Audit of Best Value
Lothian and Borders Fire and Rescue

Prepared for the Accounts Commission
March 2012

Audit Scotland is a statutory body set up in April 2000 under the Public Finance and Accountability (Scotland) Act 2000. It provides services to the Auditor General for Scotland and the Accounts Commission. Together they ensure that the Scottish Government and public sector bodies in Scotland are held to account for the proper, efficient and effective use of public funds.

Commission findings
1.	The Accounts Commission accepts the report of the Controller of Audit on the Best Value audit of Lothian and Borders Fire and Rescue.
2.	Lothian and Borders Fire and Rescue provides an effective service with a clear strategic vision supported by a good use of integrated risk management planning. This is helped by a strong approach to financial management, although improvements need to be made in its management of assets and equipment. Its workforce planning has some strengths, for example in a noteworthy approach in the day-shift duty system, with whole-time firefighters working alongside retained staff. However, high levels of sickness absence levels within the service are a concern. It also needs to invest more resource in the development of retained firefighters.
3.	The Commission is encouraged by the clear focus on preventative work, with innovative approaches of the service in working with its partners and engaging with communities, most notably with young people. However, to make its preventative work more effective, the service needs to do more to establish the reasons behind the high casualty figures in the region.
4.	The Fire and Rescue Board has good self-awareness, but needs to strengthen scrutiny of the service, which requires to be supported by better quality performance information.
5.	The Commission notes that any substantial issues arising for the service will be considered as part of the annual audit process.
6.	The Commission will review its findings from this audit alongside those of the forthcoming audit of all other fire and rescue services in Scotland, with a view to producing in 2012 a national overview of its work in fire and rescue.

The Audit of Best Value
1.	Local authorities in Scotland, including fire and rescue, have a statutory duty to deliver best value in their services. This requires them to establish management arrangements, aimed at securing continuous improvements in their performance while maintaining an appropriate balance between quality and cost.
2.	Since 2004, Audit Scotland has carried out audits of Best Value in each of the 32 councils in Scotland and in most police authorities. These audits have helped to improve performance and accountability in local government and have brought unsatisfactory performance to the public’s attention through the public reporting process.
3.	The responsibilities of fire and rescue services have changed significantly over the past decade. In 2003, all Scottish services were required to produce Integrated Risk Management Plans (IRMP), identifying the level of local risks and determining the appropriate allocation of resources. The Fire (Scotland) Act 2005 introduced further changes, placing a strong emphasis on prevention rather than simply emergency response.
4.	Some aspects of Best Value in fire and rescue have been covered in earlier Accounts Commission reports, particularly the Scottish Fire Service: verification of the progress of modernisation, published in 2004, and the Review of service reform in Scottish fire and rescue authorities, published in 2007. So far, however, there has not been any dedicated audit, covering all key aspects of Best Value. 
5.	Following a formal consultation with stakeholders in late 2010, the Accounts Commission decided that the audit of Best Value should be extended to fire and rescue. With the Scottish Government signalling a potential restructuring of the services, however, it was recognised that the audit needed to be proportionate, seeking to identify the key strengths which should be retained in a future structure and any significant weaknesses which needed to be resolved. The Scottish Government has subsequently announced its commitment to deliver a single Fire and Rescue Service for Scotland, with details on the Police and Fire Reform Bill (Scotland) 2012 published in January 2012.
6.	During 2011, audits were carried out at each of the eight Scottish fire and rescue services and authorities. These focus on core issues, such as strategic planning, the role of members, financial management, and service performance and costs. These local reports, which will support improvement and local accountability, will be followed by the publication of a national overview report in 2012. A number of best value issues, including equalities, sustainability and procurement have not been covered directly in the scope of the local audit work. These, along with a range of other issues, will be covered in the national overview report.
7.	We carried out the Best Value audit of Lothian and Borders Fire and Rescue during October 2011. We gratefully acknowledge the co-operation and assistance provided to the audit team by the Chief Fire Officer, James Campbell and now Acting Chief Fire Officer, Alex Clark; the chair of the Lothian and Borders Joint Fire Board, Councillor Michael Bridgman, and all other elected members and staff involved.

Summary
8.	Lothian and Borders Fire and Rescue (L&BFR) provides an effective and low cost emergency response service. Over the past ten years, the number of fires in the Lothian and Borders area has reduced significantly in line with the national trend, but remains higher than the national average as does the level of casualties. The cost of providing the service is the lowest per head of population in Scotland. The cost in real terms has not changed significantly over the past decade. 
9.	L&BFR has clear priorities and the principles of integrated risk management are evident throughout its strategic planning. This has been used to help shift resources towards areas of greater risk, including the closure of a fire station and some changes to shift patterns to support some of the higher risk areas covered by retained stations. Other planned changes, including the location of stations in North Edinburgh and East Lothian, have not come to fruition, as a result of the economic downturn and the progress towards a national service.     
10.	L&BFR has a clear focus on prevention work. It engages in a range of educational and awareness raising initiatives and carries out a relatively high level of home fire safety visits which are increasingly targeted on areas of greatest risk. It also has a risk focused approach to carrying out statutory fire audits but faces a significant challenge with half of the houses of multiple-occupancy in Scotland, widely recognised as high-risk properties, within the Lothian and Borders area. 
11.	Although the absolute numbers are not high the relative level of casualties compared to other services is high. While the high number of houses of multiple-occupancy is likely to be a factor, the service has not identified the underlying reason for this high level of casualties and has not been able to target preventative work accordingly. 
12.	Lothian and Borders Fire and Rescue Service has good working relations at a strategic and operational level with its partners. There are good examples of the service working well with partners on road safety and fire prevention, as well as wider community safety initiatives. There are also some examples of the service working well with council and other emergency services to make effective use of resources, such as fleet maintenance facilities.
