Brexit could cost the fire service almost £90,000 a year
The impact of Britain leaving the European Union could cost Nottinghamshire Fire and Rescue Service almost £90,000 a year, it has been predicted.
After the British public chose to leave the EU last year, the value of the Sterling dropped dramatically, and it could have a drastic effect on the finances of Nottinghamshire’s fire service.
A report, presented to the Nottinghamshire and City of Nottingham Fire and Rescue Authority finance and resources committee on Friday, said it could cost the service £89,000 a year.
It said the service works with 39 businesses which have headquarters overseas, supplying equipment, vehicles and IT systems, so the 15 per cent fall in the value of the pound could have an effect on its budget.
The report, written by Sue Maycock, head of finance at NFRS, said: “The total value of expenditure with these suppliers in the most recent full financial year 2015/16 was £596k.
“So, if it is assumed that a 15 per cent decrease in the value of Sterling against the US Dollar and against the Euro might translate into a 15 per cent price increase, this would equate to a total price increase for these suppliers of £89k if the expenditure in 2015/16 represents a typical year.”
The report said any significant price increases can be absolved by using general reserves to make up the difference.
Councillor Chris Barnfather, who was at the meeting, said they committee had asked for a report on the effect of Brexit on the finances of NFRS.
“The report was the worst-case scenario,” he said. “The reality of it is that the bulk of our budget is spent on salary – 75 per cent goes on wages.
“At a previous meeting we had asked to find out what effect the falling value of the pound would have on the finances, as it’s the season to be looking at budgets now.
“Sterling fell because of the uncertainty around us leaving the common market – but I think after the Prime Ministers speech earlier this week she has made things a lot clearer. Sterling actually went back up after the speech against the Euro.
“We’re not expecting it to have a large impact. One of the IT systems we have comes from a French company but the contract is in Sterling, so it will be the company who lose out instead of us. I think it will even itself out.”
A spokesman for the fire service said: “The report to the finance and resources committee on the fall in the value of sterling makes it clear that it is not possible to quantify any potential impact to the Fire and Rescue Service budget as there are still many uncertainties surrounding this issue for organisations.
“It is just one of the many things we are aware of and monitoring as we continue to effectively manage our finances going forward.”