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 2025/26 and future years budget, setting out the parameters within which the Council would prepare these budgets and confirmation of 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 Government’s first Budget and Spending Review, which gave rise to specific impacts for local government funding. This, along with cost and demand pressures, and other emerging issues, would inform the development of the MTFS. Further details in respect of key budget assumptions for 2025-30, together with budget and financial planning preparation timetables for 2025/26 were outlined at Appendices A and B of the report.

Decision

1.    That the financial challenges and risks that the Council faced, particularly the uncertainty surrounding future funding levels be noted.

2.    That the projected budget parameters for 2025/26 and future years and note the planning assumptions, as set out in Appendix A be noted.

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

The budget process included the recognition of these risks in determining the 2025/26 budget and MTFS, but it would be imperative that the Council continued to build upon its record of delivering significant savings and maintained a strong financial management discipline in order to ensure a sustainable financial position.

Reason for Decision

The Council’s new emerging Vision 2030 and its five strategic priorities would drive 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 2029/30. 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 2025/26.

The refresh of the MTFS needed to be seen in the context of significant financial uncertainty for the Council in relation to future Government funding levels. Significant changes to future public sector departmental spending through the Spending Review 2025, the allocation of this funding to local government through reforms to the distribution methodologies, and the potential implementation of a Business Rates Reset, were as yet all unknown but all of which had the potential to fundamentally affect the Council’s funding trajectory and MTFS

Furthermore, the Council continued to face budget pressures due to changes in the use of, and demand for, services, as well as increased costs and reduced income streams.  ...  view the full minutes text for item 49