13.	There is a good level of awareness and engagement by members of the joint board but there is scope for them to provide more leadership in setting the strategic direction, as well as challenging progress with community planning and service performance. The standard of challenge and the depth of scrutiny from members are broadly good, but the range and frequency of performance information provided to members is limited, affecting the board's ability to drive improvement.  
14.	The service recognises that its performance information systems are inadequate and has plans in place to implement a new system but it has taken too long to address this. The lack of an effective information system to efficiently collate performance information affects the availability of good quality timeous information to not only the board but also managers and the wider staff, limiting effective monitoring and improvement. Quarterly management performance reports lack sufficient analysis of performance.
15.	Leadership by the management team is good, with an effective team culture evident among the senior and wider management team. There is a good level of self-awareness with managers recognising where improvement is needed and with plans to address these. There are, however, potential risks to management capacity with resources drawn on for development of the national service and internal transitional work. 
16.	The service actively engages in improvement work at a strategic and operational level. However, there is scope to apply a number of its improvement tools more effectively, for example the service's programme of reviews is not targeted at issues of greatest need. The service uses a data base system that allows all staff to propose improvement initiatives. There is a good level of use of this tool and it actively contributes to improvement work, but requires refinement, for example to support cross-service learning. 
17.	L&BFR has some good arrangements in place to make effective use of its resources but recognises there is scope to improve how it manages its assets and workforce. In particular, more robust systems need to be established for the management and monitoring of equipment. In relation to the workforce, it needs to make further progress with absence management and, appraisal, development and training arrangements for retained firefighters. It is improving information and communications technology but there are still some challenges with particularly the speed of the ICT infrastructure.  

Part 1. Context
18.	Lothian and Borders includes the local authority areas of the City of Edinburgh, East Lothian, Midlothian, West Lothian and the Scottish Borders. It covers a region of 6,456 km2 that is a mix of urban as well as rural and agricultural areas, particularly in East Lothian and the Scottish Borders.  
19.	The population of the area is around 950,000, representing 18 per cent of the total Scottish population. There are a higher proportion of older people in the Scottish Borders than across the rest of the area. Older people are a higher risk group and particularly with the more rural nature of this area this presents potential challenges in relation to service demand and availability of individuals to provide the service.
20.	Estimates indicate that the total population of Lothian and Borders will increase to over 1.1 million by 2033 and the increase will be particularly marked in Edinburgh. Over half of the area's residents live in Edinburgh. Overall, the region is relatively affluent, but with some areas of deprivation, evident particularly in the city. A number of other factors also impact on risk in Edinburgh for the fire and rescue service. These include the historic nature of many of the buildings and infrastructure of the city, the significant increase in population during international cultural events such as the annual Edinburgh Festival and Fringe, the large student population and the wide range of organisations and businesses including the Scottish Government and Parliament, healthcare, bio-sciences, financial services, and a large number of hotels, bars and restaurants.
21.	The Lothian and Borders Fire and Rescue Service (L&BFRS) is delivered from its head quarters at Lauriston in Edinburgh and from 35 stations across the area. Of these stations, nine are whole-time stations, three stations are combined whole-time and retained stations, and one is whole-time with a day-shift duty system (DSDS) attachment. There are 19 retained stations and a further three retained stations with DSDS attachments. DSDS staff are whole-time staff that do not work in the service's shift pattern but work during the day only. These officers provide additional cover and resource during the day for emergency response and community safety activities.
22.	The service's annual expenditure is around £42.3 million (2010/11net expenditure). L&BFRS employs around 1176 staff (full-time equivalent), including 737 whole-time and 276 retained firefighters (Exhibit 1). It has a fleet of 60 response vehicles. Of these, 47 are standard fire and rescue engines, but there are other specialist vehicles such as those for aerial rescue, urban search and rescue, water rescue, line rescue, and command and control. 
23.	L&BFR is governed by a Joint Fire and Rescue Board that comprises 18 councillors. Nine of the members are from City of Edinburgh Council, including the convener of the board, three members are from West Lothian Council, and there are two members from each of the other constituent councils. The board meets five times a year with a number of subcommittees, including a scrutiny committee, also meeting regularly.

Part 2. Governance and management
Vision and strategic direction
L&BFR has clear strategic priorities. It has a mature and effective planning framework. The principles of integrated risk management are evident throughout its strategic plans, and it has a strong focus on prevention work. There is a good level of awareness and engagement by members but with scope to provide more leadership in setting the strategic direction. Management leadership is good, with an effective team culture amongst the senior and wider management team. There are potential risks to the management capacity with resources drawn on for development of the national service and internal transitional work. 
24.	L&BFR has a clear strategic vision set out in its annual performance plan. The current plan, produced in November 2011, sets out the core vision and strategic objectives, supplemented with specific commitments that relate to preparing for the merger to a national fire and rescue service.  
25.	The service has a well established and integrated planning framework. At the centre of the framework is the annual performance plan. The annual cycle for development and approval of the performance plan is phased with summer and winter management workshops to consider and refine the strategic priorities and objectives for the service. This annual planning cycle is effectively integrated with the annual budgeting process and financial management. Although ultimately the board approves the plan, the cycle does not involve formal engagement or consultation with the board. However, the convener of the board attends the development workshops.
26.	The annual planning cycle also includes the development of a hierarchy of plans that flow from the priorities and objectives set in the development of the performance plan. These plans include functional plans for the divisions of the service, including community safety, operations, technical services, training and development, central services, and personnel. Service delivery, unit and personal development plans make up the rest of the internal service planning framework.    
27.	At a strategic level the service improvement plan is complemented effectively with a series of strategic assessment documents that set out the services contribution to the five constituent authorities' community planning partnerships' priorities. In particular, these documents outline the service's priorities in relation to community safety risk in the areas. 
