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The Economic Cost of Fire:estimates for 2003

March 2005

The Economic Cost of Fire:estimates for 2003

March 2005

Office of the Deputy Prime Minister: London

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CONTENTS

Executive summary 5

CHAPTER 1Overview 6

CHAPTER 2Methodology 8

CHAPTER 3Results 19

CHAPTER 4International comparisons 28

CHAPTER 5The cost of arson and malicious false alarms 30

ANNEXES

Annex A: Average costs by location 34Annex B: Updating the economic cost of fire 38

5

Executive summary

l

This report contains new estimates of the cost of fire to the economy of Englandand Wales. Due to methodological refinements, these results are not directlycomparable to those published previously by Home Office and ODPM. However,the new method has been applied to data back to 2000 to present a consistenttime series.

l

Fire continues to impose significant costs on the economy of England and Wales.In 2003, the total cost is estimated at £7.7bn, equivalent to approximately 0.9% ofthe gross value added of the economy.

l

The costs as a consequence of fire, including property losses, human casualtiesand business disruption, are estimated at £3.3bn in 2003.

l

The cost to the FRS of providing fire cover is estimated at £1.7bn in 2003. Thecost of FRS attendance at both false alarms and non-building fires is estimated atalmost £700m respectively, due to the large proportion of all incidents that theseaccount for.

l

The total cost of arson in 2003 is estimated at £2.8bn, which includes an allocationof the total costs incurred in anticipation of fire. The cost of FRS response tomalicious false alarms is estimated at £83m.

l

The average cost of a domestic fire is estimated at £25,000, of which approximately£15,000 is accounted for by the economic cost of injuries and fatalities.

l

The average cost of fire in a commercial building is estimated at £58,000, of whichthe cost of fire damage to property represents £45,000. The average cost of avehicle fire is estimated at £4,700.

l

Whilst caution should be exercised in analysing trends over a short period oftime, particularly since it is difficult to observe costs directly, the cost of fireremained stable as a proportion of the economy over the period examined, atapproximately 0.9%.

l

Methodological changes are discussed in detail in chapter 2, but are also set out in brief below.

1. Estimates of fire protection in domestic buildings are included for the first time.

2. The FRS is placing increasing emphasis on providing community fire safety and soestimates of this cost have been made.

3. New, evidence based weights are used to estimate the time spent at secondaryfire and non-fire incidents. These replace assumptions based on a FRS handbookand alter the way in which response costs are allocated.

Box 1: Changes to the methodology for calculating the cost of fire

6

CHAPTER 1

Overview

Fire represents a significant cost to the economy in terms of its direct impact onindividuals and property, extra protection installed in buildings, the administrationof fire insurance and the resources required to provide fire cover through the Fireand Rescue Service.

Estimates of the economic cost of fire provide a useful tool to assist policy-makerswith policy appraisal and evaluation. Through use in cost benefit analysis, they canhelp to provide answers to questions such as:

l

What would be the saving to the economy of preventing a given number of fires?

l

How can scarce resources be used most effectively to tackle the most significant costs.

l

What is the optimal balance of resources that should be allocated to fire safetyeducation, fire protection and fire response? What are the trade-offs?

Of course, cost benefit analysis does not provide the definitive answer to thesequestions, and is just one of a range of tools that can be applied to consider theimpacts of a policy.

The first estimates of the cost of fire in England and Wales were published in theHome Office report The cost of fires: A review of the information available1, whichdrew upon analysis conducted overseas, particularly in the United States. Minorrefinements have been made to the methodology in subsequent estimates publishedby Home Office in 20012 and ODPM in 20033.

The challenge in any assessment of the total cost of fire is to decide on which impactsshould be included and to find appropriate methods of measuring them. Some costsare relatively easy to measure, for example expenditure on the Fire and RescueService. Other costs are more difficult to measure directly and estimates have beenmade using evidence-based assumptions. A full exploration of the methodology,including refinements made since the last estimates were published, can be foundin chapter 2.

1 Donald Roy (1997), The cost of fires: A review of the evidence available.

2 Mark Weiner (2001), The economic cost of fire (Home Office Research Study 229):http://www.homeoffice.gov.uk/rds/horspubs1.html

3 Scott Dennison (2003). The Economic Cost of Fire: Estimates for 2000:http://www.odpm.gov.uk/stellent/groups/odpm_fire/documents/page/odpm_fire_022424.hcsp

Overview

7

Estimates for 2003, the latest year for which data is available, are set out in chapter 3.The chapter also presents results for 2001 and 2002, and revises previous estimatesfor 2000, using the updated method.

Several other countries have published estimates of the cost of fire. These are brieflycompared to results for England and Wales in chapter 4.

Deliberate fires now account for over half of primary fires, causing damage to lives,property and communities. An estimation of the cost of deliberate fires and othermalicious fire behaviour is made in chapter 5.

Annex A presents estimates of the average costs of fire for a detailed list of locations.

Annex B suggests how estimates for future years could be updated until new valuesare published.

8

CHAPTER 2

Methodology

The impacts of fire are many and varied and there are a number of different waysin which those impacts could be categorised. This study continues the approachadopted by Dennison (2003), with total costs broken down into three categories:

(a) Costs in anticipation – these are predominantly protection and preventionmeasures undertaken to prevent or mitigate the damage caused by fire.

(b) Costs as a consequence – These are costs that are incurred as a result of fire.These costs are due to exposure of property, individuals or the environment tofire and its products, and the cost is borne by a range of victims. These includeindividuals, private firms and society.

(c) Costs in response – These are the costs of extinguishing and clearing up afterfire. Society bears the majority of these costs.

The components of these costs are presented in table 2.1. The rest of the chapterdiscusses how these costs have been calculated.

Estimated Not Estimated

Costs in AnticipationFire protection in buildings (capital costs)Fire safety equipmentFire safety activity by the FRSInsurance administration

Fire protection in consumer itemsFire safety researchNon-FRS fire safety education and trainingFire protection in buildings (maintenance costs)

Costs as a ConsequenceProperty lossesLost outputEmotional & physical suffering Healthcare costsLoss of business

Environmental costsHeritage and cultural costsCosts to the communityClean-up costsDisruption to householdsWider economic distortionsDisruption costs to public servicesLoss of output due to false alarms

Costs in ResponseFRS response costs Private fire brigades

Table 2.1: Costs estimated and not estimated in the cost of fire

Methodology

9

(a) Costs in Anticipation

FIRE PROTECTION

Fire protection in commercial and public sector buildingsAll new buildings (and a large proportion of the total stock) are constructed ormaintained in accordance with fire regulations. The additional protection accordedby compliance with these regulations is likely to have prevented a significant numberof fires from occurring and saved many lives. However, it will also have increasedthe monetary cost of construction and design. The majority of fire regulations applyto non-dwellings and dwellings of multiple occupation, where building owners maynot have the correct incentives to invest in fire protection at the socially-optimallevel (i.e. there is a market failure).

Research by the Building Research Establishment estimated the additional costs of meeting fire safety provisions for a variety of different building types.4 For non-dwellings, these costs were estimated at approximately 5% of constructioncosts, which is the factor adopted by Dennison (2003) and retained for this report.

There are two ways that this figure can then be used to estimate the cost of fireprotection. The approach used by Roy (1997) was to assume that the cost of fireprotection was the additional costs associated with new buildings in any one year.However, this ignores the cost of fire protection in existing capital and can result inhighly volatile estimates. There is a stock of fire protection in existing buildings andthe most suitable method for estimating the costs of these is to assume that theconstruction cost is annuitised over a number of years. This can be viewed as theannual cost of loan repayments to build the capital spread over its lifetime.

In order to calculate the annuitised costs, the following assumptions are made:

a) Real discount rate = 3.5%5

b) Average lifetime of building = 80 years6

c) Average building is half-way through its lifetime

d) The cost of fire protection in buildings is the same today as it was 80 year ago(in real terms)

In practice, it is likely that assumption (d) will overstate the overall cost of fireprotection since fire regulations tend to become more stringent, and hence costly,over time.

