%      5.30%
Rate of increase in pensions                             3.00%     3.90%     3.10%      3.80%
Rate for discounting liabilities                         6.70%     5.50%     6.90%      5.50%
Take-up of option to convert annual pension into
                                                        50.00%              90.00%
retirement lump sum




                                                   31
The Firefighters Pension Schemes have no assets to cover their liabilities. The Local
Government Pension Scheme’s assets consist of the following categories, by
proportion of the total assets held:


                            Proportion of Assets held at   Proportion of Assets held
                                         31 March 2009             at 31 March 2010

       Equities                                  62.1%                       44.0%
       Gilts                                      9.5%
       Other Bonds                               14.6%                       29.0%
       Property                                  10.8%                        7.0%
       Cash                                       3.0%                        2.0%
       Alternative Assets                                                    18.0%
                                                100.0%                      100.0%


There is no provision under the LGPS to split the total assets of the Fund to each
participating body. Therefore, for the basis of this disclosure, the above assets as a
whole are allocated to participating bodies on a consistent and reasonable basis.




                                                32
v      History of Experience Gains and Losses

The actuarial gains identified as movements on the Pensions Reserve in 2009/10
can be analysed into the following categories, measured as a percentage of assets
or liabilities at 31 March 2010.

                                     2005/06         2006/07          2007/08     2008/09   2009/10
Local Government Scheme
                                           %               %                %          %         %
Differences between     the
expected and actual returns             17.98            0.08           -15.56     -50.63     19.38
on assets

Experience gains / (losses) on
                                        -0.12               -             1.52      -0.69      0.01
liabilities


Changes in the assumptions
underlying the present value of        -24.37            6.83            15.91      18.30    -35.95
the scheme's liabilities


                                      2005/06         2006/07          2007/08    2008/09   2009/10
Firefighters Scheme                  Restated        Restated         Restated
                                           %               %                %          %         %

Experience gains / (losses) on
                                         0.51            0.92             0.41      -2.35      2.58
liabilities




10.6 Leases

The Authority has no finance leases but made rental payments on operating leases
as shown below.


                                                           2008/09      2009/10
                                                             £000         £000
                      Photocopiers                              15           15
                      Vehicles                                  253         253
                      Furniture                                 20           11
                      Total                                     288         279




                                                33
10.7 Operating Lease Commitments

At 31 March 2010, the Authority was committed to making payments under operating
leases of £602,000 as set out below.



                                                          Vehicles, Plant &
                                                                Equipment

                                                                     £000
        Leases expiring in 2010/11                                      48
        Leases expiring between 2011/12 and 2014/15                    441
        Leases expiring after 2014/15                                  113
        Total                                                          602




                                            34
10.8 Emoluments

Starting at £50,000, officers received emoluments in the following ranges:

                                              Employees        Employees
                                               2008/09          2009/10
         50,000 - 54,999                         11               15
         55,000 - 59,999                         13               11
         60,000 - 64,999                         2                 3
         65,000 - 69,999                         2                 4
         70,000 - 74,999
         75,000 - 79,999
         80,000 - 84,999
         85,000 - 89,999                         2                 1
         90,000 - 94,999                         1                 1
         95,000 - 99,999                                           1
         100,000 - 104,999
         105,000 - 109,999
         110,000 - 114,999                                         1
         115,000 - 119,999
         120,000 - 124,999
         125,000 - 129,999                       1
         130,000 - 134,999                       1
         135,000 - 139,999                                         1

Emoluments refer to all amounts paid to, and receivable by, an employee (excluding
pension contributions) and include sums due by way of expenses allowances, and
the estimated money value of any other benefits received by an employee otherwise
than in cash.




                                         35
Senior employees whose salary in 2008/09 (not total remuneration) was above
£50,000 are shown below by job title in the table below.

                                          Remuneration 2008/09
                                          Salary                      Total                   Total
                                       including    Benefit in Remuneration   Employer Remuneration
                                       fees and    Kind / Car     excluding     Pension   including
                                    allowances     Allowance      pensions Contributions  pensions
Chief Fire Officer                     122,961           7,841    130,802      26,191      156,993
Deputy Chief Fire Officer              121,375           7,841    129,216      25,853      155,069
Assistant Chief Fire Officer            86,911           7,841     94,752      18,512      113,264
Treasurer                               82,101           7,841     89,942      13,107      103,049
Director Human Resources                77,110           7,841     84,951      13,109       98,060
Area Manager                            65,800           2,190     67,990      13,978       81,968
Area Manager                            65,018           1,133     66,151      13,849       80,000
Area Manager                            60,029           2,190     62,219      12,786       75,005
Information Systems Manager             59,189           2,454     61,643      10,062       71,705
Group Manager                           57,405           1,095     58,500      11,617       70,117
Group Manager                           56,795           1,095     57,890      11,547       69,437
Group Manager                           55,884           1,095     56,979      11,853       68,832
Group Manager                           55,572           2,267     57,839      11,837       69,676
Group Manager                           55,331           2,267     57,598      11,786       69,384
Area Manager                            54,986           2,267     57,253      11,712       68,965
Group Manager                           54,714           1,095     55,809      10,825       66,634
Group Manager                           54,169           1,095     55,264      11,365       66,629
Group Manager                           53,624           2,619     56,243      11,422       67,665
Group Manager                           53,280           2,267     55,547      10,825       66,372
Group Manager                           52,495           1,095     53,590      10,960       64,550
Group Manager                           51,985           2,190     54,175      10,988       65,163
Group Manager                           50,963           1,095     52,058      10,770       62,828
Contract and Monitoring Officer *       35,600           5,227     40,827       6,052       46,879
Total                               1,483,297           73,941   1,557,238    301,006     1,858,244



* The Contract and Monitoring Officer post was filled part way through the year. The
post-holder works four days per week and the wholetime equivalent salary is
£66,740.




                                                   36
Senior employees whose salary in 2009/10 (not total remuneration) was above
£50,000 are shown below by job title in the table below.

                                       Remuneration 2009/10

                                                                 Total                      Total
                                        Salary            remuneration              remuneration
                                     including Benefit in    excluding   Employer      including
                                     fees and Kind (car       pension      pension       pension
                                  allowances allowance) contributions contributions contributions
Chief Fire Officer                  128,069       8,017       136,086       27,279       163,365
Deputy Chief Fire Officer           103,999       8,017       112,016       22,152       134,168
Assistant Chief Fire Officer         90,882       8,017        98,899       18,980       117,879
Treasurer                            84,185       8,017        92,202       13,583       105,785
Director Human Resources             78,655       8,017        86,672       13,371       100,043
Area Manager                         66,344       2,190        68,534       13,743        82,277
Area Manager                         66,222       2,267        68,489       13,880        82,369
Area Manager                         64,521       2,267        66,788       13,743        80,531
IT Manager                           60,817       2,535        63,352       10,339        73,691
Area Manager                         59,919       1,170        61,089       12,528        73,617
Contract & Monitoring Officer *      59,315       8,017        67,332       10,083        77,415
Group Manager                        58,466       2,190        60,656       11,968        72,624
Group Manager                        57,050       1,170        58,220       11,934        70,154
Group Manager                        56,625          683       57,308       11,968        69,276
Group Manager                        56,201       2,190        58,391       11,247        69,638
Group Manager                        56,186       2,267        58,453       11,968        70,421
Group Manager                        56,034       1,177        57,211       11,874        69,085
Group Manager                        55,113       1,170        56,283       11,131        67,414
Group Manager                        54,523       2,190        56,713       10,992        67,705
Group Manager                        54,316       1,170        55,486       11,129        66,615
Group Manager                        53,959       1,170        55,129       10,949        66,078
Group Manager                        53,355       2,318        55,673       10,672        66,345
Group Manager                        53,107       2,300        55,407       10,992        66,399
Group Manager                        52,703       1,170        53,873       11,095        64,968
Group Manager                        52,414       1,170        53,584       10,914        64,498
Group Manager                        52,250       2,107        54,357       11,129        65,486
Total                             1,685,230      82,973     1,768,203      339,643     2,107,846



* The Clerk & Monitoring Officer works four days per week and the wholetime
equivalent salary is £74,150.




                                                37
10.9 Discontinued Operations

None.


10.10 Members Expenses

The amount paid out as Members’ allowances during 2009/10 was £60,000.


10.11 Related Parties

The Authority is required to disclose material transactions with related parties –
bodies or individuals that have the potential to control or influence the Authority, or to
be controlled or influenced by the Authority. Disclosure of these transactions allows
readers to assess the extent to which the Authority might have been constrained in
its ability to operate independently, or might have secured the ability to limit another
party’s ability to bargain freely with the Authority.

Central Government has effective control over the general operations of               the
Authority – it is responsible for providing the statutory framework within which      the
Authority operates and prescribes the terms of many of the transactions that          the
Authority has with other parties. It also provided direct financial support to        the
Authority in 2009/10.

Other Public Bodies. The Authority had entered into the original local area
agreements in all six unitary authorities of Berkshire. It has subsequently entered
into the second generation local area agreements 2008/09 – 2010/11, all of which
will increase capacity by further complementing the local public service agreement
process and assisting with sustainability. The Authority has a statutory duty for each
of the six crime and disorder reduction partnerships of each of the unitary authorities
of Berkshire.

Assisted organisations. The Authority does not provide any significant financial
assistance to outside bodies that are outside of its normal contractual arrangements.

Members of the Authority have direct control over the Authority’s financial and
operational policies. However any contracts entered into are in full compliance with
the Authority’s constitution and any decisions are made with proper consideration of
declarations of interest. Details of any material interests are recorded in the Register
of Members’ Interests, which is open to public inspection. A Member of the Fire
Authority is an elected member of South East Fire & Rescue Service Control Centre
Ltd. Another Member has been appointed as chairman of Royal Berkshire Fire &
Rescue (Training) Ltd. The relationship between RBFRTL and the Authority is
described below under the heading Companies and Joint Ventures.