28.	The responsibilities of fire and rescue services have changed significantly over the past decade. In 2003, all Scottish services were required to produce Integrated Risk Management Plans (IRMP), identifying the level of local risks and determining the appropriate allocation of resources. The Fire (Scotland) Act 2005 introduced further changes, placing a strong emphasis on prevention rather than simply emergency response. 
29.	L&BFR has responded strongly to this new role in preventative work. In September 2004, the board approved the expansion of a pilot project in West Lothian of home fire safety checks across the area. In its IRMP and its 2006 service plan, L&BFR made the commitment to provide a home fire safety visit (HFSV) to every household in the area. This was a significant undertaking and high targets were set for staff. High numbers of homes have been provided with information on how to request a HFSV and high numbers have received a HFSV and had smoke detectors installed since 2004/05. However the approach taken did not target the most at risk individuals or properties. The approach has been refined. In 2009/10, a more risk based approach was deployed across the service.    
30.	The principles of integrated risk management are evident throughout the service's strategic planning and its IRMP processes have led to some significant changes to resources and plans for others. L&BFR board approved an IRMP in January 2006, Making Safer Communities Service Improvement Plan 2005-2010. The production of this plan, among other work, included use of the Fire Service Emergency Cover (FSEC) risk modelling tool. The process produced a picture of risks to the communities across the area and of the most effective model for the use of resources in relation to the levels of risk and provision of the service. Over more recent years, enhanced information, such as socio-demographic data software, has also been employed by the service in planning.
31.	There is evidence that IRMP has led to shifts in resources to help match community risks. In 2007, the Melrose fire station was closed. This was followed by the redeployment of various fire engines throughout the area, and changes to the balance of crewing arrangements in some stations. Of particular note is the introduction of a day-shift duty system (DSDS) at selected stations, an arrangement not commonly used across the Scottish fire services. These firefighters are located in areas where the predicted fatality rate from dwelling fires indicated the need for additional resources. These DSDS whole-time firefighters provide additional capacity during the day-shift for both response and preventative work. DSDS firefighters are located at Livingston (a whole-time station), Penicuik, Whitburn and Duns (all RDS stations). During the day it is generally recognised to be more challenging to get full availability of retained firefighters because of other commitments such as being outwith the area with their primary employment. For the specific stations and adjacent retained stations, these DSDS firefighters are an important resource. 
32.	Other potential changes to the strategic deployment of resources have not come to fruition. This includes the development of a new training centre and the closure and relocation of new stations in the north of Edinburgh and in East Lothian. Work was progressed on these projects until recently but external factors including the tightening financial position of the public sector, housing developments not progressing as planned and then moves towards reform of the Scottish fire and rescue services slowed then halted these plans. Although the new training centre has not been progressed, as an alternative, enhancements have been made to the current facilities. 
33.	The current board was established in 2007 following the local government elections in May. The board demonstrate a good understanding of the strategic issues and principles of risk. Members of the board, on the whole, are engaged but could provide the service with a stronger level of challenge and scrutiny, particularly in driving performance improvement and value for money. Members do request reports on specific issues, but have not determined the scope and structure of performance monitoring reports. Instead, fire officers and managers determine the information which is routinely provided to board members.
34.	Management leadership is strong. Senior managers demonstrated a good level of self-awareness and understanding of the areas for improvement within the service. The senior management and wider management team work in an open and inclusive manner, with a sense of common purpose. 
35.	Since the current CFO took up the post in June 2010, there has been a gradual shift in the management structure. Many staff at a middle management level have moved post over the last 18 months. This has been managed well, with the individuals predominantly seeing this as a positive opportunity. 
36.	The most significant challenge for the service management over the next year is its capacity. The planning and transition work for the national service will require a significant proportion of its management time and managers will need to balance this commitment with maintaining the current standard of support to staff and, maintaining the standard of service monitoring and management. The service recognises this issue and has prioritised maintaining good levels of firefighter and community safety in its recent service planning processes.
Partnership working
L&BFR has good working relations at a strategic and operational level with its partners. However, the board provides limited oversight of the service in relation to community planning. There are good examples of the service working well with partners on community safety initiatives and some examples of the service working well with councils and other emergency services to make effective use of resources. 
37.	Fire and rescue services work through a range of partnership arrangements. They plan for civil contingencies with public and private sector partners through Strategic Co-ordinating Groups (SCGs).  Prevention activity is typically delivered through community safety partnerships, working with local authorities, police, health, social landlords and the voluntary sector and sharing information on individuals at risk is key to ensuring prevention activity is most appropriately targeted.  Fire and rescue services also deliver their response services in conjunction with other emergency services such as police, ambulance service, coast guard and mountain rescue. Individual fire and rescue services also work with other fire and rescue services, typically to provide cross-border response services or contributing to national resilience for major incidents.
38.	L&BFR work effectively with partners in relation to community risk and contingency planning. The service regularly participates in major joint exercises with other emergency services and partners. The service also engages with major private sector bodies in the area, participating in joint emergency exercises. 
39.	The service demonstrates a good level of engagement in community planning arrangements and community safety partnership work across the five council areas it spans. Relationships with partners are good, with well-established engagement at both a strategic and operational level.  Managers and officers from across the organisation are involved at all levels of partnership arrangements. Senior managers are represented on community planning and community safety partnership strategic groups and middle managers and community safety officers engage in local level groups. For example, officers are integrated into a co-located community safety team in West Lothian, representatives participate in monthly meetings in each of the six neighbourhood areas and liaise with the 12 neighbourhood partnerships in Edinburgh. Board members approve the service's strategic assessments for the constituent areas, but there is limited evidence of board members actively providing an oversight and driving the community planning agenda, through direct engagement or through challenge and scrutiny. 
