It is a huge pleasure to serve under your chairmanship, Mr Hosie. I start in a traditional and sincere way by congratulating the hon. Member for North Tyneside (Mary Glindon) on securing the debate. She spoke extremely sincerely, as is her way. I know that she believes every word that she said and the fact that
she is accompanied by nine fellow Members from the area tells its own story about their strength of feeling. I wholly respect that and I have listened very carefully. It is in part testament to the lobbying skills of the chief fire officer, Chris Lowther, who has certainly felt the love of his MPs this morning.
Clearly, there is a keenly held local view about the importance of making sure that the fire service is properly resourced and equipped to do its extremely important work. Given the seriousness with which the case was presented, I am very happy to meet the chief fire officer and talk it through, as was suggested. As the hon. Member for Sunderland Central (Julie Elliott) observed, I have been responsive to representations from Tyne and Wear in the past, in relation to the overpayment of the pension top-up grant, where we reached a settlement that was designed to be helpful.
That recognises, in part, the fact that Tyne and Wear has had a more challenging settlement than other fire authorities over this spending review period—I have been candid about that. Spending power has been reduced by 2% over the spending review period, compared with a 0.3% increase for stand-alone fire and rescue authorities as a whole. Having reviewed the figures, Tyne and Wear will see the fourth largest reduction in core spending power, after the Lancashire, Cleveland and West Midlands fire authorities. I recognise, not just from the strength of feeling in the room, that the past few years have been challenging as a result of the spending review settlement that flows from the way in which the current funding formula works. I recognise the challenge, I have tried to help with the pension top-up grant, and I am more than happy to sit down with Chris Lowther and talk through the issues.
I will now talk about the future. We need to have some perspective on this and try to avoid excessive language, scaremongering or unsettling residents. We are talking about a fire authority whose core spending power this year has increased by 0.8%. A reduction of 2% over the spending period is not an enormous proportion. I think it is important to put this into the context of other organisations that have seen their levels of income fall, as well as the scope to improve efficiency. That applies to almost every organisation in the public and private sector. Labour MPs did not talk very much about efficiency—on the whole, they do not tend to—but we will have a better view about Tyne and Wear’s efficiency as a result of the independent inspection, which will be happening shortly.
Various Members talked about reserves. I do talk about reserves, because this is public money and there needs to be accountability and transparency around it. To be fair, Tyne and Wear has published a reserves strategy, which is quite clear. Across the system, the simple truth is that financial reserves held by single fire and rescue authorities increased by over 80% between March 2011 and March 2018 to £545 million. That means that across the system fire authorities are sitting on reserves worth 42% of their core spending power. In the context of the public hearing “cuts, cuts, cuts” and “we are short of cash”, the system has actually increased its reserves, which can be done only if there is flexibility. Those reserves of 42% of spending power compare with an average in the police system of about 13% or 14%. I feel absolutely entitled to raise the question about reserves.