The Executive Director of Resources provided an update on the preparation of the Medium Term Financial Plan 2022/23 to 2024/25.
The Committee was informed that unfortunately there were challenges in terms of the Council’s balances moving through the three year period of the plan. The plan would therefore need to focus on increasing balances during the period. There were also budget pressures arising from both pay related and non-pay related increases in inflation which represented a risk to the budget. Officers were proposing that the Council should increase Council Tax by £5 in 2022/23 and this would be built into assumptions when developing the plan. There were further options available to the Council to help balance the budget and these would be explored further over the following months.
Following the presentation of the report, the Portfolio Holder for Finance and Enabling explained that the presentation provided a useful update on the position of the Council in the budget preparation process and ensured that there was transparency in this process. Members were asked to note that the Executive Committee would be required to make some difficult decisions in order to achieve a balanced budget. The Council would also need to prioritise action that could be taken to increase the authority’s balances. Unfortunately, there remained a lot of uncertainty about local government finances and this made it difficult to prepare a budget. Council Tax remained a significant contributor to local authority finances and it was important to try to increase the Council Tax base in respect of Band D properties and above, as this would have a positive impact on the budget moving forward.
The update was subsequently discussed by Members and concerns were raised about the potential impact that inflation could have on the Council’s budget. The Committee was advised that the proposed increase of £5 to Council Tax was at the maximum level by which an increase could occur without the requirement for a local referendum to take place. However, this increase would not be sufficient to cover the impact of increases in inflation, which were particularly likely to have implications in respect of income from fees and charges. Therefore, inflation was a risk to the Council which would need to be managed.
the report be noted.