Agenda item

Resolved

That Cabinet:

i)         notes the lack of clarity regarding the timing of the Government’s Spending Review and the lack of any indication as to the value of financial settlement to Local Authorities which makes budget planning, particularly in the current environment unnecessarily complex and challenging.

ii)       agrees that Executive Directors prepare detailed plans and budget proposals in accordance with the Administration’s priorities and financial strategy objectives (paragraphs 4.2 to 4.4 of the report), taking into account emerging expenditure and funding information (section 3 of the report) and the proposed approach to savings identification (paragraph 4.5 of the report). Flowing from that budget proposals are to be brought back to Cabinet for approval as part of the annual budget report.

iii)      sets a requirement to identify savings proposals that will close the revised forecast budget gap for 2022/23 of £38m by the end of the budget process.

iv)      notes the increase in the forecast budget gap of £16m profiled in 2022/23 which increase the indicative cumulative budget gap over the three-year Medium-Term Financial Strategy period from c£71m to c£87m; and sets a requirement to also bring forward proposals to close the forecast gap in 2023/24 onwards, recognising that the local government finance settlement could have a material impact on this value.

v)       agrees that any revenue growth proposals will require savings of an equivalent quantum to be identified (paragraph 5.9.2 of the report).

vi)      notes and agrees the capital investment process as set out in the report (section 6 of the report).

vii)     notes Housing Revenue Account (HRA) Budget Strategy (section 7 of the report).

viii)    notes the budget preparation timetable as set out in the report (section 8 of the report).

Reason for Decision and Options Considered

The Council made significant investment in service areas as part of the 2022/23 budget process but continued to face significant budget pressures in future years and uncertainty, including the continuing level of support from Central Government over the medium term. Additionally due to an increased demand for services, the long-term impact of COVID-19 alongside the current backdrop of the cost of living crisis including most notably the rising inflation and energy prices, council services continued to operate in a challenging resource environment where small demand change could lead to material budget variances.

This report was part of the Council’s budget setting and business planning process. The Medium-Term Financial Strategy (MTFS) was recommended by Cabinet in February 2021 and approved by Council on 2 March 2021. Building upon that there was the subsequent approval by Cabinet in May 2022 a re-allocation of revenue growth.

This report now sought approval of the updated MTFS assumptions for 2022/23 to 2024/25 so that officers could prepare detailed budget proposals for Member consideration as part of the annual budget-setting cycle in line with the timetable in section 8 of the report.

The overarching objective of the MTFS was to set a priority-led budget over the medium term that was balanced and realistic; and supported by achievable savings plans. However, it must be recognised that significant budget gaps such as that set out in this report could severely curtail the ability of the Council to deliver service levels in line with those currently provided.

The Council would continue to consider the necessary funding requirements for delivering its priorities as part of the annual medium term financial strategy (MTFS) and budget process.