Calculations made on this basis will not capture building costs perfectly. Somebuildings (e.g. unaltered existing stock) will not be covered by these buildingregulations, whilst others will have additional fire protection not required by

4 BRE (1996) Quantifying the cost of Meeting Building Regulations Fire Safety Requirements in New Buildings.

5 As recommended by The Green Book (HM Treasury, 2003).

6 ONS Capital Stock calculations.

The Economic Cost of Fire

10

the regulations (due to licensing requirements, insurance purposes or individualpreference). Furthermore, the research suggests that the costs are higher in steel-framed buildings, an issue which is not addressed by the current method.

Further development could be beneficial in estimating the cost of maintenance andrepair. The estimates above only include the costs incurred in the initial constructionof buildings, but there are likely to be significant costs associated with repair andmaintenance of buildings in accordance with fire regulations. Estimates suggest thatover a thirty year life cycle, these could equate to around 2% of total building costs7.

The Government is reviewing the fire safety aspects of the Building Regulations andfuture estimates should take account of any changes that are made.

Fire protection and safety equipment in dwellingsPrevious estimates of the cost of fire protection in dwellings have been based onexpenditure on domestic fire protection equipment such as fire extinguishers andsmoke detectors.

In addition to these costs, this report extends the approach outlined above for non-dwellings to enable estimation of compliance costs in dwellings for the first time.

Households purchase fire protection in domestic properties through expenditure on fire safety equipment. Ownership rates of various types of fire safety equipmentare recorded by the British Crime Survey. Using these in conjunction with estimatesof the average price of equipment and its useful life, it is possible to estimateannual expenditure.

Building regulations apply to some dwellings, such as flats and houses above threefloors. Complying with these regulations requires measures such as ventilation andfire resistance of stairs and stair enclosures, escape lighting and fire protection measuresin lobbies and corridors. BRE (1996) estimated additional capital costs of 2.5% inflats and maisonettes, and 0.4% in houses of three storeys or above.

As the capital stock figures are not sufficiently detailed to allow us to separate thevalue of dwellings by the number of storeys, previous estimates have assumed thatfire regulations do not increase capital or life cycle costs in dwellings. However,other sources enable us to disaggregate the dwelling stock by the number of storeys.8

By assuming that dwellings have the same value irrespective of the number ofstoreys, it is possible to estimate the capital stock value of these types of dwellingand hence the additional capital costs incurred.

Additional capital costs are estimated at 2.5% for flats and maisonettes, and 0.4% forhouses of three storeys and above. The method adopted for non-dwellings is usedhere, though dwellings are estimated as having a useful life of 99 years (in line withONS guidelines).

The cost of compliance with building regulations may include the costs of installingsome fire protection equipment, but this is not likely to cause significant over-estimationof total costs.

7 BRE (as above).

8 English Housing Condition Survey, ODPM.

Methodology

11

Fire protection in other equipmentIt is likely that fire protection measures are incorporated into the design andconstruction of a number of goods other than buildings, and that these measures willimpose an extra cost that would not exist in the absence of fire risks. For example,it would be expected that fire protection measures are included in the design ofvehicles and electronic equipment such as personal computers. However, theheterogeneity of these items and the limited availability of reliable data make anyattempt to capture this cost extremely difficult and resource-intensive. These costshave not been estimated for this report.

FIRE SAFETY ACTIVITY

The Fire and Rescue Service undertakes fire safety work in the form of inspectionsand community fire safety.The labour cost of this work can be estimated from brigades’ records of total hoursspent on fire safety activity and average hourly pay rates. The hourly rates of payhave been calculated using medians of pay scales, with a weighting added to takeaccount of the inspection hours available to each rank of fire safety officer. Allocationsare also made for non-pay running costs and capital costs, in line with aggregateFRS expenditure.

Data on fire safety inspections is collected by local brigades and is availabledisaggregated by a number of different locations, which can be grouped togetherinto domestic, commercial and public sector buildings.

The FRS has taken an increasing role in promoting fire safety in the communitythrough home fire risk checks and publicity events. This work has been primarilytargeted at households and for the purposes of these estimates has been whollyattributed to the domestic sector.

The FRS also spends a small proportion of time on fire investigations. These havebeen apportioned to different locations in proportion to the time spent undertakingfire inspections at these different locations.

It is likely that some fire safety work is undertaken by private enterprises and publicsector bodies, but at present it is not possible to capture the likely costs of this activity.

INSURANCE ADMINISTRATION

The payment of insurance premiums does not represent a cost of fire to the economysince they are transfer payments rather than a welfare loss to society. However, theadministration cost of insurance is a genuine welfare loss and is therefore includedas a cost of fire. If there was no need for fire insurance, the capital and labour usedby insurance companies to administer policies and claims could be used elsewhere.The Association of British Insurers (ABI) records the value of ‘commissions andexpenses’ for commercial properties, domestic properties and vehicles. It is assumedthat the proportion of these expenses that are attributable to fire is equal to theproportion of fire claims to total claims. The public sector is assumed to be self-insured and so no insurance administration is attributable to these fires. ABI data is recorded for the UK, but is scaled to England and Wales using theirshare of UK gross value added.


12

(b) Costs as a consequence

DAMAGE TO PROPERTY

Insurance statistics currently provide the best insight into property losses resultingfrom domestic and commercial fires. The ABI represents the majority of the UKinsurance market and publishes annual statistics on the total value of claims fromdomestic and commercial fires each year.

There are a number of reasons why we would not expect the value of ABI claimsto fully reflect the value of actual losses.

1. The ABI does not represent the entire UK insurance market, with approximately6% of the market9 accounted for by other insurers, principally Lloyds.

2. Many domestic properties are not insured, either because they are too great a riskfor insurance companies to insure, or the premium is higher than the householdis willing to pay.

3. Large firms may have sufficient financial flexibility to insure themselves.

4. Even when property is insured, the claim will not usually equal losses becausethere are excesses to pay. Whilst this may be relatively small for domestic property,it can reach £1m for certain commercial risks.

5. Fires resulting in damage below this limit will often not be reported to insurancecompanies, and will not appear in ABI data. The BCS estimates that only around23 per cent of domestic fires are reported to the fire brigades.10

As a result, it has been necessary to make various assumptions to adjust the ABI datato estimate the value of property damaged in fire. These assumptions are listed below.

Domestic property1. Estimates suggest that approximately 27 per cent of households did not have

contents insurance, and 39 per cent did not have building insurance in 1997/8(ABI, 1999). This latter figure is likely to over-estimate uninsurance since it maynot include buildings insurance for rented properties which will be insured bythe property owner rather than the household. The problem is exacerbated sincesome properties may have buildings or contents insurance, but not both. It isassumed that one third of households (the mid-point of the above figures) donot have insurance of one form or another.

2. It is assumed that the risk of fire – and hence average property damage – is thesame for both uninsured and insured properties.

19 ABI website.

10 ODPM (2004) Fires in the Home: findings from the 2002/03 British Crime Survey.

Methodology

13

Commercial property1. It is assumed that all commercial capital will be insured (as a requirement of

institutional shareholders and loans taken out), with the exception of smallbusinesses which may tend to avoid insurance to minimise costs. (For this purpose,small businesses are defined as non-dwelling capital owned by persons).

Conversations with people in the insurance industry suggest that the assumptionon uninsured capital may be a serious under-estimate of the size of the uninsuredmarket. Large firms in particular will tend to self-insure and some even have theirown internal insurance companies which insure and re-insure risks to managethe exposure of the company to fire losses. This implies that losses will be higherthan the assumptions suggest, but at present it is not possible to estimate thelikely extent of underestimation.

2. The technique then assumes that the ratio of damage to capital stock is the samefor both insured and uninsured property, due to a lack of evidence to suggestotherwise, at the time of this analysis.

3. Lloyds and other non-ABI insurers are assumed to represent 10% of the non-domestic market (following advice from ABI11).

Public propertyThe assumption that all public property is uninsured is retained, though furtherwork might be useful to test the validity of this. It follows that property losses andloss of business in these buildings will not be included in ABI statistics. In previousreports, the value of damage has been estimated by assuming that the averagedamage per property is the same as for fires in commercial buildings.

An alternative approach is used in Danish estimates of the cost of fire12, which assumethat public property burns at the same rate as private property, and that the ratio offire damage to total building value is the same. This approach substantially reducesestimates of public sector property damage – by approximately £10,000 per fire.This example illustrates that estimates of the cost of fire are sensitive to theassumptions made.

