Agenda item

2023/24 Medium Term Financial Strategy

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


Cllr Richard Samuel introduced the report, moved the officer recommendation and made the following statement.


“The Medium Term Financial Strategy (MTFS) sets out an assessment of the financial climate the council expects to encounter over the next five years and is used to inform the budget setting process.


There are a number of key points to highlight.


·  The council is still in recovery from the financial shock created by covid where members will recall it was necessary to introduce an emergency budget in July 2020.Whilst the immediate financial impacts have been successfully managed there are still longer-term impacts particularly arising from future income assumptions that require close attention.


·  During the past year in particular we have seen challenging economic conditions at national level with growth in inflation, labour and commodity shortages and pressures on wage growth following 10 years of austerity. The Conservative government’s response has unfortunately made matters worse particularly the catastrophically incompetent mini budget in September.


·  Whilst some of these shocks could and should have been managed better, no-one could have foreseen the impact on global energy markets arising from the illegal Ukraine invasion. Whilst the short- term energy supports will be welcomed by residents – they are short term. The council, as with all businesses, remains exposed to the impacts of energy price rises and these cannot be contained within normal budgets without Government support.


·  The MTFS sets out some core principles:


o  Budgets will be expected to balance without the need to draw on unallocated reserves and the strong reserves position achieved by this administration will be maintained.

o  Growth either by demography, inflation, or political priority can only be accommodated where headroom has been created.

o  Priority will be given to key statutory services and policies that contribute to tackling the climate emergency.

o  Council tax and social care precepts may be expected to rise over the period.

o  Further income raising income opportunities will be sought and current income streams maximised.


·  The report highlights the continuing lack of reform of local government finances first promised by the Conservatives 7 years ago.


Across the board pressures are rising and I fear that the coming years up to the next general election offer stark choices and difficult decisions in setting council budgets.

The autumn statement next week will hopefully provide extra clarity but after 12 years of Conservative austerity there really is no fat to cut.”


Cllr Tom Davies seconded the motion and made the following statement.


“I know that it has been mentioned before, but, as we consider this key financial paper, I would like to say again how good it is to see our colleague and friend, Cllr Richard Samuel back with us in the Chamber.


Since May 2019 Richard has demonstrated remarkable leadership of the Council’s finances - working with the Council’s senior officers, they have steered us through three extraordinarily difficult financial years and in all years, not only balancing the books but also facilitating our ability to deliver throughout all areas of our manifesto commitments - many of which we have seen further evidence of tonight - whilst also enabling the Council to lead from the front in our local response to the Covid-19 pandemic. Indeed, last year, the Council ended the year with a £4m favourable outturn - funds which we have then used to enable us to protect the new Park & Ride contract and meet some of the inflationary pressures seen this year with energy costs.


After the events of the last few years, one would have hoped that we could have been spared more turmoil and challenge but as the Medium Term Financial Strategy sets out, this is not to be.


As the Strategy shows - with current forecasts, the Council is projected to have to find up to £36m in savings over the coming years - with the main pressures being the significant inflationary pressures and pressures on our income whilst we also expect to see an increasing demand on our services throughout this period - most notably, as the report shows, in adult social care and children’s services.


We need to be open and transparent with residents that to achieve these savings, there will be very difficult and challenging decisions to be taken - decisions that will inevitably impact the support the Council can provide - but we also need to be clear that this position has been aggravated by the disastrous actions of the Conservative Party - with the global economy slowing and inflationary pressures growing, this Conservative Party embarked on an ideological experiment with us all as its Guinea Pigs - and in September Liz Truss and her colleagues - many of whom still find themselves in leadership positions - crashed our economy with their disastrous fiscal event.


Through their reckless actions, we are now poorer as a nation, our residents are and will continue to suffer as a result of the cost of living crisis and as a Council, seeking to support our residents, the Government is silent on what support we will have at this time - we stand alone with our residents as we experience one of the most disastrous periods of national leadership in our history.


We will do what we can - and whilst the purpose of the report is not to detail how we will respond to these pressures, residents should be in no doubt that this LibDem administration will continue to demonstrate the sound and strong financial leadership required to navigate the Council through these challenges - we have delivered to date and will continue to do so.”


RESOLVED (unanimously): To approve the Medium Term Financial Strategy.

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