Senior Officers of the Authority have control over the day-to-day management of the
Authority and all Senior Officers have been asked to declare any related party
transactions. The Treasurer is a Director of the Fire and Rescue Authorities’ Mutual
Limited (FRAML). The Director of Human Resources and the Senior Accountant are


                                            38
Directors of Royal Berkshire Fire & Rescue (Training) Ltd and the Clerk and
Monitoring Officer is the Company Secretary.


Companies and Joint Ventures.
FRAML is now in the process of being wound up, and the Authority’s capital
contribution was returned in January 2010.
Royal Berkshire Fire & Rescue (Training) Ltd is a fully owned subsidiary of the Fire
Authority. It was set up to provide fire safety courses to commercial organisations.
All profits from the company are returned to the Fire Authority.

South East Fire & Rescue Service Control Centre Ltd will assume the fire control
room function and is a regional company, part-owned by the Authority.


10.12 Funding

The Fire Authority’s net revenue expenditure is funded by Government grants and
local authority precepts.

                                              Restated
                                               2008/09     2009/10
                                                  £000        £000



            RSG / NNDR                            15,270    15,346

            Contributions / Precepts

            Bracknell Forest Council               2,258     2,388

            Reading Council                        2,717     2,877

            Slough Council                         2,134     2,249

            West Berkshire Council                 3,264     3,436

            Windsor and Maidenhead Council         3,380     3,570

            Wokingham Council                      3,400     3,580

            Total                                 32,423    33,446



From 1 April 2009 precepts included in the Income and Expenditure Account must
be accrued income for the year. This contrasts with previous accounting treatments
where precepts included in the Income and Expenditure Account were amounts paid
from the Collection Funds of the six Berkshire Unitary Authorities to the Fire
Authority. The Income and Expenditure Account comparatives for 2008/09 have
been re-stated to reflect this.



                                             39
10.13 Net Fixed Assets

i         Movement of Tangible Fixed Assets 2009/10


                                                   Land and    Vehicles, Plant Non-Operational
                                                                                                    Total
                                                   Buildings   and Equipment           Assets
                                                       £000              £000              £000     £000

     Valuation as at 31.3.05                         22,545
     Additions since valuation                        1,876
     Gross Book Value as at 31.3.09                  24,421             6,678              1,002   32,101
     Accumulated depreciation                        -1,594            -4,903                      -6,497
      Revaluation / Impairment                                                              -179     -179
     Net Book Value as at 31.3.09                    22,827              1,775              823    25,425

     Movements in year
      Additions                                         677                277             1,471    2,425
      Disposals/Transfers                                65                124              -189        0
      Depreciation for Year                            -439               -763                     -1,202
      Revaluation / Impairment                        1,619                                         1,619

     Net Book Value as at 31.3.10                    24,749              1,413             2,105   28,267

     Gross Book Value as at 31.03.10                 25,163             7,079              2,105   34,347
     Accumulated Depreciation / Impairment             -414            -5,666                      -6,080
     Net Book Value as at 31.03.10                   24,749              1,413             2,105   28,267


Land and buildings have been valued by Babcock at 31 March 2010.

Non-operational assets comprise water tenders and specialist vehicles that are
under construction as well as three investment properties, valued at £539,000.

Assets valued at less than £10,000 are normally excluded from the balance sheet.
The only exceptions are for vehicles and major IT or equipment asset replacement
programmes, funded through the capital programme.


ii        Statement of Physical Assets

As at 31 March 2010 the Fire Authority owned the following assets:


            Buildings                                   Vehicles

            Fire Stations                    19         Water Tenders                         33
            Headquarters Offices             1          Specialist Fire Support Vehicles      17
            Training Centre                  1          Vans and Minibuses                    55
            Investment Properties            3          Other Vehicles                        17



                                              40
and leased the following assets:


         Vehicles

         Water Tenders                      11
         Specialist Fire Support Vehicles   3
         Boat                               1



iii   Fixed Asset Valuation

The freehold and leasehold properties held by the Royal Berkshire Fire Authority
were inspected between March and April 2010, with a valuation date of 31 March
2010. The valuations were undertaken by Mark Deacon MRICS and Mr Martin Fell
MRICS under the direction of Stephen Ashby FRICS. The Instructing Officer was Mr
Andrew Vallance CPFA, the Authority’s Treasurer. The valuations were undertaken
on the under-mentioned bases in accordance with the Statements of Asset Valuation
Practice and Guidance Notes of the Royal Institution of Chartered Surveyors (RICS).
All the properties were regarded by the Authority as operational.

The sources of information and the assumptions made in producing the various
valuations are set out in the Valuation Certificate below:

The valuations are on existing use value (EUV). Where the properties are
specialised properties, such that it is not possible to form a view of the EUV by
reference to normal market information, the basis of the method of valuation as
stated in the RICS Appraisal and Valuation Standards (edition 5) is the Depreciated
Replacement Cost (DRC), subject to the prospect and viability of the continuance of
the occupation and use.

DRC is based on an estimate of the Market Value for the existing use of the land,
plus the current gross replacement (reproduction) costs of the improvements, less
allowances for physical deterioration and all relevant forms of obsolescence and
optimisation, subject to the prospect and viability of the continued occupation and
use (RICS Appraisal and Valuation Standards, edition 5).


The total value of the properties is £24,749,000.

Full details are set out in the Report and Valuation prepared for the Royal Berkshire
Fire Authority.




Mark Deacon, MRICS
26 May 2010




                                             41
The three investment properties have been valued as at 31 March 2010 by Mr Mark
Deacon, MRICS, in accordance with the RICS Red Book.

Based on the assessment of market values and the assessed age of the tenants, the
total value of the properties is £539,000.

Full details are set out in the Report and Valuation prepared for the Royal Berkshire
Fire Authority.


iv    Movement of Intangible Fixed Assets 2009/10

There were no new additions to intangible assets during 2009/10.


                                               Software Licences
                                                            £000
          Original Cost                                     224
          Amortisations to 1 April 2009                    -112
          Balance at 1 April 2009                           112
          Expenditure in Year                                  -
          Written off to Revenue                            -58
          Balance at 31 March 2010                           54




                                          42
10.14 Capital Expenditure and Financing

The table below shows the effect of capital expenditure on the Authority’s capital
financing requirement.



                                                              2008/09       2009/10
                                                                £'000         £'000
Opening Capital Financing Requirement                             6,505          7,442
Capital Expenditure
Intangible Assets                                                   81               -
Operational Assets                                                1,006           954
Non-operational Assets                                             490           1,471
Sources of Finance
Government Grants and other Contributions                           -19          -683
Capital Receipts                                                      -          -142
Revenue Funding including MRP                                     -621           -615
Closing Capital Financing Requirement                             7,442          8,427

Explanation of Movements in the Year
Increase in the underlying need to borrow (supported by
                                                                   782            874
Government financial assistance)
Increase in the underlying need to borrow (unsupported by
                                                                   155            111
Government financial assistance)
Increase / (Decrease) in Capital Financing Requirement             937            985



The Fire Authority’s formally approved Capital Programme for future years is shown
below. However it is normal practice for the future Capital Programme to be
reviewed as part of the annual budget process.

                                         2010/11     2011/12        2012/13
                                            £000        £000           £000
  Vehicles                                   496            692           1771
  Buildings                                 1271            579           352
  IT                                          70              -              -
  Equipment                                   36            142            36
                                            1,873        1,413        2,159



Although the Authority has approved capital expenditure as shown in the above
table, it has not entered into any significant long-term contracts for capital
investment.


                                                43
10.15 Debtors

A breakdown of debtors is given in the table below.

                                                      2008/09         2009/10
                                                         £000            £000
    VAT Repayment                                       1,404             175
    Government grants owed                               892                -
    Collection Fund Debtors                              756              599
    Trade Debtors                                        146              128
    Bad Debt Provision                                       -4             -
    Total                                               3,194             902




10.16 Disclosure of Financial Assets and Liabilities

i       Financial Instruments Balances

The borrowings and investments disclosed in the Balance Sheet are made up of the
following categories of financial instruments.

                                                                  Long Term                  Current
                                                              31.03.09    31.03.10      31.03.09     31.03.10
                                                                  £000        £000          £000         £000

Financial liabilities at amortised cost                           8,042         8,842          -            -
Financial liabilities at fair value through the I&E                   -             -          -            -
TOTAL BORROWINGS                                                  8,042         8,842          0           0

Loans and receivables                                                -              -     2,878        2,840
Available-for-sale financial assets                                  -              -         -            -
Financial assets at fair value through the I&E                       -              -         -            -
Unquoted equity at cost in FRAML                                   128              -         -            -
TOTAL INVESTMENTS                                                  128             0      2,878        2,840

The Authority’s three investment properties have not been shown in the table above.




                                                        44
ii    Financial Instruments Gains / Losses

The gains and losses recognised in the Income and Expenditure Account and
STRGL in relation to financial instruments are shown for 2009/10 in the table below.

                                Financial
     2009/10                    Liabilities                         Financial Assets

                                Liabilities
                                measured
                                    at                                     Available-       Fair value
                                amortised                                   for-sale       through the
                                   cost           Loans and receivables      assets            I&E       Total
                                  £000s                  £000s             £000s (1)        £000s (2)    £000s
     Interest expense                  -353                           -                -             -      -353

     Losses on de-recognition                 -                       -                -             -            -

     Impairment losses                        -                       -                -             -            -

     Interest payable and
                                       -353                           -                -             -     -353
     similar charges



     Interest income                          -                     16                 -             -           16

     Gains on derecognition                   -                       -                -             -            -

     Interest and investment
                                              -                     16                 -             -           16
     income



     Gains on revaluation                     -                       -                -             -

     Losses on revaluation                    -                       -                -             -
     Amounts recycled to the
     I+E Account after                        -                       -                -             -
     impairment


     Surplus arising on
     revaluation of financial                 -                       -                -             -
     assets



     Net gain/(loss) for the
                                       -353                         16                 -             -
     year




                                                        45
The gains and losses recognised in the Income and Expenditure Account and
STRGL in relation to financial instruments are shown for 2008/09 in the table below.


