Agenda item

A draft report for 2021/22 and the latest Medium Term Financial Strategy (MTFS) to 2023/24 was presented. The covering report commented on:

• the impact of the Covid-19 pandemic and consequent uncertainties upon budgetary projections;

• the financial recovery plan and progress in exerting tighter cost controls, resulting in the Council being removed from the Government’s ‘watchlist’ (during the previous three months since the inception of the 2021/22 budget setting process, the projected shortfall had reduced from c£2.5 million to c£0.2 million);

• issues regarding the shortfalls in the collections of Council Tax and business rates for 2020/21;

• the financial improvement programme implemented by the interim Chief Finance Officer since her appointment in July 2020; and

• the service delivery plans being pursued under the auspices of this and the other three policy committees.

The report confirmed that the government was now conducting a one-year comprehensive spending review. A provisional local government financial settlement was expected imminently, with a final settlement due in January 2021 but little detail is known about what this would include. A prudent assumption had also been made in respect of additional Covid payments which should also be received. A ‘roll-forward’ of the 2020/21 settlement was anticipated, including a permitted Council Tax increase of £5 for Band D properties. Ongoing resilience was also being built into the budget via the contingency and General Fund Reserves. 

The MTFS to 2023/24 assumed annual increases in pay (1%) and contract (2%) inflation rates and a 2% uplift in fees and charges. Funding gaps of £1.899 million and £2.914 million were projected for 2022/23 and 2023/24 respectively. Service delivery plans were being developed to improve this medium term outlook. Delays to local government finance reforms and the absence of a longer term financial settlement from central government provided challenges for effective budgetary planning during the course of the MTFS. 

Draft 2021/22 revenue budgets for all four policy committees, including the Housing Revenue Account for the Housing Committee, were attached to the report, together with a draft capital programme to 2023/24.  Work would be continuing on these documents with a view to bringing a balanced budget in January and February 2021.

Concerns were raised in respect of some of the proposed budget savings. It was confirmed that greater detail for each committee would be provided in the separate budget reports in January 2021 and the use of Capital Reserves would be clarified at the next meeting. 

It was noted that there had been salary inflation figures of 1% referred to across all committees which appears to contradict the Government’s intention for all public sector pay to be frozen.  The Committee was informed that the Council is not part of the National Pay Scheme but could opt to follow the spirit of the guidance. Options were currently being considered to self-fund the increase and conversations were ongoing with Staff Conference. Some Members felt that an increase would not be a preferable option at this time.

It was highlighted that the recommendation had been changed for the committee to note the document as opposed to approve.  This change was suggested on the basis that the budget was still in draft form and, at this time, was not balanced.  

            R E S O L V E D – that the draft budget for 2021/22 and Medium-Term Financial    Strategy to 2023/24 be noted.