Agenda item

From the Cabinet, 14 February 2023

Further to Minute 89 of the Cabinet, the City Council considered a report of the Interim Chief Executive (Section 151 Officer) that presented a Medium-Term Financial Strategy (MTFS) for adoption by the City Council. The previous strategy was approved in January 2022 (min 52/21 referred). The Strategy, which was included in full as a separate Appendix to the report, set out the financial and policy context for the Council’s medium-term financial plans.

The report had been considered by the Scrutiny Co-ordination Committee at their meeting on 8^th February 2023 (their minute 38/22 referred) and a Briefing Note setting out a recommendation from the Committee that indicated that the Committee supported the Medium-Term Financial Strategy 2023-2026 and recommended that the Cabinet recommended to Council the approval of the Strategy as the basis of its medium-term financial planning process, was circulated. The report would also be considered at the meeting of Council on 21^st February 2023.

Cabinet considered separately the detailed proposals for 2023/24 within the Pre-Budget Report in December 2022 (minute 64/22 referred) which included the best estimate of the Council’s three-year settlement financial position available at that time. The final Budget Setting Report would be brought to Cabinet and Council in February 2023.

The national funding background had 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 19th December 2022. This confirmed the position that there would be no structural changes to the funding arrangements in the coming financial year.

The Council’s existing financial position had 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 had 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 faced significant budget gaps in the medium-term and one of the purposes of the MTFS was to set out the Council’s approach to managing this position. Notwithstanding, the Council would need to maintain dynamic financial models that took account of changes in its medium-term budget position and ongoing re-evaluation of its Capital Programme. These would be set out fully at the point of decision making.

The Strategy had 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 represented 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 was crucial that the Council’s financial strategy was both robust and flexible. This would provide the financial foundations required to ensure that Council services were 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.

RESOLVED that the City Council approve the Strategy as the basis of its medium-term financial planning process.