Issue - meetings

Report of the Chief Executive

Presented by the Corporate Portfolio Holder

The Corporate Portfolio Holder presented the report to members, explaining that this was the first time the authority had produced a 5 year Medium Term Financial Strategy (MTFS), which was the industry standard.  He highlighted the amount of work which had been undertaken to produce the strategy.  He drew members’ attention to the additional consultation response received from the Federation of Small Business which had been circulated at the meeting.  He sought Cabinet’s approval of the strategy attached at Appendix 2.

The Corporate Portfolio Holder advised that the MTFS projected a potential drop of £1 million in business rates income from 2021, when the outcome of the Fair Funding review was implemented.  He advised that this was the most significant funding change and any transitional arrangements would not be known until the Fair Funding review had progressed.  He added that along with the projected loss in revenue support grant and increased cost pressures, the potential drop in business rates was estimated to produce a deficit of £1.4 million in 2021, increasing each year afterwards with a projected balance of surplus and deficits over the 5 year period of £5.3 million.  He explained that the strategy also addressed the long term reliance on the New Homes Bonus by setting a self-sufficiency target over the 5 year period of £1.5 million.  He added that a new self-sufficiency reserve would be created using the general fund balances of £900,000 and the projected outturn from the General Fund of £1.86 million.  This fund would be held for the purpose of transforming the organisation, investing in revenue generating commercial initiatives and where necessary, to balance a predicted deficit year.  For the first time the MTFS included detail on the Housing Revenue Account and the Capital Programmes to 2023 to enable members of the public to understand the Council’s holistic financial position and forecasts.  He thanked the officers for their work on producing the strategy.

Councillor R Blunt commented that the approach taken previously was not strategic enough and acknowledged that priorities could be changed overnight.  He added that planning for all eventualities was a prudent way forward. 

Councillor N J Rushton highlighted that this would be delivered along with a freeze in Council Tax for the coming year. 

Councillor R D Bayliss referred to the Housing Revenue Account debt repayment regime which showed that the £78,000,000 borrowed in 2012 as part of the self-financing settlement was being paid in good order which showed sound treasury management and financial controls.  He felt this was the hallmark of the Council.  

It was moved by Councillor N J Rushton, seconded by Councillor R Blunt and

RESOLVED THAT:

The Medium Term Financial Strategy be approved.

Reason for decision: Requirement of the budget setting process.