Agenda item

Purpose of Report

To consider the Medium Term Financial Strategy for the period 2018-23 and the budget for 2018/19, for referral to Council.

Decision

That the Executive:

(1)       Notes the Chief Finance Officer’s statement on the robustness of the budget and the adequacy of reserves as detailed in paragraphs 4.17 to 4.19 and 5.11 to 5.13 of the report.

(2)       Recommends to Council the Medium Term Financial Strategy 2018-23 and the Capital Strategy 2018-23, to include the following specific elements:

·         a Council Tax increase of 2.95% for 2018/19;

·         a housing rent decrease of 1% for 2018/19;

·         the Council being a member of the Lincolnshire Business Rates pilot for 100% business rates retention in 2018/19;

·         the general fund revenue forecast 2018/19-2022/23 as set out in Appendix 1 to the report and the main basis on which the budget had been calculated;

·         the general investment programme 2018/19-2022/23 as set out in Appendix 2 to the report and the main basis on which the programme had been calculated;

·         the housing revenue account forecast 2018/19-2022/23 as set out in Appendix 3 to the report and the main basis on which the budget had been calculated;

·         the housing investment programme 2018/19-2022/23 as set out in Appendix 4 of the report and the main basis on which the programme had been calculated.

Alternative Options Considered and Rejected

None.

Reasons for Decision

The Council approved the Medium Term Financial Strategy 2017-2022 in March 2017, based upon the financial context in which the Council was operating in at that time and upon a number of key assumptions which were volatile and subject to significant change. Based upon these assumptions the Medium Term Financial Strategy highlighted a requirement to deliver a challenging savings target of £4 million by 2018/19.

The context in which the new Strategy was set reflected the changing economic environment arising as a result of the outcome of the EU Referendum and the subsequent impacts this had on Government policy and its fiscal strategy. The Council’s Medium Term Financial Strategy had now been updated to reflect these latest developments in the financial and policy context in which the Council operated, along with further changes in resources, cost pressures and efficiencies. Based on this, the requirement to deliver a savings target had been increased by £250,000 from 2020/21 to £4.25 million per annum thereafter.

It was reported that the Council had already made considerable progress towards its target savings and had delivered a track record of strong financial discipline. Planning ahead, securing savings in advance, re-investing in more efficient ways of working and adopting a more commercial approach whilst making careful use of reserves to meet funding gaps was an approach that had served the authority well. This successful planning had enabled the protection of core services for the people of Lincoln, while at the same time allowing for resources to be redirected in support of its strategic priorities and Vision 2020. It was therefore proposed that the Medium Term Financial Strategy must continue with the managed, comprehensive approach that had served it well in the past in order to deliver a budget and forward projection that was sustainable over the medium to longer term.

Prior to submission of the Medium Term Financial Strategy 2018-2023 to Council on 27 February 2018, the budget and council tax proposal had been subject to public consultation and member scrutiny. No responses had been received to the public consultation. The Council’s Budget Review Group considered the proposed Medium Term Financial Strategy and budget at its meeting on 7 February 2018. The minutes of that meeting were appended to the report.

The report provided key considerations in relation to the following aspects of the Medium Term Financial Strategy and budget:

·         the general fund;

·         the Local Government Finance Settlement;

·         council tax;

·         spending plans;

·         the Towards Financial Sustainability Programme;

·         robustness and adequacy of the budget and reserves (general fund);

·         the housing revenue account;

·         repairs and maintenance;

·         financing and capital programme;

·         housing rents;

·         robustness and adequacy of the budget and reserves (housing revenue account);

·         the general investment programme;

·         the housing investment programme;

·         consultation and scrutiny.

It was noted that the cremation fees, as set out in Appendix 8 of the report, should reflect an amount of £720 for both residents and non-residents of the city. In addition, fees and charges relating to the Christmas Market were to be removed from the Medium Term Financial Strategy at this stage and would be the subject of a separate report in due course together with coach parking, stall holder and park and ride fees.