40.	The service has Strategic Assessment documents to coordinate the service's contribution to the five partnerships’ priorities and single outcome agreements. These are well structured, clearly indicating the priorities for each area within the framework of the service's own risk-based planning approach and, are reflected in operations and community safety plans.  
41.	The service works well with a number of partners in different ways to target preventative community safety work to those identified as being at risk. For example L&BFRS works with council partners on a ‘stair-aware’ campaign to reduce the incidence of rubbish in common stairs which creates a significant fire hazard. The service works with health and social services partners to target vulnerable individuals for home safety visits. This includes approaches such as inclusion of questions in shared risk assessments undertaken by health and other care professionals regarding fire safety and also fire and rescue officers involvement in case conferences for individuals identified as being at particular risk from fire related incidents. The service works closely with the police in a number of initiatives to support work to tackle antisocial behaviour. This includes the service's involvement in initiatives to educate and engage young people known to be involved with starting fires or those at risk of becoming involved in antisocial behaviour. 
42.	It is difficult to evidence the impact of these initiatives in reducing community risk. The service has undertaken a broad evaluation of the economic impact of its HFSV (see paragraph 88) but has not evaluated other individual initiatives for their impact and value for money.  
43.	Although, like other Scottish fire and rescue services, the level of shared and joint service arrangements is limited, L&BFR does work well with other partner services to promote more efficient use of resources. For example: 
•	with the city of Edinburgh council CCTV unit to improve the safety of crews. Two CCTV screens in the service control centre are used to view areas covered by CCTV in the city to advise crews of any risks evident at sites they are attending
•	Lothian and Borders Police use the fire and rescue service operational support centre facilities for vehicle maintenance
•	the Scottish Ambulance service uses some fire stations as standby locations
•	L&BFR provide some garaging of vehicles for the British Red Cross, Her Majesty’s Coast Guard and Scottish Ambulance Service 
•	the service has a memorandum of understanding with Tweed Valley Mountain Rescue to support line recue provision in the Scottish Borders area.
44.	Some progress has been made in recent years in partnership working between fire and rescue services, particularly in relation to procurement. However, the scope of cross boundary partnership working is limited and it is disappointing that more has not been done to find efficiencies in provision through more partnership and shared activity. There are, however, a few examples in L&BFR, such as a formal arrangement with Central Scotland Fire and Rescue to provide fire investigation services and for Central Scotland Fire and Rescue Service to provide L&BFR with access to a trained accelerant detector dog. Other potential areas for shared services, such as occupational health, ICT and control room arrangements, have been considered but have not been progressed.  
Scrutiny, performance management and improvement
The service recognises that its performance information systems are inadequate and has plans in place to implement a new system, but it has taken too long to address this. There is a well established culture for continuous improvement, although the application of the tools used needs to be improved. The standard of challenge and the depth of scrutiny from members is broadly good, but the range and frequency of performance information provided to members is limited, affecting the boards ability to drive improvement. 
45.	Performance management is an area for improvement. The service does not have an effective information system to efficiently collate performance information and make this readily available to managers or board members. Information is being collated and reported from various systems into the management reporting arrangements, but the lack of a dedicated system detracts from the robustness and flexibility of performance management. A software tool anticipated for a number of years from an external partner has not been progressed and the service has not put an alternative arrangement in place to date. The service now has plans to put in place a system during 2011/12 to address this gap. 
46.	Quarterly performance reports are produced for the service management team. These reports contain a range of management information, such as progress with projects, budget information and reporting of trends in activity outputs. The service recognises the need to develop these further into more useful reports, with a better emphasis on underlying performance issues rather than reporting on activity levels.
47.	Improvement to the performance information systems would support better performance reporting to members. The limited performance information systems also mean that current local performance information is not readily available to staff in stations. Performance information at the front line of service delivery is useful to motivate staff and stimulate improvement.   
48.	There is continuous improvement work undertaken at all levels of the service, although the application of the tools used needs to be improved. Strategically, the service has undertaken PSIF (Public Sector Improvement Framework) self-assessment exercises in 2007/08 and 2009/10 but these have not been used effectively to provide internal challenge and prompt improvement. The service has undertaken a cyclical programme of best value reviews for several years. Over time, these cover all areas of activity, with the aim of identifying efficiencies and improvements in performance. Recent reviews include training and development, occupational health and fitness and, community safety. The reviews have contributed to improvements, however, there is little prioritisation of the areas that are subject to review. The board and service should consider whether any review activity planned for the coming year is effectively targeted to make best use of the resources.
49.	An important contribution to the service's improvement work is its use of an 'initiatives system'. This software tool is used for monitoring progress of activities and projects in action plans at all levels of the organisation but is also actively used at all levels of the organisation to suggest improvement initiatives. There is a systematic approach to managing and approving proposed initiatives. This includes ensuring that all initiatives contribute to the service's priorities. Reports from the system are provided to key management groups for monitoring. The system would benefit from more systematic arrangements to ensure cross-service learning and involvement in initiatives as currently it tends to be used as a tool within teams rather than to promote wider improvement. 
50.	Operational assurance is well managed. Arrangements are well developed and contribute to continuous improvement through monitoring of the efficiency and effectiveness of policies and procedures and their implementation operationally in stations and at incidents. The service should ensure that feedback mechanisms to staff from operational assurance activities are consistent and effective; our audit work indicated some variability across stations. The service could also consider how it can expand this quality assurance approach into other areas of work such as its community safety activities. 
