Agenda item

Finance and Economic Development – (C040-2020-21) - this is the first iteration of the Medium Term Financial Plan within the 2021/22 budget cycle.

(1)        The Cabinet noted the contents of the report, including Appendix A (Medium-Term Financial Plan 2021/22 to 2025/26); and

(2)        The Cabinet discussed and agreed any actions required, including the assumptions included in the MTFP and the potential options for addressing the underlying budget deficit in order to set a balanced budget for 2021/22.

The Finance and Economic Development Portfolio Holder introduced the report on the medium term financial plan.

The preparation of a Medium-Term Financial Plan (MTFP) provided the cornerstone on which the Council could build and deliver services in accordance with their aims and objectives.

This was the first iteration of the MTFP within the 2021/22 budget cycle. It was a forward-looking document which provided a tentative look at the Council’s financial picture over the next five years (2021/22 through to 2025/26) and set the scene by providing a framework for developing the 2021/22 General Fund budget. Through the early consideration of the core issues it allowed budget development activity to be focused over the next two months on refining assumptions and developing options. 

The impact of the Covid-19 pandemic on Epping Forest District Council had a huge impact on both operations and finances, with major losses being experienced on a number of income streams ranging from core funding sources such as Council Tax and Business Rates through to fees and charges from Leisure Centres, Car Parking, Building Control, Planning and Licensing. The 2020/21 financial year had so far borne the brunt of the financial pressure, with the position being alleviated – to an extent – by emergency financial support from the Government. However, at the time of preparing this MTFP, it appears inevitable that the financial effects would continue well into 2021/22 and beyond and, in some cases, income streams may never recover to pre-pandemic levels. The Portfolio Holder noted that they were looking at a deficit of at least £2.1 million for next year, after the assumption of getting £1million from the Government and using £1million from our reserves.

Against this backdrop – where uncertainty reigns, and the country enters a second ‘lockdown’ – it was extremely challenging to prepare a robust budget for 2021/22.

Councillor Heap asked about various aspects of the report; he questioned the paragraph on miscellaneous income and the assumption of a stable income stream of £2.9 million assumed from 2021/22 from Qualis. Could this be fleshed out. He then questioned the assumed 3% pay award and asked what individual fees would have to go up. And finally, there was no mention of the need to repay £33 million to the public works loan board. The Portfolio Holder replied that the miscellaneous income would be picked up in the Qualis Business plan to go to the next cabinet meeting. As for the employees cost in terms of the annual pay award. The indications were that it would be at 3%, but we do not know this for sure as yet. There were no indications yet as to which fees were going up or which would be capped. And as for the repayments, he assumed these were the HRA ones, this report was looking at the general fund.

Councillor Bedford noted that if the NJC award came out at 3%, we would wholeheartedly support it as staff have worked very hard over the last few months.  But this was only a guesstimate.

Councillor C Whitbread added that there were many unknowns and we have just gone through some very difficult months. But we were in a good position when we started. The Finance Portfolio Holder reminded the meeting that the accounts still had to be signed off. The council had done its work on this and we were now waiting for the auditors to do their bit.

Decision:

(1)        The Cabinet noted the contents of the report, including Appendix A (Medium-Term Financial Plan 2021/22 to 2025/26); and

(2)        The Cabinet discussed and agreed any actions required, including the assumptions included in the MTFP and the potential options for addressing the underlying budget deficit in order to set a balanced budget for 2021/22.

Reasons for Proposed Decision:

 To set a framework within which the Council can develop and set its Budget for 2021/22 and update its Medium-Term Financial Strategy through to 2025/26, ensuring that financial sustainability was maintained in the light of the shock caused by Covid-19.

Options for Action:

None at this time.