Agenda item

Purpose: To set out the financial planning assumptions for future years and align these with the Council Strategy to ensure that the Council Strategy will be delivered. The MTFS highlights the overarching key issues facing the Council’s finances as well as how there are many different scenarios and uncertainty concerning the future revenue streams for the Council in the future.

The Council is able to commence the next four years of the MTFS from a strong financial base and this position and future projections are highlighted in the report.

Council considered a report (Agenda Item 5) which set out the purpose of the Medium Term Financial Strategy (MTFS) to determine financial planning assumptions for future years, aligned with the delivery of the Council Strategy. The MTFS highlighted the overarching key issues faced by the Council, and the different scenarios and uncertainty concerning future revenue streams. The Council was able to commence the next four years of the MTFS from a strong financial base, and this position and future projections were highlighted in the report.

MOTION: Proposed by Councillor Ross Mackinnon and seconded by Councillor Lynne Doherty:

That Council approve the Medium Term Financial Strategy.

Councillor Ross Mackinnon in introducing the report stated that the Strategy was a rolling four year programme built to ensure that the Council had the financial resources to deliver the Council’s Strategy, and it included a number of assumptions and uncertainties around both income and expenditure. The Local Government Financial Settlement for 2023 was broadly similar to the previous year, but the outcome of the Local Government Fair Funding Review was still awaited for more long term certainty around business rates.

Councillor Mackinnon highlighted that the Council had to bridge a funding gap of around £14m over the next three years and these savings would be met by transformation, digitization, and income generation. He believed that the Council had an excellent track record in delivering required savings in recent years without any cuts to frontline services. He stated that it was crucial for the Council to have adequate reserves in place to smooth what was anticipated to be an irregular pattern of savings, and to protect the provision of services. Councillor Mackinnon highlighted how carrying out a medium term forecasting exercise helped to see the demands and challenges ahead, and ensured that the Council continued to meet the needs of its residents. He stated that the recently released Financial Resilience Index showed that the Council was well placed to face the future with sufficient reserves and healthy financial indicators, which demonstrated its overall robust financial health.

Councillor Jeff Brooks highlighted that he had previously asked for the Strategy to be published alongside the outturn. He called for there to be a comparison published between the initial forecast and the actual outcomes at future meetings so that an accurate review can be undertaken in public.

Councillor Adrian Abbs highlighted the principal of ‘Save Money And The Environment’ (SMATE), raised concerns about the approach to investing into environmental protection, and referred to projects that could save the Council both money and protect the environment.   

Councillor David Marsh queried why the decision had been taken to raise Council Tax by 1% rather than 2%, which had resulted in more than £1m being drawn from the Council’s reserves when previous proposals from other political groups to withdraw from the reserves had been rejected.

Councillor Graham Bridgman stated that funding was set aside into specified reserves to counter fluctuations in specific areas of the budgets such as adult social care.

Councillor Lynne Doherty stated that sound financial stewardship of the Council’s budget was something that the current administration had demonstrated since 2005. The previous two years had been a challenging time for local government finances with the impact of the COVID-19 pandemic. She suggested that sound financial planning must sit at the heart of good public finance in West Berkshire and stated that this was a Council that looked ahead and managed its finances well. She welcomed the Strategy as she felt it was a careful balance of prudent and efficient spending, it was carefully managed, it provided investment into the Council’s strategies and priorities, and it demonstrated the understanding that Council Tax needed to kept as low as possible whilst recognising the need to continue to care for the most vulnerable. Councillor Doherty referred to the uncertainties affecting the Council’s finances such as the impact of COVID-19 on the economy, adult social care reforms, the Fair Funding Review and a potential business rate reset. Those uncertainties meant that the Council must remain prudent to ensure it had the financial resources available to make West Berkshire an even greater place in which to live, work and learn.

Councillor Ross Mackinnon highlighted that revenue and capital performance was considered every quarter by the Executive but that he continued to look at the issue of reviewing delivery against forecasts as raised by Councillor Brooks. He also highlighted how the majority of spending on the environment strategy came from the capital budget, and the withdrawal from the reserves as raised by Councillor Marsh was the use of specific reserves for previously identified risks that had been earmarked and set aside.   

The Motion was put to the meeting and duly RESOLVED.