Agenda item

Medium Term Financial Strategy

A report updating Members of the Select Committee on the latest update to the Medium Term Financial Strategy.


The joint report of the Director of Finance and Transformation and the Cabinet Member for Finance, Innovation and Property provided an update on the Medium Term Financial Strategy (MTFS) and the Savings and Transformation Strategy (STS), as requested by the Finance, Regeneration and Property Scrutiny Select Committee.


It was reported that when the Budget was set in February 2022, the adopted MTFS identified a funding gap of circa £2.15m.  In June 2022, Cabinet was advised that the funding gap was anticipated to be between £2.5m and £3.0m.  Unfortunately, the funding gap continued to grow due to the current global economic issues and rising inflation.  At the meeting of Cabinet on 8 November it was reported that the funding gap was now estimated to be between £2.6m at best case to £3.8m at worse case.


Members attention was drawn to the report presented to Cabinet on 8 November (attached at Annex 1) which set out in detail the financial challenges faced by the Borough Council.  These included rising inflation, uncertainty around the Fair Funding Review and the future of the New Homes Bonus and a potential reform of business rates.   It was also noted that unless central Government recognised the scale of pressure on local authorities in future finance settlements and council tax referendum principles, a number of councils finances would be under severe strain.  Partner organisations representing local government continued to lobby Government on these matters.


Significant savings were required by April 2028 in order to preserve the integrity of the Borough Council’s financial plans.  Members recognised that these were extremely challenging times and it was important to focus firmly on the delivery of the necessary savings.  It was the view of Officers that plans to deliver savings of £1.5m within the next 3 years, inclusive of the tranche of savings already identified had to be escalated.


Savings achieved so far in meeting Tranche 1 were summarised in 1.4 of the report and totalled (to date) £164.300.  In addition, Cabinet had recommended increases in Fees and Charges which would generate £50,000 to contribute to Tranche 1.  However, this still left in excess of £100,000 to be achieved before the start of 2023/24.


Members welcomed the opportunity to comment on potential areas of cost saving and/or income generation.  A number of issues were discussed in depth, including the potential to increase council tax if central Government changed the referendum principles, a further review of garden waste charges, the introduction of charges in car parks in the north of the Borough, potential development of Borough Council owned land, the Business Rates Retention Scheme, the use  and review of the Borough Council’s  earmarked reserves and whether there was benefit in using the Community Infrastructure Levy (CIL) rather than s106 developer contributions.  There was also general discussion on the Leisure Trust utility cost sharing agreement and the management agreement. 


It was recognised that the discussion on council tax referendum principles was speculative, that any proposals might not benefit borough or district councils and any decision regarding council tax increases would be for Members to consider as part of the budget setting process.


In conclusion, Members recognised that the Borough Council faced a challenging and complex financial future which needed to be balanced with protecting services for everyone.

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