51.	There has been some improvement over the last 18 months in the range of performance information members receive but more, and better, performance information needs to be available to members to support good scrutiny and challenge. Currently the board receives an annual report on service performance. As part of its remit, the scrutiny committee is meant to receive quarterly performance reports by the functional departments but this has not happened consistently in practice. The quality of these reports for scrutiny is inadequate. They contain a lot of information on progress with projects, budget information, activities and outputs but limited trend information, no benchmarking information or costing data. Performance on specific issues is also presented as required, such as progress reports on activities such as the HFSVs. However, this does not provide members with a clear illustration of how effectively the service is performing across its priorities and primary activities, across the constituent areas, or comparatively with other services. It is therefore difficult for members to monitor the service’s overall performance and help drive improvement.
52.	Scrutiny and challenge from board members tends to focus on specific issues. There is a good level of engagement and understanding of the strategic issues by members and a good standard of discussion and challenge to the service management on issues brought to the board. They can ask very pointed questions and provide strong, independent challenge.   
53.	Board members carry out some overview of the service's improvement agenda. They are informed by managers of the proposed cycle of best value reviews, but do little in terms of prioritising areas in need of review. They are not involved in undertaking the reviews. 

Part 3. Use of resources
L&BFR has some good arrangements in place to make effective use of its resources but recognises there is scope to improve how it manages its assets and workforce.  It manages its financial resources well. It also manages its workforce well, with clear plans and policies in place, but it needs to make further progress with absence management and training and development arrangements for retained firefighters. Asset management of the service's property and fleet is effective, but more robust systems need to be established for the management and monitoring of equipment. It is improving information and communications technology but more progress is needed in improving some of the ICT infrastructure.  
Financial management 
L&BFR manages its financial resources well. It has managed reductions in the budget effectively. There is a 'zero based' approach to budget planning and members of the joint board are engaged in the annual budgeting process. 
54.	L&BFR demonstrates good financial management and has dealt with some reduction in its budget over the past four years without detrimental impact on service performance. Between 2007/08 and 2010/11, the service's net expenditure (excluding pensions) has reduced by around 4.6 per cent from £45.28 to £43.20 per capita. It has achieved efficiencies through vacancy management and through a move to a 'zero based' budget planning approach. This means the budget is not based on assuming spending will be on the same things and at approximately the same levels as the previous year. No assumptions were made and the budget is built up from the strategic plans and commitments for the year. This has helped focus resources on priorities. This was introduced for the 2010/11 budget planning cycle. 
55.	The service's net expenditure in 2010/11 was £42.3 million. In 2011/12, the budget is £41.2 million. Further reductions in the budget are anticipated for 2012/13. The service is planning for this. Its focus for achieving further reductions in the budget is to prioritise maintenance of the current standard of service and work that contributes to the transition to a national service. Other initiatives and programmes of work are being reviewed for deletion or reduction in scope and resources.   
56.	L&BFR's general fund balance reduced from around £3.9 million in March 2010 to £3.1 million in 31 March 2011, but remains a healthy level of reserve. 
57.	Members of the joint board are engaged in the annual budget planning arrangements and approve and monitor the service's revenue budget and capital programme. Financial information is provided regularly to the board for scrutiny but members could take a stronger role in challenging and driving value for money. 
58.	The service has a devolved budgeting approach that is well structured and monitored. This contributes to the priority-led budgeting approach and also devolves responsibility and accountability for budgets across managers throughout the departments of the service. Although this has developed well, continued support is needed for budget holders as there is a mixed level of ability in dealing with financial information. The system for monitoring and managing the budgets has also developed well with improved information systems producing better reporting for budget holders and a Budget Review Group of senior managers from across the departments providing an oversight of the budget management. 
Workforce management
Workforce management is good and improving in L&BFRS. Firefighter health and safety is a clear priority for the service management. Strategic planning has developed well over the last two years. Training and development arrangements are good although there is scope to improve systems for supporting retained firefighters. Although improving, the service needs to make more progress with absence management. 
59.	The workforce profile of L&BFRS has changed very little over the last decade. There has been a slight reduction in the total number of staff, since 2000 the full-time equivalent (FTE) has reduced by 76; 45 of these have been since 2005. In 2011, the total FTE staff number is 1176, four per cent less than 2005. There are 20 less FTE whole-time firefighters, 35 less retained firefighters, but nine more FTE of other staff. 
60.	L&BFR has a documented workforce strategy laid out in its Human Resource Strategy and Personnel Workplan, produced in 2010. In general, there is a sound and structured approach to workforce management.
61.	The managers monitor the workforce effectively, for example monitoring age profiles in relation to potential retirements and succession planning. There is an established vacancy management group. The service has used vacancy management as a tool to manage budget reductions. At the time of the audit, for example, 15 support staff vacancies were being held unfilled. A voluntary severance process was also implemented in 2010/11. As a result, 14 members of staff left the service under the terms of the process.
62.	During 2010/11, the service put in place a new HR management information system that has enhanced access to management information and has supported the devolvement of staff management issues further to area and station level management.  
63.	The management of training and development is good, but with scope for further improvement. There is good evidence that the arrangements are well established and deployed across the organisation. There is also good evidence of ongoing improvement and development of the training and development systems. Whole-time members of staff receive an annual appraisal of their performance and there are clear links to an assessment of training needs. There is scope for the service to improve the corporate monitoring and assurance of the arrangements at station level. 
64.	As with other fire and rescue services, the provision of training and development for RDS firefighters is challenging. The service allocates two hours a week for RDS training. This is a very limited amount of time to cover the range of training, recording of training and other tasks required of the RDS firefighters each week. On average a training officer attends each RDS station around half of the weekly training nights. RDS firefighters are not a part of the service's appraisal and personal development systems. 
