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 considered the report (Agenda Item 4). The Medium Term Financial Strategy (MTFS) 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 MTFS highlighted the overarching key issues facing the Council’s finances as well as the fact that there were many different scenarios and uncertainty concerning the future revenue streams for the Council.

MOTION: Proposed by Councillor Iain Cottingham and seconded by Councillor Jeff Brooks:

That the Council:

“approve the Medium Term Financial Strategy”.

Councillor Cottingham stated that the MTFS was a very important document for the Council in setting out the financial plan for the next four years. It provided a direction of travel for the Council to achieve greater financial resilience.

The forecasting of financial performance over an extended timeframe was challenging, particularly in a time of financial uncertainty.

The finances of local government were a concern nationally. The results of a recent local government survey showed that a high proportion of Council Leaders were concerned about financial stability. One in ten respondents felt there was a risk their local authority could go bust in the next year. Approximately half of those responding felt this could happen in the next five years without additional funding.

Post the 2023 local elections, the Executive considered the Q1 financial performance reports. The projected revenue overspend at that time was £8m (in excess of the General Reserves at that time). Radical action needed to be taken and much hard work was put in place to strengthen financial controls. This included the formation of the Financial Review Panel (FRP) which reviewed expenditure in excess of £2k. This approach had helped to reduce the overspend to £3.3m.

In was the intention, over the period of the MTFS, to replenish General Reserves by £6m to improve the Council’s financial resilience. This would require annual Council Tax increases of 4.99% (2.99% Council Tax and 2% Adult Social Care precept).

These steps were also necessary to help meet increasing Adult Social Care and Children’s Social Care costs and because of the inadequacy of Central Government funding.

Councillor Ross Mackinnon noted the introduction of the FRP to tighten controls, but then referred back to debate at the 19 December Council meeting and the proposal from the Administration to withdraw the Local Plan. The Government stepped in to prevent this from happening. Had it been withdrawn then the Council would have incurred costs in the region of £2m. He therefore considered that the Administration was not in a position to raise concerns with regard to the budget.

Councillor Tony Vickers was pleased to note that the Council would be continuing with the Municipal Bond scheme giving home owners who could afford it the opportunity to invest in schemes to help the wider community such as the solar farm.

Councillor Brooks responded to the points raised by Councillor Mackinnon. The Liberal Democrat Administration inherited financial difficulties from the previous Administration and inherited the flawed Local Plan. The costs of fixing the Local Plan, in the region of £1.7m, would have been found over a two year period. It would not have been an immediate cost pressure.

Councillor Brooks stated that he would continue to raise concerns over the financial situation inherited from the Conservative Administration.

This MTFS set out a clear financial plan for the next four years and would keep a firm grip on the Council’s finances.

Councillor Brooks thanked the Portfolio Holder and the officers for all their hard work in producing the budget papers.

Councillor Cottingham commented that the MTFS gave a much needed level of reassurance on the Council’s finances. Financial resilience would continue to grow and the Council would build back its reserves.

The Motion was put to the meeting and duly RESOLVED.