Issue - meetings

The Medium Term Financial Strategy (MTFS) sets out the strategic direction and priorities for the Council as well outlining the financial context and challenges the Council faces over the next five years and the strategy that will be used to inform its annual budget process.

Councillor Richard Samuel introduced the report by reading out the following statement:

‘The Medium Term Financial Strategy (MTFS) is not the council budget – that will come later when more detail about government funding appears in the autumn and leads to the budget and council tax setting in February. The MTFS is however an important health check on the pressures and opportunities facing the council in the medium term and describes actions the council may need to take to balance our finances.

I made it clear on taking office that it was my intention that the council live within its means throughout the whole of this administration’s term. That means balancing the books and not spending more than we receive in income, grants and tax. So far, we are on track to achieve that objective for the third year in a row having done so in 19/20 and 20/21. This is an outcome that was never achieved by the previous administration whose waste and inefficiency made me determined to try to do better.

This latest MTFS highlights the severe challenges ahead. These have just been added to by the government in their Health and Social Care taxes. Whilst the detail of how this will affect local government remains opaque what we know already is that the employers NI changes will add 750k to our wage bill at a stroke roughly equivalent to 1% on council tax. At this stage we are also unclear how the changes which, are broadly beneficial for most residents requiring care, will be funded. I have to give this stark message. There is no money to top up any shortfalls in government funding. Our finances are already at their limit following government underfunding of covid pressures – another hollow Tory promise. To use a hackneyed phrase – there is no magic money tree.

Turning back to the MTFS Cabinet will recall that to deal with the extreme conditions caused by the pandemic it was necessary to draw from reserves to in effect cash flow our funding. That draw down must be repaid and is a key component of the MTFS. At the same time, we are currently experiencing a big increase in social care service requests which were fewer during the 2020 lockdowns. Predicting future demand is a fraught process as is what the government’s intentions for local government finance in the medium term. The MTFS identifies that potentially £28m will need to be saved over the next five years. It seems at times that the council like others is in perpetual Kafkaesque cycle of continuous cuts where no exit ever arrives.

Within the plan great uncertainties exist about the government’s funding plans for local government. We do not know at this point what will be said about social care precepts and council tax capping limits. What we do know is that by avoiding progressive tax rises to pay for health and social care the burden has been placed on working age adults with the imposition  ...  view the full minutes text for item 66