Analysis of data collected by the FRS indicates that the average spread of fire in publicsector buildings is similar to the average spread in other commercial buildings.13

This analysis lends support to the current assumption that average property lossesin public sector and commercial buildings are the same, since we would expectproperty damage to be correlated with the extent of fire spread. If property valueswere significantly different in public buildings compared to commercial buildings,this might support an alternative approach, but this possibility has not yet beentested. Therefore, this paper presents no change to previous methods for estimatingpublic property damage.

11 Mark Weiner (2001) The economic costs of fire.

12 Danish Emergency Management Agency (2001) The socio-economic costs of fire in Denmark.

13 ODPM analysis.


14

Vehicle firesThe ABI publishes the total value of claims for damage to vehicles from all perils,but it is not possible to identify the proportion of the claim solely attributed to fire.However, research by the Arson Prevention Bureau estimated the value of insuranceclaims from malicious car fires to be £77m in 199614. From this figure it is possibleto estimate the average damage per car fire in 1996 and use the consumer priceindex to calculate estimates for more recent years, assuming that the average damagehas remained constant in real terms. A further assumption is that the average cost ofdamage is the same for accidental as for malicious fires.

These assumptions may need development in future to test whether they are still appropriate.

HUMAN COSTS

It is often argued that it is not possible to place a value on casualties in fire, or anyother situation. However, such values are implicit in choices that policy-makers faceevery day. The decision on whether to fund a road improvement against a newschool, or to target domestic over other types of fire requires a judgement by a decision-maker and places an implicit value on casualties. There are researchtechniques that are increasingly being used to place objective values on the cost of casualties. These values include three elements:

Healthcare costs. Fire casualties tend to result in costs to the NHS. Reducing thesecasualties will free money and time to be used on other conditions.

Lost output. Fire victims will often have to take time off work. This represents a reduction in production in the economy. Preventing fatalities and injuries willincrease the output of the economy.

Emotional and physical suffering. The emotional and physical suffering of victims isa significant cost and the hardest to value. It is not possible to value the cost to theindividual of experiencing an incident, since different people will be affected in verydifferent ways. To attempt to value this would demean the trauma suffered. However,it is possible to derive the value society places in preventing this incident occurring.

A variety of organisations around the world have attempted to value casualties. Thevalues used in this study are published by the Department for Transport and havebeen used for a number of years in the appraisal of road schemes.15

A significant element of the value of avoiding fatalities is the gain made by society interms of increased output. This is a function of the age profile of those at risk andtheir potential years in work. There is likely to be a significant difference in the ageprofile of those most at risk of fatality in road accidents and in fires and therefore wewould expect the value of lost output and thus the statistical value of life to differbetween the two hazards. There is also some evidence to suggest that people placedifferent values on suffering injury or ill health from different causes. Further researchmay provide more appropriate estimates for use in estimates of the cost of fire.

14 Arson Prevention Bureau (1998) Malicious Car Fires. Research by the Arson Prevention Bureau.

15 Department for Transport (2004) Highway Economics Note No.1 2003 Valuation of the Benefits ofPrevention of Road Accidents and Casualties.

Methodology

15

The DfT research also provides guidance on valuing serious and slight injuries. Inorder to apply these figures to fire casualties it is therefore necessary to classify injuriesby severity, which is an area that fire statistics do not currently record in much detail.General categories of burns, smoke inhalation, physical injuries and other injuries arerecorded, but within these categories there can be significant variation in the severityof injuries.

The assumptions used by Roy (1997) are retained. All injuries involving burns and25 per cent of injuries involving smoke inhalation are classified as serious injuries.The remainder are assumed to be slight.

LOST BUSINESS

Fire can result in significant losses for businesses in terms of lost production, marketshare and customer goodwill. Even a minor fire at crucial stages of production canmean very large losses for individual firms. In addition, fires resulting in the closureof firms could have significant effects on staff.

However, the losses are not generally as large for the country as a whole. The lostoutput of one firm may result in a gain in orders (and output) for another firm. Forexample, a fire that causes a local supermarket to close for a period of time will simplymean that customers will shop at the nearest alternative. In this case the only coststo society are from any additional travel costs (including reduced leisure time). Inthe same way, a company which gains business may employ more staff to meet thatdemand, and the net effect on unemployment may be zero.

The only loss to the country from fire is where output is lost that is not then producedby another firm. This could either be through foreign competitors picking up theshortfall, or where firms are producing unique goods that cannot be producedelsewhere in England and Wales. There may also be some costs in terms of short termadjustments in the labour market, with people having to move or re-train to findwork. There may also be some wider economic distortions (such as social exclusion)that result from large-scale loss of business. However, these costs have not beenestimated for the current report.

The ABI records the total value of claims made for business interruption. This is likelyto under-estimate the lost business to the individual firms, for the same reason thatproperty is generally under-insured. However the losses to society will be significantlyless than the sum of the losses to individual businesses. Previous estimates haveassumed that the loss to society is 50 per cent of the value of claims for businessinterruption and that this only relates to commercial fires. This is a rather arbitraryassumption, but given the lack of evidence it is not yet possible to improve upon it.

Alternative estimates of indirect lossEstimates of the Cost of Fire in the United States16 have used an alternative methodto estimate indirect loss. These estimates refer to the costs of lost business, temporaryhousing and missed work, and calculate indirect loss as a multiple of direct loss, wherethe magnitude of the multiple varies with the type of property affected. The USapproach does not take into account any redistribution between different businesses.

16 Hall Jr (2003) The Total Cost of Fire in the United States National Fire Protection Agency.


16

Estimates of the Danish cost of fire exclude indirect costs since the authors concludethat indirect losses are unlikely to be a true cost to the national economy.

In the absence of robust evidence supporting an alternative, the existing ODPMmethodology has been retained. However, we recognise the limitations of thisapproach and hope that work undertaken in future will enable it to be refined.

COSTS TO THE CRIMINAL JUSTICE SYSTEM

The prosecution and punishment of arsonists results in considerable costs to thecriminal justice system. Costs are incurred in terms of policing, legal expenses, courtcosts and the probation and prison services. The Home Office Flows and Costs modelprovides estimates of these costs for criminal damage cases, a category which extendsbeyond arson. Arson cases can take a number of different routes through the criminaljustice system and further analysis of these might enable more robust estimates of thecosts imposed to be made.

(c) Costs in response

The cost of the Fire and Rescue Service has been split into two elements for thepurpose of estimating the cost of fire:

l

response costs; and

l

fire safety costs.

The cost of FRS response to all incidents can be estimated by subtracting the cost offire safety work (see (a)) from the total budget. The FRS responds to a large numberof non-fire incidents (also known as special service incidents), and it is necessary tostrip out the cost of responding to these to obtain a more accurate measure of thecost of attending fires.17

Response costs are allocated to different incident types on the basis of the staff hoursspent attending them. These hours are calculated from statistics detailing the averageamount of time spent by fire appliances at each incident and an assumption of thenumber of firefighters operating each appliance (the “ridership factor”). For sometypes of fire and non-fire incidents, this data has not been available in previous yearsso assumptions have been made based on a fire service training manual. One-offdata supplied for construction of the FSEC18 model has now become available, whichshows that in general these assumptions overestimated the time, and hence resources,required to respond to both non-fire incidents and secondary fires. The new datahas been incorporated into the estimates of response costs contained in this report.

17 Special Service Incidents include a number of non-fire incidents, notably road traffic accidents.

18 Fire Service Emergency Cover – a computer-based model to assist fire and rescue authorities in theconstruction of local Integrated Risk Management Plans.

Methodology

17

An estimate is made of the cost of attending and providing cover for special serviceincidents, and this is then removed from the total cost of response. The remainingcost represents the resources spent by the FRS on providing fire cover. These canthen be allocated between different the fire incident types – again using data onstaff hours.

The cost of responding to false alarms is included in the total cost of fire since falsealarms would not occur without the risk of fire.

In the short run, the marginal cost of attending an additional fire is likely to besignificantly below the average cost, since the FRS operates with sufficient sparecapacity to enable them to respond to every incident. Therefore caution should beexercised in assuming that the cost of response would be a realisable saving in theevent of preventing a given number of fires. However, in the long-run, these costsshould be variable as the level of fire cover could be adjusted to take account of areduction in risk.