                                Financial
     2008/09                    Liabilities                         Financial Assets

                                Liabilities
                                measured
                                    at                                     Available-       Fair value
                                amortised                                   for-sale       through the
                                   cost           Loans and receivables      assets            I&E            Total
                                  £000s                  £000s             £000s (1)        £000s (2)         £000s
     Interest expense                  -298                           -                -             -           -298

     Losses on de-recognition                 -                       -                -             -                -

     Impairment losses                        -                       -                -             -                -

     Interest payable and
                                       -298                           -                -             -           -298
     similar charges



     Interest income                          -                    125                 -             -            125

     Gains on derecognition                   -                       -                -             -                -

     Interest and investment
                                              -                    125                 -             -            125
     income



     Gains on revaluation                     -                       -                -             -

     Losses on revaluation                    -                       -                -             -

     Amounts recycled to the
     I+E Account after                        -                       -                -             -
     impairment


     Surplus arising on
     revaluation of financial                 -                       -                -             -
     assets



     Net gain/(loss) for the
                                       -298                        125                 -             -
     year




A reconciliation of the net gain on loans and receivables to investment income as
shown in the Income and Expenditure Account is given below.

                                                                             2008/09             2009/10
                                                                                £000                £000
     Financial instruments gain                                                  125                  16
     Rental income from investment properties                                     11                  11
     Current account interest                                                     30                   5
     Investment income received in I&E                                             166                   32




                                                        46
iii       Fair value of Assets and Liabilities carried at Amortised Cost

Financial liabilities and financial assets represented by loans and receivables are
carried on the balance sheet at amortised cost. Their fair value can be assessed by
calculating the present value of the cash flows that take place over the remaining life
of the instruments, using the following assumptions:
         For loans from the PWLB and other loans payable, premature repayment
          rates from the PWLB have been applied to provide the fair value under PWLB
          debt redemption procedures;
         For loans receivable prevailing benchmark market rates have been used to
          provide the fair value;
         No early repayment or impairment is recognised;
         Where an instrument has a maturity of less than 12 months or is a trade or
          other receivable the fair value is taken to be the principal outstanding or the
          billed amount;
         The fair value of trade and other receivables is taken to be the invoiced or
          billed amount.
The fair values calculated are as follows:


                                        31 March 2009 Restated      31 March 2010
                                           Carrying                Carrying
                                                      Fair value              Fair value
                                            amount                  amount

PWLB debt                                    8,042        8,758      8,842        9,033
Trade creditors                              1,007        1,007      1,149        1,149
Total Financial Liabilities                  9,049        9,765      9,991      10,182


Money Market Loans less than one year        2,878        2,878      2,840        2,840
Trade debtors                                  146          146        128          128
Total loans and receivables                  3,024        3,024      2,968        2,968


Government creditors and debtors have been removed from the 2009 comparatives
as per the SORP guidance.

The fair values for loans and receivables have been determined by reference to the
Public Works Loans Board (PWLB) redemption rules which provide a good
approximation for the fair value of a financial instrument, and includes accrued
interest. The comparator market rates prevailing have been taken from indicative
investment rates at each balance sheet date. In practice rates will be determined by
the size of the transaction and the counterparty, but it is impractical to use these
figures, and the difference is likely to be immaterial.




                                             47
10.17 Nature and Extent of Risk Arising from Financial Instruments

The Authority’s activities expose it to a variety of financial risks. The key risks are:

       Credit risk – the possibility that other parties might fail to pay amounts due to
        the Authority;

       Liquidity risk – the possibility that the Authority might not have funds available
        to meet its commitments to make payments;

       Re-financing risk – the possibility that the Authority might be requiring to
        renew a financial instrument on maturity at disadvantageous interest rates or
        terms.

       Market risk - the possibility that financial loss might arise for the Authority as a
        result of changes in such measures as interest rates movements.



i       Overall Procedures for Managing Risk
The Authority’s overall risk management procedures focus on the unpredictability of
financial markets, and implementing restrictions to minimise these risks. The
procedures for risk management are set out through a legal framework in the Local
Government Act 2003 and the associated regulations. These require the Authority to
comply with the CIPFA Prudential Code, the CIPFA Treasury Management in the
Public Services Code of Practice and Investment Guidance issued through the Act.
Overall these procedures require the Authority to manage risk in the following ways:

       by formally adopting the requirements of the Code of Practice;

       by the adoption of a Treasury Policy Statement and treasury management
        clauses within its standing orders;

       by approving annually in advance prudential and treasury indicators for the
        following three years limiting:

           o The Authority’s overall borrowing;

           o Its maximum and minimum exposures to fixed and variable rates;

           o Its maximum and minimum exposures regarding the maturity structure
             of its debt;

           o Its maximum annual exposure to investments maturing beyond a year.

       by approving an investment strategy for the forthcoming year setting out its
        criteria for both investing and selecting investment counterparties in
        compliance with the Government Guidance.


                                             48
These are required to be reported and approved at or before the Authority’s annual
Council Tax setting budget or before the start of the year to which they relate. These
items are reported with the annual treasury management strategy which outlines the
detailed approach to managing risk in relation to the Authority’s financial instrument
exposure. Actual performance is also reported annually to Members.

The annual treasury management strategy which incorporates the prudential
indicators was approved by Authority on 11 February 2009 and is available on the
Authority website. The key issues within the strategy were:

         The Authorised Limit for the 2009/10 was set at £10.5m. This is the
          maximum limit of external borrowings or other long term liabilities.

         The Operational Boundary was expected to be £10.0m. This is the expected
          level of debt and other long term liabilities during the year.

         The maximum amounts of fixed and variable interest rate exposure were set
          at 100% and 50% based on the Authority’s net debt.

These policies are implemented by the Treasurer. The Authority maintains written
principles for overall risk management, as well as written policies covering specific
areas, such as interest rate risk, credit risk, and the investment of surplus cash
through Treasury Management Practices (TMPs). These TMPs are a requirement of
the Code of Practice and are reviewed periodically.



ii       Credit risk
Credit risk arises from deposits with banks and financial institutions, as well as credit
exposures to the Authority’s customers.

        This risk is minimised through the Annual Investment Strategy, which
         requires that deposits are not made with financial institutions unless they
         meet identified minimum credit criteria, in accordance with the Fitch, Moody’s
         and Standard & Poors Credit Ratings Services. The Annual Investment
         Strategy also considers maximum amounts and time limits in respect of each
         financial institution. Deposits are not made with banks and financial
         institutions unless they meet the minimum requirements of the investment
         criteria outlined above. Additional selection criteria are also applied after
         these initial criteria are applied.

The full Investment Strategy for 2009/10 was approved by Full Authority on 11
February 2009 and is available on the Authority’s website.




                                           49
The following analysis summarises the Authority’s maximum exposure to credit risk.
The table (composite defaults from Fitch, Standard & Poors and Moody’s) gives
details of global corporate finance average cumulative default rates (including
financial organisations) for the period since at least 1990 to 2009. Defaults shown
are by long term rating category on investments out to one year.

                                                            Adjustment
                                                              for market    Estimated
                                  Amount at    Historical     conditions     maximum
                                   31 March   experience    at 31 March    exposure to
                                       2010    of default          2010        default

                                     £000s            %              %          £000s

      Deposits with banks and
      financial institutions            (a)           (b)            (c)        (a * c)

      AAA                 rated
      counterparties                     0         0.00%         0.00%               0

      AA rated counterparties         2,733        0.03%         0.03%               1

      A rated counterparties           107         0.08%         0.08%               0

      Trade     debtors    (not        128         5.00%         5.00%               6
      including       statutory
      debtors    –    Authority
      Tax/NNDR)

      Total                           2,968                                          7


No breaches of the Authority’s counterparty criteria occurred during the reporting
period and the Authority does not expect any losses from non-performance by any of
its counterparties in relation to deposits and bonds.
Whilst the current credit crisis in international markets has raised the overall
possibility of default the Authority maintains strict credit criteria for investment
counterparties.
The allocation of the Authority’s investments between institutions domiciled in foreign
countries and in the UK was as follows:

                                                                 31 March                 %
                                                                     2010
                                                                     £000s
       UK       UK                                                   1,728                61
       EU       Spain                                                1,005                35
       EU       Ireland                                                107                 4
                Total                                                2,840            100




                                              50
The Authority does not generally allow credit for its trade debtors, such that £16,000
of the £128,000 balance is past its due date for payment. The past due amount can
be analysed by age as follows:

                                                  31 March 2009       31 March 2010
                                                          £000s               £000s
       Less than three months                               140                112
       Three to six months                                    1                 12
       Six months to one year                                 -                  3
       More than one year                                     5                  1
       Total                                                146                128

During the reporting period the Authority held no collateral as security.


iii    Liquidity risk

The Authority manages its liquidity position through the risk management procedures
above (the setting and approval of prudential indicators and the approval of the
treasury and investment strategy reports), as well as through a comprehensive cash
flow management system, as required by the CIPFA Code of Practice. This seeks to
ensure that cash is available when it is needed.

The Authority has ready access to borrowings from the Money Markets to cover any
day to day cash flow need, and whilst the PWLB provides access to longer term
funds, it also acts as a lender of last resort (although it will not provide funding to an
Authority whose actions are unlawful). The Authority is also required to provide a
balanced budget through the Local Government Finance Act 1992, which ensures
sufficient monies are raised to cover annual expenditure. There is therefore no
significant risk that it will be unable to raise finance to meet its commitments under
financial instruments.

The maturity analysis of financial assets is as follows:


                                                     31 March 2009     31 March 2010
                                                             £000s             £000s

       Less than one year                                    2,878              2,840
       Between one and two years                                  -                   -
       Between two and three years                                -                   -
       More than three years                                      -                   -
       Total                                                 2,878              2,840



All trade and other payables are due to be paid in less than one year and are not
shown in the table above.



                                            51
iv       Refinancing and Maturity Risk

Whilst the cash flow procedures above are considered against the refinancing risk
procedures, longer term risk to the Authority relates to managing the exposure to
replacing financial instruments as they mature. This risk relates to both the maturing
of longer term financial liabilities and longer term financial assets.

