Issue - meetings

The Director of Finance, Resources and Business Improvement introduced a report setting out the updated Medium-Term Financial Strategy (MTFS) explaining that:

·  Before drawing up detailed budgets every year it was the practice to update the Council’s five-year rolling MTFS.  The idea of the MTFS was to show how the Council would deliver its strategic objectives in financial terms, paying attention to the economic context, which was challenging at present with high inflation and an impending recession.  It was not yet known how exactly the Government would respond to the situation, but the position would become clearer with the Chancellor’s Autumn Statement on 17 November 2022.

·  Given that uncertainty, as in previous years, several possible scenarios had been considered for the future.  The draft MTFS attached to the report used Scenario 4 as the base case and it also included a worst case, Scenario 5.  Under Scenario 4 there would be a budget gap of £2.5m for 2023/24 making assumptions such as a 2% Council Tax referendum limit, a staff pay increase of 5% and generalprice and contract cost inflation of 5%.  Allowance had also been made for a higher than expected spend on the provision of temporary accommodation, which was likely to continue.  An approach to addressing the budget gap was set out in the MTFS and detailed budget proposals would be brought forward in January 2023.

·  The MTFS also addressed the Capital Programme which amounted to £230m over the next five years.  With inflation, this £230m would buy less, so some prioritisation of schemes would be required.

During the discussion, the Director of Finance, Resources and Business Improvement and his team were thanked for their work on the MTFS given the current economic situation and uncertainty.

RESOLVED:

1.  That the issues and risks associated with updating the Medium-Term Financial Strategy be noted. 

2.  TO RECOMMEND TO THE EXECUTIVE:  That the Medium-Term Financial Strategy be approved, 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.

Note:  Councillor S Webb, a Substitute Member and Member of the Executive, abstained from the voting on this item.