Agenda item

Cabinet Portfolio: - Corporate Services and Finance

Strategic Directorate: - Finance and Customer Services

Consideration was given to a report that was submitted for pre-decision scrutiny ahead of the Cabinet meeting scheduled for 23 November 2020 in respect of the Medium-Term Financial Strategy. The Cabinet Member for Finance and Corporate Services, the Strategic Director for Finance and Customer Services and the Assistant Director - Financial Services attended the meeting to present the report.

The Cabinet Member for Finance and Corporate Services advised that the report provided a review and update of the Council’s Medium-Term Financial Strategy up to 2022/23. It was noted that the report provided an interim review and that it would be revised further in advance of the Council Budget setting meeting in March 2021 in order to take account of the Local Government Finance Settlement for 2021/22 and budget policy proposals on council tax, fees and charges and any budget investment.

The Cabinet Member advised that the review of the Medium-Term Financial Strategy, along with the latest Financial Monitoring report were predicting that there would be a balanced financial outturn position achieved for 2020/21. The Cabinet Member also noted that the current position would enable £4.3m top-up to reserves, as detailed in the Budget and Medium-Term Financial Strategy to be made, as well as preserving the £4million budget contingency and savings that had arisen in 2020/21 to be used to support the 2021/22 budget.

The Strategic Director for Finance and Customer Services noted the challenges that the Council continued to face with regards to the financial impact and ongoing uncertainty related to the pandemic and noted that the review of the Medium-Term Financial Strategy had incorporated adjustments to the assumptions previously made as a response to the ongoing uncertainty. The Strategic Director advised however that the improved position relating to the Council’s reserves, the level of which had increased from £11million to £25million over the last few years put the Council’s finances in a much stronger position than would have been the case had the level of reserves not increased.

Members welcomed the report and the assurances that the Council was predicting a balanced budget 2020/21 and 2021/22. Members also noted with approval that the Council was also in a position to increase its levels of reserves held at this difficult time. Members also noted the difficult financial situation that faced the country after the pandemic and their concerns on the impact of a prolonged recession and the return of austerity on the Council’s finances.

The Chair asked for further information on the confidence levels regarding the assumptions that had been included in the report that were predicting a balanced budget for 2020/21. The Strategic Director advised that the assumptions that had been included in the Medium-Term Financial Strategy had high confidence levels, having been based on the current challenging financial situation. The Strategic Director advised however that there were risks surrounding increased social care costs and around savings targets not being met, emphasising the importance of these savings being made in order to support the ability of the Council to deliver balanced budgets into the future.

Members asked whether the initial announcement regarding the Local Government Financial Settlement from the Government, as scheduled in mid-December was being expected to be made as scheduled. The Strategic Director advised that there had been no information received to indicate that the details of the settlement would not be announced as scheduled.

Members asked for further information on how the budget for Children’s Services in areas of spending that were greatly demand led, were being managed and how work was being carried out to deliver the required savings in these areas was progressing. The Strategic Director assured members that officers in Children and Young People’s Services were confident that a balanced budget could be delivered in the future and advised that despite the challenges of dealing with the pandemic that the directorate had still managed to deliver some of its required savings. The Strategic Director noted however that this budget area and its need to deliver on savings targets was a significant area of budgetary risk.

Members asked for further information and assurances about the budget contingencies that had been included in the strategy. The Strategic Director assured members that contingencies to safeguard the outturn of the budget had been included in the preparation of the Medium-Term Financial Strategy. The Strategic Director advised that it was possible that the budget outturn position for the current year would end up being more positive than was currently being predicted with the more positive outturn being used to support the budget in future more challenging years.  The Strategic Director advised that it would become increasingly difficult into the future for new areas of savings to be found, and advised that if more savings were to be found that the time and related costs involved in identifying and delivering some of these savings could outweigh their eventual financial benefit. The Strategic Director advised that it is important to stick to and deliver the approved plan rather than looking for new and different savings.

The Chair thanked the Cabinet Member for Finance and Corporate Services, the Strategic Director for Finance and Customer Services and Assistant Director - Assistant Director – Financial Services for attending the meeting and for answering members’ questions.

Resolved: -

1.    That Cabinet be advised that the recommendations be supported.

2.    That if the assumptions that have been used in the development of the Medium-Term Financial Strategy change substantially before the Overview and Scrutiny Management Board is consulted on the Council’s Budget proposals, then a further report be presented to the Overview and Scrutiny Management Board.