AREAS FOR FUTURE RESEARCH

This report aims to capture as many of the impacts of fire on the economy as possible,but it has not been possible to make robust estimates in some cases due to dataconstraints. In some of these areas, future research might provide a basis for furtherdevelopment of the cost of fire estimates.

It is likely that there are considerable environmental impacts from fire and from fire-fighting, but these have not been quantified sufficiently to enable an estimationof the monetary cost imposed on the economy. Future estimates may be able todraw on on-going research in this field.19

In addition to the resources required from the FRS, false alarms may well impose asignificant cost in terms of output foregone during an alarm – for example if an officeblock is evacuated. These costs have not been estimated, and a robust method to doso would need to exclude both the output that is not lost, but simply transferred toother firms, and the output regained by the firm through more productive workingin the time after the alarm has ended.

Fires in non-commercial buildings such as schools or hospitals may also reduce outputthrough disruption costs. These costs, which for a school fire might include the lossof educational facilities to pupils for a short period, are likely to be borne by theeconomy at large rather than transferred elsewhere. However, it is difficult to envisagehow these costs might be quantified.

Table 2.2 identifies some areas where future research may enable improvements in estimates of the economic cost of fire. The table indicates the potential impact on the total cost of fire from accurately capturing the cost, and the likelihood ofachieving these improvements (based on what we understand to be on-going orplanned research and our assessment of the difficulties in measuring the costsrequired to develop the Cost of Fire estimates).

19 E.g. forthcoming research, US National Fire protection Agency.


18

Research area Potentialimpact oncost of fire

Potential forachievingimprovements to cost of fire

Fire protection in consumer items Large Very small

Costs to the environment from fire and fire-fighting Medium Medium

Improved estimates of the costs incurred by theCriminal Justice System

Medium Medium

Improved estimates of the statistical value of fire deaths

Medium Medium

Property damage from fires in public buildings Medium Medium

Disruption to public services Medium Medium

Disruption to households Medium Medium

Costs of maintenance and repair in accordancewith building regulations

Medium Small

Expenditure by central government not already captured

Small High

Improved estimates of insurance coverage inpublic sector buildings

Small High

Comparison of the value of property damage indeliberate and accidental fires

Small Medium

Cost of vehicle fires Small Medium

Fire research expenditure by non-governmentbodies

Small Medium

Output lost due to false alarms Small Medium

Heritage and cultural costs Small Small

Clean-up costs Small Small

Non-FRS fire safety education and training Small Small

Table 2.2: Potential areas for future development

19

CHAPTER 3

Results

INTRODUCTION

This chapter presents estimates of the total cost of fire to the economy in 2003. Resultsare also presented for 2000 (revised since the previous report20), 2001 and 2002, whichenables some analysis of trends over time.

Results for all years are presented in current prices. A time series is not presented inconstant prices due to the difficulty in adjusting the total cost accurately. The cost offire is an aggregation of a number of different impacts, the prices of which will changeat different rates. A notable example of this is the value of insurance claims forproperty damage, which will be affected by changes in property prices. Propertyprices rarely move in tandem with the general price level and since this is a majorcomponent of the total cost of fire, fluctuations in property prices will impact ontotal cost estimates. Inflation effects should therefore be considered carefully ininterpreting changes to the total cost of fire, particularly if used as a measure of FRS performance.

As set out in the chapter 2, the methodology used to calculate the cost of fire hasbeen refined. The data presented below is a continuous time series, but cannot becompared to previous publications of The Economic Cost of Fire.

TOTAL COST OF FIRE

Table 3.1 shows the headline results for the period 2000-03. The total cost of fire inthe first column includes costs incurred in anticipation of fire, such as fire protectionmeasures in buildings. The second column presents the total cost excluding thesecosts, and it is from this figure that average costs are calculated later in the chapter.The third column illustrates the cost of fire as a proportion of gross value added(GVA) in England and Wales21.

20 Scott Dennison (2003). The Economic Cost of Fire: Estimates for 2000.

21 Gross value added (GVA) is the value of final output net of intermediate input. It is used herebecause GDP data is not available at a lower level than the UK as a whole.


20

The total cost of fire in England and Wales is estimated at approximately £7.7bn in2003, representing approximately 0.9% of national GVA. By comparison, the total socialand economic cost of crime was estimated at approximately 8% of GVA in 2000.22

Chart 1 compares growth in the total cost of fire with changes in nominal GVAbetween 2000 and 2003. The chart shows that whilst both have grown steadily over the period, the cost of fire has increased at a faster rate.

22 Brand and Price (2000), The economic and social costs of crime (Home Office Research Study 217):http://www.homeoffice.gov.uk/rds/pdfs/hors217.pdf

Total Cost(incl. cost inanticipation)

Total Cost (excl. cost inanticipation)

Total (incl. anticipation)

as % of GVA

2000 £6,223m £3,992m 0.85%

2001 £6,822m £4,415m 0.88%

2002 £7,178m £4,636m 0.89%

2003 £7,724m £4,967m 0.90%

% change, 2000-2003

+24% +24%

Table 3.1: Total economic cost of fire in England & Wales, 2000-03 (current prices)

0

20

40

60

80

100

120

140

Total Cost of Fire GVA

2000200120022003

Chart 3.1 Growth in the cost of fire (including costs in anticipation) and GVA,2000-03 (current prices, 2000 = 100)

Source: ODPM, ONS.

Results

21

TOTAL COST, BY CATEGORY OF COST

The total cost of fire is an aggregate of the estimated cost of a number of differentfire impacts. These impacts can be grouped together into three broad categories:costs in anticipation of fire; costs as a consequence; costs in response. Chart 3.2shows changes in the three main components over the time period. These categoriescan then be broken down further to enable more detailed analysis.

COSTS IN ANTICIPATION

Costs in anticipation include fire protection in buildings, insurance expenses andfire safety equipment. Overall this category has risen by 24% over the period,reaching £2.8bn in 2003.

Fire protection23

The cost of fire protection, including fire protection measures in buildings and thepurchase of protective equipment, was estimated at £2.2bn in 2003, representingapproximately 29% of the total cost of fire. Fire protection in dwellings was estimatedto cost approximately £300m, including £100m attributable to fire protection equipment.The cost of fire protection in commercial buildings and public sector buildings wasestimated at £1.2bn and £650m respectively.

23 The cost of fire protection in this publication is lower than estimates in previous publications(Dennison (2003)). This is due to a change in the discount rate recommended for use by The Green Book (HM Treasury), 2003.

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

2000 2001 2002 2003

ResponseConsequenceAnticipation

Chart 3.2 Components of the total cost of fire, 2000-03 (current prices)

Source: ODPM.


22

As shown in chart 3.3, these costs have remained relatively stable over the period.This is because the vast majority of costs are annuitised over the assumed lifetimeof the buildings. They reflect the additional costs of construction due to fire safetylegislation, along with the existing measures that are already in place in buildings.The annuitised costs will, by their nature, remain fairly constant over time.

Fire safety activityThe cost of fire safety activity was estimated at approximately £46m in 2003. Theestimated costs have remained relatively stable since 2000, though we would expectincreases in future as the FRS undertakes more community fire safety work.

Insurance administration costsThe administration of fire insurance was estimated to cost £560m in 2003. Althoughthis represented an increase of over 70% on the estimate for 2000, the reason forthis may be partly due to the estimation method rather than real fluctuations. Costscannot be observed directly so are calculated by assuming that the proportion oftotal insurance expenses attributable to fire is equal to the proportion of fire claimsto total claims. The value of total expenses rose by over 30% between 2000 and2003, whilst at the same time the share of total claims due to fire claims also increased,particularly in the commercial sector.

COSTS AS A CONSEQUENCE

Costs as a consequence include property losses, the costs of casualties (fatal andnon-fatal), and business disruption costs. The estimated cost of this category hasrisen every year to reach approximately £3.3bn in 2003, 23% higher than in 2000.

Property damageThe value of property damaged by fire was estimated at £1.9bn in 2003, accountingfor approximately one-fifth of the total cost of fire, and an increase of 40% since2000. The proportion of total property damage attributable to commercial and publicsector buildings rose from 52% to 58% over the period, largely due to an increase inthe value of damage per fire in these locations of 67%. This compares to an increasein damage per domestic fire of 21%. The causes of these increases are difficult tounravel as they reflect a combination of property price inflation, the ability ofbuildings to withstand fire spread and the performance of the FRS.

