Public sector risk financing: exploring the potential use of weather derivatives by fire and rescue services

John Hood, Bill Stein, Mark Jarman

Research output: Contribution to journalArticle

Abstract

The floods of 2007, experienced across much of England, resulted in local authority organisations, including Fire and Rescue Services, mounting large-scale responses and incurring additional and unexpected expenditure. Although central government activated funding schemes, some local authorities fell below the thresholds set and had to absorb the additional costs. This raised a question of what alternative methods were available to allow these local authority organisations to finance such unexpected costs. Weather derivatives are widely used in certain sectors to manage the financial risk that arises from undesirable weather conditions and the objective of this research is to explore the reactions of an FRS towards the use of these financial instruments in managing additional costs, such as those arising from the 2007 floods.
Original languageEnglish
Pages (from-to)562-581
Number of pages20
JournalLocal Government Studies
Volume39
Issue number4
Early online date6 Feb 2013
DOIs
Publication statusPublished - 2013

Keywords

  • public sector
  • weather derivatives
  • rescue services
  • risk analysis

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