Agenda item

Briefing Note of the Director of Finance and Resources

The Finance and Corporate Services Scrutiny Board (1) received a briefing note of the Director of Finance and Resources that sought the Board’s views on the content of the (Draft) Medium-Term Financial Strategy (MTFS) 2025-2028, attached as an Appendix to the briefing note.

At the meeting of Cabinet on 10th December 2024 (their minute 44/24 referred), approval was given for a seven-week public consultation period on revenue spending and savings proposals for 2025/26 (Pre-Budget Report 25/26) and future financial years together with the approach in relation to Council Tax and the Adult Social Care precept.

Following the consultation and details on the final settlement for Local Government, officers would consult Members the outcome of which would result in final Budget and Council Tax Setting Reports and associated recommendations being considered by Cabinet and Council on 25th February 2025. An updated Medium-Term Financial Strategy (MTFS) would be attached to the final Budget Report which would set out the position for the current year, and also a medium-term three-year planning view of the Councils Finances.

The MTFS performed a number of functions, setting out initially the policy assumptions and financial management framework that underpinned the wider Strategy. The Strategy described the Council’s operating environment from a cost and resources perspective and set out to explain the framework for how the Council would balance its short to medium-term budget positions.

As with the last couple of years, it had not been possible to consider this 2025 – 2028 MTFS for longer than a single year with any degree of confidence, due to the last couple of Local Government settlements only considering the following year and had not been able to provide multi-year certainty.  Additionally, the cost environment for all Local Authority Services, but particularly Social Care Services, had been very volatile, reflecting the inflationary environment and the resulting market conditions.

These resourcing and costing uncertainties restricted the Council from being able to produce a medium-term view with any degree of confidence however, the new Government had indicated that they intended to both fundamentally review the funding regime, and seek to provide multiyear funding settlements, details of which will be received in the new year. These changes would need to be reflected in future versions of the Council MTFS.

The Draft Strategy was an early draft of the document that would be appended to the final Budget Report, subject to further information that may come to light as part of the provisional and final settlements for Local Government and the local impact for Coventry City Council.

In considering the briefing note, the Board questioned officers, received responses and discussed matters as summarised below:

·  The settlement for Local Government for year one had already been underwritten, with subsequent awards data driven.

·  Assumptions had been made and set out in Pre-Budget Report in respect of savings that would help to close the financial gap.

·  The Authority had to understand the settlement and work through the detail, this would include consideration of the costs of schemes and the assessment of liabilities.

·  The settlement together with the budget proposals would together assist in closing the financial gap. Budget cuts still needed to be considered and implemented.

·  The Government had pledged multi-year settlements, and a consultation was currently underway on this.

·  Flexibility on the spending of the additional settlement once all costs were met and there was still a surplus – Adult Social Care funding was prescriptive, Childrens Prevention was a new element which was unclear at this stage. Need to make an assessment for final budget.

·  Need to work with voluntary organisations as effectively as possible, however the Council needs to reassess any subsidy or support provided from time to time and can mean that cuts to those provisions were proposed.

·  Each voluntary organisation was considered on a case-by-case basis as services needed to be cost effective. The costs of running, providing a service, and meeting its obligations to customers, needed to be balanced and covered by the organisation and its users without subsidies from the Taxpayer/cost to the Council.

·  Prices of voluntary organisations services would need to be reviewed with statutory obligations managed appropriately.

·  The Council used to apply a flat line across the board regarding fees and charges for discretionary services, but now need to apply a rule that each service could increase their charges as they needed. The Council couldn’t make a loss in those service areas, so need to get the fees and charges right to cover everything without impacting on the Authority’s budget.

RESOLVED that the Finance and Corporate Services Scrutiny Board (1) agrees with the direction of travel in respect of the Medium-Term Financial Strategy 2025/26 – 2027/28.