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Medium Term Financial Strategy 2023/2028 |
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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 Council’s decisions on the allocation of resources to all objectives of the strategic plan. |
Section 151 Officer & Finance Team |
Cross Cutting Objectives |
The MTFS supports the cross-cutting objectives in the same way that it supports the Council’s other strategic priorities. |
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 considers the strategic financial consequences of the recommendations in this report. |
Section 151 Officer & Finance Team |
Staffing |
The process of developing the 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. |
Interim Deputy Head of Legal Services and Monitoring Officer |
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. |
Section 151 Officer & Finance Team |
Equalities |
The MFTS report scopes the possible impact of the Council’s 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 & Communities Officer |
Public Health
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The resources to achieve the Council’s objectives are allocated through the development of the Medium Term Financial Strategy. |
Section 151 Officer & Finance Team |
Crime and Disorder |
The resources to achieve the Council’s objectives are allocated through the development of the Medium Term Financial Strategy. |
Section 151 Officer & Finance Team |
Procurement |
The resources to achieve the Council’s 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 Council’s objectives are allocated through the development of the Medium Term Financial Strategy. |
Section 151 Officer & Finance Team |
2. INTRODUCTION AND BACKGROUND
2.1 The Medium Term Financial Strategy (MTFS) sets out in financial terms how the Council will deliver its Strategic Plan over the next five years. The Council adopted a Strategic Plan for the period 2021 – 2045 in December 2018, and the existing MTFS for the period 2022/23 to 2026/27 reflects the Strategic Plan. The new MTFS will continue to reflect the Strategic Plan priorities.
2.2 A key outcome of the process of updating the MTFS is to set a balanced budget and agree a level of council tax for 2023/24 at the Council meeting on 22 February 2023.
2.3 A draft MTFS is attached to this report. As background, it comprises an assessment of the economic environment and the Council’s own financial position. It will be seen that the Council faces a difficult financial position, with continued high inflation and potential reductions of local government funding.
2.4 We have carried out an assessment of the Council’s financial resilience. CIPFA provide a Resilience Index tool to test a council’s financial resilience, which indicates no high risks and we have reviewed a number of elements that contribute to financial resilience, according to CIPFA, using financial data and also considering financial management. Again this shows a positive position.
2.5 As in previous years, different future scenarios have been considered. Scenario 4 provides the latest view on the size of the challenge. We have also developed a scenario 5 that shows a worst case scenario if inflation continues to remain high. The MTFS focuses on these two most likely scenarios and sets out how the Council should respond.
2.6 The development of the MTFS and the detailed budget for 2023/24 will maintain short to medium term financial resilience.
3.1 The Committee has the following options:
1 To note the contents but may choose to comment on the content.
2 That the Committee recommend to the Executive to approve the MTFS and the proposed approach outlined to development of an updated Medium Term Financial Strategy for 2023/24 – 2027/28 and a budget for 2023/24 be approved.
3 That the Committee do not recommend approval and Council runs the risk of operating without a clear MTFS and an unclear plan of how it can balance the budget in 2023/24.
4. PREFERRED OPTION AND REASONS FOR RECOMMENDATIONS
4.1 The preferred option is option 2. That the Committee recommend to the Executive to approve the MTFS and the proposed approach outlined to development of an updated Medium Term Financial Strategy for 2023/24 – 2027/28 and a budget for 2023/24 be approved.
5. RISK
5.1 The preceding paragraphs have indicated at several points the risks and uncertainty surrounding the Council’s financial position. In order to address these in a structured way and to ensure that appropriate mitigations are developed, the Council 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.
5.2 It should be recognised that risks are not usually discrete. There are interrelationships between the risks, such that (for example) inaccurate inflation projections could impact the overall risk of failing to deliver a balanced budget.
6. CONSULTATION RESULTS AND PREVIOUS COMMITTEE FEEDBACK
6.2 Corporate Services Policy Advisory Committee on 13 July 2022 recommended that an additional alternative course of action be considered, namely a 0% council tax increase. Details of this were provided. The cost is around an additional £2m of savings that would be required by 2027/28.
7. NEXT STEPS: COMMUNICATION AND IMPLEMENTATION OF THE DECISION
7.1 An outline timetable for developing the Medium Term Financial Strategy and budget for 2023/24 is set out below.
Date |
Meeting |
Action |
23 November 2022 |
Executive |
Agree proposed approach to updating MTFS for submission to Council |
December 2022 |
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Receive 2023/24 Local Government Finance Settlement |
January 2023 |
All Policy Advisory Committees |
Consider 23/24 budget proposals |
8 February 2023 |
Corporate Services Policy Advisory Committee |
Agree 23/24 budget proposals for recommendation to Executive and then to Council |
22 February 2023 |
Council |
Approve 23/24 budget |
8. REPORT APPENDIX
· Appendix 1: Draft Medium Term Financial Strategy 2023/28
9. BACKGROUND PAPERS
None.