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POLICY AND RESOURCES COMMITTEE

24 November 2021

Is the final decision on the recommendations in this report to be made at this meeting?

No

 

Medium Term Financial Strategy 2022/23-2026/27

 

Final Decision-Maker

Council

Lead Head of Service

Chief Executive

Lead Officer and Report Author

Director of Finance and Business Improvement

Classification

Public

Wards affected

All

 

Executive Summary

This report sets out a draft new Medium Term Financial Strategy (MTFS) for the Council.† The new MTFS rolls forward the existing strategy to cover the five-year period 2022/23 to 2026/27 and reflects emerging budget priorities.† It will now be subject to consultation with the Service Committees and will be further updated to take account of the Local Government Finance Settlement, due to be announced in December 2021, prior to final approval by this Committee and by Council in February 2022.

 

 

This report makes the following recommendations to this Committee:

1.   That it endorses the Draft Medium Term Financial Strategy 2022/23 Ė 2026/27 at Appendix A, subject to further consultation and development.

 

 

Timetable

Meeting

Date

Policy and Resources Committee

24 November 2021

Communities Housing & Environment Committee

30 November 2021

Strategic Planning & Transportation Committee

7 December 2021

Economic Regeneration & Leisure Committee

14 December 2021

Policy & Resources Committee

9 February 2022

Council

23 February 2022



Medium Term Financial Strategy 2022/23-2026/27

 

1.       CROSS-CUTTING ISSUES AND IMPLICATIONS

 

Issue

Implications

Sign-off

Impact on Corporate Priorities

The Medium Term Financial Strategy and the budget are a re-statement in financial terms of the priorities set out in the strategic plan. They reflect the Councilís decisions on the allocation of resources to all objectives of the strategic plan.

Chief Executive,

Section 151 Officer & Finance Team

Cross Cutting Objectives

The MTFS supports the cross-cutting objectives in the same way that it supports the Councilís other strategic priorities.

Chief Executive,

Section 151 Officer & Finance Team

Risk Management

This has been addressed in section 5 of the report.

Section 151 Officer & Finance Team

Financial

The budget strategy and the MTFS impact upon all activities of the Council. The future availability of resources to address specific issues is planned through this process. It is important that the committee gives consideration to the strategic financial consequences of the recommendations in this report.

Section 151 Officer & Finance Team

Staffing

The process of developing the Strategic Plan and the associated budget strategy will identify the level of resources available for staffing over the medium term.

Section 151 Officer & Finance Team

Legal

The Council has a statutory obligation to set a balanced budget and development of the MTFS and the strategic revenue projection in the ways set out in this report supports achievement of a balanced budget.

Legal Services

Privacy and Data Protection

Privacy and Data Protection is considered as part of the development of new budget proposals.† There are no specific implications arising from this report.

 

Policy and Information Team

Equalities

The MFTS report scopes the possible impact of the Councilís future financial position on service delivery.† When a policy, service or function is developed, changed or reviewed, an evidence based equalities impact assessment will be undertaken.† Should an impact be identified appropriate mitigations will be identified.

 

Equalities and Corporate Policy Officer

Public Health

 

 

The resources to achieve the Councilís objectives are allocated through the development of the Medium Term Financial Strategy.

Public Health Officer

Crime and Disorder

The resources to achieve the Councilís objectives are allocated through the development of the Medium Term Financial Strategy.

Section 151 Officer & Finance Team

Procurement

The resources to achieve the Councilís objectives are allocated through the development of the Medium Term Financial Strategy.

Section 151 Officer & Finance Team

Biodiversity and Climate Change

The resources to achieve the Councilís objectives are allocated through the development of the Medium Term Financial Strategy.

Section 151 Officer & Finance Team

 

 

 

2.           INTRODUCTION AND BACKGROUND

 

2.1        At its meeting of 21 July 2021 this Committee agreed the approach and timetable for the development of an updated Medium-Term Financial Strategy (MTFS) to cover the five-year period 2022 to 2027. This report provides an update on progress and sets out a draft MTFS.† The MTFS remains subject to further consultation and the governmentís announcement of the Local Government Finance Settlement 2022/23, which is expected in December 2021.

 

2.2        The vision and priorities set out in the Councilís existing Strategic Plan are clear and remain relevant. However, within the framework of the existing Strategic Plan, priority initiatives are under development, including a new Town Centre Strategy and the commitment to invest in 1,000 new affordable homes.† The governance framework within which these priorities will be delivered is also due to change, with the reintroduction of a Cabinet system in 2022.

2.3        The draft MTFS is attached as Appendix A.† It sets out in financial terms how it is intended to deliver the Strategic Plan, given the Councilís capacity and capability.† It builds on the existing MTFS, but reflects emerging priorities and developments in the external environment.

