Agenda item

Cabinet Portfolio:                 Corporate Services and Finance

Strategic Directorate:           Finance and Customer Services

Consideration was given to a report submitted by the Strategic Director of Finance and Customer Services which shared an interim update to the Council’s Medium Term Financial Strategy (MTFS), which set out a framework for understanding the challenges the Council faces and supports corporate planning. It helps the Council to shape its finances over the medium term by examining the projected resources available to meet the s priorities as set out in its Council Plan.

Members noted that the Strategy set out the framework and principles upon which current and future financial projections, over the medium term, will be predicated. The MTFS financial projections were revised and updated alongside the setting of the revenue budget 2018/19 and illustrated budget gaps of £29.7m over the period 2019/20 and 2020/21. The updated budget gaps were re-affirmed in the Financial Outturn 2017/18 report to Cabinet in July 2018 and the financial assumptions underpinning the budget gaps were reviewed again in Summer 2018 with no changes required to key financial assumptions.

Members noted that the financial projections had been reviewed and updated again alongside the development of a two-year budget for 2019/20 and 2020/21 and are incorporated into the MTFS. The details of the budget including outcomes of consultation had been scheduled to be reported to Cabinet and Council in February 2019, when the Budget and Council Tax Report 2019/20 would be considered.

The Strategy provided both national and local context of the challenges faced by councils in delivering services, particularly the demand pressures in respect of adults and children’s social care. It set out a clear set of objectives that were intended to support the Council in developing its annual budgets and ensuring financial resilience. Furthermore, it provided details of the risks and uncertainties that were characteristic of local government finances.

Members noted that the Strategy document represented an interim update to the Council’s medium term financial plans, which would be further updated following completion of budget consultation and the receipt of further information on the Council’s funding from Government to be provided on 6 December 2018 within the Provisional Local Government Finance Settlement for 2018/19.

Members sought clarification in respect of contingency plans if the strategy for the management of the Council’s finances could not be realised. In response, the Strategic Director confirmed that the Council would have call on its reserves and take in-year action to balance budgets. The Chair referred to the recent case of Northamptonshire County Council who had been allowed to convert a capital receipt to revenue budget to assist with its financial challenge and queried whether this would be something that the local government sector should lobby central government to introduce for all authorities. In response, the Strategic Director indicated that course of action would not be advocated and would require legislative change.

Members sought assurances that the budgets proposed and the detail of the strategy was controllable. In response, the Strategic Director indicated that she could only be as confident as the information that was presented for analysis from each directorate in respect of every part of the budget, however Members could be reassured that every part of the budget was being challenged and correctly set.

Reference was made to the Healthcheck that had been arranged to take place in February 2019 and Members sought assurances that the budget position and financial strategy would be sufficiently robust to meet the expectations of those assessing the Council prior to intervention ceasing at the end of March 2019. In response, the Strategic Director reflected on all of the actions being taken across the Council and specifically in respect of Children’s Services and Adults Services, which had been subject to scrutiny by officers and Members. To this end, there was confidence that the financial strategy was sufficiently robust.

Resolved:-

1.    That the report be noted.

2.    That the Strategy be updated by the Strategic Director of Finance and Customer Services to take account of the funding announcements from central government and address the concerns expressed by Members.