Issue - meetings

The Council received a report setting out an update on the Medium-Term Financial Plan (MTFP) and progress with the Financial Recovery Plan.

Councillors noted that the Council had agreed the 2023-24 budget in February 2023 with a £3.3m shortfall requiring further work to remove this gap, with the fallback position being the deployment of usable reserves.

An updated MTFP position had been presented to full Council on 25 July 2023 which set out the key issues and the position in which the Council was now left.  In summary, this had been a remaining in-year deficit of £1.7m and a budget gap of £18.3m over the MTFP period to 2026-27.

A Financial Recovery Plan had been presented to full Council at its extraordinary meeting on 30 August and updated at its last meeting on 10 October. This had set out the immediate and medium-term actions being taken to address both the in-year and medium-term budget gaps.

In October, the Interim s151 officer had concluded that sufficient progress had been made to avoid the need for a s114 report to be issued but that significant work was still required to produce a balanced budget for 2024-25 and beyond.

In addition to providing an update on the MTFP position, potential funding changes, and progress on the Recovery Plan workstreams, the report presented to the Council had also set out the outcome of the review of the Capital Programme.  If approved, this would remove £96.6m from the Approved and Provisional Capital programmes which, in turn, would reduce the Council’s projected borrowing needs.

The report had also provided a high-level update on the potential remaining budget gap to be addressed and the actions ongoing to address this. The work to date on the Financial Recovery Plan had reduced the July MTFP gap of £18.3m to £7.3m.  Although excellent progress had been made, significant further work was still required to produce a balanced budget for 2024-25.

Prior to their formal consideration of the report, the Interim Section 151 Officer commented the government had issued a policy statement that afternoon regarding the Local Government Funding Settlement, which had set out some of the high-level expectations around council tax and funding for next year.  The statement had confirmed that the council tax rise would actually be 2.99% maximum. It had also confirmed a 3% funding guarantee for the Council that there would be another single year allocation of New Homes Bonus and also that the revenue support grant would increase by RPI.  All of these were in line with the assumptions in the report.

The Lead Councillor for Finance & Property, Councillor Richard Lucas proposed, and the Leader of the Council, Councillor Julia McShane seconded the adoption of a motion to approve the changes proposed to the Approved and Provisional Capital Programmes described in the report.

The Council noted that the report had also been considered by the Corporate Governance & Standards Committee at its meeting on 16 November 2023.  The Committee supported the proposed changes to the Approved  ...  view the full minutes text for item 74

Decision:

To note the updated MTFP position and the further work ongoing to produce a balanced budget for 2024-25.

Recommendation (to Council: 5 December 2023)

That the proposed changes to the Approved and Provisional Capital Programmes, as set out in Appendix 1 to the report, be approved.

Reasons:

To enable the Council to protect the current level of reserves and to set a balanced budget and a robust Medium-Term Financial Plan.

The Lead Councillor for Finance and Property introduced the report and advised that progress continued to be made to address the Council’s financial deficit. A key element to the progress was the outcome of the review of the Capital Programme. If approved by Budget Council in February this would remove £96.6m from the Approved and Provisional programmes which would reduce the Council’s projected borrowing needs. Additionally, a further workstream within the Financial Recovery Plan was looking at the potential for asset disposals. A target sum of £50m of capital receipts was being sought which would help to further reduce the long-term borrowing needs of the Council. These disposal plans would be developed over the next few months, prior to the Council’s budget being set in February 2024. This would also have an additional knock-on effect of reducing the revenue costs for the running and maintenance of the Council’s assets.

In addition to reducing the borrowing needs there would be a review of fees and charges to seek to improve the current income levels to the Council. It was reported that the work to date on the Financial Recovery Plan had reduced the July MTFP gap of £18.3m by £11m to £7.3m. Work would continue to address the deficit by means of further operational economies and asset disposals.

The Executive thanked officers and councillors for the hard work that had been undertaken to reach the current position but acknowledged that although excellent progress had been made, significant further work was still required to produce a balanced budget for 2024-25.

The Executive,

RESOLVED:

To note the updated MTFP position and the further work ongoing to produce a balanced budget for 2024-25.

Recommendation (to Council: 5 December 2023)

That the proposed changes to the Approved and Provisional Capital Programmes, as set out in Appendix 1 to the report, be approved.

Reasons:

To enable the Council to protect the current level of reserves and to set a balanced budget and a robust Medium-Term Financial Plan.