The value of fire damage to vehicles was estimated at just under £200m in 2003.

Human costsThere were 500 deaths from fire in 2003 and around 13,000 injuries. The economicvalue of these human costs was estimated at around £1.3bn.

Although there were 21 fewer fatalities in 2003 than in 2000, the total economic cost offire deaths was estimated at £660m, 10% higher than in 2000. This reflects an increasein the statistical value of life over the period.

Results

23

The number of injuries fell by 11% over this period, though the estimated economiccost rose by 4% to £600m due to an increase in the statistical value of injury.

Around three-quarters of total human costs were suffered in domestic properties, withonly 5% in commercial properties.

Business lossesThe value of lost business as a result of fire was estimated at £35m in 2003. Thiscategory was extremely volatile over the period, with a figure of £90m reported in 2002.

Costs to the criminal justice systemThe total cost of arson to the criminal justice system was estimated to be £87m in 2003,of which £84m was accounted for by the cost of proceedings in the crown court.

COSTS IN RESPONSE

Fire service response costs are estimated at £1.7bn in 2003. This represents an increaseof 25% since 2000. However, since the FRS responded to a greater number of fires,the cost per fire attended rose by only 11%.

Chart 3.3 summarises the change in the components of the cost of fire between 2000and 2003.

–40% –20% 0% 20% 40% 60% 80%

Fire safety

Insurance admin

Fire protection

Property losses

Fatalities

Injuries

Lost business

Response

Chart 3.3 Changes in the costs of fire, 2000-03 (current prices)


24

The cost of fire by locationThe total cost of fire to the economy can also be analysed by the type of fire. Firestatistics for England and Wales24 are published for 46 different locations, and thesehave been used as the basis for calculations. However, for a number of cost categories(e.g. property losses), data is not available at such a detailed level and so, for thepurposes of the estimates in this report, has been allocated on a pro-rata basis inproportion to the percentage of fires at a given location within a larger category. As a result, in general there is a greater degree of confidence in results at the largercategory level. The results presented in this chapter are at this level, though moredetailed results are available in annex A.

Total cost, by locationTable 3.2 shows the cost of fire in different locations, broken down by categories of cost.

24 ODPM (various years) Fire Statistics United Kingdom.

Allincidents1

Domestic Commercial Publicsector

Non-building

Vehicle2

Number ofincidents3

(000s)

923 63 15 9 415 89

Anticipation Fireprotection

2,160 420 1,210 650 0 0

Fire safety 50 20 20 5 0 0

Insuranceadmin.

560 170 320 0 60 60

Consequence Propertylosses

1890 440 670 420 200 200

Fatality 660 500 10 10 130 90

Injury 600 450 40 20 80 30

Lostbusiness

35 0 35 0 0 0

CJS 87 27 6 4 43 39

Response Fireserviceresponse

1,700 200 110 30 700 100

Total 7,720 2,230 2,420 1,150 1,210 516

Table 3.2: Total cost of fire 2003 by location & cost category (£m)

1 Includes false alarms.

2 Does not include fires in derelict vehicles.

3 Includes estimates for days affected by industrial action.

25

The cost of fire in commercial buildings remains the largest contributor towards thetotal cost of fire, accounting for some 32% of the overall cost. Whilst property lossesare highest in the commercial sector, the primary reason for its relative importanceis the significant cost of incorporating fire protection in commercial buildings.

The total cost of fire in the domestic sector has fallen from 30% of the total cost offire in 2000 to 27% in 2003. Domestic fires are responsible for some 75% of all firedeaths and injuries, and as a result account for a similar proportion of total humancosts from fire.

The non-building category includes fires in vehicles, outdoor fires, chimney firesand secondary fires25. This latter category alone accounted for over 60% of all firesthat the FRS attended in 2003 (one-third when false alarms are included). As a resultnon-building fires as a whole accounted for 41% of total response costs, despite thefact that the value of direct losses are significantly lower for these fires than in forbuilding fires.

The cost of responding to false alarms (not included in table 2) is also verysignificant, estimated at £700m in 2003.

Chart 3.4 shows how the cost of fire in different locations contributes towards theoverall cost. The proportions have remained relatively stable over the period.

Results

25 Secondary fires are defined as reportable fires that are not in primary fire locations, did not involvecasualties or rescues, were not chimney fires in buildings and were attended by four or fewerappliances. In most years, grassland and refuse fires account for over 80% of secondary fires.Derelict buildings, derelict vehicles, intentional straw burning and ‘other secondary’ account forthe remainder.

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

0%2000 2001 2002 2003

False AlarmsNon-buildingsOther buildingsPublic SectorCommercialDomestic

Chart 3.4 Total cost of fire, by location

Source: ODPM.


26

Average cost, by locationThe average costs of fire are calculated as the ratio of total consequential and responsecosts to the number of incidents. Whilst it is instructive to examine the costs ofanticipation in an analysis of aggregate costs, calculating them as an average per fireis not likely to be useful. These costs will be incurred irrespective of the number offires that take place and cannot be avoided by reducing the incidence of fire. However,in the long-run, costs in anticipation might be reduced if the total risk of fire declined.

The costs to the Criminal Justice System have also been excluded since they areonly incurred by deliberate fires. The cost to the CJS is estimated to be £430 perprimary fire (including accidental fires). For secondary fires, chimney fires and falsealarms, costs to the CJS are assumed to be zero. Average costs for deliberate firesare presented in chapter 5.

Table 3.3 shows the composition of the average costs in 2003 according to categoriesof costs and types of fire. A more detailed breakdown by location is presented inAnnex A.

Average costs are highest in commercial and public sector fires, largely due to the highlevel of property losses associated with these fires. Domestic fires suffer by far thehighest average cost in terms of both fatalities and injuries. Average response costsare highest for commercial fires.

Average response costsEstimates of response costs by location can show considerable variance over time,reflecting how a small number of particularly large incidents can distort the average.

The cost of responding to different incidents is allocated in proportion to the timespent attending them. The costs incurred in waiting for a call (providing cover) areapportioned in the same way. As such, the cost of responding to incidents willdepend upon a number of factors: the number of incidents in total; the proportion

All fires1 Domestic Commercial Publicsector

Non-building

Vehicle2

Consequence Propertylosses

3,670 7,000 44,740 44,740 480 2,220

Fatality 1,270 7,990 800 830 320 980

Injury 1,160 7,120 2,760 2,680 190 330

Lostbusiness

70 0 2370 0 0 0

Response Fireserviceresponse

1,990 3,170 7,430 3,180 1,680 1,130

Total 8,170 25,280 58,100 51,430 2,660 4,670

Table 3.3: Average cost of fire by location & cost category, 2003 (£)

1 Does not Include false alarms.

2 Does not include fires in derelict vehicles.

27

of total incidents accounted for by that category; the average time spent at differentincidents; and the resources available to the FRS.

In the short run the marginal cost of attending an additional fire is likely to besignificantly below the average cost, since the FRS operates with sufficient sparecapacity to enable them to respond to every incident. Therefore caution should beexercised in assuming that the cost of response would be a realisable saving in theevent of preventing a given number of fires. However, in the long-run, these costsmight be more variable as the level of fire cover could be adjusted to take accountof a reduction in risk.

Results

28

CHAPTER 4

International comparisons

Attempts to estimate the economic cost of fire have been made in a number of othercountries. As yet there is no internationally agreed methodology, so costs cannot bedirectly compared. However, chart 4.1 shows a comparison of costs as a percentageof the national income in four countries. In the case of England and Wales, a measureof gross value added is used as a measure of national income, since GDP figures areonly available for the UK as a whole.26

Costs as a percentage of national income vary between approximately 0.9% inDenmark and 1.8% in the United States. This difference can partly be explained by the category ‘other economic costs’, which has not been included in estimates for Denmark and England and Wales, but has been for the USA and Canada. This category largely consists of estimates of the cost of building fire protection into equipment other than buildings (for example, computers).

26 Data is taken from: Danish Emergency Management Agency (2001) The socio-economic costs of firein Denmark; Hall Jr (2003) The Total Cost of Fire in the United States National Fire Protection Agency;Schaenman, Stern, Bush (1994) Total Cost of Fire in Canada. An Initial Estimate, The National ResearchCouncil of Canada Fire Research Laboratory.

