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can be provided by the latter at a much lower cost than by an independent controlling-authority owing to the fact that the general administration, keeping of accounts, supply of stores and equipment, and other functions of the Fire Board can be conveniently dove-tailed in with other municipal activities. It is admitted that the fact that the insurance companies contribute to the cost of the fire service should be recognized by giving the insurance interests some say in the administration. The proposal set out below for supervision by a Central Insurance Council appears to meet this requirement. Certain difficulties have been raised with respect to liaison, but these could probably be overcome by the appointment of a representative of the Municipal Association to the Central Council. There would appear to be no objection to this. As indicated in my last report, one of the most common objections by the municipalities to the formation of fire districts under the existing legislation is the fact that when a fire district is formed the municipal authority loses all control of the service, and particularly of expenditure, and has to pay whatever levies are demanded by the Fire Board. It is alleged that invariably a considerable increase in annual expenditure takes place, and the result in most cases is that, despite the insurance contribution, the cost of the fire-protection service to the local authority increases under Fire Board control. There are several important factors which are lost sight of in this contention. In most cases a Fire Board has not been formed until the fire-protection service of a town has been allowed to reach a stage where complete reorganization is necessary. The Fire Board is also required to repay to the local authority the value of the existing plant and equipment estimated as a going concern. It must also be noted that in a number of cases it has been found on investigation that the Fire Brigade account of the local authority, on which the contention is based, is not charged with expenses such as rental, or, alternatively, interest and sinking fund on the cost of the station, plant, and equipment — the capital cost of these being buried in the general loan account. Administrative and other services rendered by the local authority staff are also not taken into consideration, but are, of course, always charged in the Fire Board accounts. It has also been ascertained that in a number of cases where the local authority has claimed to operate an efficient service at a low cost the Brigade has, by the holding of social functions and collections from the public, contributed largely both to the capital and maintenance costs of the service. The brigade officers in most of these cases give their time voluntarily and should be free to devote their whole attention to the organization and training of the brigade. The insurance contribution, which it is proposed should be made general, will avoid the necessity at present existing for the brigade officers to carry the responsibility of the finance as well as of the fire-fighting. It is important that any amendment in the existing law should not have the effect of reducing the standard of service which has been provided by the Fire Boards. This would be an essential condition of agreement to any proposals by both the fire underwriters and the volunteer firemen. The proposals for supervision by the Insurance Council and the right of the latter to proceed to arbitration if necessary with respect to proposals of the local authority, which are regarded as unsatisfactory from an efficiency point of view, would appear to offer the necessary safeguard. Another factor which is giving some concern to the municipal authorities is the action taken by the Hon. the Minister of Internal Affairs in refusing to consent to the formation of additional Fire Boards. This is quite logical in view of the Government policy for the amalgamation of existing local authorities, but the effect is that in districts where a Fire Board does not already exist there is no method available by which the municipality can obtain any contribution from the insurance companies towards the cost of the fire-protection service. This is a matter of major concern to some of the larger boroughs owing to the fact that the improved conditions of service and other factors have resulted in considerably increased costs of operation during the last few years. The discussions at the Fire Brigade Conference in New Plymouth in February last indicated that proposals on the lines indicated would be acceptable provided that the volunteer status of the brigades was not affected, that the association maintained its position as the authority representing the brigadesmen generally, and that the existing arrangements for financial support were not disturbed. The suggestion was made that a representative of the association should be appointed to the Central Insurance Council for liaison purposes, and in view of the fact that practically 90 per cent, of the firemen are volunteers this suggestion appears to be reasonable. The proposals intended to give effect to the desiderata set out in my last annual report were submitted to the interested parties in general terms only, and the following outline of the proposals modified to meet the views set out above is now submitted for further consideration :— (1) That the administration of the fire-protection service in existing fire districts be handed back to the municipal authorities except in the Metropolitan areas or where, by reason of the contiguity of their respective districts, it is desirable that one authority should control the fire-protection service of the combined areas. Notes.—(a) Experience both in this and other countries shows that it is essential for efficiency of operation in contiguous areas that the respective fire brigades should either be under one control or that provision be made for co-operation and backing-up service. Of these alternatives, the former is definitely preferable. Typical cases for consideration are the Lower Hutt and Petone area, and the North Shore boroughs in Auckland. It would be practicable to operate these either as separate units or as part of the metropolitan organization. Neither of these alternatives has any great advantage from an efficiency point of view, and the question could therefore be left to the preference of the local authorities concerned. (6) The above clause sets out the principle which is considered desirable. It could, if necessary to meet the wishes of the interests concerned and without greatly affecting the general efficiency of the scheme, be modified to retain the existing Fire Board organization in the secondary cities and the larger towns. It is suggested for consideration, however, that it would be difficult to justify the retention of an independent controlling authority in towns with a population of less than five thousand.

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