Agenda item

To consider a report from the Head of Democratic Services providing a financial update to members following work initiated in July which established a focus on ensuring budget robustness and long-term budget sustainability during the board’s work in 2021/22. The Council’s Medium Term Financial Strategy and latest Financial Health report are presented to members as part of this approach.

The Board considered the submitted report of the Head of Democratic Services for the Budget 2021/22 Financial Health Update, Financial Challenge and Medium -Term Financial Strategy.

In attendance for this item were:

·  Victoria Bradshaw – Chief Officer Financial Services

·  Neil Evans – Director of Resources

·  Cllr Debra Coupar – Executive Member for Resources

Appended to the report were the Medium -Term Financial Strategy (MTFS) and an update in respect of financial health in the revenue budget and Housing Revenue Account (HRA). Both were presented to Executive Board in September.

Members were informed of the following points:

·  Following the Covid-19 pandemic the Council is facing a period of significant financial challenge. The MTFS identifies an estimated budget gap of £146.5m for the five-year period covered by the Strategy. It was noted that the Council were focussing on the next 3 years which require £126.7m of savings, the biggest impact would be in 2022/23, where savings were required of £65.4m. Proposals in relation to this would be brought to the Board in December for discussion.

·  The Comprehensive Spending Review (CSR) is expected on 27th October to be announced alongside the Budget. However, amounts would not be known for each council until December which would impact on how the council can plan for the savings required. It was noted that there was uncertainty about the 3 year settlement, fair funding review, business rates, rates at which council tax can be set and social care funding.

·  In relation to the current financial year which was reported to Executive Board in September there was a projected £400,000 overspend not related to Covid.  There is a significant overspend linked to Covid of £24.9m for which the council has received funding to mitigate this in this financial year. However, the Council was still mindful of how this would carry over for the coming years and how the economy recovers.

Responding to questions officers provided the following information:

·  Clarification was provided in relation to Table 4.1 of the submitted report on the Council’s Net Revenue Budget.

·  Each year all services are looked at to ensure that they have the required resources to deliver an efficient and effective service. However, there are fixed costs to deliver services and the budgets are looked at in detail. Therefore, going back to zero based costing, would not necessarily deliver the required savings.

·  It was recognised that as a result of Covid the Council should have a higher level of reserves than have had in previous years. It was noted that this was built into the Medium-Term Financial Strategy in detail.

·  The 2030 target is around looking at the priorities for the Council around old spending decisions which are taken into account and resources are prioritised. It was noted that it was also around sensible business cases and planning for the future and paying back over a number of years.

·  Table 1.1 Decrease in settlement funding 2010/11 -2021/22. It was acknowledged that it didn’t include real time information or inflation. However, it would be looked at with an aim to improving how the information was presented.

·  Analysis of savings as part of Early Leavers Initiative, to be circulated.

·  It was acknowledged that with the increase in energy costs this could add pressure to the Council’s finances, work was ongoing on this.

RESOLVED – To note the updated Medium- Term Financial Strategy 2022/23 to 2026/27.

Cllrs Anderson and Coupar left the meeting at 12:55 at the end of this item.