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Issue - meetings
Medium Term Financial Strategy
Meeting: 03/09/2018 - Cabinet (Item 99)
99 Medium Term Financial Strategy PDF 246 KB
Additional documents:
Minutes:
Peter Grace, Assistant Director, Financial Services and Revenues, presented a report on the Medium Term Financial Strategy. This report came to cabinet as the council looks to forecast its financial position over the medium term in order to ensure it can align corporate objectives with available resources. The Medium Term Financial Strategy seeks to identify the financial risks that will affect the annual budgets for each of the next 4 years (2019/20 to 2022/23) in order that key priorities can be matched to expected funding.
The Assistant Director, Financial Services and Revenues stated that the Council accepted the government’s offer for a four year settlement in order to provide some certainty on part of the Council’s funding stream – 2019/20 being the final year. The government’s Spending Review is due to take place in 2019 (SR2019) and as such in the meantime there is very significant uncertainty on what the future holds for local government funding as a whole and for borough and district councils in particular.
In readiness for 2020/21 the results of the Fair Funding Review and retention 75% of business rates should be announced by December 2019. There may well be impacts on other income streams, such as New Homes Bonus and Discretionary Housing Payments. The retention of more business rates transfers added risk and volatility to Council income streams in the future.
He advised that government funding reductions continue in 2019/20 - a £650,000 reduction being predicted. Costs of Waste Collection and Street Cleaning look set to increase by potentially £1million p.a. from 2019/20. Income generation projections, whilst providing very significant additional resources, are having to be revised downwards over the period of the strategy. The projected budget deficits as a result are £1.1m in 2018/19, £2.1m in 2019/20, £2.9m in 2020/21, £3.2m in 2021/22, £3.3m in 2022/23.
He stated that the Council has had a very good record of making budget savings since 2010/11 but strongly advised that it now needs to take further robust action to identify efficiencies, income generation opportunities and service cuts as part of the 2019/20 and 2020/21 budget processes. He advised that the Transition Reserve was insufficient to meet the budget deficit now predicted for 2019/20 unless budget savings were identified and implemented.Councillor Chowney proposed approval of the recommendations which was seconded by Councillor Fitzgerald.
RESOLVED (by 6 votes for, 2 against) that:
1. Approve the Medium Term Financial Strategy.
2. The Council take the robust actions necessary in this financial year and throughout the 2019/20 and 2020/21 budget processes to achieve a sustainable budget.
Reasons for Recommendations:
The council matches its available resources to its priorities across the medium term.
The report provides the opportunity to assess the council's resources to assist the review of corporate priorities given the continued reductions in funding and the need to continually ensure limited resources are properly aligned to targets.
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