Issue - meetings

Medium Term Financial Strategy

Meeting: 14/12/2021 - Cabinet (Item 52)

52 Medium Term Financial Strategy 2022-2025 pdf icon PDF 200 KB

Report of the Director of Finance

Additional documents:

Minutes:

The Cabinet considered a report of the Director of Finance that had been considered by the Finance and Corporate Services Scrutiny Board (1) at their meeting on 1st December 2021 (their minute 22/21 referred) and would also be considered by Council at their meeting on 18th January 2022, that presented a Medium-Term Financial Strategy (MTFS) for adoption by the City Council. A briefing note setting out a recommendation from Finance and Corporate Services Scrutiny Board (1) consideration of the report was circulated.

 

The previous strategy was approved as part of the 2021/22 Budget Report in February 2021. The Strategy set out the financial planning foundations that supported the Council’s vision and priorities and the financial and policy context for the Council’s current Budget process. Cabinet would consider proposals within the Pre-Budget Report in December and the final Budget Setting Report would be brought to Cabinet and Council in February 2022.

 

The national funding background to the MTFS was that the local government would be subject to a new settlement from Government within the financial parameters of the Autumn Budget and Spending Review 2021 (SR2021) announced in October. Although a major upheaval in the funding arrangements for all councils had been signalled at regular intervals this was once again postponed in SR2021 and there would be no structural changes to the system until 2023/24 at the earliest. In addition, SR2021 provided only indicative control totals for the sector and it would not be until the provisional local government settlement was released in December 2021 that firmer indications would be provided of the Council’s outline financial settlement for the next three years. The Pre-Budget report that would be considered by Cabinet alongside this one set out the best estimate of the Council’s three-year settlement financial position. Current medium-term estimates were still based on assumptions of local authorities continuing to face significant financial pressures.

 

The national political and financial environment had continued to be subject to fluidity and uncertainty resulting from the impact of Covid and the economic transition as restrictions had been lifted. Despite the large increase in Government borrowing incurred during the pandemic SR2021 indicated that real terms growth would be allowed across Government departments over the medium term. How this affected the financial position for local government would not be known with any certainty until the forthcoming local government settlement, although it was anticipated that demographic, societal and inflationary pressures would absorb much if not all of the indicated growth in the sector. The shorter-term impact of this was likely to be some additional funding for local government to help deal with known and growing financial pressures. The extent that the position could be forecast beyond 2022/23 would depend greatly on the detail set out in the settlement. There was every expectation that the pressure on public finances would not ease in a sustained way and that any increase in available revenue resources would be at least matched by equivalent need to meet pressures within the sector, in  ...  view the full minutes text for item 52