65.	There has been significant additional investment over the past two years in incident command training. In addition to station-based watch exercises, the service has an annual programme of officer exercises to develop and maintain incident command and decision-making skills in realistic scenarios. The scenarios and exercises are specific to the role and level of responsibility of the individual. This corporate approach supplements nationally recognised command training and assessment processes. All of the service's managers with command responsibilities have attended training and passed a national assessment at the appropriate command level. 
66.	There is a strong emphasis on maintaining core skills of staff and ensuring safe working practices. Breathing apparatus training has been reorganised logistically so that all firefighters receive annual training. During 2010/11, the service's carbonaceous fire training facilities was replaced. This is an important resource for the service in the provision of training for firefighters in fire behaviour.
67.	Following the death of a Lothian & Borders firefighter in July 2009, there is a heightened focus on health and safety of firefighters. It is clearly a strong priority for senior management and this is evident throughout the organisation at a strategic level in planning, through to training, a strong approach to producing tactical information on properties, and, day-to-day practice, such as a revised accident reporting approach, and communications in stations. This is clearly a strength but managers need to be alert to how health and safety information is communicated to staff. Staff spoken to during the audit welcomed the focus on health and safety and the principles and systems in place to safeguard their personal safety but did not believe information was always communicated in the most effective ways.
68.	Days lost due to sickness absence are high. At nine days lost per member of staff this is well above the national average for fire and rescue services nationally (Exhibit 4). A new policy for absence management was produced in 2009/10 and is starting to have an impact. In 2009/10, the absence level was 9.8 days, so although relatively high, 9.0 days in 2010/11 shows improvement. There is clear recognition that absence management needs further improvement and the service is currently reviewing further ways to improve its absence management arrangements and therefore improve performance. 
Asset management 
L&BFR's day-to-day management of its property and fleet is effective with a software tool providing improved support. The service needs to make progress with producing its asset management strategy and equipment register. 
69.	The service recognises the need to improve asset management arrangements. It has committed, in its improvement action plan, to producing an asset management strategy and equipment register, but these have not yet been produced. However, day-to-day management of the services property and fleet is good, supported by information systems that assist effective monitoring.
70.	L&BFR property is in reasonably good order and is managed and monitored effectively by the service and board. During 2010/11, a number of projects were reviewed with the current financial context and transition to a national service in mind. A new training centre, planned for development at Newbridge, and development of the station at Wallyford, for example, have been put on hold by the board. 
71.	In 2005/06, the previous board invested approximately £800,000 to purchase two combined aerial rescue pump (CARP) appliances. Technical difficulties have been experienced by a number of services with these vehicles. L&BFR have been unable to use these two vehicles as intended since their delivery in 2007 and now have been re-valued at £200,000 to reflect their use, after adaption, for driver training. 
72.	Asset management of equipment is less well managed. Although some equipment on vehicles is effectively managed and monitored via the fleet maintenance systems, this is not the case for most equipment. There is not an effective information system in place providing an equipment register. There are limited systems in place to ensure equipment is individually identified, monitored and managed. This means that, for example, pieces of equipment requiring testing or replacement are not readily traceable. For example, ladders are tested regularly. Ladders used by two crews from different stations at an incident may be transferred between appliances in error at the end of the incident. Without clear identification of items and traceability, testing and monitoring is not reliable and therefore there are potential health and safety risks not being adequately managed. 
73.	There has been a long-term lack of investment in the information and communications technology (ICT) infrastructure. The service and board has recognised this as an area for improvement and has, over the last two years, made efforts to make progress. In 2010/11, a refreshed ICT strategy was produced following an extensive review. The review recognised the scale of what was required in relation to the infrastructure. The review also took into consideration the likelihood of restructuring of fire and rescue services nationally. The resulting action plan, now being progressed, reflects this, with a range of improvements that are necessary for the service in the interim but is not a long-term investment plan.

Part 4. Service performance
L&BFR provides a good emergency response service and a strong focus on prevention work, at a relatively low cost. The cost of the service per head of population is the lowest in Scotland. The number of both primary and secondary fires is reducing and the service responds quickly to calls. However, the level of casualties is the highest in Scotland. The service has made some progress with addressing automatic false alarm levels but the number is still high and accounts for over half of the calls the service responds to. The service provides high numbers of targeted home fire safety visits to its communities and is engaged in a wide range of community safety initiatives. 
Service costs
The cost of providing the fire and rescue service in Lothian and Borders is the lowest across Scotland per head of population. The service's expenditure has varied very little in real terms over the past decade. 
74.	L&BFR’s operating costs per head of population are well below the Scottish average. In 2010/11, excluding pension costs, it spent £43 per head of population, significantly below the Scottish average of £53 and is the lowest cost per head of population across the eight services. 
75.	The service's expenditure has risen gradually over the past decade but this is off-set by a significant increase in the population in the area. Between 1999 and 2010, the estimated population across Scotland increased by just over two per cent. In Lothian and Borders, the population over the same period increased by almost eight per cent, the highest increase across the eight service areas. Over the past decade cost per head of population has remained consistently lower than the national and has varied very little.  
Prevention 
L&BFR shows a strong level of engagement in prevention work. It carries out relatively high numbers of risk targeted home fire safety visits in its communities and engages in a range of educational initiatives. It has a risk-focused approach to undertaking fire audits in non-domestic properties but faces a significant challenge with half the houses of multiple occupancy in Scotland within Lothian and Borders area.   
76.	A key feature of the introduction of IRMP and the Fire (Scotland) Act 2005 was an increased emphasis on preventative work. L&BFR's main approach to meeting this responsibility is through the delivery of HFSV, giving advice and installing smoke detectors.  
77.	L&BFRS made a strong commitment at an early stage to this work. In 2006, the previous chief fire officer and joint board committed to provide an HFSV to all dwellings in the area. Initially, the service did not take a risk-based approach to target this work, which was primarily driven by the overall numbers of homes approached, HFSVs undertaken and smoke detectors fitted. To 2010/11, the service reports that it has contacted over 397,000 of the almost 445,000 homes in Lothian and Borders and provided HFSVs to over 98,000. 
