Issue - meetings

The Interim S151 Officer presented an update on the Medium Term Financial Plan (MTFP) 2023/24 to 2025/26.

It was reported that each year the Council set out a 3-year Medium Term Financial Plan, with the final Council Tax Resolution being approved by Council in February. The Cabinet was advised that this year, the MTFP process would be run in two tranches in order to prepare the budget as early as possible. The initial tranche would use information known as at the end of September and would seek to close as much of the current deficit as possible. The second tranche would be processed after December 2022 and would be approved in February 2022. This second tranche would take into account the Local Government Settlement, details of which would not be known until early January 2023.

Members were informed that budget setting within the current climate would be more difficult due to a number of challenges. These were outlined as follows:

·       Starting the process with an initial deficit amount of approximately £1.5m from the 2022/23 MTFP

·       This being the first year that the Government began repaying for Covid-19 and the associated pandemic

·       The cost of living crisis

·       Changes at national level including new Prime Ministers and changes to Cabinet membership

·       The Council having limited Reserves and Balances.

The MTFP 2023/24 to 2025/26 – Update report highlighted 10 major items in terms of budget setting for 2023/24 to 2025/26. These were as follows:

·       The starting position for the 2023/24 MTFP and the three year “gap” that needed to be bridged in order for the Council’s budget to come back into a balanced sustainable position

·       Unallocated savings – These would be considered as part of the Q2 2022/23 Finance and Performance Monitoring report due to be considered in November 2022.

·       The emerging national picture which was not clear at the time of this meeting. It was hoped that more information would be available when the new Chancellor released his statement on 17^th November 2022. At that point, it was thought more clarity would be available on the new Local Government Financial Settlement, which was expected to still be released the final week before Christmas.  Officers informed Cabinet that it was still unknown as to whether this would be a single or multiple year settlement, however the preference, from a Council perspective, given the current economic conditions, would be a single year settlement.

Officers reported that they had made a number of base assumptions within the report, including the following:

·       An assumption on Council Tax on a full 1.99% or £5 increase (whichever was the least)

·       An assumption of no growth in Business Rates

·       An assumption that there would no New Homes Bonus in 23/24 onwards

·       An assumption that there would be no Lower Tier Services Grant from 23/24 onwards

In respect of Pension Fund assumptions, it was noted that the Council’s pension fund was in surplus, and the new contributions were approximately £500k less than they had been previously.

Cabinet was informed  ...  view the full minutes text for item 42