The approved treasury indicator limits for the maturity structure of debt and the limits
placed on investments placed for greater than one year in duration are the key
parameters used to address this risk. The Authority approved treasury and
investment strategies address the main risks and the central treasury team address
the operational risks within the approved parameters. This includes:

        monitoring the maturity profile of financial liabilities and amending the profile
         through either new borrowing or the rescheduling of the existing debt; and

        monitoring the maturity profile of investments to ensure sufficient liquidity is
         available for the Authority’s day to day cash flow needs, and the spread of
         longer term investments provide stability of maturities and returns in relation
         to the longer term cash flow needs.

The maturity analysis of financial liabilities is as follows, with the maximum and
minimum limits for fixed interest rates maturing in each period (approved as part of
the Authority’s Treasury Management Strategy):

                               Approved           Approved       Actual        Actual
                               maximum            Minimum     31 March      31 March
                                   limits            Limits       2010          2009
                                                                 £000s         £000s

Less than one year                  50%                0%            0             0
Between    one   and   two          50%                0%            0             0
years
Between    two   and   five         25%                0%            0             0
years
Between five and ten years          40%                0%            0             0

More than ten years                100%                0%        8,842          8,042
Total                                                            8,842          8,042




                                             52
v       Interest rate risk

The Authority is exposed to interest rate movements on its borrowings and
investments. Movements in interest rates have a complex impact on the Authority,
depending on how variable and fixed interest rates move across differing financial
instrument periods. For instance, a rise in variable and fixed interest rates would
have the following effects:

       borrowings at variable rates – the interest expense charged to the Income and
        Expenditure Account will rise;

       borrowings at fixed rates – the fair value of the borrowing will fall (no impact
        on revenue balances);

       investments at variable rates – the interest income credited to the Income and
        Expenditure Account will rise;

       investments at fixed rates – the fair value of the assets will fall (no impact on
        revenue balances).

Borrowings are not carried at fair value on the balance sheet, so nominal gains and
losses on fixed rate borrowings would not impact on the Income and Expenditure
Account or STRGL. However, changes in interest payable and receivable on
variable rate borrowings and investments will be posted to the Income and
Expenditure Account and affect the General Fund Balance. Movements in the fair
value of fixed rate investments that have a quoted market price will be reflected in
the STRGL, unless the investments have been designated as Fair Value through the
Income and Expenditure Account, in which case gains and losses will be posted to
the Income and Expenditure Account.

The Authority has a number of strategies for managing interest rate risk. The Annual
Treasury Management Strategy draws together the Authority’s prudential and
treasury indicators and its expected treasury operations, including an expectation of
interest rate movements. From this Strategy a treasury indicator is set which
provides maximum limits for fixed and variable interest rate exposure. The
Treasurer will monitor market and forecast interest rates within the year to adjust
exposures appropriately. For instance during periods of falling interest rates, and
where economic circumstances make it favourable, fixed rate investments may be
taken for longer periods to secure better long term returns, similarly the drawing of
longer term fixed rates borrowing would be postponed.




                                            53
If all interest rates had been 1% higher (with all other variables held constant) the
financial effect would be:

                                                                £000s

       Increase in interest payable on variable rate
                                                                     -
       borrowings
       (Increase) in interest receivable on variable rate
                                                                   -28
       investments

       Impact on (Income) and Expenditure Account                  -28

       Decrease in fair value of fixed rate investment assets
                                                                     -
       (impact on STRGL)

       Decrease in fair value of fixed rate borrowings
                                                                 1005
       liabilities (no impact on I+E Account or STRGL)



vi     Price risk

The Authority, excluding the pension fund, does not invest in equity shares or
marketable bonds.

vii    Foreign exchange risk

The Authority has no financial assets or liabilities denominated in foreign currencies.
It therefore has no exposure to loss arising from movements in exchange rates.


10.18 Contingent Assets

There are no contingent assets to disclose.


10.19 Contingent Liabilities

There is a contingent liability in respect of current and former retained firefighters
who may be eligible to join the Firefighters Pension Scheme with backdating to 2000.
The Employment Tribunal has decided that retained firefighters were unfairly treated
in relation to pension rights. It is currently impossible to assess what the Authority’s
liability may be.


10.20 Post Balance Sheet Events

There are no post balance sheet events to report.




                                                  54
10.21 Provisions

The following table shows movements on the Authority’s provisions.

                                                        31.03.09   Movement   31.3.10
                                                            £000       £000     £000
  Long Service Increments                                  -283                  -283
  Less favourable     treatment   of   part-time
                                                                        -74       -74
  employees
  Total                                                    -283         -74      -357


The Authority has an obligation to ensure that the money that is no longer paid as a
long service increment is ring-fenced so that it can be used to fund continuing
professional development payments.

A provision is required in respect of current and former retained firefighters who have
suffered unfair treatment compared to wholetime firefighters. The Employment
Tribunal asked the parties to negotiate a settlement and compensation has now
been agreed in principle with the FBU.

A provision is required to cover the Authority’s liability with regard to outward
transfers from the Firefighters’ Pension Scheme before 1 April 2006. All transfers
since 1 April 2006 are processed through the Pension Account and therefore have
no impact on the Authority’s finances. This provision was previously shown as an
accrual but has now been re-categorised as a provision in both 2008/09 and
2009/10.


10.22 Government Grants - Deferred

When a government grant is to be applied to the financing of capital expenditure, a
balance is established representing a deferred credit to be released to revenue to
offset depreciation charged on the asset.

                                                                    2008/09   2009/10
                                                                       £000      £000
      Balance as at 1 April                                             451      397
      Grant Funding of Capital Expenditure                               19      684
      Offset Depreciation on Grant-funded Assets                        -73       -83
      Balance as at 31 March                                            397      998




                                                   55
10.23 Unapplied Capital Contributions

The balance of £10,000 represents S106 contributions that will be spent on new fire
hydrants.

10.24 Euro Costs

The Financial Systems used by the Authority are Euro compliant.


10.25 Revaluation Reserve

The closing position of the Reserve at 31 March 2010 shows revaluation gains
accumulated since 1 April 2007.

                                                       2008/09             2009/10
                                                          £000               £000
   Balance as at 1 April                                  613                 436
   Revaluation of Assets                                  -177               2,086
   Balance as at 31 March                                 436                2,522



10.26 Capital Adjustment Account

The Capital Adjustment Account will have a credit balance where capital finance has
been set aside at a faster rate than fixed assets have been consumed. It will have a
debit balance where fixed assets have been consumed in advance of their being
financed. However, the balance on the account is affected by the decision to
implement the Revaluation Reserve with a zero balance at 1 April 2007. The effect of
this is to consolidate revaluation gains accumulated up to 31 March 2007 with the
“capital financing vs. consumption” deficit.


                                                                 2008/09             2009/10
                                                                    £000                £000
   Balance as at 1 April                                          17,969              17,391
   Revenue Financing of Capital including MRP                       621                 615
   Asset disposal adjustments                                                           -131
   Depreciation / Amortisation / Impairment Reversal              -1,272              -1,726
   Use of capital receipts                                             -                142
   Government Grants Deferred Adjustment                             73                  83
   Balance as at 31 March                                         17,391              16,374




                                                56
10.27 Usable Capital Receipts Reserve

The Usable Capital Receipts Reserve contains the proceeds from the sale of fixed
assets, pending their use to finance capital expenditure. The movement on this
reserve during 2008/09 and 2009/10 is shown below.

                                                           2008/09            2009/10
                                                              £000               £000
Balance as at 1 April                                             -
In-year receipts                                                                  149
Use of receipts to fund capital expenditure                                      -142
Balance as at 31 March                                            -                 7



10.28 Collection Fund Adjustment Account

From 1 April 2009 precepts included in the Income and Expenditure Account must
be accrued income for the year. This contrasts with previous accounting treatments
where precepts included in the Income and Expenditure Account were amounts paid
from the Collection Funds of the six Berkshire Unitary Authorities to the Fire
Authority. There is no effect on the General Fund as the balance is written off to the
Collection Fund Adjustment Account as shown below.


                                                           2008/09            2009/10
                                                              £000               £000
Balance as at 1 April                                            3                -18
In-year adjustments                                            -21                -47
Balance as at 31 March                                         -18                -65



10.29 Appropriations to and from Reserves

During 2009/10 appropriations to and from earmarked reserves were made as set
out in the table below.

                                                       Transfers to / (from) Earmarked
                                                                              Reserves
                                                                                  £000
  Operational Equipment Reserve                                                   119
  Regional Control Costs                                                           40
  Budget Carry Forward Reserve                                                    -70
                                                                                   89




                                              57
10.30 Earmarked Reserves

At the end of 2009/10 the Authority had earmarked reserves as set out below.

