Agenda item

To consider the attached update on the Medium Term Financial Plan.

The Interim Chief Financial Officer, Chris Hartgrove introduced the Updated Medium-Term Financial Plan (2023-24 to 2027-28). He noted that the Cabinet received the Updated Medium-Term Financial Plan for 2022/23 to 2026/27 on 10th October 2022. At that meeting the contents of the report were considered and discussed, including the implications for both the General Fund and Housing Revenue Account.

Cabinet also agreed that the report should go forward for scrutiny by the Stronger Council Select Committee in accordance with the Financial Planning Framework (2023/24 to 2027/28) adopted on 30th September 2022.

This was the first iteration of the MTFP within the 2023/24 budget cycle. It was a forward-looking document which provided a tentative look at the Council’s financial picture over the next five years (2023/24 through to 2027/28) and set the scene by providing a framework for developing both the General Fund and Housing Revenue Account (HRA) budgets for 2023/24.

The General Fund forecast within the MTFP reveals a projected deficit of £4.126 million for 2023/24. This reflects major spending pressures – driven by inflation – (for example) on Employees and Supplies & Services, which is exacerbated by an anticipated drop in Government grants of £1.154 million. Estimated net expenditure in 2023/24 is £19.402 million, compared to available funding of £15.276 million.

Looking further ahead – assuming a balanced budget was achieved for 2023/24, without recourse to the use of reserves – a budget gap was expected to open-up again on the General Fund from 2024/25, with annual budget pressures in the region of £1.4 million anticipated for two consecutive financial years.

The committee commented that a £4million deficit was a large proportion of the council’s budget. We can look to increase the Council Tax, housing rents etc. all options must be considered. Officers confirmed that they were being considered.

The committee noted that the biggest expenditure currently was staff, it used to be accommodation, but not anymore. A substantial amount of saving therefore would come from staff, but was there any more savings to be had from accommodation? They were told that salary costs have always been high, exceeding any other expenditure that the council had. The comparatively high vacancy rate captures some of the potential savings to be had without impacting on staff directly. Options have been presented to Cabinet and they have been working through them. At the next meeting this committee will see a detailed set of proposals as agreed by Cabinet for consultation. The Cabinet are always driven by the desire to maintain services as best they can. This was by far the most difficult, challenging budget we have seen as the impact of inflation and global economic issues had not been conceived at the beginning of this year, so there was no time to plan for it. The priority was still to protect council services by driving up efficiency in council services and maximising income streams where we could. If we could not do this, we would have to look to raising tax and finally think about reduction in services which may mean some staff reductions. But hopefully, any reductions in staff in posts would be minimal.

RESOLVED:

The Committee considered and commented on the Updated Medium-Term Financial Plan 2023/24 to 2027/28 as presented to Cabinet on 10th October 2022.