Councillor Eamonn O’Brien, the Leader of the Council and Cabinet Member for Finance and Growth, presented the report regarding the refresh of the Medium Term Financial Strategy (MTFS), a 4 year plan which aligns the Councils spending decisions and priorities with its corporate plan and those identified through the Boroughs Let’s Do It! Strategy.
In response to Members’ questions it was noted the transformation and reform agendas maintained a system of checks and balances to monitor and measure cost pressures and ensure early signs of non-delivery or additional pressures were picked up and addressed. In most cases these would be absorbed internally, with directorates tasked with tackling emerging pressures in existing budget envelopes. With regards to Council Tax growth, an assumption had been made in the figures that this would increase by 0.5% each year which was based on the pipeline of work coming though planning. With regards to the Real Living Wage, these were set out in the report but included an assumed national increase year on year.
In response to a question about use of reserves, it was noted that there was an assumption that reserves would not be used as a long term solution but using them now would allow space for the reform and transformation savings to be realised. This strategic use allowed for reserves to be built back in later. Finally, it was noted that the terminology of Labour/Council amendments in the report were all the same and should all read ‘Council’.
Decision:
Cabinet:
1. Approved the medium term financial strategy and the assumptions regarding resources and spending requirements as at October 2021;
2. Noted that additional demand pressures are subject to directorates identifying and delivering demand management programmes, mitigations, or savings to offset;
3. Noted that the option of an adult social care precept is not reflected in the strategy until further national government announcements are made;
4. Noted the projected budget gap of £2.306m in 2022/23 and £16.656m in 2023/24;
5. Noted the significant financial risks for funding, income and demand pressures in future years and the ongoing impact of COVID on the strategy;
6. Noted that the Medium Term Financial Strategy (MTFS) is to be updated when the government Spending Review (SR21) takes place and the outcome of the local government settlement is announced in December; and
7. Noted further reports will be coming to Cabinet identifying proposals for consideration on how to close the financial gap in future years.
Reasons for the decision:
The Council has a statutory duty to set a legal budget for the following financial year. This report sets out an approach that enables this to be achieved within the required timescales. The MTFS aligns the Council’s spending decisions and priorities with its corporate plan and those identified through the Boroughs Let’s Do It Strategy.
Other options considered and rejected:
N/A