Shropshire and Wrekin Fire and Rescue Authority approved a budget of just under £23.5 million for 2021/22, along with the precept rise.
The increase – equivalent to just under 4p a week for a band D property – will come into effect at the start of the new financial year in April.
Joanne Coadey, head of finance, told members of the authority that the amount of council tax and business rates forecast to be collected this year had been hit by the coronavirus pandemic. A proportion will be covered by the government and the shortfall has been factored into next year’s budget.
The service is currently predicting a deficit in its budget from 2022/23 onwards, but Ms Coadey said there were a number of ways this could be reduced and that current forecasts should be treated “very much as estimates which will be updated when we have further information available”.
A government review of local authority funding is also expected to be undertaken this year, giving more certainty for future years.
Councillor Chris Mellings, chair of the fire authority’s strategy and resources committee, said: “While it doesn’t look very healthy with projected deficits, clearly we are in a situation where there are still a number of uncertainties to work through, but we would hope that once those are worked through those deficits will be eliminated.
“As we know from our work in previous years we have been very prudent and planned very carefully for the finances of the service and while none of us want, particularly in the current climate, to take more in council tax than we absolutely need to, we think that 4p per week increase over and above this year is again a prudent figure to ensure that we can continue to provide the high class fire service that we do going forward.”
The fire authority has also agreed to set aside more capital reserves towards the major refurbishment of Telford Central Fire Station, to reduce borrowing for the project and therefore minimise interest on repayments.
Councillor Mellings said: “Our reserve strategy has been deliberately set to ensure that we can minimise borrowing costs going forward and quite clearly with the cost of the Telford project that will save us quite a bit of money by committing capital reserves to support that project.
“So while it does look a little bit uncertain going forward I think the sound financial management of the service in recent years has put us in very good stead and I know that work won’t stop once the budget for next year has been agreed and put in place.
“There’s still a lot more work to do but hopefully the authority and the public of Shropshire can be confident that we are in reasonable financial shape to respond to any issues and challenges that we face in the future.”