Budget Proposal for Manchester Fire and Rescue Services - Case Study Example

Type the company name] Manchester Fire & Rescue Services Budget Proposal for 2011 user [Pick the date] Content Introduction 3 Impact of proposal cut 3 Risk 6 Risk Considered by Greater Manchester Fire and Rescue Authority 8 Opinion 10 Conclusion 11 References 12 Introduction Finance forms an important aspect of planning and with proper execution of financial strategy the planning process will be sound. It will ensure that “there is steady inflow and outflow of funds so that decisions made are sounder and management is better”. (James, 2005) Money is a requirement. Fire and service rescue team needs to ensure it. This will help them. It will provide the necessary equipments. Reducing the budgeted expenditure by 5% will have an effect on the manner the services are rendered. This will improve efficiency on certain aspect but will also bring certain negatives along with it. Reducing the budget will help to ensure that the present equipments, staff and premises are used to the optimum level and at the same time there is abundant fund to be invested in technology. While devising the manner in which the budget will be reduced it is important to ensure that reducing the expenses doesn’t result in delaying the rescue operations. This is their priority and the decision to go about reducing the expenses should be based on it. This will help to improve the manner is which operations are carried out and will help to gain popularity among the masses. Impact of proposal cut Greater Manchester Fire and Rescue Authority can consider reducing the budgeted expenditure on certain areas which are staff, equipment and premises. Cutting down the expenditure will help Greater Manchester Fire and Rescue Authority to ensure that the cost are controlled but will hamper the growth rate on certain areas Reduction in Staff: Reducing the staff will affect Greater Manchester Fire and Rescue Authority as it will hinder their rescue operations. Reduction in the number of employees will push extra pressure on the remaining employees as they will have to work longer and will require special training and motivational tools to keep them enthusiastic. This will help Greater Manchester Fire and Rescue Authority to reduce the staff expenses but will at the expenses of other factors and will increase the risk which has further been discussed. Reduction in the number of staff will de-motivate the employees and will render the process unsuccessful. Reducing the employees will also put extra burden on the employees and this will lead to a situation where they are unable to concentrate on the work on hand leading to more casualties and loss of lives including the fire fighters. The employees as a result will have to look towards external agencies for some of the work which will affect transparency and will also lead to a situation where they are unable to create a proper environment to work on. Reduction in engine cost: This will help Greater Manchester Fire and Rescue Authority to bring down expenses but will act as a barrier to ensure that the services are delivered efficiently. This will make the fire and rescue services to ensure that they are able to use the other equipments which will create barriers and make certain tools obsolete and will increase the risk which have been discussed in the risk section. Reducing the expenses on engine will make them rely on the already processes technology which will delay the work as certain work which could have been achieved using modern equipments won’t be possible. This might lead to a situation where delay in operations increases the casualty rates. On the other hand this will make them use the present technology to the optimum possible extent. Reduction in insurance cost: Greater Manchester Fire and Rescue Authority will be able to reduce cost on insurance as decrease in fire fighters will reduce the insurance expenses associated with them but would also lead to an increase in repair cost as the machines will be used extensively which will have to be repaired regularly. This will make the cost associated with repairs rise but insurance fall. The magnitude of this change will depend on the manner it is utilized in the organization. Reduction in premises expenses: This will make Greater Manchester Fire and Rescue Authority to use the present location effectively. This will help Greater Manchester Fire and Rescue Authority to ensure that reduction in premises save them on the maintenance cost. It will make easy for the fire fighters to keep the surrounding premise clean at the same time it will ensure that they are able to use the premise efficiently in all their operation from storage of equipments to their own purpose of staying in it. Reducing the expenses on premises will benefit the fire operation greatly as it will help to save huge sums which can be used elsewhere. This will help to improve the efficiency in operations and ensure that the fire and rescue operation continues according to the set standard. This will thereby help the fire fighters to mould the manner in which the services are carried out and will result in gaining more relevance. Risk Risk is involved everywhere. The risks faced are as follows Financial Risk: It is defined as “the risk associated with the company due to the fact that it is not able to meet its financial obligation”. (Green, 2007) This risk affected the decision. Organisations need to check it. Reducing the expenditure will help to curb financial risk to a certain extent. Reducing expenses will act as a barrier and ensure that the funds are used in the correct directions. This will help the fire and rescue operations ensure that a liquidity crunch is not developed which will thereby help to improve the focus and ensure that the services are carried out effectively. Economic Risk: It is “the risk that the project’s output will not be saleable at a price that will cover the project operating and maintenance cost and debt service requirements”. (Little, 2009) Thus, it states that “the danger that economy can turn against investment” (Little, 2009). Fire and rescue service by reducing the budget cut will benefit as it will help them generate abundant reserves. This will help the Fire and rescue service operation and help them fund projects at times when the economy is not willing to do so. This will thereby help them to purchase the required technology in the future and will act as a barrier against economic risk. Business Risk: It is the “risk that the company will not have adequate cash flows to meet its operating expenses”. (Rath, 2009) Companies need to reduce it. This can be done through effective risk management techniques with focus on health and safety, food safety and information security. (Rath, 2009) Fire and rescue services by reducing their expense can ensure that the cash flows are not affected. Since, cutting down staff will result in abundant cash which can be used to procure equipments. This will also ensure that the risk management techniques helps the Fire and rescue services by generating sufficient funds which also ensures that they operate within the boundary limits. Physical Risk: It is the “risk that fire service tender man are their life which they might