                           Opening Transfers    Closing
                                                                       Purpose
                           Balance In / (Out)   Balance
                                                        To cover unbudgeted pension
Pension Reserve              1,624                1,624 transfers and ill-health
                                                        retirements
                                                        To roll forward specific budget
                                                        lines where commitments have
Budget Carry Forward
                               459        -70       389 been made but expenditure has
Reserve
                                                        not yet been incurred by the
                                                        close of the financial year
                                                          To meet costs associated with
Regional Control Reserve       116        40       156
                                                          the transition to regional control
Operational Equipment                                     To enhance operational
                                65       119       184
Reserve                                                   response capabilities
                                                       To offset the costs of the
Protective Equipment
                               785                 785 replacement programme, which
Reserve
                                                       are estimated to be £785,000

Balance as at 31 March       3,049        89      3,138




                                          58
10.31 Notes to Cash Flow Statement


i      Reconciliation of the Deficit on I&E to Net Cash Flow from Revenue
Activities


        2008/09                                                          2009/10
           £000                                                             £000
          8,463 Deficit for the year on Income and Expenditure Account     9,094
                  Remove Non Cash Transactions in I&E
        -15,045 FRS 17 Pension Entries                                   -15,060
            -36 Movement in Provisions                                       -74
         -1,214 Depreciation                                              -1,202
              - Impairment                                                  -466
            -58 Amortisation                                                 -58
             73 Government Grants Deferred Credit                             83
            -10 Trading Company Transactions                                   4


                  Add Cash Transaction not in I&E
          6,418 Pensions Paid                                              6,517
           -294 Net Transfers                                               -142


                  Movement in revenue items on an accrual basis
            -71     Increase / (Decrease) in Stocks                           38
          1,223     Increase / (Decrease) in Debtors                      -1,917
            287     (Increase) / Decrease in Creditors                       147
            -10     (Increase) / Decrease in Income in Advance              -199


           -298 Remove Interest Payable                                     -353
            166 Remove Interest Receivable                                    32
              2 Remove profit / loss on sale of Fixed Assets                  17


           -404 Net Cash Flow from Revenue Activities                     -3,539




                                                59
ii         Reconciliation of Net Cash Flow to Movement in Net Debt


                                                            2008/09     2009/10 Movement
                                                               £000       £000      £000
           Cash and Bank                                      1,261        4,152    2,891
           Investments                                        2,878        2,840      -38
           Borrowing                                          -8,042      -8,842    -800
                                                              -3,903      -1,850    2,053

           Increase in cash in the period                     2,891
           Cash inflow from increase in debt                    -800
           Cash inflow from decrease in liquid resources        -38
           Movement in net debt for the period                2,053
           Net funds at 1 April 2008                          -3,903
           Net funds at 31 March 2009                         -1,850


iii         Movement in Liquid Resources and Long-Term Borrowing

                                                           2008/09     2009/10 Movement
                                                              £000       £000      £000
         Investments                                         2,878       2,840      -38
         Long-Term Borrowing                                -8,042      -8,842     -800



iv          Definition of Liquid Resources

Liquid resources are short-term investments, which are disclosed on the face of the
balance sheet.

v           Analysis of Grants

                                                                     Revenue
                              Description
                                                                        £'000
      Community Fire Safety                                               76
      Regional Control                                                   115
      New Dimensions                                                      42
      Pension Top-up Grant                                             4,215
                                                                       4,448




                                                   60
11. Financial Statements for Firefighter Pension Fund

11.1 Financial Arrangements for the Firefighter Pension Schemes

Before April 1 2006, Fire Authorities suffered budgetary volatility due to fluctuations
in the number of Firefighters retiring in any given year. To overcome this problem,
Central Government decided that Fire Authorities must keep a separate Pensions
Account from which pensions will be paid. On the income side, employer and
employee contributions are paid into the account. Employer contributions consist of a
flat rate contribution and an ill-health charge. Ill-health charges are spread over three
years. Transfer values for firefighters that transfer into and out of the scheme are
also posted to the account. If the account is in deficit at the end of the financial year,
the Government will provide a top-up to bring the account into balance.


11.2 Pension Fund Account


           Restated
            2008/09                                                        2009/10
              £'000                                                          £'000
                      Contributions Receivable
             -2,684 Employer Flat Rate Contributions                         -2,656
                -98 Employer Ill-Health Contributions                          -37
             -1,456 Employee Contributions                                   -1,468
               -244 Backdated commutaion grant                                -371
               -304 Transfers In                                              -189


                      Benefits Payable
              4,844 Pensions                                                 5,300
              2,158 Commutations and Lump Sum Benefits                       1,779

               153 Transfers Out                                                87

              2,369 Net amount payable for the year                          2,445
              2,369 Top-up Grant Receivable                                  2,445



The comparative figure for the top-up grant for 2008/09 (previously shown as
£2,613,000) has been split into two: the main top-up grant of £2,369,000 and the
backdated commutation grant of £244,000.




                                                 61
11.3 Net Assets Statement


        2008/09                                                             2009/10
          £'000                                                               £'000
           425 Prepayment of April pension paid in March                       445
           892 Top-up Grant receivable from / (payable to) the Government      -507
         -1,317 Amount owing (to) / from the General Fund                       62
             0                                                                   0


It should be noted that the Fund’s financial statements do not take account of
liabilities to pay pensions and other benefits after 2009/10. These liabilities are
shown in the Authority’s main financial statements.




                                             62
12. Annual Governance Statement 2009/10


12.1 Scope of Responsibility

The Royal Berkshire Fire Authority is responsible for ensuring that its business is
conducted in accordance with the law and proper standards, and that public money
is safeguarded and properly accounted for, and used economically, efficiently and
effectively. The Royal Berkshire Fire Authority also has a duty under the Local
Government Act 1999 to make arrangements to secure continuous improvement in
the way in which its functions are exercised, having regard to a combination of
economy, efficiency and effectiveness.

In discharging this overall responsibility, the Royal Berkshire Fire Authority is
responsible for putting in place proper arrangements for the governance of its affairs,
facilitating the effective exercise of its functions, and which includes arrangements
for the management of risk.

The Royal Berkshire Fire Authority has approved and adopted a code of corporate
governance, which is consistent with the principles of the CIPFA/SOLACE
Framework Delivering Good Governance in Local Government. This statement
explains how the Royal Berkshire Fire Authority has complied with the code and also
meets the requirements of regulation 4(2) of the Accounts and Audit Regulations
2003 as amended by the Accounts and Audit (Amendment) (England) Regulations
2006 in relation to the publication of a statement on internal control.

12.2 The purpose of the governance framework

The governance framework comprises the systems and processes, and culture and
values, by which the authority is directed and controlled and its activities through
which it accounts to, engages with and leads the community. It enables the authority
to monitor the achievement of its strategic objectives and to consider whether those
objectives have led to the delivery of appropriate, cost-effective services.

The system of internal control is a significant part of that framework and is designed
to manage risk to a reasonable level. It cannot eliminate all risk of failure to achieve
policies, aims and objectives and can therefore only provide reasonable and not
absolute assurance of effectiveness. The system of internal control is based on an
on-going process designed to identify and prioritise the risks to the achievement of
the Royal Berkshire Fire Authority’s policies, aims and objectives, to evaluate the
likelihood of those risks being realised and the impact should they be realised, and to
manage them efficiently, effectively and economically.

The governance framework has been in place at the Royal Berkshire Fire Authority
for the year ended 31 March 2010 and up to the date of approval of the Statement of
Accounts.

The governance framework elements are set out in the table below.




                                           63
                                                ROYAL BERKSHIRE FIRE AUTHORITY
                                            Code of Corporate Governance
Governance is about how local government bodies, such as fire authorities, ensure that they do the right things, in the right way, for the
right people in a timely, inclusive, open, honest and accountable manner.

It comprises the systems and processes, and culture and values, by which local government bodies are directed and controlled and
through which they account to, engage with and, where appropriate, lead their communities.

This Code has been written using the framework and guidance published in 2007 by a joint working group sponsored by CIPFA and
SOLACE, in which good governance is defined as:

1.   Focusing on the purpose of the authority and on outcomes for the community and creating and implementing a vision for the local
     area

2.   Members and officers working together to achieve a common purpose with clearly defined functions and roles

3.   Promoting values for the authority and demonstrating the values of good governance through upholding high standards of conduct
     and behaviour

4.   Taking informed and transparent decisions which are subject to effective scrutiny and managing risk

5.   Developing the capacity and capability of members and officers to be effective

6.   Engaging with local people and other stakeholders to ensure robust public accountability

Within the framework, these six “core principles” have a number of supporting principles each of which in turn translates into a range of
specific requirements that should be reflected in an authority’s code of governance.

This code, therefore, examines the core and supporting principles and sets out or points to the practices, procedures and documents
that demonstrate the governance arrangements currently in place and how the Fire Authority proposes to review and improve those
arrangements on a year-by-year basis.


                                                                    64
                            FOCUSING ON THE PURPOSE OF THE AUTHORITY AND ON OUTCOMES FOR THE
                           COMMUNITY AND CREATING AND IMPLEMENTING A VISION FOR THE LOCAL AREA

    The code should reflect the           Source documents/good practice/other            Self Assessment Score            Plans for Improvement
 requirement for local authorities to:           means that may be used to                 (1 to 5, Higher being better)
                                                  demonstrate compliance
Develop and promote the authority’s      Used as a basis for:
purpose and vision.                      - corporate and service planning                                  4               Strategic commitments are now in
                                         - shaping the community strategy                                                  place following review. Strategic
                                         - local area or performance agreements                                            planning process currently under
                                                                                                                           review.
                                         RBFA Corporate Plan 09/10 (includes
                                            Strategic Plan/Community Safety
                                            Plan)
                                         RBFA IRMP Action Plan 09/10
                                            (including 5 year plan)
                                         Promoted through web site/consultation
                                            documents/precepting literature.
Review on a regular basis the               - Governance code                                                              Embed changes to commitments and
authority’s vision for the local area                                                                      4               committee structures.
and its impact on the authority’s        RBFA Management Committee and
governance arrangements.                 CFA review, annually, the strategic
                                         commitments and monitor progress
                                         against the action plans. In addition the
                                         Authority has an IRMP Working Party
                                         (Member Led), a Strategic Asset
                                         Management Committee and an Audit
                                         and Performance Review Committee
                                         which regularly consider the strategic
                                         issues relevant to their body and
                                         propose appropriate changes.




                                                                                     65
Ensure    that     partnerships are      - Partnership protocol.
underpinned by a common vision of        - Governance code.                                 3   RBFA Partnership Strategy to be
their work that is understood and                                                               reviewed in 2010 to reflect future
agreed by all parties.                   LAA/CAA agreements with Unitary                        financial and political constraints
                                         partners
                                         Thames       Valley     Arson  Liaison                 RBFA needs to continue to
                                         Partnership                                            encourage other partners to work
                                         Community safety partnership activity is               consistently   towards     agreed
                                         monitored by Crime and Disorder                        outcomes.
                                         Reduction Partnerships
Publish an annual report on a timely     - Annual financial statements.
basis to communicate the authority’s     - Annual business plan.                            3   An annual report is being developed
activities and achievements, its                                                                for approval by the June Fire
financial position and performance.      Currently incorporated within Corporate                Authority
                                         Plan
Decide how the quality of service for    This information is reflected in the
users is to be measured and make         authority’s :                                      5   Maintain performance management
sure that the information needed to           - corporate plan                                  systems and culture at current high
review service quality effectively and        - annual business plan                            levels (Especially in the run up to and
regularly is available.                       - medium-term financial strategy                  introduction of Regional Control
                                              - resourcing plan                                 Centres)
                                         in order to ensure improvement.
                                                                                                A Community Engagement Steering
                                         Local Performance Indicators are                       Group has been established to
                                         derived from extensive risk information                coordinate the many and varying
                                         managed and monitored through a                        community engagement activities
                                         comprehensive GIS system. This                         undertaken by RBFRS.
                                         produces effective data and mapsets
                                         that are available to officers and public
                                         through     RBFRS        intranet/internet.
                                         allowing frequent (often daily) review.