78.	The service now has a more targeted approach to HFSVs. Weighted scores are given to higher risk dwellings and the focus for stations and watches has shifted to targeting higher risk properties. As a result, the volume of this work has decreased in recent years. However, L&BFR still carries out a high number of HFSVs. In 2009/10, the last year for which comparative data is available, it carried out 12,337 HFSVs, equivalent to just over 28 per 1,000 dwellings. This is significantly higher than the national average of 20.4 visits per 1,000 dwellings in that year. 
79.	There is still some scope to develop this risk-based approach. The service now uses risk and socio-demographic information to target its HFSV work. However, there is no link in this system to any analysis of the casualties within the Lothian and Borders area to target HFSV at these categories of individuals and property types. There is also no evidence of quality assurance mechanisms in relation to the delivery of HFSVs and therefore the service management and board have no means of assessing the consistency or scope for improvement in delivery.
80.	The available time for firefighters to do HFSVs and install smoke detectors in target properties is currently affected by a significant amount of time being used to respond to fixing detectors already installed by the service now coming to the end of their life or faulty. The service needs to consider how it can minimise the cost and impact on service delivery of this legacy issue.  
81.	L&BFR also uses a campaign calendar to focus educational and information campaign work across the stations. For example, highlighting smoking safety around the same time as national No Smoking Day, around particular times of the year where there are specific risks, such as barbeque and water safety in the height of summer, bonfire & firework safety, and fire risks at Christmas. The calendar also highlights other religious celebrations for targeting educational work such as Chinese New Year. 
82.	There is a strong level of engagement with young people in order to raise awareness in relation to community safety issues. The service provides a range of educational programmes with schools and other partners including structured visits to primary schools and secondary schools. Visits to secondary schools are targeted prior to bonfire night and the school holidays to reduce wilful fire-raising. A road safety programme, 'Make it or Break it' aimed at 17 to 18-year-olds and is delivered in partnership with Lothian and Borders Police. The service is involved with the Risk Factory (Interactive Safety Centre) in Edinburgh that brings together a range of different agencies to deliver key safety information ranging from fire safety to internet safety and safety around railways for primary school children. 
83.	The service also shows a strong commitment to activities that support the social inclusion of young people to promote good citizenship.
84.	Statutory fire safety audits of non-domestic premises are another important approach to minimising fire risks in the community. In particular, this work should be focused on properties that pose a higher risk to life, should a fire occur, such as care homes, hospitals and other buildings of multiple occupancy. 
85.	In 2010/11, the service completed 1,751 fire safety audits, 5.25 per cent of known non-domestic properties, slightly less than the national average of 6.24 per cent. It has a systematic approach to prioritising and managing this work, with a clear focus on risk to life.  
86.	However, the service faces a significant challenge in relation to houses of multiple-occupancy. Of the total 1,751 audits undertaken, 18 formal notices were issued. Of these 18 notices, 17 were for houses of multiple-occupancy, from 63 such premises audited. The service recognises this as one of the highest risk property types. However, in 2010/11 the service audited less than one per cent of the houses of multiple-occupancy in the area. This reflects the scale of this issue for the service with half of the houses of multiple-occupancy in Scotland within the Lothian and Borders area. An officer is seconded to the City of Edinburgh Council in a jointly funded post to work with the housing and licensing services to improve the fire safety standards in these types of premises. Given the risks associated with these properties and in light of the relatively high casualty levels across the area, the service and board need to review whether additional preventative work is required in this area.   
87.	During 2010/11, the community safety department was restructured to better integrate the work of community safety officers working closely with community partners and groups, with the fire safety legislative work, through area based teams. The service anticipates this will improve performance. It is too early to assess the impact of this change on the efficiency and effectiveness of the department's work.  
88.	L&BFRS recognise the need to evaluate the value for money of the community safety work it undertakes. Although it does not have systems in place to evaluate the impact and value for money of individual initiatives, it has used an evaluation based on the estimated economic cost of fires to review the potential impact of its HFSVs. While these estimated benefits are open to some challenge, they do show that the service understands the importance of evaluating the impact of its work.
Emergency response
The number of primary fires in the Lothian and Borders has reduced significantly in line with the national trend but remains higher than the national average per head of population. The number of casualties is high and the service needs to do more to use information about incidents to identify common factors and use this to target preventative work.    
89.	In 2010/11, L&BFR responded to 18,245 incidents. In line with the national pattern, about 14 per cent of these related to primary fires (those in buildings, vehicles or involving casualties), about 20 per cent to secondary fires (typically outdoor fires in heathland, rubbish bins or derelict buildings), and well over half, 58 per cent, to false alarms accounting for 10,599 of the recorded incidents. The remainder related to chimney fires and a range of 'special services', primarily road traffic collisions and, to a lesser extent, flooding.  
Number of fires and casualties 
90.	Historically, the level of fires and casualties within Lothian and Borders has been relatively high in relation to the Scottish average. Over the past decade, the number of primary fires has reduced significantly in line with the national trend but has remained consistently above the Scottish average. In 2010/11, the service responded to 2,552 primary fires, which equates to just over 19 per cent of all of the primary fires in Scotland. The service reports that it rescued 148 people from these fires.
91.	The number of secondary fires in the Lothian and Borders area has also broadly followed the national trend over the past decade and over the past four years there has been a lower incidence of secondary fires per head of population than the national average. In 2010/11, Lothian and Borders responded to 3,596 secondary fires, equivalent to 3.79 fires per 1,000 population. This is significantly lower than the national average of 4.63 fires per 1,000 people. Although there is not the evidence to draw a direct relationship, this positive progress may reflect the service's investment in educational and youth engagement initiatives over recent years. 
