Agenda item

For members to receive a presentation from the S.151 officer on the Medium Term Financial Plan.

Simon Davey, Strategic Lead Finance, presented the draft Financial Strategy 2021 – 2031.  The purpose was to provide background information and set the scene in advance of the Overview Committee considering the more detailed budget for the next financial year at its meeting in January.

The Draft Strategy outlined how the Council would structure and manage its finances over the next ten years to deliver services in accordance with the objectives set out in the Council Plan.  The Strategy, which was updated annually, covered the general fund (all services except housing which had its own financial plan) and capital.

The Medium Term Financial Plan (MTFP) was explained, and the following points were highlighted:

·         Reduction in funding from central Government had severely impacted on all local authorities

·         Renegotiation of the refuse and recycling contract for 2022/23 would require significant capital investment

·         The ongoing commitment of £323k per annum for the carbon reduction programme would need external funding if the Council was to meet its objectives in full

·         The Covid-19 pandemic has had a significant impact on income generation in the current financial year.  Despite Government funding to reimburse the loss of various income streams, the Council would need to find £1.2 - £1.3million of its own funds to make up the deficit

·         Timing of the Government’s proposed re-basing of business rates was uncertain which made financial planning difficult.  The likely loss of business rate income as a result of re-basing had been taken into account in future years

·         Income from the New Homes Bonus scheme had been reducing year on year and would disappear completely from 2023/24.  As yet there were no details from Government as to a replacement for the New Homes Bonus

The MTFP showed a projected deficit for 2021/22 of £0.694m, which increased annually, reaching £5.653m in 2030/31 as a cumulative deficit.  In order to mitigate the uncertainty surrounding the timing of the loss of the New Homes Bonus and the reduction in business rates income, the Council had set aside £2 million into a MTFP risk reserve which would enable the Council to support service delivery and then react when there was greater clarity and certainty.

The MTFP also showed the projected capital expenditure and funding position.  Capital expenditure was considered on a scheme by scheme basis and, through a rigorous assessment process, was balanced against the funding available.

During discussions the following points were noted:

·         Concern that the increase in car park charges would take away money for the community.

·         Clarification sought about whether an analysis had been done on the savings.  In response Simon Davey confirmed that an analysis had been done on Homesafeguard which showed there was a demand for additional services that people want and are prepared to pay for.  He also referred to item 12.  He felt confident, subject to Members approval, that the savings that could be made and were achievable and that the demand was there to generate the level of income.

·         It was noted the positive lift in Business Rates was as a result in the efforts of Libby Jarrett and her team.

·         Concern raised about the loss of business rates in towns with shops closing down.  In response Simon Davey confirmed the loss had been taken into account and although still important it was not significant as there had been high rateable value increases with the likes of the Enterprise Zone and large supermarkets.

·         Concern raised about the rise in car park charges if businesses were struggling and a suggestion was made to defer the increase for a year.  In response to the suggestion to defer the increase in car park charges for a year he urged Members to consider the loss of £300,000 which would need replacing.

RESOLVED:

That the contents of the report be noted.