                                         Regular reports are given to Members,
                                         particularly Audit and PR Committee.




                                                                                       66
Put in place effective arrangements    - Complaints procedure
to identify and deal with failure in                                                     4   The complaints process is very little
service delivery.                      There is     an    effective   complaints             used and therefore its effectiveness
                                       process.                                              is difficult to ascertain. Revision of
                                                                                             Authority Committees includes an
                                       Performance      Review      department               Audit and Performance Review
                                       monitors operational effectiveness                    Committee, with a specific remit to
                                                                                             consider        organisational     and
                                                                                             operational        and      partnership
                                                                                             performance and exceptions. Action
                                                                                             plans would be developed and
                                                                                             monitored where necessary
Decide how value for money is to be    - The results are reflected in authority’s
measured and make sure that the        performance plans and in reviewing the            4   Maintain value for money and high
authority or partnership has the       work of the authority.                                performance levels despite the
information needed to review value                                                           disappointing grant settlement.
for    money     and    performance    RBFA have the second lowest precept
effectively.         Measure    the    of all CFAs
environmental impact of policies,
plans and decisions.




                                                                                    67
                          MEMBERS AND OFFICERS WORKING TOGETHER TO ACHIEVE A COMMON PURPOSE
                                       WITH CLEARLY DEFINED FUNCTIONS AND ROLES

The code should reflect the               Source documents / good practice /           Self Assessment Score   Plans for Improvement
requirement for local authorities to:     other means that may be used to
                                          demonstrate compliance
Set out a clear statement of the          The statutory requirements for                                       The Fire Authority will be asked at
respective roles and responsibilities     an executive do not apply to the                                     this year’s Annual Meeting (June
of the executive and of the               Fire Authority but the roles of                       4              2010) to commit to achieving the
executive’s members individually and      the    Executive     and     other                                   Member Development Charter
the authority’s approach towards          Committees and members are
putting this into practice.               set out in the various sections of
Set out a clear statement of the          the RBFRS Handbook approved
respective roles and responsibilities     at the June 2007 meeting of the
of     other     authority  members,      Fire Authority.
members generally and senior
officers.                                 Significant changes to improve
                                          the committee structure and
                                          operations of the Fire Authority
                                          have been made and include
                                          revised ToR for each committee,
                                          job descriptions/role maps and
                                          guidance       for     Member
                                          Champions and other Member
                                          roles


Determine a scheme of delegation          - Constitution
and reserve powers within the             - Committees powers and duties                        4              Regular review    and   update   as
constitution, including a formal          - Standing Orders                                                    required
schedule of those matters specifically
reserved for collective decision of the   Standing Orders (generally and from
authority, taking account of relevant     ASD1 to ASD 90 in particular refer to
legislation, and ensure that it is        delegated powers)
monitored     and     updated    when
required.




                                                                                  68
Make a chief executive or equivalent       - Conditions of employment                           Performance management process is
responsible and accountable to the         - Scheme of delegation                           4   currently being reviewed following
authority for all aspects of operational   - Statutory provisions                               the last appraisal of the CFO by the
Management.                                - Job descriptions/specification                     Chairman and Vice Chairman of
                                           - Performance management system                      RBFA. Regular monitoring and
                                                                                                reporting to take place. Improvement
                                           Job Description and delegated powers,                register to be published and action
                                           (annual    appraisal     process  and                plans undertaken.
                                           performance related pay)
Develop protocols to ensure that the       The Chief Fire Officer and the                       Maintain effective communication
leader and chief executive (or             Chairman of the Authority have regular           4   with actions as required.     Party
equivalent) negotiate their respective     meetings and have a good working and                 Leader     briefings  have    been
roles early in the relationship and that   professional relationship.                           introduced and are being developed
a shared understanding of roles and                                                             to inform all political groups of
objectives is maintained.                                                                       emerging issues.
Make a senior officer (the S151            - Section 151 responsibilities
officer) responsible to the authority      - Statutory provision                            5   Monitor & Review by Fire Authority
for ensuring that appropriate advice       - Statutory reports                                  as necessary
is given on all financial matters, for     - Budget documentation
keeping proper financial records and       - Job description/specification
accounts, and for maintaining an
effective system of internal financial     Authority Treasurer and Head of
control.                                   Financial Services Job Description
Make a senior officer (usually the         The Fire Authority has appointed a               5   Job Description to be kept under
monitoring officer) responsible to the     Clerk and Monitoring Officer who has                 review by Fire Authority
authority for ensuring that agreed         these responsibilities through a specific
procedures are followed and that all       Job Description and relevant statutory
applicable statutes and regulations        provisions
are complied with.
Develop protocols to ensure effective      A Member/Officer Protocol was recently           5   Protocol to be kept under review by
communication between members              approved by the Authority in June 2007               Fire Authority
and officers in their respective roles.    (Members Handbook)




                                                                                       69
Set out the terms and conditions for      - Pay and conditions policies and             4   Performance management process is
remuneration of members and               practices                                         currently being reviewed following
officers and an effective structure for                                                     the last appraisal of the CFO by the
managing the process, including an        Members scheme of allowances and                  Chairman and Vice Chairman of
effective remuneration panel (if          expenses. RBFA is not required to                 RBFA. Improved strategic plan and
applicable)                               have a remuneration panel, but sought             improvement      register   to    be
                                          an Independent expert opinion before              published. Action plans to deal with
                                          approving its Scheme of Allowances in             specific issues.
                                          2009.
                                                                                            The current scheme of allowances
                                          Officers Performance Development                  was approved in 2009 for a period of
Ensure that effective mechanisms          Interviews include targets set against            up to 4 years subject to annual
exist to monitor service delivery?        service performance.                              adjustment in accordance with the
                                                                                            terms of the Scheme

                                  -
Ensure that the organisation’s vision,    RBFA Corporate Plan 09/10 (includes           4   There are difficulties as the public are
strategic plans, priorities and targets      Strategic Plan/Community Safety                becoming increasingly averse to
are developed through robust                 Plan)                                          responding to consultation (two
mechanisms, and in consultation with      RBFA Integrated Risk Management                   responses      from     500,000     plus
the local community and other key            Plan Action Plan 09/10 (including 5            precepting leaflets).
stakeholders, and that they are              year plan)
clearly articulated and disseminated.     Promoted through web site/consultation            A revised strategic planning process
                                          documents/precepting literature                   will     incorporate      appropriate
                                                                                            consultation processes.

                                                                                            Community      and       Equality
                                                                                            Engagement Group (CEEG) set up.




                                                                                   70
When working in partnership ensure          Protocols for partnership working. For             3
that members are clear about their          each partnership there is:                             RBFA needs to continue to
roles and responsibilities both                                                                    encourage other partners to work
individually and collectively in relation    - a clear statement of the partnership                consistently      towards    agreed
to the partnership and to the                  principles and objectives.                          outcomes. There also needs to be
authority.                                   - clarity of each partner’s role within               greater clarity as to how significant
                                               the partnership.                                    local   indicators,    are  to     be
When working in partnership:                 - definition of roles of partnership                  incorporated    in    the  LAA/CAA
                                               board members.                                      process.
Ensure that there is clarity about the       - line management responsibilities for
legal status of the partnership.               staff who support the partnership.                  The removal of the two National Fire
                                             - a statement of funding sources for                  Indicators may make it more difficult
Ensure that representatives or                 joint projects and clear accountability             for the Fire Authority to secure buy in
organisations both understand and              for proper financial administration.                from     partner     authorities   and
make clear to all other partners the         - a protocol for dispute resolution                   organisations.
extent of their authority to bind their        within the partnership.
organisation to partner decisions.          RBFA Partnership Strategy                              The effectiveness of partnerships will
                                            LAA/CAA agreements with Unitary                        be monitored as part of the remit of
                                            partners                                               the A and PR committee
                                            Thames         Valley     Arson     Liaison
                                            Partnership
                                            Community safety partnership activity is
                                            monitored by the Crime and Disorder
                                            Reduction Partnerships




                                                                                          71
           PROMOTING VALUES FOR THE AUTHORITY AND DEMONSTRATING THE VALUES OF GOOD GOVERNANCE
                       THROUGH UPHOLDING HIGH STANDARDS OF CONDUCT AND BEHAVIOUR

The code should reflect the                Source documents/good practice/other        Self Assessment Score   Plans for Improvement
requirement for local authorities to:      means that may be used to
                                           demonstrate compliance
Ensure that the authority’s leadership     Members Handbook (PRO 26) and                              5        Endeavour      to    maintain   open
sets a tone for the organisation by        Brigade Charter                                                     communications and good working
creating a climate of openness,                                                                                relationships at current levels
support and respect.
Ensure that standards of conduct and       Members’/officers’ code of conduct                         4        Endeavour     to   maintain    open
personal behaviour expected of             Performance management systems.                                     communications and good working
members and staff, of work between         Performance appraisal.                                              relationships at current levels.
members and staff and between the          Complaints procedures.                                              Member/Officer protocol to be
authority, its partners and the            Anti-fraud and corruption policy.                                   reviewed during current year by Fire
community      are     defined      and    Member/officer protocols.                                           Authority
communicated through codes of              Standards Committee
conduct and protocols.
Put in place arrangements to ensure        Standing orders                                            5        Standing orders to be updated during
that members and employees of the          Codes of conduct                                                    2010/11.
authority are not influenced by            Financial regulations
prejudice, bias or conflicts of interest   Equality & Diversity Training
in dealing with different stakeholders     Standards Committee
and put in place appropriate               Declarations of Interest
processes to ensure that they
continue to operate in practice.
Develop and maintain shared values         Codes of conduct                                           4        Develop further leadership training
including leadership values for both       Complaints procedures                                               for Members, Officers and Staff.
the organisation and staff reflecting      Brigade Charter
public        expectations          and    Regional IdEA training                                              Members will be asked at the 2010
communicate these with members,            Aspire Leadership Model (officers)                                  Annual Meeting to commit to
staff, the community and partners.         Transformational Leadership Training                                achieving the Member Development
                                           (Officers)                                                          Charter.

