Report of the Strategic Director of Finance and Customer Services
1. That the MTFS review and update is noted.
2. That the plans to reserve funding and savings from 2020/21 to support the 2021/22 budget are noted.
3. That finalisation of the Budget and MTFS for 2021/22 and 2022/23 maintains the approved Budget Strategy and Budget Savings as already agreed.
4. That the assumptions within the MTFS to increase Fees and Charges by 2% for 2021/22 remain unchanged for this update.
Consideration was given to the report which set out in detail the review and update of the Council’s Medium Term Financial Strategy to 2022/23. This was an interim review and would be revised further in advance of the Council Budget setting meeting in March 2021, to take account of the Local Government Finance Settlement for 2021/22 when issued, along with budget policy proposals on levels of Council Tax and fees and charges and any budget investment.
The MTFS review, alongside the latest Financial Monitoring 2020/21 report on this same Cabinet agenda, envisaged a balanced financial outturn position being achieved for 2020/21, whilst maintaining the £4.3m top-up to reserves included within the Budget and MTFS Strategy and preserving the £4m budget contingency and savings arising in 2020/21 as support for the 2021/22 budget.
The updated MTFS forecasts identified that a balanced budget for 2021/22 could still be set, but that at this stage there was a potential funding gap arising in 2022/23. These positions were subject to the further reviews as described above.
This review and update of the MTFS, therefore, focused on a review and update of the Council’s financial assumptions, including an estimate of the impact of the Covid-19 pandemic on income from Business Rates and Council Tax and on the Council’s timeline for the delivery of the agreed savings within the Budget and MTFS. This review would support and inform the detailed budget setting process for 2021/22, alongside taking into account the outcomes of the Local Government Finance Settlement for 2021/22, when issued, which would follow on from the Spending Review announcement, probably around mid-December.
it was currently anticipated that the Council would achieve a balanced budget position for 2020/21, whilst still replenishing reserves by £4.3m and without need to draw on either the £4m budget contingency or the £2m budget contingency reserve. These contingencies could, therefore, remain available to support the MTFS and specifically the 2021/22 budget.
The 2 year budget for 2019/20 and 2020/21 set at Council in February 2019 required £31.5m of budget savings to be delivered to meet estimated funding gaps over the 2 years, including savings that had been agreed in previous years for delivery across this timescale. Delivery of over £16m of these savings would have been completed by the end of the current financial year, leaving around £15m to continue to address across the MTFS.
However, whilst recognising the COVID impact on savings delivery, it was still anticipated that the remaining agreed savings could be delivered as planned, but over a longer timescale, with most, but not quite all, of the savings delivered by 2022/23.
On that basis, there were no recommendations within this review of the MTFS to vary from the agreed package of savings, either to remove any of the savings from the budget or to seek alternative savings. The focus remained on completing the delivery of the savings already agreed.
This report had been considered by the Overview and Scrutiny Management Board as part of the pre-scrutiny process who were in support of the recommendations, subject to the assumptions that have been used in the development of the Medium-Term Financial Strategy change substantially before the Overview and Scrutiny Management Board was consulted on the Council’s Budget proposals, then a further report be presented to the Overview and Scrutiny Management Board.
Resolved:- (1) That the MTFS review and update be noted.
(2) That the plans to reserve funding and savings from 2020/21 to support the 2021/22 budget be noted.
(3) That finalisation of the Budget and MTFS for 2021/22 and 2022/23 maintains the approved Budget Strategy and Budget Savings as already agreed.
(4) That the assumptions within the MTFS to increase Fees and Charges by 2% for 2021/22 remain unchanged for this update.