92.	However, despite this steady fall in the number of incidents, casualty rates in the Lothian and Borders area are comparatively high and have been consistently above national levels for many years. In 2010/11, the proportion of fatal and non-fatal casualties was the highest in Scotland. 
93.	This is a significant concern and there is no evidence that the service has analysed why the level of casualties in the area is relatively high. Members have not been provided with comparative information on this issue and have consequently not challenged the service. The service needs to consider how it can use data on incidents and casualties to identify common factors so that it can target preventative work. The service does monitor on an on-going basis the type of people who die in incidents and reports that these are people that would be considered as either 'hard-to-reach' or 'hard-to-influence' and are therefore within the service's priorities for its more targeted approach to preventative work.
Special services
94.	L&BFRS deals with an increasing number of ‘special service incidents’, such as road traffic collisions. Special services now represent around seven per cent of its emergency responses. In 2010/11, the service responded to 1,329 special services incidents. 
95.	The service attended 381 road traffic collisions in 2010/11 and rescued 105 people. Other types of incidents the service responded to during the year included 49 incidents requiring a rescue from height, 41 incidents involving hazardous substances and 13 incidents involving people trapped in water. The service reports that during 2010/11 the total number of rescues, other than from fires and road traffic collisions, was 379.
96.	There are no performance measures available locally or nationally to assess the standard of special services work.  
False alarms 
97.	False alarms can be caused by a range of factors, such as malicious hoax calls or faulty automatic alarms. They account for over half of L&BFRS's emergency calls. This is higher than the national average and represents a significant use of resources on non-productive work. More importantly this means that there may be delays in responding to genuine emergencies. 
98.	The level of false alarms is a challenge, but the service has made good progress over the past three years in reducing the level of apparatus related false alarms and malicious calls. The overall number of false alarms in 2007/08 was 11,152. Of these 8,655 were fire alarms due to apparatus (AFA) failures and 1,026 were malicious false alarms, equivalent to approximately one per 1,000 of the population. In 2010/11, the total number of false alarms was 10,599. The number of fire alarms due to apparatus failures has reduced by ten per cent to 7,789 and the number of malicious false alarms has reduced by 62 per cent to 394.   
99.	The service has implemented a number of approaches to reduce the impact of false alarms due to AFAs. In 2004, the service piloted an approach of reduced attendance to automatic fire alarms in West Lothian and rolled this out across the service during 2005/06 to the rest of the service area. It also targets liaison work with organisations that are frequent sources of AFAs. These include university halls of residents, hospitals, and shopping centres.    
100.	The service has also actively tried to address the level of malicious calls through implementing a call challenging system and engaging with the criminal justice system to target individual offenders. The call challenging system involves control staff using techniques to assess whether a caller is genuine or making a malicious call. If a control operator believes a call to be malicious, the number can be traced and passed to the police. Where criminal charges have been brought against individuals the service has engaged in restorative justice approaches such as directly engaging in hard hitting educational sessions with offenders to stress the potential consequences of their actions. 
101.	The service is currently reviewing its policy on managing unwanted emergency calls in response to guidance issued by the Chief Fire Officers Association (UK) in 2011. 
Emergency response standards 
102.	The speed of emergency response and number of vehicles and firefighters mobilised can be important factors in securing positive fire and rescue outcomes. Prior to 2005, standards of emergency response were set out in the National Standards of Fire Cover, with standards varying according to risk factors associated with different types of buildings. With the introduction of IRMP, these national standards were withdrawn. This allows individual fire and rescue authorities to determine their own speed and level of response to meet the specific level of risks identified in their IRMP. In previous years, L&BFR has reported on the time taken for the first appliance to reach an incident, based on the risk categories used in the old National Standards. This has shown a good level of performance with, for example, a first appliance attending 92 per cent of high-risk incidents within five minutes in 2009/10. However, since the introduction of the national Incident Reporting System (IRS), it is no longer possible to breakdown data into these risk categories.  
103.	The Scottish Fire & Rescue Advisory Unit (SFRAU), as part of its 2011 report, Review of the Implementation and Impact of Integrated Risk Management Planning in Scottish Fire and Rescue Services, suggests that L&BFR's average response times for primary dwelling fires have increased slightly over the past decade but are still in line with those for other fire and rescue services. 

Part 5. Improvement agenda
With the establishment of a national fire and rescue service in 2013, there is a need to prioritise improvement activities. Some issues can be addressed immediately. Other actions, however, will need to be coordinated with the emerging management arrangements for the new national service.  
Leadership and strategic direction
•	The service and joint board need to ensure there is adequate management capacity to maintain the current standard of service and safety, while implementing improvements, contributing to the national agenda and preparing internally for the transition to a Scottish Fire and Rescue Service. 
Service delivery and performance
•	Review the factors contributing to the service having a higher proportion of casualties than other services using the range of information available within the service and from partners to identify issues that can be targeted through partnership working and prevention activity.  
•	Review the service's approaches in addressing the particular risks associated with the high number of houses of multiple-occupancy within the area and consider whether there is additional prevention work that can be implemented to support improved outcomes. 
•	The service needs to consider how it can make further progress with reducing the number and impact of AFAs. 
Management systems
•	Systems to support effective asset management of equipment need to be put in place, particularly where this has implications for health and safety. 
•	Progress needs to be made rapidly with performance information systems to better support management and members to drive improvement. 
•	Planned review work needs to be targeted at issues identified as risk areas or requiring improvement rather than on a function and cyclical basis to make best use of available management and staff capacity. 
Workforce management
•	The service needs to extend its appraisal and development arrangements to include RDS firefighters.