Agenda item

The purpose of the Medium Term Financial Strategy (MTFS) is to set out the financial planning assumptions for future years and align these with the Council Strategy to ensure that 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 considered the report (Agenda Item 5) which set out the financial planning assumptions for future years. These were aligned with the Council Strategy to ensure that Council Strategy would be delivered. The Medium Term Financial Strategy (MTFS) highlighted the overarching key issues facing the Council’s finances as well as how there were many different scenarios and uncertainty concerning the future revenue streams for the Council in the future.

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

“That the Council approve the Medium Term Financial Strategy.”

Councillor Mackinnon, in introducing the report, stated that the MTFS was a rolling four year programme built to ensure that the Council had the necessary financial resources to deliver the Council Strategy. 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, Adult Social Care funding and the replacement for the New Homes Bonus.

Councillor Mackinnon highlighted that the Council had to bridge a funding gap of around £3 million over the next three years and these savings would be met by transformation, digitalisation 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. This year alone £9.1 million pounds of savings had been achieved and proposals had already been drafted to cut the funding gap. The nation was still emerging from the effects of the pandemic and the dreadful events in Ukraine that were impacting our economy. Good financial planning helped meet these challenges and the needs of our residents.

Councillor Jeff Brooks stated that over 20 years ago there was not an MTFS process and Councils’ seemed to manage their budgets. He did not take issue with having an MTFS but he did with its accuracy. He said that when you compared last year’s MTFS with today’s revenue budget they would be dramatically different. So when we set four years ahead with all the imponderables, the macro economy, government grants and all sorts of moving parts accuracy was questionable.  He had undertaken three year forecasting in the private sector but they did not have as many imponderables. If past MTFS were scrutinised we would see the inaccuracies but we would also be able to improve our forecasting. He repeated that he was not against the MTFS but rather wanted an accurate one.

Councillor David Marsh mentioned that last year he questioned why Council Tax had only been increased by 1% and wanted to know if the Portfolio Holder regretted this.  Councillor March advised that he was accused a year ago of wanting to increase our resident’s tax burden but the proposal was for reserves to be used to support the Revenue Budget.

Councillor Lynne Doherty stated that sound financial stewardship of the Council’s budget was something that the current Administration had demonstrated since 2005. She said it was lovely to see Honorary Alderman Jones in attendance as he had been instrumental in getting balanced budgets started. She disagreed with Councillor Brooks’ comments of looking back 20 years and undertaking ad hoc year on year budgets. The global pandemic and the war in Ukraine could not have been predicted and it was not possible to forecast all that would happen in the future. However, the Council had undertaken successful financial planning and even though there might be fluctuations, our financial resources were used in the most effective way. She said that if there was a look back she had confidence that the Council Strategy had been delivered based on sound financial planning since 2019. This was a Council that looked ahead and managed their finances to make West Berkshire an even greater place in which to live, work and learn. She was therefore happy to second the paper. 

Councillor Mackinnon mentioned that as he had highlighted last year the revenue and capital performance was considered quarterly by the Executive and he continued to look at the issue of reviewing delivery against forecasts as raised by Councillor Brooks. Where there was movement this did not mean that the forecast was flawed, over a 12 month period there would be internal and external pressures. With regards to the question from Councillor Marsh he said that he had no regrets in keeping residents money in their pockets, especially during a cost of living crisis. Councillor Marsh was correct that reserves had been used but this was possible because the Council had built up its reserves partly due to having an MTFS.

The Motion was put to the vote and duly RESOLVED.