Merseyside Fire and Rescue Authority (MFRA) will continue to use Liverpool Council for its electricity supplies despite a “disaster” and will consider its options moving forward.
In a move that is expected to cost the authority an additional £1m, members have agreed to continue its long-standing utilities agreement for the next 10 months amid a litany of failures at Liverpool Council. A series of mistakes and miscommunications earlier this year led to the local authority being placed onto a higher tariff that will add millions to its own bill and those of city schools and the fire service, who are involved in the same deal.
With the mandatory cut off date for a contract to be secured with Crown Commercial Services (CCS) looming, Merseyside Fire and Rescue Authority held an urgent committee meeting to discuss whether to retain its partnership with Liverpool Council, which has stood for 36 years. Chief Fire Officer Phil Garrigan said alternative options will be considered for MFRA for future procurement of utilities from March 2023 onwards and the outcome of Liverpool Council’s own independent review into the management of its electricity contract will be considered.
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Chief Officer Garrigan added that MFRA gets its utilities for all owned properties through the council as it currently does not have the specialist in house energy knowledge or expertise to monitor and manage the complex energy supply market and has benefitted from this arrangement in the past. He said that as of April 1, the council and fire service have been subject to a variable rate as a result of being out of contract which has placed an increase of 400% on its electricity costs.
By joining the CCS framework, costs are to increase by £1m for MFRA which while budget adjustments had been made for an increase across all utilities, it had not been forecasted at this scale. Therefore it was recommended that the expected revenue underspends for the financial year 2021/22 be used to cover the increase.
The hit on the authority’s reserves will also impact its ability to support recruits. Ian Cummings, MFRA director of finance and procurement, said: “If it wasn’t for this issue requiring an increase in the inflationary reserve, then I would have been recommending any underspend going towards training and development academy (TDA) costs.”
Committee chair Cllr Les Byrom said: “There’s two issues really; why did this happen? That’s something for Liverpool really, we’ve obviously got concerns about it; and what are we going to do about it? The obvious thing is to protect the budget of the authority.
“This is a disaster that we didn’t see coming over the horizon. We weren’t planning, the million quid we’ve got here was going to go on frontline firefighting or the TDA, what are you going to do?
“It’s not what we want, what we’ve got to do is stop the haemorrhaging from now on.” Chief Officer Garrigan added that moving away from the council would take time and it would move the authority onto a similar or higher rate.
It was not in the best interests of the authority to delay, he said. Cllr Byrom said: “I know it’s politically controversial in Liverpool but I don’t think it’s a controversy here.
“We’ve got to stem this.” Following the decision, MFRA has also commissioned an internal audit of its agreement with Liverpool Council.
