Agenda item

Finance – Cllr. J Philip (C-017-2022-23) – To note the backdrop to the Financial Planning process for 2023/24 to 2027/28.

(1)           That the Cabinet noted the backdrop to the Financial Planning process for 2023/24 to 2027/28, including the impact of the economic crisis, limited financial reserves, and emerging changes in local authority finance; and

(2)           That the Cabinet agreed the proposed approach to Financial Planning for 2023/24 to 2027/28, including the reporting and governance timetable summarised in Appendix A.

The Finance Portfolio Holder introduced the report and informed the Cabinet that the Council was looking at next year’s finances much sooner because of significant budget pressures from the economic crisis. This included increased staff expenditure and fuel costs, as well as the refuse contract, which went up by the Consumer Prices Index (CPI). There were also pressures from construction on Qualis. Therefore, next year the Council would face the toughest budget yet, and for the one after that. EFDC was a well-run council that had balanced its budgets, so there had not been much previous pressure on Council reserves, but this would be a real problem next year. The Cabinet was working / looking at areas in the budget to make savings. By February 2023 the Council needed a budget that would keep EFDC operating. The agenda report set out where the Council finances were currently and the work the service directorates were doing by looking at savings.

Councillor H Kane queried where revenue gains came from. The Finance Portfolio Holder advised that if the Council could increase its revenues, then it would have to make less savings. In the past the Council had been prudent by developing the Epping Forest retail park and also Qualis over time would drive up revenue. Asset Management had already started to help increase revenue from rents.

The Leader remarked this was the hardest budget-round he had known. The economic crisis had made the situation difficult for years to come on top of rising inflation, but there would be time to deliver essential services by setting transformation in motion. Also, in this post-Covid pandemic period, the car parks were not back up to the pre-Covid demand levels, and there were staffing shortages as well as supply-side issues. Qualis was playing an important part and would help the Council to achieve more. Councillor C Whitbread thanked the Finance Portfolio Holder and officers for the constructive conversations held across the service areas.

Councillor S Kane acknowledged the problems were not exclusive to EFDC but to local authorities nationwide. However, the way EFDC dealt with them was key to how it would see the Council through.

Councillor S Murray agreed this was a difficult situation for the Council, but priority services should be kept and for those in more marginalised groups, so he hoped Essex County Council would protect those communities as a priority.

Decision:

(1)           That the Cabinet noted the backdrop to the Financial Planning process for 2023/24 to 2027/28, including the impact of the economic crisis, limited financial reserves, and emerging changes in local authority finance; and

(2)           That the Cabinet agreed the proposed approach to Financial Planning for 2023/24 to 2027/28, including the reporting and governance timetable summarised in Appendix A (of the agenda report).

Reason for Decision:

To set a framework within which the Council could develop and set a balanced budget for 2023/24 and update its MTFP through to 2027/28, ensuring that corporate priorities continued to be delivered in a financially sustainable way.

Other Options for Action:

The report set out the Council’s updated financial context and represented the beginning of the 2023/24 budget preparation process. The information disclosed – including financial statistics – was for illustrative purposes only and solely for noting.

Members had the option to accept the recommended approach to Financial Planning, including the reporting and governance timetable, or to suggest amendments.