The Audit and Finance Committee of the Combined Fire Authority for County Durham and Darlington was scheduled to review the financial performance and risk management of the service. Key discussions were expected to focus on the audit completion report for the year ending March 2025, the statement of accounts for the same period, and the forecast outturn for the current financial year. The committee was also set to consider the 2026/27 budget and the medium-term financial plan, alongside the corporate risk register and the authority's short-term investments and long-term borrowing.

Audit Completion Report Year Ended 31 March 2025

The committee was scheduled to receive the Audit Completion Report for the year ended 31 March 2025, prepared by external auditors Forvis Mazars LLP. This report would have summarised the audit findings and conclusions for the financial year. The report indicated that the audit procedures were substantially complete and anticipated an unqualified opinion on the financial statements, subject to the satisfactory resolution of outstanding matters. A significant area of focus during the audit was the accounting for leases under IFRS 16, including Private Finance Initiative (PFI) arrangements, where work was ongoing. The report also highlighted a deficiency in internal control regarding related party declarations, noting that seven councillor declarations had not been completed and returned.

Statement of Accounts for the Year Ended 31 March 2025

A key item on the agenda was the approval of the Statement of Accounts for the financial year ended 31 March 2025. The report from the Deputy Chief Executive explained that the statement had been prepared in accordance with the 'Code of Practice on Local Authority Accounting in the United Kingdom 2024/25' and the 'Accounts and Audit Regulations 2003'. The statement includes the Narrative Report, the Independent Auditor's Report, and the core financial statements: Movement in Reserves, Comprehensive Income and Expenditure, Balance Sheet, and Cash Flow Statement. It also consolidates the performance and balances of the subsidiary companies, Vital Fire Solutions Limited and County Durham and Darlington Fire and Rescue Service CIC. The report recommended that members approve the Statement of Accounts.

Corporate Risk Register – Position on 31 December 2025

The committee was to be updated on the Corporate Risk Register as of 31 December 2025. The report indicated that there were six high-level risks facing the Service, with their original and residual risk scores detailed. One significant risk identified was the Failure to achieve the savings via the service transformation options outlined in the Community Risk Management Plan (CRMP) consultation leading to a greater budget deficit, with an increased residual risk score due to funding reductions. Another related risk, The actual position relating to pay awards, inflation and grant cuts etc, turns out to be different to the assumptions underpinning the Medium-Term Financial Plan (MTFP) leading to a greater budget deficit, also saw its residual risk score increase due to the provisional settlement outlining further government funding reductions.

Forecast of Outturn 2025/26 (Quarter Three)

The committee was to receive an estimate of the Service's revenue and capital financial outturn position based on expenditure and income up to 31 December 2025. For the revenue budget, a forecast underspend of £0.732M (2.00%) was anticipated. Variances included an overspend on salaries and wages due to pay awards and increased retained firefighter payments, and an overspend on premises due to essential repairs. An underspend was forecast for supplies and services due to IT savings, and a significant underspend was projected for contingencies, partly offsetting other overspends. For the capital budget, a forecast underspend of £1.535M (18.65%) was anticipated, primarily due to delays in the New Service Headquarters project and vehicle deliveries.

Short-Term Investments and Long-Term Borrowing – Period to 31 December 2025 (Quarter Three)

An update was scheduled on the performance of the Authority's short-term investments and long-term borrowing for the period ending 31 December 2025. Interest earned on short-term investments was forecast to exceed the budget, with a balance of £14.538M invested at the quarter end across various institutions including Money Market Funds, Lloyds Bank, Bank of Scotland, and the Debt Management Office. The outstanding principal balance for long-term loans from the Public Works Loan Board (PWLB) was reported as £4.788M.

2026/27 Budget and Medium Term Financial Plan

A significant item on the agenda was the consideration of the 2026/27 revenue and capital budgets and the medium-term financial plan (MTFP). The report detailed the provisional local government finance settlement for 2026/27, highlighting concerns about the level of government funding and its detrimental impact on frontline services. The provisional settlement indicated further reductions in government funding over three years, equivalent to 24 wholetime firefighter posts. The report outlined budget pressures including pay awards and inflation, and presented a draft MTFP for 2026/27 to 2029/30, which indicated a balanced budget for 2026/27 after utilising reserves, but projected shortfalls in subsequent years. The committee was asked to consider the level of council tax for 2026/27, with a proposal for a £5 increase on Band D properties. The capital programme for 2026/27 to 2029/30 was also presented, including provision for building works, vehicle and equipment renewals, and ICT replacement.

Any Other Business

This item was scheduled for any other business that the committee wished to raise.