The Executive Director of Finance and Corporate Resources delivered a presentation on the subject of the Medium Term Financial Plan (MTFP) 2020/21 to 2023/24 (Appendix 1). During the delivery of this presentation the following matters were highlighted for Members’ consideration:
· The starting point for the budget was a deficit of £1.170 million in 2020/21 rising to £1.5 million in 2023/24.
· There were pressures on the budget, including a likely 2% salary increase in 2020/21 as well as anticipated increases in utility fees. In addition, there was a £50,000 pressure from Parks and Open Spaces and further pressures arising from bad debts and WRS pension liaibilities.
· However, over £300,000 savings had also been secured and £50,000 had been released from reserves.
· The Council had been awarded New Homes Bonus (NHB) funding in 2020/21 which had not been anticipated, though the Government had been clear that there would be no legacy payments in subsequent years.
· There had also been positive news about an increased return on investments in the pension fund which had resulted in savings over the four years of the plan.
· Officers were proposing that there should be £200,000 set aside in a reserve for the pension fund in case less positive news emerged about the fund between 2021/21 to 2023/24.
· There had been a review of borrowing costs which had resulted in savings. A significant proportion of these savings derived from a review of the fleet replacement programme.
· The Government had announced that district Councils could only increase Council Tax by 2% in 2020/21. This was less than had originally been anticipated in the MTFP in February 2019 so had financial implications for the Council moving forward.
· By the date of the meeting the gap in the budget for 2020/21 was £217,000.
· Should Members agree to close the One Stop Shops and to make the proposed changes to the support the Council provided to VCS organisations the budget gap would reduce significantly further in 2020/21.
· Officers were aiming to review overhead costs in order to reduce the costs of delivering Enabling services.
· However, there remained a gap of £1.6 to 1.7 million to find in the subsequent three years of the plan. Therefore Members would still need to make difficult decisions in order to balance the budget moving forward.
· Furthermore, the future funding arrangements for local government remained uncertain and any decisions at a national level in respect of this matter over the next few years could have implications for the Council’s budget.
· In respect of the Housing Revenue Account (HRA) in 2020/21 the budget could only currently be balanced using funding from balances. This would mean that in the first two years of the plan the HRA would go below the recommended level of balances.
· However, in year three it was anticipated that the budget position for the HRA would improve significantly as a result of increasing rents.
Members subsequently discussed the MTFP and in doing so noted the following:
· The challenging financial position of the Council and the need for Members to make difficult decisions in order to balance the budget.
· The need for the Government to provide local Councils with certainty about future funding arrangements.
· The reduction in the revenue support grant that had been received from the Government by the authority over the years and the impact that this had had on the Council’s finances.
· The risk that the Government would impose further reductions on Council House rents in future years and the implications of this action for the HRA.
· The stock condition survey that was being undertaken. Officers explained that the information obtained in this survey would help to ensure that a robust approach was undertaken to repairs and maintenance work in future years.
· The Council’s Financial Services team. Members thanked officers in the team for their hard work.
the report be noted.