0.2%

0.4%

0.6%

0.8%

1.0%

1.2%

1.4%

1.6%

1.8%

2.0%

0%England& Wales

Denmark USA Canada

Co

st a

s %

of

Nat

iona

l GD

P

Firefighter costsHuman lossesOther economic costsBuilding constructionNet fire insuranceEconomic losses

Chart 4.1 International comparison of the cost of fire

29

Estimates of firefighter costs are substantially larger for the USA and Canada, whereestimates include the cost of volunteer firefighters. In the USA, fire departments madeup wholly or largely of volunteers cover around two-fifths of the population, andthe value of the time they donate is included in the cost of fire. This cost is equivalentto approximately 0.2% of GDP. Estimates for Canada also include the costs of volunteerfirefighters.

Estimates of the direct and indirect losses from fire are also published by the WorldFire Statistics Centre.27

International comparisons

27 More details can be found at www.genevaassociation.org/wfsc.htm

30

CHAPTER 5

The cost of arson andmalicious false alarms

The costs of arson and malicious false alarms represent a significant proportion of thetotal costs of fire. These costs are not in addition to the estimate already of total costof all fires, which includes the cost of deliberate fires28 and malicious false alarms, butare a separate exercise.

TOTAL COST OF MALICIOUS FIRE BEHAVIOUR

The estimated costs of malicious fire behaviour are presented in table 5.1. Due torefinements made to the methodology, the estimates presented here should not beregarded as directly comparable to those in Dennison (2003).

Malicious fire behaviour was estimated to impose a cost of £2.9bn on the economyin 2003. This is an increase of 32% since 2000, a larger increase than in the total costof fire over this period. The cost of arson was estimated at £1.7bn when costs inanticipation were excluded. The cost of malicious false alarms was £94m, a declineof 11% since 2000.

To estimate the cost to the economy of deliberate fires, a few amendments are madeto the method adopted in chapter 2. These are set out below. In addition, an estimateis made for the costs incurred by the criminal justice system.

28 Deliberate fires are those fires where malicious or deliberate ignition is merely suspected. They include those recorded by the fire service as ‘doubtful’.

Arson (incl. costs inanticipation)

Arson (excl. costs in

anticipation)

Malicious False Alarms

Total (inc. costs inanticipation)

2000 2,153 1,238 94 2,246

2001 2,427 1,443 96 2,521

2002 2,586 1,535 85 2,670

2003 2,849 1,714 84 2,932

% change,2000-2003

+32% +38% -11% +31%

Table 5.1: Total cost of malicious fire behaviour (£m)

31

COSTS IN ANTICIPATION

Fire protection in buildings, insurance against fire and fire safety activity are not solelyundertaken due to the threat of arson. However, deliberate fire-setting increases therisk of fire and so it can be assumed that it will increase the costs incurred inanticipation of fire occurring. It has been assumed that the proportion of fireprotection expenditure due to arson is equivalent to the long-run proportion of allfires that are deliberate. For the purposes of this paper, ten year averages were taken,which indicated that approximately 20% of domestic fires are deliberate, 45% of otherbuildings and 70% of vehicle fires.

COSTS AS A CONSEQUENCE

Data on casualties in deliberate fires is collected separately to all fires, enabling anestimate of the average human cost for deliberate fires. In general, there are fewerfatalities and injuries in deliberate fires and hence human costs are lower.

In Dennison (2003), the cost of malicious fires was estimated based on the assumptionthat the average value of property loss from a deliberate fire was the same as in anaccidental fire.

However, both anecdotal and statistical evidence suggest that fire damage is moresignificant in deliberate fires. Table 5.2 presents the results of analysis that indicatesfire spread in deliberate fires is twice as extensive as in accidental fires.

It is likely that the value of property losses is correlated with the area affected byfire damage, but more work is required to quantify this relationship.

For this report, the average value of property damage has been adjusted using datafrom an analysis of the British Crime Survey29, which suggested that the average costof damage from deliberate dwelling fires is 15% higher than in all dwelling fires. It isassumed that a similar relationship exists for fires in other buildings.

The cost of arson and malicious false alarms

29 Aust (2001) Fires in the Home: Findings from the 2000 British Crime Survey.

% of incidents where firespread beyond room

Average area affectedby direct burning (m2)

Dwellings

Accidental 6.4% 2.6

Deliberate 20.6% 6.6

All Fires 9.5% 3.6

Non-dwelling buildings

Accidental 10.6% 7.0

Deliberate 21.2% 13.2

All Fires 15.4% 10.0

Table 5.2: Fire spread in deliberate and accidental fires

Source: ODPM analysis of FDR1 returns


32

The value of lost business due to arson is calculated as a proportion of the lost businessdue to all fires, with the proportion equal to the percentage of all commercial firesthat are deliberate.

Costs to the criminal justice systemAs set out in chapter 3, the total cost of arson to the criminal justice system wasestimated to be £87m in 2003. It is assumed that only individuals responsible forprimary fires will be prosecuted and hence the cost of secondary fires, chimney firesand false alarms is zero. It is further assumed that the average cost to the CJS is thesame for all primary fires.

RESPONSE COSTS

Average response costs are assumed to be the same for deliberate fires as for allfires. The cost to the FRS of deliberate fires was estimated to be £643m in 2003.

Table 5.3 compares the relative contribution of different categories to the cost of allfires and the cost of arson.

Response costs rose by over 60% between 2000 and 2003. This was largely due to a substantial increase in the number of secondary fires attended by the FRS, manyof which were deliberately started. The proportion of total FRS costs that areallocated to secondary fires (and thus arson) therefore increased. This may present a false picture of real costs, in as much as brigades retain spare capacity to enablethem to provide fire cover at all times. As such they may be able to attend increasednumbers of secondary fires without using additional resources. However, it doesindicate the very real burden that deliberate fire-setting places on the FRS.

THE COST OF MALICIOUS FALSE ALARMS

In addition to deliberate fire setting, there is a further cost from malicious false alarms.Currently the only cost that can be calculated is the cost of the time spent by the Fireand Rescue Service in responding to these calls. This cost was estimated at £84m in 2003.

Cost (£m) Share of total cost of arson

Fire safety 20 1%

Insurance expenses 220 8%

Fire protection 900 31%

CJS costs 90 3%

Human costs 250 9%

Property damage 710 25%

Lost business 20 1%

Response costs 640 23%

Table 5.3: The costs of arson in 2003

Source: ODPM analysis

33

AVERAGE COST OF DELIBERATE FIRES

Estimates of the average cost of deliberate fires tend to be slighter higher than estimatesfor all fires due to the assumption that the damage to property is more widespread.There is also a small additional cost incurred by the criminal justice system. Table5.4 presents estimates for the average cost of deliberate fires in various locations.

Since the costs incurred by the criminal justice system are not available by location,average costs are calculated by simply dividing total CJS costs by the number ofprimary fires. It is assumed that no action will be taken against individuals responsiblefor secondary fires.

It should be noted that the vehicle fire category does not include fires in derelictvehicles, which are instead classified as secondary fires. Fires in derelict vehiclesonly account for approximately 5% of all secondary fires, the majority of which areaccounted for by refuse or grassland fires. Due to data constraints it has not beenpossible to estimate response costs for different types of secondary fire, but it islikely that the cost of responding to a fire in a derelict vehicle is the same asresponding to a fire in any other vehicle. However, other average costs (human,property, lost business, CJS costs) will be as for secondary fires in general (i.e. zero).

The cost of arson and malicious false alarms

Humancosts

PropertyDamage

Lostbusiness

CJScosts

ResponseCost

AverageTotal cost

All fires 460 3,720 70 230 1,840 6,320

Building 6,080 17,150 560 850 3,320 27,960

Domestic 8,570 7,100 0 850 3,170 19,690

Commercial 660 45,410 2,370 850 7,430 56,720

Public sector 3,490 45,410 0 850 3,180 52,930

Non-derelict vehicle 590 2,260 0 850 1,130 4,830

Derelict vehicle 0 0 0 0 1,130 1,130

Secondary 0 0 0 0 1,650 1,650

Table 5.4: Average costs of deliberate fires, 2003 (£)

34

ANNEX AAverage costs by location

The table below presents the average costs, by location for each year 2000-03,broken down into response and consequential costs. For the purposes of appraisal,data for 2003 should be used, but this time series may be useful to show that thereis some variance in average costs, particularly in categories where there are a relativelysmall number of incidents in a given year.

