Issue - meetings

Purpose of Report

To update Executive on the latest Medium Term Financial Strategy (MTFS) position for the Council, including the challenges in preparing for the 2024/25 and future years budget, setting out the parameters within which the Council would prepare these budgets and confirm the Council’s approach to development of the budget and Medium Term Financial Strategy.

The report included an update on the current economic position and developments in national policy, specifically the high level of uncertainty surrounding local government financing and national funding reforms. This, along with the unavoidable and escalating cost pressures, cost of living crisis and rising demand for Council services, would inform the development of the MTFS. Further details in respect of key budget assumptions for 2024-29, together with budget and financial planning preparation timetables for 2024/25 were outlined at Appendices A and B of the report.

Decision

1.           That the significant financial challenges and risks faced by the Council, particularly the unplanned, and unavoidable increasing cost pressures be noted.

2.           That the projected budget parameters for 2024/25 and future years and the planning assumptions, as set out in Appendix A of the report be noted.

3.           That the budget, strategic and service planning preparation programme, as set out in Appendix B of the report, be noted.

Alternative Options Considered and Rejected

There were significant, unprecedented risks to the Council’s budget strategy, particularly in the short-term as detailed within the officer’s report.

Due to the level of uncertainty it was difficult to make a full, definitive and comprehensive assessment of the ongoing financial impact of these issues. As such, the figures in this report were based upon best estimates and forecasts and would therefore be subject to change as the budget process developed.

Reason for Decision

The Council’s Vision 2025 and five strategic priorities drove the medium-term financial planning process, with changes in resource allocation determined in accordance with policies and priorities. The MTFS provided the framework for the development of annual budgets in line with the aims of the Council’s strategy and priorities.

The refreshed MTFS would include financial projections for the five-year financial planning period through to 2028/29. It would set out the financial parameters within which the Council was required to work and the recommended approach to addressing the financial challenges the Council faced to develop a balanced, sustainable budget and set Council Tax and Housing Rents for 2024/25.

The refresh of the MTFS needed to be seen in the context of significant financial uncertainty for the Council. Exceptional economic factors such as the continued and sustained impact of rising inflation on the Council’s pay bill and the cost of goods and services, rising interest rates increasing the cost of borrowing, and the increasing demand for key services as those more vulnerable in the city looked to the Council for support as the cost-of-living crises impacted on households, continued to add significant cost pressures to the Council’s budgets.

These pressures were on top of the continued reduction in core government funding  ...  view the full minutes text for item 44