Agenda item

The Scrutiny and Overview Committee is asked to review the draft report presented to Cabinet on 12 December 2022 together with draft appendices A and B. Relevant comments from Cabinet will be reported to the Committee. A final version of the MTFS will be presented to Cabinet in February 2023.

The Scrutiny and Overview Committee considered a draft Cabinet report updating the Medium Term Financial Strategy to the financial year 2027-2028 and the medium term financial plan following the outcome of a mid-year review of financial forecasts. Members noted that some of the assumptions used in the report might need adjusting as the budget developed and further information became available, such as through the provisional 2023-2024 Local Government Finance Settlement. However, the Head of Finance assured Councillor Anna Bradnam that he was confident that the assumption that the Council would borrow at 5% was robust.

In response to Councillor Graham Cone, the Head of Finance confirmed that the Council had significant funds invested upon which it could draw at short notice.

Councillor James Hobro asked about the ability of the assumptions made to deal with the anticipated volatility in inflation and interest rates during the next two years. The Head of Finance acknowledged the degree of uncertainty involved in predicting future events but said that the scenarios set out in the report reflected the circumstances thought most likely by officers.

Councillor Richard Stobart asked how various risks faced by the Council related to the scenarios set out in the report, and at what stage those scenarios would be triggered. In reply, Councillor John Williams assured the Committee that the situation was under constant review and that he was notified straightaway about any issues causing concern. The Head of Finance added that the corporate Risk Register considered every six months by the Audit & Corporate Governance Committee included those risks referred to by Councillor Stobart. The Head of Finance explained that the making of savings was the best way to address the challenge posed by the Fair Funding Review, which represented the biggest risk to South Cambridgeshire District Council. When further savings could not realistically be made then the Council would need to focus on income generation instead.

For Councillor Tom Bygott, it was important to understand the implications for this Council of forthcoming changes to the allocation of retained Business Rates. Following an explanation of the possible outcome of these changes, Councillor John Williams concluded that upper-tier Authorities such as Cambridgeshire County Council would benefit at the expense of district councils. Councillor John Williams assured the Committee that the diversity of Council investments and the adoption of new working practices were helping to protect the Council against potential future uncertainty about funding, which included changes to the way in which the Public Works Loan Board operated. The Head of Finance said that South Cambridgeshire District Council was in a remarkably strong position financially.

Appreciating that the MTFS was subject to change prior to a final version being considered by Full Council in February 2023, Members discussed what role the Scrutiny and Overview Committee m8ght play in managing any risk posed by financial volatility during the next two months. The Chair said it would be a matter of judgment as to whether circumstances should trigger a further review by the Scrutiny and Overview Committee.

Following further discussion, and subject to comments made during this meeting, the Scrutiny and Overview Committee noted and endorsed the draft recommendation that Cabinet

(a)            acknowledges the projected changes in service spending and the overall resources available to the Council over the medium term to 2027-2028; and

(b)            recommends to Full Council the updated Medium Term Financial Strategy once the 2023-2024 budget is complete and the settlement finalised.