In addition, for the purposes of appraisal, caution should be exercised beforeassuming that the cost of response would be a realisable saving in the event ofpreventing a fire. In the short run the marginal cost of attending an additional fire islikely to be significantly below the average cost, since the FRS is expected to operatewith sufficient capacity to respond to any incident. However, in the long-run, wemight expect these costs to be more variable as the level of fire cover adjusts inline with the risk of fire.

The average costs presented below exclude costs incurred by the Criminal JusticeSystem, since these only apply to deliberate fires. The cost to the CJS is estimated to be £430 per primary fire (including accidental fires). For secondary fires, chimneyfires and false alarms, costs to the CJS are assumed to be zero.

Locational definitions are as used in Fire Statistics United Kingdom.

35

Annex A

2000

2001

2002

2003

Res

pons

eC

ons

Ave

Co

stR

espo

nse

Co

nsA

ve C

ost

Res

pons

eC

ons

Ave

Co

stR

espo

nse

Co

nsA

ve C

ost

Tab

le A

1: A

vera

ge

cost

s b

y lo

cati

on

Fire

s an

d f

alse

ala

rms

£1,7

00£3

,200

£4,9

00£1

,600

£3,3

00£4

,900

£1,9

00£3

,400

£5,3

00£1

,800

£3,4

00£5

,300

Tota

l fire

s£1

,900

£6,4

00£8

,200

£1,7

00£6

,200

£7,9

00£2

,200

£6,7

00£8

,900

£2,0

00£6

,300

£8,3

00

Tota

l bui

ldin

gs

£2,8

00£2

1,40

0£2

4,20

0£2

,700

£24,

300

£26,

900

£4,5

00£2

8,40

0£3

2,90

0£3

,300

£28,

500

£31,

800

Tota

l do

mes

tic

£2,5

00£1

9,00

0£2

1,60

0£2

,500

£20,

300

£22,

800

£3,1

00£2

0,30

0£2

3,40

0£3

,200

£22,

100

£25,

300

Sin

gle

occu

pan

cy d

wel

ling

£2

,500

£23,

300

£25,

800

£2,5

00£2

5,10

0£2

7,70

0£3

,100

£25,

400

£28,

500

£3,5

00£2

7,80

0£3

1,30

0

Mul

tiple

occ

upan

cy d

wel

ling

£2

,700

£17,

700

£20,

400

£2,7

00£1

9,70

0£2

2,40

0£3

,400

£20,

200

£23,

600

£3,1

00£2

2,10

0£2

5,20

0

Oth

er o

r un

spec

ified

dw

ellin

g

£3,1

00£1

0,60

0£1

3,70

0£2

,500

£10,

000

£12,

500

£3,1

00£1

0,10

0£1

3,30

0£3

,500

£11,

600

£15,

100

Priv

ate

gara

ges,

she

ds,

etc

£2

,000

£9,6

00£1

1,60

0£2

,100

£9,0

00£1

1,00

0£2

,100

£7,5

00£9

,600

£2,3

00£9

,200

£11,

500

Tota

l co

mm

erci

al£6

,400

£33,

600

£39,

900

£6,1

00£4

0,20

0£4

6,30

0£1

0,70

0£4

8,90

0£5

9,60

0£7

,400

£50,

700

£58,

100

Agr

icul

tura

l bui

ldin

gs

£20,

400

£31,

800

£52,

100

£21,

300

£37,

400

£58,

700

£60,

600

£47,

300

£107

,900

£33,

000

£48,

400

£81,

400

Ind

ustr

ial p

rem

ises

£7,3

00£3

4,10

0£4

1,40

0£7

,500

£42,

100

£49,

600

£8,2

00£5

0,30

0£5

8,50

0£8

,000

£52,

100

£60,

100

Min

ing

and

qua

rryi

ng

£8,7

00£4

0,70

0£4

9,40

0£4

,800

£39,

500

£44,

200

£3,5

00£5

7,50

0£6

1,00

0£1

1,50

0£4

7,10

0£5

8,60

0

Ele

ctric

ity,

gas,

wat

er c

oke,

nucl

ear

£5

,700

£33,

800

£39,

500

£5,8

00£6

0,00

0£6

5,70

0£8

,300

£48,

500

£56,

800

£8,5

00£5

2,70

0£6

1,20

0

Met

al m

anuf

actu

re

£7,3

00£3

5,70

0£4

3,00

0£8

,900

£68,

300

£77,

200

£7,2

00£5

2,80

0£6

0,10

0£1

0,50

0£5

6,70

0£6

7,10

0

Non

-met

allic

min

eral

pro

duc

ts

£8,9

00£3

0,80

0£3

9,60

0£9

,900

£42,

100

£52,

000

£4,5

00£4

5,50

0£5

0,10

0£6

,900

£86,

500

£93,

400

Che

mic

als

£7

,300

£37,

900

£45,

200

£16,

000

£43,

900

£59,

900

£13,

600

£53,

100

£66,

700

£6,4

00£5

3,40

0£5

9,90

0

Met

al g

ood

s en

gine

erin

g £6

,400

£34,

800

£41,

200

£6,7

00£4

1,50

0£4

8,20

0£9

,900

£55,

500

£65,

400

£7,7

00£4

7,50

0£5

5,20

0

Vehi

cle

man

ufac

ture

£6

,800

£31,

300

£38,

100

£7,2

00£4

0,10

0£4

7,30

0£5

,600

£50,

700

£56,

300

£9,2

00£5

4,30

0£6

3,60

0

Food

, d

rink,

and

tob

acco

£7

,700

£32,

000

£39,

700

£8,5

00£3

9,40

0£4

7,90

0£6

,500

£49,

200

£55,

800

£7,8

00£4

9,00

0£5

6,80

0

Text

iles,

foo

twea

r et

c.

£9

,900

£32,

000

£41,

800

£15,

100

£40,

200

£55,

300

£10,

000

£54,

900

£64,

900

£8,8

00£5

3,60

0£6

2,40

0

Tim

ber

, w

ood

pro

duc

ts

£10,

400

£32,

400

£42,

800

£6,3

00£3

9,40

0£4

5,70

0£8

,700

£46,

000

£54,

800

£10,

100

£62,

800

£72,

900

Pap

er,

prin

ting

£4

,400

£32,

700

£37,

200

£4,4

00£3

8,20

0£4

2,60

0£6

,300

£47,

000

£53,

400

£4,7

00£4

9,20

0£5

3,90

0


36

2000

2001

2002

2003

Res

pons

eC

ons

Ave

Co

stR

espo

nse

Co

nsA

ve C

ost

Res

pons

eC

ons

Ave

Co

stR

espo

nse

Co

nsA

ve C

ost

Tab

le A

1: A

vera

ge

cost

s b

y lo

cati

on

(con

tin

ued

)

