Issue - meetings

Council  

Agreed          to

A)           Acknowledge the projected changes in service spending and the overall resources available to the Council over the medium term to 2028/2029.

B)           Adopt the refreshed Medium Term Financial Strategy at Appendix A and updated financial forecast at Appendix B.

Councillor John Williams presented this report on the review of the Council’s five-year Medium Term Financial Strategy. The future decisions of the Government were uncertain, but it appeared likely that it would retain a greater percentage of business rates and that rural areas of high growth would receive less funding. This meant that after five years the Council was looking at a deficit of £5m, which had been reduced from an expected deficit of £6m. The Council had met its target of receiving 25% income from commercial investments. A further £2 million of savings were expected from the Transformation Programme.

Councillor Heather Williams expressed concern regarding the size of the deficit and expressed doubt that sufficient savings would be found.

In response to questioning, Councillor John Williams explained that the administration had decided in 2018 to increase the Council’s commercial investments, which had included investing in the Science Park, which was in the District. The administration had succeeded in increasing the income from commercial investments from £1m to £7m. This success had been recognised by the external auditors and the peer review.

Councillor John Williams explained that currently the Government retained 50% of business rates, this authority received 40%, the County Council received 9% and the Fire Authority received 1%.

Councillor John Williams agreed that Councillor Lina Nieto should receive a written response to her question on whether the income received from business rates was ring-fenced to support housing development and economic development.

Councillor John Williams proposed and the Leader seconded the recommendations in the report. A vote was taken and were cast as follows:

In favour (23):

Councillors Michael Atkins, Henry Batchelor, John Batchelor, Paul Bearpark, Anna Bradnam, Ariel Cahn, Dr Martin Cahn, Stephen Drew, Libby Earle, Peter Fane, Corrine Garvie, Bill Handley, Geoff Harvey, Carla Homan, Helene Leeming, Peter McDonald, Brian Milnes, Dr Lisa Redrup, Peter Sandford, Bridget Smith, Richard Stobart, Dr Aidan Van de Weyer and John Williams.

Against (6):

Councillors Dr Shrobona Bhattacharya, Graham Cone, Sue Ellington, Lina Nieto, Dr Richard Williams and Heather Williams.

Abstain (1):

Councillor Daniel Lentell.

Council  

Agreed          to

A)           Acknowledge the projected changes in service spending and the overall resources available to the Council over the medium term to 2028/2029.

B)           Adopt the refreshed Medium Term Financial Strategy at Appendix A and updated financial forecast at Appendix B.

Cabinet:

1.    acknowledged the projected changes in service spending and the overall resources available to the Council over the medium term to 2028/2029, and

2.    recommended to Full Council the refreshed Medium Term Financial Strategy at Appendix A to the report and updated financial forecast at Appendix B to the report.

Councillor John Williams, Lead Cabinet Member for Finance, introduced the report and moved the recommendations. In so doing, Councillor John Williams advised that the Medium Term Financial Strategy (MTFS) was reviewed every six months. It was considered that the biggest problem in maintaining the strategy was the uncertainty around funding, including the Fair Funding Review, which had been prepared for since 2018 but delayed each year. It was noted that the funding gap between 2024/2025 and 2028/2029 had been reduced to £5.4 million.

The recommendations were seconded by Councillor Brian Milnes, who noted that the Peer Review had referenced the Council’s minimum revenue position.

Cabinet Members raised the following points during consideration of the report:

·       It was noted that it was difficult to predict the level of funding to be provided from the Government in future years and, therefore, the MTFS relied on estimates for forecast positions.

Resolution

Cabinet:

1.    acknowledged the projected changes in service spending and the overall resources available to the Council over the medium term to 2028/2029, and

2.    recommended to Full Council the refreshed Medium Term Financial Strategy at Appendix A to the report and updated financial forecast at Appendix B to the report.

Options Considered

The option existed of not approving the new MTFS.

Reasons for Decision

To ensure that the Cabinet was aware of the financial challenges over the medium term, the key service and financial drivers of the financial forecast and the strategic response required to meet the financial challenge to ensure that the Council would be in a position over the medium term to deliver sustainable and affordable public services.

To provide Cabinet with an update of the financial position and forecasts for the General Fund over the medium term following a review of financial assumptions.

To enable the Cabinet to recommend the MTFS to Council for approval in order to assist in the Council’s financial planning.