Issue - meetings

Report of the Deputy Chief Executive (Place)

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

The Cabinet noted that the MTFS 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.  Cabinet considered proposals within the Pre-Budget Report (Minute 52 above refers) and it was further noted that the final Budget Setting Report would be brought to Cabinet and Council in February 2020.

The national funding background to the MTFS was that the Council was currently within the final year (2019/20) of a four-year funding settlement from Government.  A major upheaval in the funding arrangements for all councils that had been signalled for the period from 2020/21 onwards had been postponed until 2021/22 at the earliest.  The Pre-Budget report that was considered by Cabinet, set out the impact of the one-year settlement proposed for 2020/21.  Current medium-term estimates were still based on assumptions of local authorities continuing to face significant financial pressures.

The national political environment was currently subject to much fluidity and uncertainty, resulting from deliberations over the UK’s exit from the European Union and the dynamic political situation that flowed from this. The likelihood or otherwise of the Government’s ability or intention to adhere to its fiscal rule (that borrowing should remain below 2% of Gross Domestic Product) had been widely questioned by commentators. The short-term impact of this was some short-term additional funding for local government but with no guarantee that this would continue beyond 2020/21. Therefore, concern remained that the pressure on public finances would not ease in a sustained way and that real reductions in available revenue resources and spending levels were likely to continue.

On a local level, the Council continued to face challenging conditions affected by shortfalls in achievement of a small number of existing savings plans and financial pressures in particular within services for children, housing and homelessness.  Although the Council had some ambitious Capital Programme plans, the scale and pace of these represented a significant challenge in terms of the Council’s ability to deliver them to the required timescales and within its existing project capacity.  In addition, the elements of the Programme that were funded by future West Midlands Combined Authority grant approvals would not be able to proceed until resourcing for these grants had been secured through the WMCA.

Notwithstanding the approaches set out in the strategy, the Council would 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 would have a shorter-term focus or which re-evaluated the Council’s approach to financial risk.  These would be set out fully at the point of decision making.

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

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

·  Expectations on the  ...  view the full minutes text for item 53