The Interim Section 151 Officer presented an update on the Medium Term Financial Plan (MTFP) 2023/24 to 2025/26.
The Executive Committee was advised that the Council would run the MTFP process in two tranches in the build up to setting the budget in February 2023. The Council set an MTFP every year, which covered a three-year period, with the final Council Tax Resolutions being approved by Council in February.
Work on the budget was being undertaken in a challenging context, due to the following factors:
· Starting the process from an initial deficit position from the 2022/23 MTFP.
· This being the first year that the Government would start to pay for the Covid-19 pandemic.
· The cost of living crisis.
· Changes at a national level, in respect of the Prime Minister and Cabinet.
· The Council having limited Reserves and Balances.
As such, it was considered prudent to split the budget process into two tranches. The initial tranche would seek to close as much of the deficit as possible using information known as at the end of September 2022 and seeking approval for those savings to be implemented at Council in January 2023. The second tranche would be considered after the Christmas break, which would be approved in February 2023. This would take into account the Local Government Settlement, the final detail for which was not due to be known until early January 2023.
The starting position for the 2023/24 MTFP, was to consider the three year “gap” that needed to be bridged for the Council’s budget to come back into a balanced sustainable position. The revised gap was because the MTFP had been rolled on a year to include 2025/26. During the period, the gap was expected to increase from £949,000 in 2023/24 to £1.04 million in 2025/26. In addition, there were unallocated savings in the existing MTFP. These would need to be addressed as part of the ongoing 2022/23 budget setting process and would be set out in the Q2 Finance and Performance Report.
The emerging national picture, including the expected settlement dates, remained unclear by the date of the Executive Committee meeting. There was the potential that clarity would be provided in the Chancellor’s statement on the 31st October 2022. Should this proceed on this date, it was likely that the Local Government Financial Settlement would be confirmed in the final week before Christmas, like previous years. There was also uncertainty about whether Councils would be offered a single year settlement or multiple year settlement. However, in the current national context, it was suggested that it might be better for Councils to have a single year settlement.
In reviewing the initial tranche, Officers had made a number of base assumptions, including the following:
· That Council Tax would increase by the maximum 1.99 per cent possible without triggering a local referendum and that there would be the ability to increase this by £104,000 from 2024/25.
· An assumption that there would be no growth in the business rates base. Members were ... view the full minutes text for item 73