Agenda item

The Medium Term Financial Strategy sets out the strategic direction and priorities for the Council as well as 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.

Cllr Mark Elliott, Cabinet Member for Resources, introduced the report, moved the officer recommendation and made the following points:

·  The Medium-Term Financial Strategy is a key, underlying document which provides the framework for all the strategic planning of the council.  It sets out the current financial challenge we face, the strategic direction, and the financial priorities, and sets out our mechanisms for financing our activity.

·  It is a pre-cursor to the budget setting period and sets out what savings we believe will be required, and our approach to addressing predicted funding gaps.

·  Last year we set out a two-year balanced budget, but this is somewhat speculative until the new Chancellor’s budget on 30^th October.

·  One of the key challenges is the large ongoing demand on Children’s Services.  The increase in numbers of children in care, the increase in cost per child from external providers and the huge increases in numbers of children with Special Educational Needs, many of whom are using services provided by external providers.

·  The long-term fix must be, firstly, to put a stop to the back-door privatisation of social care for both adults and children.  Many services are run by for-profit private providers.  At the last cabinet meeting we discussed and agreed to use the Culverhay school site to build new Alternative Provision and SEND Schools.  Yesterday, the decision by Cllr May to repurpose Charlton House as a new Special Residential and Day School was published.  These kinds of decisions, which allow us to provide in-area, council run services, rather than commissioning out-of-area, privately run services, are key both to getting control of the budget and providing a better experience and service to our vulnerable children.

·  It is also important to work with our colleagues in the Health Service to develop much better mental health services for the most vulnerable children in our society.

·  We are taking action to bring the social care spending back under control, but there are no quick solutions, and this will require capital investment to improve the financial position over time. 

·  On the up-side our Heritage Services and Parking Services continue to perform very well.  In these incoming generating services, where we have much more control over our own destiny, we are showing how a well-managed, well-run council can use its assets to try to mitigate at least some of the enormous financial pressures we are facing elsewhere.  Without this income, those pressures in Children's Services would be felt even more harshly.

·  Things will continue to be difficult for local government financially.  However, we are taking action, putting in place the in-house services which will help alleviate the pressure in the long-run, and will continue to balance the books despite these pressures.

Cllr Paul May seconded the motion and made the following points:

·  The council has statutory duties set by national legislation which remains our commitment, but things change over time, so the primary aim is to live within our means, seek financial efficiency improvements, seek to improve income and invest revenue expenditure for new ideas in a corporate sensible way.

·  Accountability to the public requires transparency and the council takes that responsibility as a significant priority.

·  The broken system of Children’s Services has left many other local authorities on the verge of bankruptcy.  The service is dictated by strict legal requirements and inadequate government funding for those requirements. Earlier intervention and use of new technologies can help us transform our service working with parents. This also highlights the power of capital investment to reduce long term revenue pressures. We are also dedicated to working with the newly created in-house adult service to help children transfer more effectively to adulthood.

RESOLVED (unanimously):

To approve the Medium Term Financial Strategy attached as Appendix 1 to the report.