 

2.4        A key outcome of the process of updating the MTFS is to set a balanced budget and agree a level of council tax for 2022/23 at the Council meeting on 23 February 2022.† This report is a key step towards achieving that objective.

 

Revenue Projections

 

2.5        The MTFS incorporates revenue projections for the five year planning period.† Various potential scenarios were modelled, described as adverse, neutral and favourable.† Key assumptions made in the projections are as follows.

 

Council Tax Ė It has been assumed that the government continues to set a limit of 2% to increases, above which a referendum would be required (as in 2021/22), and that the Council increases Council Tax to this limit.†

 

Business Rates - The Business Rates baseline, which dictates the amount of business rates that local authorities may retain locally, will be increased in line with inflation in 2022/23, as part of an expected roll forward of the existing 2021/22 financial settlement.

 

Inflation Ė In the neutral scenario, the core assumption is for CPI inflation of 2% over the medium term, in line with the governmentís target.† However, it is recognised that inflation is currently higher than this level and this will create pressures, in the short term at least.

 

Updated Strategic Revenue Projections are set out in Appendix B.

 

Budget Consultation

 

2.6        As in previous years, and in line with legal requirements and good practice, a public consultation has been carried out to ascertain residentsí views on what the Councilís priorities for spending should be.† The consultation attracted over 1,000 respondents and the results are considered to be statistically robust.† A report on the outcomes is included at Appendix C.† Respondents identified Environmental Enforcement, Parks & Open Spaces and Housing & Homelessness as the top priorities for additional expenditure.† Members will no doubt wish to take these views into account when considering detailed budget proposals in January 2022.

 

 

3.           AVAILABLE OPTIONS

 

3.1        The Committee could endorse the draft MTFS attached at Appendix A.

 

3.2        The Committee could endorse the draft MTFS, subject to

any amendments that it may agree.

 

3.3        The Committee could choose not to endorse the draft MTFS.

 

 

 

 

4.              PREFERRED OPTION AND REASONS FOR RECOMMENDATIONS

 

4.1           The Committee is asked to endorse the draft MTFS as a basis for further consultation and development.† Without an agreed MTFS, the Council will have no formal framework for consideration of next year's budget, and will therefore risk not being able to meet its statutory responsibility to set a balanced budget.† The basis for the assumptions underlying the MTFS and the proposed Council Tax setting principle are set out in the body of this report.

 

 

 

 

5.              RISK

 

5.1           The Councilís financial position is subject to a number of risks and to considerable uncertainty.† In order to address this in a structured way and to ensure that appropriate mitigations are developed, it has developed a budget risk register.† This seeks to capture all known budget risks and to present them in a readily comprehensible way.† The budget risk register is updated regularly and is reviewed by the Audit, Governance and Standards Committee at each meeting.†

 

 



6.              CONSULTATION RESULTS AND PREVIOUS COMMITTEE FEEDBACK

 

6.1           Policy and Resources Committee reviewed the background to setting a new Medium Term Financial Strategy at its meeting on 21 July 2021.†

 

6.2           The three Service Committees Ė Economic Regeneration & Leisure, Strategic Planning & Infrastructure and Communities, Housing & Environment Ė will consider the draft MTFS at their forthcoming meetings.† The outcomes will be reported back to Policy & Resources Committee when it is asked to consider the MTFS again for recommendation to Council at its 9 February meeting.

 

6.3           A survey has recently concluded, in which residents were consulted on what they wish to see in the budget.† This is attached as Appendix C.

 

 

 

7.              NEXT STEPS: COMMUNICATION AND IMPLEMENTATION OF THE DECISION

 

7.1           An outline timetable for developing the Councilís Strategic Plan and the associated Medium Term Financial Strategy and budget for 2022/23 is set out below.

 

 

Date

Meeting

Action

24 November 2021

Policy and Resources Committee

Consider draft MTFS

November / December 2021

Service Committees

Consider draft MTFS

December 2021

 

Finalise detailed budget proposals for 2022/23

January 2022

Policy and Resources Committee, Service Committees

Consider 2022/23 budget proposals

9 February 2022

Policy and Resources Committee

Agree MTFS and 2022/23 budget proposals for recommendation to Council

23 February 2022

Council

Approve MTFS and 2022/23 budget

 

 

 

 

 

8.        REPORT APPENDICES

 

The following documents are to be published with this report and form part of the report:

         Appendix A: Draft Medium Term Financial Strategy 2022/23 Ė 2026/27

         Appendix B: Strategic Revenue Projection 2022/23 Ė 2026/27

         Appendix C: Budget Consultation Survey

 

 

 

9.        BACKGROUND PAPERS

 

None.