lose while rendering service so they need to be careful and see that proper precautionary measures for safety are in ace so that physical life doesn’t get hampered”. (Gregory, 2005) This is an important consideration for Fire and rescue services. They need to ensure that reducing the expenses will not increase the risk of fire fighters and the locals. It is important that they ensure the required equipments which will facilitate fire operations and ensure that they are able to improve efficiency. This is an area which needs to be watched and every small aspect needs to be considered so that steps can be taken in the right direction which helps to ensure that there is sufficient measures which helps to reduce physical risk. Environment Risk: This is the most watched topic. FRS needs to preserve environment. This will help to bring safety. FRS faces this. They need to perform their duties seeing that environment is not hampered. They need to ensure safety. Like, forest fire affects environment. FRS takes measure to bring this risk under control. This is another area which the Fire and rescue services need to look for. They should ensure that reducing the expenses will not have an impact on environment as certain fire fighting equipments will be difficult to purchase and use. This should be considered as an important aspect and only after the Fire and rescue services are sure that they have sufficient plans and equipments which will help to preserve environment steps should be taken to cut expenditure in this direction. Risk Considered by Greater Manchester Fire and Rescue Authority Greater Manchester Fire and Rescue Authority have considered many risks. This has helped as by doing so the department was able to come up with service. The risk which Greater Manchester Fire and Rescue Authority has looked into is as follows Reserves: Greater Manchester Fire and Rescue Authority have a general reserve of 14.586 million. This will help Greater Manchester Fire and Rescue Authority “to meet the political risk arising from government modernization programme”. (Statement of account, 2009-10) Working Capital Risk: Greater Manchester Fire and Rescue Authority short term investment. This will “meet the day to day working capital risk and allow for better performance and execution of strategies”. (Statement of account, 2009-10) Physical risk: Greater Manchester Fire and Rescue Authority have 1274.46 million in pension fund. This will reduce physical risk. “It will provide them the ability to ensure that the safety is looked at even during the tenure of service and after that retirement by receiving regular income”. (Statement of Account, 2009-10) Economic Risk: With recession engulfing the entire globe this risk is huge. Greater Manchester Fire and Rescue Authority have taken measures have been taken to tackle it. Meeting have been held for it. It has been seen that this doesn’t affect their services. They have worked to tackle it. This has resulted in good service. Credit Risk: Greater Manchester Fire and Rescue Authority have limited it. This is done by “taking the form of a bank not repaying the deposits or the interest or a default on the loan that might arise”. (Statement of account, 2009-10) This is done through Treasury Council. Investment Risk: Greater Manchester Fire and Rescue Authority have invested in “banks and financial investment”. “This investment consists of short term investment and Greater Manchester Fire and Rescue Authority has been able to see that it doesn’t arise and has not happened till now”. (Statement of account, 2009-10) Contingent Liabilities: Greater Manchester Fire and Rescue Authority have not recognised any. This will increase risk. It will result that contingencies are not controlled. This will create pressure. Price Risk: Greater Manchester Fire and Rescue Authority have managed it well. “Not investing in equity shares have ensured that the fluctuation of the capital is reduced and since their task is to render service it is done without any failure”. (Statement of account, 2009-10) Strategic Risk: Greater Manchester Fire and Rescue Authority have this risk. It has various projects. Not able to deliver proper strategy will be reflected. It will result in loss. It will affect the growth. Even getting equipments will be tough. This will also make it tough for Greater Manchester Fire and Rescue Authority to get funds. Legal Risk: Greater Manchester Fire and Rescue Authority have looked after this. “They have adhered to the Fire and Rescue service Act, 2004 with other enactments thus complying with all the formalities and rules of the government”. (Statement of Account, 2009-10) Health & Safety Risk: Greater Manchester Fire and Rescue Authority have ensured it. They have proper equipments. Using the latest technology has helped. They have been able to see that safety is first priority. Having insurance back up has helped. This has ensured safety for families. Asset Management Risk: Greater Manchester Fire and Rescue Authority have not disclosed it. The risk associated with them is uncertain. Even the projects don’t disclose it. It is an area to work on for Greater Manchester Fire and Rescue Authority. Opinion On the basis of the entire framework followed by Greater Manchester Fire and Rescue Authority I feel that they are working on every area. Greater Manchester Fire and Rescue Authority while looking towards a budget cut needs to weigh both the positives and negatives and based on it should decide the future course of action. Greater Manchester Fire and Rescue Authority should ensure that any cut in the budget doesn’t affect their manner of operation as it will increase the risk associated with life both for the fire fighters and the local people. It is imperative that Greater Manchester Fire and Rescue Authority weighs all the risk and then decide their future course of action as it could fire back and result in losing the widely developed reputation of the services. Conclusion Greater Manchester Fire and Rescue Authority have ensured that best equipments are available. It has ensured that planning is better. Greater Manchester Fire and Rescue Authority needs to evaluate all the risk that comes along with their operation. Reducing the expenses on staff, equipment and premises will help them ensure liquidity and make the available resources to be used to the optimum level. This will shape the manner in which Greater Manchester Fire and Rescue Authority perform by developing efficiency and ensuring that the fire operators are able to use the available resources most efficiently. This will bring some negatives along with it as it might render certain operation difficult and might increase the risk of life. This is a serious issue which Greater Manchester Fire and Rescue Authority needs to consider and needs to evaluate the manner they will benefit from the budget cut and based on it should decide their action. Greater Manchester Fire and Rescue Authority should lay special emphasis and ensure that even the smallest of risk is considered and then developing the step will benefit Greater Manchester Fire and Rescue Authority. It will help them to improve their relation and will help them build a good reputation with the locals. 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