The Head of Financial and Customer Services presented an update on the Medium Term Financial Plan 2021/22 to 2024/25 and in so doing highlighted the following for Members’ consideration:
· The report set the parameters for the budget planning process.
· Two recommendations had been included in the report; the second related to the Section 24 Notice that had been issued the previous year against the Council by the external auditors and would only apply subject to the Section 24 Notice being renewed.
· In planning the budget, Officers were aiming to allocate resources to support the Council’s strategic purposes.
· The Council would aim to maximise income opportunities in order to balance the budget whilst continuing to support vulnerable people.
· Any new proposals for expenditure or service reviews needed to be underpinned by robust business cases.
· Officers were aiming to develop the Council as a commercial authority.
· Key areas for review would be vacant posts, consistent underspends in service budgets, spending plans and progress with expenditure in the capital programme to ensure that this remained on track.
· The Council had been advised that it was likely that the Government funding settlement would be for the first year of the four-year plan period only.
· Covid-19 had already impacted on the Council’s financial position and on demand for services.
· By the date of the meeting Officers were anticipating that the Council would be overspent by £158,000 by the end of the 2020/21 financial year.
· There was some uncertainty about the impact that the end of the furlough scheme would have locally and it was possible that an increase in demand for Council services could result in a commensurate increase in costs.
· The Council had already received £1.38 million from the Government in additional funding during the year to help address costs arising from the Covid-19 pandemic. Further financial support had been requested in respect of leisure services but there was uncertainty about the amount that might be provided.
· There was also uncertainty about the extent to which the Council could expect to receive funding through the New Homes Bonus (NHB) in the future.
· Officers were anticipating that Council Tax would increase by 2% in 2021/22 and this would be incorporated into the calculations for the budget moving forward.
· In total, over £1.7 million savings needed to be identified over the four years.
The Committee subsequently discussed the report and whilst welcoming the government settlement for 2020/21 noted that uncertainty would arise because this did not cover the entire four years. Budget planning for the Council remained challenging, though there had been particular uncertainty for local government in 2020 due to the Covid-19 pandemic. The grant funding that had already been provided by the Government to support the Council during the Covid-19 pandemic was welcomed. However, Members had been in correspondence with the Government urging the need for additional funding to help support leisure services as well as Council companies such as Rubicon Leisure.
Members commented that it was important to monitor the risks to the Council as part of the budget setting process. There was general consensus that the Council had worked hard to address the issues that had been raised by the external auditors when the Section 24 Notice was applied to the Council and Members raised hopes that this notice would be lifted.
1) the parameters to be used to prepare the 2021/22 budget and the framework for the Medium Term Financial Plan to 2024/25 be noted; and
2) should the Section 24 notice be continued, there should be regular reporting of the Section 24 action plan, once approved by Audit, Standards and Governance, through to the Executive Committee.