Financial Management in Greater Manchester Fire and Rescue Service - Case Study Example

Manchester Fire & Rescue Services Budget Proposal for 2011 Table of Contents Introduction 3 Overview 3 Proposed Budget Cut Areas 4 Risk Involved 9 Risk Considered 10 Opinion 11 Conclusion 12 References 13 Introduction The report presents the manner in which Greater Manchester Fire and Rescue Service is working to improve the operational area and the manner in which the senior management has been able to deliver proper services. The report looks into the manner the different proposed budget cut in staff, equipments and premises will benefit the organization. The paper also highlights the manner in which Greater Manchester Fire and Rescue Service will be able to handle it and need to decide the future course of action after weighing th positives and negatives before taking a course of action. Overview Greater Manchester Fire and Rescue Service which works in the area of protecting human lifes by redcing casualties have ensured a smooth financial performance which helps them to meet their objectives both in the short and long run. The senior management has ensured that the stakeholders give special care and attention to ensure prudent financial managment policies. This has helped Greater Manchester Fire and Rescue Service to achieve the following Enable to ensure a long term planning on the investment frontier so that the operations of Greater Manchester Fire and Rescue Service are cariried out easily. Acquisition of new fire stations, equipment and fire-fighting technologies which add to their asset base and help them ensure better service delivery by saving lifes. Enabling safety of the fire fighters through proper equipments and insurance facilities. The United Kindgdom slowly coming out of an economy is proposing a cut of 5% on public spending so that the economic conditions doesnt affect their services. Greater Manchester Fire and Rescue Service has thereby identified the area where they can reduce their expenses and the manner in which it will affect the operations. Proposed Budget Cut Areas Greater Manchester Fire and Rescue Service are looking towards cutting expenditure by 5% in the following areas. Reduction in Staff Greater Manchester Fire and Rescue Service which has around 1,960 staff spread over 39 destinations look after the society in times of casualties. (Annual Report, 2010) Of the total staff working for Greater Manchester Fire and Rescue Service around 1911 are full time fighters, 39 retained on duty terms and the remaining work on other issues concerned the department. (Annual Report, 2010) Greater Manchester Fire and Rescue Service speds around 68% of their entire revenues on staff and reducing the expenses will have a large impact on the financial planning and will help them save. Greater Manchester Fire and Rescue Service by redicing can look forward towards the following impact and benefits that will accrue to them. They are as follows How Impact Reduce Impact Reduce the staff working in different areas other than the main operation and also reevalute the real fire fighters required Chances of strices and agitation Develop a work enviornment which is flexible and prepare employees from the beginning for such a situation Reduction in employees training and medical camp which are of little use Reduce the morale of the employees Use talented people who motivate the employees through other measures Outsource the employes in situation they are required Lack of necessary skills to perform the art of fire fighters Collaborate with educational institute who train and guide the employees This will help Greater Manchester Fire and Rescue Service to ensure that there is smooth transformation for the employees and by having proper internal control and monitoring devices Greater Manchester Fire and Rescue Service will be able to redcue the staff expenses. This will greatly benefit Greater Manchester Fire and Rescue Service as they will be able to improve efficieny. Reduction in Equipmnt Greater Manchester Fire and Rescue Service by reducing the staff is looking towards upgrading their equipment and tools so that the fire fighters are able to render similar services and are able to build a good rapport with the public. The financial statement for Greater Manchester Fire and Rescue Service highlights that £4.533 million has been incurred under capital expenditures. The expenditure by Greater Manchester Fire and Rescue Service which are of capital nature has been done on the following Equipment & Supplies Communications Information System Transport Greater Manchester Fire and Rescue Service to improve their operations is looking towards upgrading the manner in which services are rendered and is looking towards using information technology and the latest gadgets to reduce casualties. Greater Manchester Fire and Rescue Service in this sphere looks towards the follwing ways to ensure effectiveness in equipments. How Impact Reduce Impact Modernize the equipments slowly by phasing out the old technology Increase the cost both for the new technology and skilled employees that will be required There will be better services which will result in better return than the cost involved Take an udertaking for 3 years where the burden for new equipment gets distributed over the entire period Increase the risk that the assets get destroyed before the term of payment might result in extra loss Ensure an insurance of machines so that in case the machine gets destroyed then it can be compensated Look forward for a private partnership by issuing equity Might increase conflicts between the internal and external management Develop a partnership in the manner where the external influence is limited Greater Manchester Fire and Rescue Service thus by looking towards different area of equipments can improve the manner in which servcies will be rendered. While devising this strategy it is important that Greater Manchester Fire and Rescue Service weighs the positives and negatives and then decide their actions. Reduction in Premises Greater Manchester Fire and Rescue Service spend a considerable amount of money on premises. Premises