Issue - meetings

Purpose of Report

To consider recommending the Medium-Term Financial Strategy for the period 2024-2029 and the budget for 2024/25 to the Council for approval.

To consider recommending the Capital Strategy 2024-2029 to the Council for approval.

Decision

That the Council be recommended to approve the Medium Term Financial Strategy 2024-2029, and the Capital Strategy 2024-2029, which included the following specific elements:

• a proposed council tax Increase of 2.92% for 2024/25;
• the Council being a member of the Lincolnshire Business Rates Pool in 2024/25;
• the General Fund Revenue Forecast 2024/25-2028/29, as shown in Appendix 1 and the main basis on which this budget had been calculated (as set out in paragraph 4);
• the Housing Revenue Account Forecast 2024/25-2028/29, as shown in Appendix 2 and the main basis on which this budget had been calculated (as set out in paragraph 5);
• the General Investment Programme 2024/25-2028/29, as shown in Appendix 3, and the main basis on which the programme had been calculated (as set out in paragraph 6).
• The Housing Investment Programme 2024/25-2028/29, as shown in Appendix 4, and the main basis on which the programme had been calculated (as set out in paragraph 7).

Alternative Options Considered and Rejected

None.

Reasons for the Decision

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 impact of inflation on the Council’s pay bill and the cost of goods and services it purchased; rising interest rates increasing the cost of borrowing; increased costs of construction impacting on capital schemes; and reductions in service income and collection rates, continued to add considerable cost pressures to the Council’s budgets

In addition, the Council was facing growing demands for some of its key services as those more vulnerable in the city looked to the council for support as the cost-of-living crisis continued to impact on household incomes. The imbalance between housing supply and demand and the reliance on temporary accommodation, to provide the necessary support, were of particular challenge to the Council.

Alongside these cost and demand pressures, there still remained uncertainty around the level of funding for local government beyond the current Spending Review period and the implementation of the planned national funding reforms. These reforms had the ability to fundamentally alter the course of the MTFS. Although it had been confirmed that these fundamental reforms would not be implemented in 2024/25, and there was a high likelihood that this would be the case in 2025/26 as well, all this did was shift the financial challenges to later in the MTFS period. This was further compounded by the risk of a new round of public expenditure austerity measures. The funding outlook for local authorities therefore remained uncertain.

As a result of these factors, the financial landscape for local government continued to pose a challenge to the Council and was set in the context of this significant, inherent uncertainty. It was a long time since the Council had any medium-term certainty  ...  view the full minutes text for item 89