Issue - meetings

Report of the Deputy Chief Executive (Place)

Note: A briefing note detailing Finance and Corporate Services Scrutiny Board (1)’s consideration of this matter, along with its recommendations, is appended at page 73.

The Cabinet considered a report of the Deputy Chief Executive (Place) which presented the Medium Term Financial Strategy (MTFS) 2019-2022 for adoption by the City Council.

The Cabinet noted that the report had also been considered by the Finance and Corporate Services Scrutiny Board (1) at their meeting held on 12^th September 2018.  A briefing note setting out their recommendations was appended to the report and accepted by the Cabinet.

The previous MTFS was approved in December 2017.  The Strategy sets out the financial planning foundations that support the Council’s vision and priorities and the financial and policy context for the Council’s forthcoming budget process.  It was noted that proposals within the Pre-Budget report would be considered by the Cabinet in November 2018 and the final Budget Setting Report would be submitted to Cabinet and Council in February 2019.

The national funding background to the MTFS is that the Council is approaching the final year (2019/20) of the current four year funding settlement from Government.  From 2020/21 there will be significant upheaval in the funding arrangements for all councils and local authorities continue to face severe financial pressures.  Although the previous government policy of targeting a budget surplus by 2020 has been pushed back, uncertainty of the future of local government finance and wider financial matters, including future Brexit negotiations, mean that the pressure on public finances is unlikely to ease in the foreseeable future.  This Strategy assumes that reductions in available revenue resources and spending levels are likely to continue.

On a local level, the Council continues to be faced with a challenging and fluid financial position affected by temporary shortfalls in delivery of its existing savings plans and financial pressures within services for children, housing and homelessness. Although the Council has some ambitious Capital Programme plans, the scale and pace of these represent a significant challenge in terms of the Council’s ability to deliver them to the required timescales and within its existing project capacity. 

Notwithstanding the approaches set out in this strategy, the Council will need to maintain dynamic financial models that take account of changes in its medium term budget position and ongoing re-evaluation of its Capital Programme. This may include adopting some measures which have a shorter-term focus or which re-evaluate the Council’s approach to financial risk. These will be set out fully at the point of decision making.

In summary, the key national and local contexts that frame this Strategy include:

•  A paramount need to protect the most vulnerable people in the city;

•  Expectations on the Council to maintain service levels and standards across a wide range of core services;

•  Fast population growth causing greater demand and expenditure pressures in areas such as housing, social care and waste disposal;

•  Likely future reductions in government resources within a revised local government funding framework;

•  A 75% Business Rates retention system emphasising the increasing importance of promoting growth in the local economy;

•  A massive Capital Programme which defines  ...  view the full minutes text for item 43