Rub

ber

, p

last

ics

£6

,600

£44,

300

£50,

800

£5,7

00£3

6,80

0£4

2,50

0£7

,400

£47,

100

£54,

600

£10,

100

£52,

700

£62,

800

Oth

er M

anuf

actu

ring

£11,

000

£34,

900

£46,

000

£8,8

00£3

9,80

0£4

8,60

0£1

2,20

0£4

8,20

0£6

0,40

0£1

0,90

0£4

9,00

0£5

9,90

0

Con

stru

ctio

n£3

,900

£31,

900

£35,

800

£3,7

00£3

7,00

0£4

0,80

0£3

,400

£53,

200

£56,

500

£4,1

00£5

0,80

0£5

4,90

0

Trad

e ho

tels

etc

£4,6

00£3

3,60

0£3

8,20

0£4

,300

£39,

800

£44,

100

£6,1

00£4

8,70

0£5

4,80

0£4

,600

£50,

500

£55,

100

Who

lesa

le d

istr

ibut

ion

£5,6

00£3

0,90

0£3

6,50

0£1

3,60

0£3

6,50

0£5

0,10

0£1

8,00

0£4

5,70

0£6

3,60

0£1

0,20

0£4

7,10

0£5

7,30

0

Rec

yclin

g

£37,

700

£30,

100

£67,

800

£9,9

00£3

9,60

0£4

9,50

0£2

8,00

0£4

8,70

0£7

6,70

0£1

3,00

0£4

8,90

0£6

1,80

0

Ret

ail d

istr

ibut

ion

£4,2

00£3

2,30

0£3

6,50

0£3

,500

£39,

100

£42,

600

£5,0

00£4

8,50

0£5

3,50

0£3

,800

£49,

200

£53,

000

Sal

e, r

epai

r et

c. o

f ve

hicl

es

£7,1

00£3

7,70

0£4

4,80

0£5

,100

£40,

500

£45,

600

£8,5

00£5

0,40

0£5

8,90

0£7

,800

£54,

200

£62,

000

Hot

els

£3,5

00£3

6,30

0£3

9,80

0£4

,000

£44,

900

£48,

900

£4,6

00£4

8,90

0£5

3,50

0£5

,100

£49,

800

£55,

000

Hos

tels

, ho

liday

cam

ps,

etc

. £2

,100

£35,

200

£37,

300

£2,2

00£3

7,50

0£3

9,70

0£2

,100

£48,

000

£50,

100

£2,4

00£5

0,10

0£5

2,50

0

Res

taur

ants

£2

,800

£35,

000

£37,

800

£3,5

00£3

9,90

0£4

3,40

0£1

2,00

0£5

0,30

0£6

2,30

0£4

,000

£52,

900

£56,

800

Pub

lic h

ouse

s, c

lub

s et

c.

£4,9

00£3

3,50

0£3

8,40

0£5

,300

£42,

000

£47,

400

£4,9

00£4

9,20

0£5

4,20

0£4

,800

£52,

400

£57,

200

Tran

spor

t an

d co

mm

unic

atio

ns

pre

mis

es£5

,200

£31,

700

£36,

900

£8,1

00£3

9,40

0£4

7,40

0£4

,800

£46,

800

£51,

600

£7,2

00£4

9,90

0£5

7,10

0

Ban

king

, fin

ance

, in

sura

nce,

real

est

ate

etc.

£7,1

00£3

1,50

0£3

8,60

0£4

,900

£37,

400

£42,

400

£4,6

00£4

6,70

0£5

1,30

0£6

,100

£48,

200

£54,

300

Pub

lic s

ecto

r£2

,700

£29,

600

£32,

300

£2,9

00£3

8,20

0£4

1,10

0£4

,100

£43,

200

£47,

300

£3,2

00£4

8,30

0£5

1,40

0

Pub

lic a

dmin

istr

atio

n, d

efen

ce,

law

enf

orce

men

t et

c.

£2

,800

£32,

600

£35,

400

£2,8

00£4

0,50

0£4

3,40

0£9

,900

£46,

300

£56,

200

£3,3

00£5

0,80

0£5

4,10

0

Sch

ools

£3,6

00£2

7,50

0£3

1,10

0£3

,600

£35,

100

£38,

600

£3,5

00£4

0,60

0£4

4,10

0£3

,900

£45,

600

£49,

600

Furt

her

educ

atio

n et

c.

£4

,000

£28,

900

£32,

900

£3,0

00£3

5,80

0£3

8,80

0£2

,900

£42,

300

£45,

100

£3,3

00£4

5,30

0£4

8,60

0

Hos

pita

ls -

non

psy

chia

tric

£2

,200

£28,

900

£31,

200

£2,4

00£3

9,10

0£4

1,50

0£2

,400

£41,

500

£44,

000

£2,6

00£4

8,30

0£5

0,90

0

Hos

pita

ls -

psy

chia

tric

£2

,100

£36,

100

£38,

200

£1,5

00£4

3,00

0£4

4,50

0£1

,500

£47,

100

£48,

600

£1,6

00£5

3,00

0£5

4,60

0

37

Annex A

2000

2001

2002

2003

Res

pons

eC

ons

Ave

Co

stR

espo

nse

Co

nsA

ve C

ost

Res

pons

eC

ons

Ave

Co

stR

espo

nse

Co

nsA

ve C

ost

Tab

le A

1: A

vera

ge

cost

s b

y lo

cati

on

(con

tin

ued

)

Oth

er m

edic

al c

are

£2,6

00£2

7,30

0£2

9,90

0£3

,400

£35,

800

£39,

200

£2,5

00£3

9,50

0£4

2,00

0£2

,900

£45,

200

£48,

100

Rec

reat

iona

l and

oth

er c

ultu

ral

serv

ices

£3

,200

£28,

500

£31,

800

£3,2

00£3

4,80

0£3

8,00

0£3

,200

£40,

900

£44,

100

£3,5

00£4

5,80

0£4

9,30

0

Eld

erly

per

sons

hom

e£1

,900

£28,

600

£30,

500

£1,9

00£4

4,90

0£4

6,80

0£1

,900

£44,

300

£46,

200

£2,2

00£5

1,20

0£5

3,40

0

Chi

ldre

ns h

ome,

hom

es

for

dis

able

d£2

,500

£28,

600

£31,

100

£1,9

00£4

4,00

0£4

5,90

0£1

,900

£50,

600

£52,

500

£2,7

00£4

8,10

0£5

0,80

0

Oth

er m

isce

llane

ous

serv

ices

£2

,600

£30,

100

£32,

700

£4,1

00£3

8,90

0£4

3,00

0£1

1,80

0£4

5,60

0£5

7,40

0£5

,000

£52,

500

£57,

500

Oth

er b

uild

ings

£4,9

00£2

9,10

0£3

4,00

0£3

,400

£36,

500

£39,

900

£4,9

00£4

1,50

0£4

6,40

0£6

,100

£46,

500

£52,

600

Uns

pec

ified

bui

ldin

gs£7

,400

£29,

800

£37,

200

£4,2

00£3

6,40

0£4

0,60

0£4

,000

£42,

000

£46,

100

£4,9

00£4

4,70

0£4

9,60

0

Tota

l non

-bui

ldin

gs£1

,500

£1,3

00£2

,800

£1,5

00£1

,000

£2,5

00£1

,600

£1,1

00£2

,700

£1,7

00£1

,000

£2,7

00

Vehi

cle

fires

£1,3

00£3

,600

£5,0

00£1

,000

£3,2

00£4

,200

£1,7

00£3

,200

£4,8

00£1

,100

£3,5

00£4

,700

Out

doo

r (p

rimar

y)£3

,500

£6,7

00£1

0,10

0£3

,400

£6,1

00£9

,500

£4,0

00£8

,600

£12,

600

£5,3

00£8

,200

£13,

500

Out

doo

r fir

es£1

,400

£0£1

,400

£1,5

00£0

£1,5

00£1

,500

£0£1

,500

£1,7

00£0

£1,7

00

Chi

mne

y fir

es£3

,200

£0£3

,200

£3,2

00£0

£3,2

00£3

,200

£0£3

,200

£3,6

00£0

£3,6

00

Fals

e al

arm

s£1

,400

£0£1

,400

£1,5

00£0

£1,5

00£1

,500

£0£1

,500

£1,7

00£0

£1,7

00

1D

oes

not

incl

ude

fires

in d

erel

ict

vehi

cles

.

Figu

res

may

not

sum

due

to

roun

ding

.

38

ANNEX BUpdating the economic cost of fire

In order to be of use in the appraisal of fire projects, it is necessary for the cost offire, particularly average costs, to be up-to-date. In future, ODPM will aim to publishannual data in the December following the end of the calendar year. However, thistarget will rely on the availability of both data and resources. If estimates are requiredbefore new data is published, a standard method can be adopted to update valuesas a guide.

Because the cost of fire is made up of a number of components not fully representativeof the general economy, we would not necessarily expect average costs to move withinflation and nominal GDP. However, for guidance purposes, values can be upratedusing an index which reflects inflation and real per capita economic growth in theintervening period.

For example, if values are required at price and output levels for a future year, theseshould be calculated by adjusting the 2003 figures given in appendix A by the currentestimates of the increase in nominal GDP per capita. To obtain values for year x, the2003 values can be multiplied by:

1 + % increase in nominal GDP per capita100

It is expected that the method used to calculate the cost of fire will continue to evolveand therefore it is recommended that the most recent estimates of the economic costof fire should be used.

cost of fire - uk government web archive – the...

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