                                                                                                               Develop     better   communication
                                                                                                               channels with the public, especially
                                                                                                               with underrepresented groups




                                                                                  72
Put in place arrangements to ensure       Statutory code of conduct for Members            Review of standing orders, financial
that systems and processes are            and code of conduct for officers.            4   regulations & contract procedure
designed      in    conformity     with                                                    rules    currently    in  progress.
appropriate ethical standards, and                                                         Consideration will also be given to
monitor their continuing effectiveness                                                     using the ethical governance toolkit
in practice.                                                                               resources permitting.
Develop and maintain an effective         Statutory powers                             5   Standards Committee TOR have
standards committee                       Terms of reference                               been reviewed and will continue to
                                          Regular reporting and attendance by              be monitored pending introduction of
                                          Independent Members at Management                proposed new Code of Conduct
                                          Committee and Fire Authority meetings
                                          Independently chaired
Use the organisation’s shared values       Inclusive decision-making processes         4   Continue to improve the already
to act as a guide for decision making      (Round Table/Fire Liaison Group)                good internal communications and
and as a basis for developing              Brigade Charter                                 working relationships
positive and trusting relationships        Reports show assessment against
within the authority.                      Partnership for Common sense                    Future Focus Forum and other staff
                                                                                           meetings are held regularly
In pursuing the vision of a               Draft Partnership Strategy                   3   Strategy for partnership working
partnership, agree a set of values                                                         Endeavour      to     ensure  that
against which decision making and                                                          partnerships agreements are based
actions can be judged. Such values                                                         on shared ethical values
must be demonstrated by partners’
behaviour both individually and                                                            Increasing financial and political
collectively                                                                               pressures will dictate the need to
                                                                                           concentrate       resources     on
                                                                                           partnerships that focus on the FA’s
                                                                                           strategic commitments.




                                                                                  73
                                  TAKING INFORMED AND TRANSPARENT DECISION WHICH ARE SUBJECT
                                             TO EFFECTIVE SCRUTINY AND MANAGING RISK


The code should reflect the                Source documents/good practice/other            Self Assessment Score   Plans for Improvement
requirement for local authorities to:      means that may be used to
                                           demonstrate compliance
Develop and maintain an effective          The scrutiny function is carried out by                        4        The committee structure has been
scrutiny function which encourages         the Audit and Performance Review                                        reviewed       and    functions   and
constructive challenge and enhances        Committee following review last year                                    responsibilities re-aligned. Although
the authority’s performance overall        and has similar powers to those                                         not required to have a scrutiny
and that of any organisation for which     contained in the Local Government Act                                   committee, as we do not operate
it is responsible.                         2000 (Terms of Reference in Members                                     executive arrangements the current
                                           Handbook                                                                structure will continue to include a
                                                                                                                   scrutiny role.
Develop and maintain open and              Minutes are taken for all Fire Authority                       5
effective       mechanisms           for   and Committee meetings. These and
documenting evidence for decisions         the relevant Agendas and supporting
and recording the criteria, rationale      reports are available on the Authority’s
and considerations on which decision       website as well as in manual format.
are based.
Put in place arrangements to           -   Members’ code of conduct                                       5
safeguard members and employees        -   Officers code of conduct
                                       -
against conflicts of interest and put in   Member/Officer Protocol
place appropriate processes to         -   Declaration of Interest
ensure that they continue to operate
in practice.
Develop and maintain an effective          Audit and Performance Committee                                5        The Audit function has been included
audit committee (or equivalent) which      established in 2009 with terms of                                       in the ToR of the Audit and
is independent of the executive and        reference set out in the Handbook.                                      Performance Review Committee
scrutiny functions or make other
appropriate arrangements for the
discharge of the functions of such a
committee.
Ensure that effective, transparent         There is    an    effective   complaints                       4        Low number of complaints therefore
and accessible arrangements are in         process.                                                                process has not been extensively
place for dealing with complaints.                                                                                 tested.



                                                                                      74
Ensure that those making decisions          Standard report template                       4   Standard report template to be
whether for the authority or the                                                               updated and revised guidance on
partnership     are     provided    with                                                       report reporting to be issued to
information that is fit for the purpose                                                        officers during 2010.
– relevant, timely and gives clear
explanations of technical issues and                                                           Continue to monitor quality and
their implications.                                                                            effectiveness of reports
Ensure that professional advice on          All reports have standard paragraphs           4   Changes made to meeting structure
matters that have legal or financial        for advice from the Chief Fire Officer,            to ensure more effective meetings .
implications is available and recorded      the Authority Treasurer and the Clerk
well in advance of decision making          and Monitoring Officer                             Additional support for Committee
and used appropriately.                                                                        Manager has been secured to ensure
                                                                                               resilience in supporting Committees
                                                                                               and Members, and in developing and
                                                                                               maintaining     Committee    Work
                                                                                               Programmes and the Forward Plan.
Ensure that risk management is              Risk Management Group                          4   Structural changes have been made
embedded into the culture of the            Risk Management Register                           to Risk Management Group
authority,   with members        and        Risk management section on all reports             (now chaired by CFO).
managers at all levels recognising          Regular reports to CMT and Fire
that risk management is part of their       Authority                                          Risk Management Training for
jobs.                                       Financial standards and regulations.               Members to be rolled out in 2010,
                                                                                               starting with Audit and Performance
                                                                                               Review Committee in May 2010.
Ensure that arrangements are in             Confidential Reporting Policy (Whistle-        4   This policy is to be reviewed and
place for whistle-blowing to which          blowing policy)                                    updated as required in the current
staff and all those contracting with                                                           year and revised policy to be widely
the authority have access.                                                                     publicised amongst staff.
Actively recognise the limits of lawful     Constitution                                   4   Continue to ensure that Members are
activity placed on them by, for             Delegations to Officers                            advised and trained as to the legal
example, the ultra vires doctrine but       Monitoring Officer’s advice                        parameters of their actions/decisions
also strive to utilise powers to the full   CFA has no power of ‘wellbeing’
benefit of their communities.
Recognise the limits of lawful action       Constitution                                   4   Continue to ensure that Members are
and observe both the specific               Delegations to Officers                            advised and trained as to the legal
requirements of legislation and the         Monitoring Officer’s advice                        parameters of their actions/decisions
general responsibilities placed on          CFA has no power of ‘wellbeing’
local authorities by public law.



                                                                                      75
Observe all specific legislative          Monitoring officer provisions                   4   Issue of statutory duties is still moot
requirements placed upon them, as         Job description/specification                       as there is currently a difference of
well as the requirements of general       Statutory duties under Fire Safety Order            opinion between government and
law, and in particular to integrate the   and Fire & Rescue Services Act 2004                 Fire Authorities over statutory duties
key principles of good administrative                                                         for rescue from floodwaters.
law – rationality, legality and natural
justice – into their procedures and
decision-making processes.




                                                                                     76
                 DEVELOPING THE CAPACITY AND CAPABILITY OF MEMBERS AND OFFICERS TO BE EFFECTIVE

The code should reflect the                 Source            documents/good           Self Assessment Score   Plans for Improvement
requirement for local authorities to:       practice/other means that may be
                                            used to demonstrate compliance
Provide      induction    programmes                                                                  3        Members are appointed from other
tailored to individual needs and        Induction programme offered                                            Authorities   and    better   liaison
opportunities for members and           Update     courses/information    made                                 regarding Member training needs to
officers to update their knowledge on   available                                                              be developed. Fire specific training
a regular basis.                                                                                               can then be supplied as needed.

                                                                                                               Adoption of Member Development
                                                                                                               Charter will help to keep Members
                                                                                                               apprised of new developments.
Ensure that the statutory officers      Job description/personal specifications                       4        Continue to monitor job descriptions
have the skills, resources and          Delegated powers                                                       through appraisal process
support necessary to        perform     Rigorous selection process
effectively in their roles and that     Performance development process
these roles are properly understood      CMO appointed at Director level
throughout the authority.
Assess the skills required by           Officers have a sophisticated learning                        4        Members are appointed from other
members and officers and make a         and development plan linked to their                                   Authorities   and    better   liaison
commitment to develop those skills to   appraisals (PDI)                                                       regarding Member training needs to
enable roles to be carried out                                                                                 be developed. Fire specific training
effectively                                                                                                    can then be supplied as needed.