for Greater Manchester Fire and Rescue Service include buildings, maintainence activities, land and other association which helps them in their operations. The financial statement highlights that Greater Manchester Fire and Rescue Service have reduced their expenses on premises by 50% and will help them immensely. It will help to ensure effeciency in the use of premises and save them from the extra pressure to maintain the premises. Greater Manchester Fire and Rescue Service finally look towards the following How Impact Reduce Impact Shut down the areas which are less operative and the cost associated with those are very high Increase the likelyhood of casualties as it will take time for the fire tenders to reach the spot Gathering information by deploying patrol party which brings to the notice any incidents which could result in massive destruction Reduce the cosnumprtion of water and electricity by turning them off when not required Could result in a situation where the fire tenders are not able to hear to fire alarms Ensur checks and traisl to improve the validity of it and ensure better management Greater Manchester Fire and Rescue Service can look towards a mix of different ways to reduce their expenses on premises. While devising this strategy it is important that Greater Manchester Fire and Rescue Service weighs the positives and negatives and then decide their actions. Also Greater Manchester Fire and Rescue Service should ensure that efficiency improves and they are able to handle the extra pressure better. Risk Involved Greater Manchester Fire and Rescue Service while reducing their expenses will have to face additional risk and needs to devise strategy to combat those. The risks faced are as follows Financial Risk: Greater Manchester Fire and Rescue Service by reducing the expenses on staff and procuring new equipments can increase the financial risk as it will create a situation where they are not able to ensure liquidity to finance the additional technology required. Business Risk: Greater Manchester Fire and Rescue Service needs to consider this risk which are inhrent part of the structure and even reducing the expenses will have no bearing on it. This needs to be considered in the planning process and decided accordingly. Physical Risk: Greater Manchester Fire and Rescue Service faces maximum risk when it comes to safety of both the fire fighters and the residents. Not having adequate staff and equipments increases the chances of physical casualties which Greater Manchester Fire and Rescue Service needs to look at. Environmental Risk: Greater Manchester Fire and Rescue Service faces risk as reducting in premises, staff and equipments will increase the likelihood of a small forest fire converting into someting big. This is an area Greater Manchester Fire and Rescue Service needs to look at and have a plan which will help to redcue its impact. Risk Considered Greater Manchester Fire and Rescue Service have considered many of this risk by devising plans and startegies which helps them to safeguard against those. Some of the strategies which will help to reduce risk are as follows Provision: Greater Manchester Fire and Rescue Service have provision for the purchase of equipments and technology in the future in case the need arises. Provision will also ensure safety of fire fighter through insurance and tools which facilitates it. Reserves: Greater Manchester Fire and Rescue Service have reserves for the contingencies in the future in case the need arises. This will ensure that they are able to cope with the changes that Greater Manchester Fire and Rescue Service encounters in the future. Disclosure: Greater Manchester Fire and Rescue Service have disclosed all their transaction and manner in which operations are carried out. This helps to buld a good understanding with the people and facilitates the process of saving lifes. Liquidity Risk: Greater Manchester Fire and Rescue Service has reduced this by ensuring that the investment are well diversified. They have invested both in short and long term assets which helsp to ensure that Greater Manchester Fire and Rescue Service is able to garner maximum benefit from those. Interest rate Risk: Greater Manchester Fire and Rescue Service have made it a policy to invest in both fxed and floating interest rate. This allows them to ensure that in case interest rate fluctuates the variations are limited and helps them to plan accordingly. Greater Manchester Fire and Rescue Service has thus taken care of the risk which might areise from the budget cut and needs to ensure that there is efficiency in their operations so that maximum benefist is provided. Opinion Greater Manchester Fire and Rescue Service has been able to devise a strategy which looks into various factors before deciding the budgeted cut. Greater Manchester Fire and Rescue Service needs to ensure that the benefits and losses are considered before taking a final call on cut. It is true that reducing the expenses will help to improve efficiency and will help to ensure better management but will also increase the risk of life. It will also increase the likelihood of employees being demotivated and might result in a situation where they are not able to garner the maximum result. Overall Greater Manchester Fire and Rescue Service has performed excllently and can proceed with the budget cut as it wiull help them in the long run and gain a good rapport with the resident. Conclusion Greater Manchester Fire and Rescue Service has been able to deliver proper service and reduction in the expense will help Greater Manchester Fire and Rescue Service to ensure similar result. They need to continue in the same manner and it will help Greater Manchester Fire and Rescue Service in the long run and will develop their management process to provide better services to the community. References Annual Report. (2010). Greater Manchester Fire and Rescue Authority: Statement of Accounts 2009/10. Retrieved on March 5, 2011 from http://www.manchesterfire.gov.uk/media/68567/statement_of_accounts_2009- 10.pdf Brigham, F., & Houston, F. (2009). Fundamentals of Financial Mgmt. Cengage Learning, Denver Read More