Agenda item

Report of the Interim Chief Executive (Section 151 Officer)

Note: The Finance and Corporate Services Scrutiny Board (1) have been invited to attend for consideration of this item.  

The Committee considered a report, which would be considered by Cabinet at their meeting to be held on 14 February, 2023, and which presented a Medium term Financial Strategy (MTFS) for adoption by the City Council.

The national funding background has been set out in the Autumn Statement published by the Government in November 2022 with further detail included in the 2023/24 Provisional Local Government Finance Settlement on 19^th December 2022. This confirmed the position that there will be no structural changes to the funding arrangements in the coming financial year.

The Council’s existing financial position has been characterised by several fundamental financial challenges including a long period which saw the real value of Government financial settlements reduce, an increase in the demand for services such as social care and the emergence of inflationary pressure on a wide range of costs. In response the Council has been able to balance its budget through the receipt of significant time-limited Government grant allocations and approval of maximum permitted Council Tax rises. The Council still faces significant budget gaps in the medium-term and one of the purposes of the MTFS is to set out the Council’s approach to managing this position. Notwithstanding, 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. These will be set out fully at the point of decision making.

The Strategy has at its heart the need to deliver the priorities set out in the One Coventry Council Plan with a paramount need to protect the most vulnerable people in the city and deliver expectations on the Council to maintain service levels and standards across a wide range of core services.

Taken together, these factors represent a combination of limited resources, challenging underlying economic and demographic conditions, increased demand, pressure to sustain the quality of services and new challenges represented by government reform and local structural and governance relationships. In these circumstances it is crucial that the Council’s financial strategy is both robust and flexible. This will provide the financial foundations required to ensure that Council services are fit for purpose to protect the most vulnerable as well as providing good quality core services for every citizen in the city in line with the Council’s aspiration to deliver its One Coventry Plan. 

The Committee asked questions, made comments and sought clarification on a number of issues including:-

·  The uncertainty of the continuation of the Adult Social Care precept long term

·  The potential for grant funding and the prudential decisions made based on uncertainty over grant income.

·  How risk on capital projects and business concerns are managed

·  Concerns about the increased costs of placements within Children’s Services and increased pressures generally.

·  Reserves allocated for Transformation projects.

RESLOVED that the Scrutiny Co-ordination Committee:-

1)  Supports the Medium Term Financial Strategy 2023-2026 and recommends that the Cabinet recommends that Council  approves the Strategy as the basis of its medium-term financial planning process

2)  Refers the budget pressures being felt by Children’s Services to the Education and Children’s Services Scrutiny Board for further scrutiny.