The cost to Merseyside Fire and Rescue Service as a result of the energy blunder at Liverpool Council could be at least 50% more than first anticipated.
The local authority has acted as electricity provider to the fire service for 36 years and will continue to for at least another 12 months despite the fiasco coming out of the Cunard Building earlier this year. When members of the authority that oversees the fire service voted to extend the partnership in an emergency meeting in May, it had been expected it would add an additional £1m to their bill for the current financial year.
A report to authority members revealed that it could have gone up to as much as £2m but Ian Cummins, Merseyside Fire and Rescue Service director of finance and resources, told a meeting of the authority’s policy and resources committee it was more likely to cost the service at least £1.5m - 50% more than the original £1m expected. Mr Cummins told the meeting the price would be based around usage owing to the variant nature of the contract Liverpool Council entered into.
READ MORE: Catalogue of errors that led to city council energy contracts mess
He said it would be monitored closely and estimates were “somewhere in the middle” of the original assessments of £1-2m of cost to the fire service. The authority’s inflation reserve is to be increased by almost £2m to cover the higher utility costs and potential pay costs in the financial year.
Cllr Andrew Makinson, deputy leader of the Liberal Democrat group on Liverpool Council and member of the Merseyside Fire and Rescue Authority (MFRA), said: “Just when we thought it couldn’t get any worse, we will see our city’s schools under even more pressure from September.
“Schools need a firm promise that they will be protected from Liverpool Council’s mistake, warm words do not help headteachers when they’re struggling to balance their budgets.” Cllr Makinson said the local authority had spent seven months “dithering over signing a fixed rate deal when everyone knew bills were rocketing.”
Chief Fire Officer Phil Garrigan said in May that alternative options will be considered for MFRA for future procurement of utilities from March 2023 onwards and the outcome of the Mazars’ independent review into the management of its electricity contract will be considered.
The increased hit on the authority’s reserves will also impact the MFRA’s ability to support recruits, Mr Cummins said in May.
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