                                                                                                               Adoption of Member Development
                                                                                                               Charter will help to keep Members
                                                                                                               apprised of new developments




                                                                                  77
Develop skills on a continuing basis      Training and development plans should              3   Members are appointed from other
to improve performance, including         reflect requirements of a modern                       Authorities   and    better   liaison
the ability to scrutinise and challenge   councillor including :                                 regarding Member training needs to
and to recognise when outside expert           - the ability to scrutinise and                   be developed. Fire specific training
advice is needed.                                  challenge.                                    can then be supplied as needed.
                                               - the ability to recognise when
                                                   outside advice is required.                   Adoption of Member Development
                                               - advice on how to act as an                      Charter will help to keep Members
                                                   ambassador for the community.                 apprised of new developments
                                               - leadership and influencing
                                                   skills.
Ensure that effective arrangements        Audit     and    Performance      Review           4   The fire authority does not operate
are in place for reviewing the            Committee                                              executive       arrangements      but
performance of the executive as a         Standards Committee                                    decisions of, and reports to, the
whole and of individual members and       Member        Development       Champion               Management          Committee     are
agreeing an action plan which might,      appointed to address the issue of                      considered by the Audit and
for example, aim to address any           Member Training                                        Performance Review Committee and
training or development needs.                                                                   will continue to be scrutinised.
Ensure that effective arrangements        Local Area Forums already exist within             4   There are potential dangers in
are in place that are designed to         RBFA’s constituent unitary authorities.                forming parallel public involvement
encourage individuals from all            The Authority consults widely on its                   processes within the Unitary areas.
sections of the community to engage       Service Delivery (IRMP) and is involved
with, contribute to and participate in    as a partner in many local events                      A Community Engagement Steering
the work of the authority.                (Newbury Show, Slough Mela, etc).                      Group has been established to look
                                          The Authority also undertakes many                     into the best means of acquiring a
                                          local community safety initiatives                     ‘reference group’ to inform the
                                          w(often in partnership) from the fitting of            Authority and to comment on issues
                                          child safety seats to home fire risk                   such as people impact assessments.
                                          assessments. These activities are risk
                                          based and overseen by the Crime and
                                          Disorder Reduction Partnerships
Ensure that career structures are in      Members are elected not selected and               3   Succession management is difficult
place for members and officers to         therefore career structures do not apply               to manage in a relatively small single
encourage      participation    and                                                              purpose organisation
development                               There is a robust career development
                                          system for operational officers the
                                          training needs are recognised through
                                          the appraisal system.




                                                                                        78
                                         ENGAGING WITH LOCAL PEOPLE AND OTHER STAKEHOLDERS TO
                                                 ENSURE ROBUST PUBLIC ACCOUNTABILITY

The code should reflect the                      Source             documents/good           Self Assessment Score   Plans for Improvement
requirement for local authorities to:            practice/other means that may be
                                                 used to demonstrate compliance
Make clear to themselves, all staff          Delegated Powers within Members                                3        Role of Member Champions to be
and the community to whom they are           Handbook                                                                reviewed in 2010
accountable and for what.                    Clear Committee and Working Party
                                             Structures and Reporting Lines
Consider         those       institutional
stakeholders to whom the authority is        Member Champions appointed at FA
accountable       and      assess      the   2009
effectiveness of the relationship s
and any changes required.
Produce an annual report on the              Annual report produced                                         5
activity of the scrutiny function.
Ensure that clear channels of                Operational and community safety                               3        Further work to improve equality and
communication are in place with all          strategy based on risk profiles, through                                diversity level
sections of the community and other          the IRMP’
stakeholders, and put in place                                                                                       Difficulty in communicating with a
monitoring arrangements to ensure            Meetings are held in public.                                            public that is increasingly consulted
that they operate effectively.                                                                                       on a wide range of issues.
                                             Community Liaison Officer appointed
Hold meetings in public unless there         and Equality and Diversity level 3 has
are good reasons for confidentiality.        been achieved.                                                          A Community Champion has been
                                                                                                                     appointed to act as a lead on this
Ensure that arrangements are in                                                                                      issue
place to enable the authority to
engage with all sections of the
community effectively.          These
arrangements should recognise that
different sections of the community
have different priorities and establish
explicit processes for dealing with
these competing demands.




                                                                                        79
Establish a clear policy on the types     Communications strategy             2   A broader consultation policy would
of issues they will meaningfully          IRMP Consultation Policy                be beneficial but there are difficulties
consult on or engage with the public                                              in deciding what issues could and
and service users about including a                                               should be taken to the public,
feedback mechanism for those                                                      particularly in the light of the public’s
consultees to demonstrate what has                                                ‘consultation fatigue’ noted above.
changed as a result.
                                                                                  Guidance will be sought from
                                                                                  Members as to upon what issues
                                                                                  IRMP     consultation should   be
                                                                                  undertaken.
On an annual basis, publish a             Corporate plan                      5   Proposals for changing the format
performance plan giving information       Annual IRMP action plan                 and content of these publications
on the authority’s vision, strategy,      IRMP 5 Year Plan                        was agreed at the AGM 2009 to
plans and financial statements as         Financial Accounts                      make the Annual Report more
well as information about its                                                     accessible
outcomes, achievements and the
satisfaction of service users in the
previous period.
Ensure that the authority as a whole      Constitution                        4   Authority to develop and publish a
is open and accessible to the             Partnership for Common Sense            statement of principle regarding
community, service users and its          Brigade Charter                         openness and transparency
staff and ensure that it has made a       Fire Liaison Group
commitment to openness and                Round Table
transparency in all its dealings,
including partnerships, subject only
to the need to preserve confidentiality
in those specific circumstances
where it is proper and appropriate to
do so.
Develop and maintain a clear policy       Partnership for Common Sense        4   Authority to develop and publish a
on      how     staff    and     their    Brigade Charter                         statement of principle regarding
representatives are consulted and         Fire Liaison Group                      openness and transparency
involved in decision making.              Round Table




                                                                         80
12.3 Review of Effectiveness

The Royal Berkshire Fire Authority has responsibility for conducting, at least annually, a
review of the effectiveness of its governance framework including the system of internal
control. The review of effectiveness is informed by the work of the executive managers
within the authority who have responsibility for the development and maintenance of the
governance environment, the Internal Auditor’s annual report, and also by comments
made by the external auditors and other review agencies and inspectorates.

During 2009/10 a number of enhancements have been made to the governance
arrangements.

The most significant activity has been the continued development of the Audit and
Performance Review Committee with the remit:

      To consider the effectiveness of the Authority’s risk management arrangements,
       the control environment and associated anti-fraud and anti-corruption
       arrangements
      To seek assurances that action is being taken on risk-related issues identified by
       auditors and inspectors
      To be satisfied that the Authority’s assurance statements, including the Statement
       of Internal Control, properly reflect the risk environment
      To approve internal audit’s strategy, plan and monitor performance
      To review summary internal audit reports and the main issues arising, and seek
       assurance that action has been taken where necessary
      To receive the annual assurance report from the internal auditors
      To consider external audit reports


The Fire Authority has maintained its internal control role:

      It has achieved a “3” for Internal Control under CPA as improvements have become
       embedded

      It has implemented a revised Risk Management Policy

      It regularly reviews the risk register and progress in risk management

      It receives regular risk management reports

      It has funded an additional post in the finance section which enables senior
       managers to further develop risk management and the internal audit function

The Risk Management Group is currently reviewing each risk on the risk register and the
results will be reported to the Audit and Performance Review Committee in September
2010


                                              81
The Standards Committee has reviewed changes to the Scheme of Member Allowances
and members’ declarations of interest.

RSM Bentley Jennison (now Tenon) have completed their contract as the Authority’s
internal auditors.

      Their overall audit opinion is:

       We are satisfied that sufficient internal audit work has been undertaken to allow us to draw a
       reasonable conclusion on the adequacy and effectiveness of Royal Berkshire Fire Authority’s
       arrangements.
       For the 12 months ended 31 March 2010, based on the work we have undertaken, our opinion
       regarding the adequacy and effectiveness of Royal Berkshire Fire Authority’s arrangements for
       governance, risk management and control is as follows:
                                       Red     Amber    Green

                                                                  The Authority has made good
                                                                  progress implementing outstanding
                     Governance
                                                                  governance recommendations in
                                                                  2009/10.
                                                                  The Authority has made reasonable
                                                                  progress implementing
               Risk Management
                                                                  recommendations made by the
                                                                  2008/9 Risk Maturity Review.
                                                                  Three limited assurance reviews.
                           Control




Substantial assurance was given for core financial controls.

Limited assurance was given for three audited areas:

              CRB checks for community safety staff
              Absence management procedures
              IT security

Haines Watts have been appointed as the new internal auditors to the Authority.

A new procurement officer has been appointed to manage the Authority’s procurement
and ensure that proper procedures are followed.

NFI matches have been investigated by internal audit.

A review of anti-fraud measures has been commissioned. The report will be considered at
the September 2010 Audit and Performance Review Committee meeting.

As a result of the work undertaken by the management team, the Internal Auditors, the
External Auditors and our own Audit and Performance Review Committee plans are in
place to address the weaknesses identified and ensure continuous improvement of the
governance system is in place.



                                                   82
12.4 Significant Governance Issues

The table below sets out the plan to address governance issues identified during 2009/10:

                                Issue                                     Action                     Lead        By when
1     Continue to develop and embed governance processes Develop the role and work of           AT          Ongoing
      for performance and risk management                    the Audit and Performance
                                                             Review Committee
2     Improve the strategic management of risk               Revised Risk Management            CFO         Ongoing
                                                             Group, chaired by the Chief Fire
                                                             Officer, reporting to Corporate
                                                             Management Team
3     Ensure that all partnership arrangements are supported Arrangements to be audited         Outstanding
                                                                                                DCFO            from
      by appropriate governance arrangements                                                    2009/10
4     Review ethical guidance                                                          CMO
                                                             Use ethical governance toolkit     Not         currently
                                                                                                planned.
5     Develop a strong counter-fraud culture supported and Become more pro-active & AT          Report to September
      promoted by members and senior officers              allocate resources                   2009 Audit &
                                                                                                Performance Review
                                                                                                Committee
6     Address CRB issues in Community Safety               Ensure      compliance with DHR/DCFO Urgent
                                                           legislation
7     Improve compliance with absence management Monitor controls and address DHR               December 2010
      procedures                                           weaknesses
8     Improve IT Security                                  Address weaknesses          ISM      Urgent




                                                                  83
We propose over the coming year to take steps to address the above matters to
further enhance our governance arrangements. We are satisfied that these steps
will address the need for improvements that were identified in our review of
effectiveness and will monitor their implementation and operation as part of our next
annual review.




Signed:………………………………………………………….

Dr Paul Bryant
Chairman of the Royal Berkshire Fire Authority




Signed: …………………………………………………………...

Iain Cox
Chief Fire Officer of the Royal Berkshire Fire Authority




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