Agenda item

Purpose of Report

To recommend to the Executive the draft Medium Term Financial Strategy for the period 2021-2026, the budget for 2021/22 and the Capital Strategy 2021-2026 for referral to Council.

Decision

Executive recommended to Council for approval:

·         The Medium Term Financial Strategy 2021-2026, and;

·         The Capital Strategy 2021-2026

Including the following specific elements:

·         A proposed Council Tax increase of 1.9% for 2021/22.

·         The Council is member of the Lincolnshire Business Rates Pool in 2021/22.

·         The General Fund Revenue Forecast 2021/22-2025/26 as shown in Appendix 1 and the main basis on which this budget has been calculated (as set out in paragraph 4).

·         The General Investment Programme 2021/22-2025/26 as shown in Appendix 2, and the main basis on which the programme has been calculated (as set out in paragraph 6).

·         The Housing Revenue Account Forecast 2021/22-2025/26 as shown in Appendix 3 and the main basis on which this budget has been calculated (as set out in paragraph 5).

·         The Housing Investment Programme 2021/22-2025/26 as shown in Appendix 4, and the main basis on which the programme has been calculated (as set out in paragraph 7).

Alternative Options Considered and Rejected

None.

Reason for Decision

The financial landscape for local government presented an unprecedented challenge to the Council. The Covid19 pandemic was having immediate effects on the Council’s budgets as a result of increases in spending on local services and plummeting income from sales, fees and charges and commercial activities. Beyond the immediate impact the crisis would cast a longer term shadow on the Council’s finances. The Government had pumped billions of pounds into the economy to support the response phase of the pandemic and to protect jobs and services. In the medium-term the levels of additional national borrowing and the UK’s budget deficit would need to be managed down at the same time as meeting ongoing needs to invest in recovery to achieve the growth required to repay the national deficit. The Government’s strategy to address this challenge was not yet known, nor what it would mean for local government funding more generally. Furthermore, there remained potential longstanding impacts on the Council’s local income sources if behaviour, working practices and spending patterns in the city continued to change. 

Further to consideration of the Medium Term Financial Strategy 2021-2026 and the budget and Council Tax proposal for 2021/22 at the meeting of the Executive held on 18 January 2021, the initial draft had been subject to public consultation and scrutiny via the Council’s Budget Review Group. In addition, an all member workshop was undertaken during January 2021 to ensure that as large a number of members as possible had the opportunity to fully understand the financial position of the Council.

The minutes of the Budget Review Group’s meeting held on 3 February 2021 were appended to the report and it was noted that the Group had supported the Medium Term Financial Strategy in terms of its principles and the process that had been followed to develop it. A small number of responses to the public consultation had been received, which were largely in favour of the budget proposals.

Councillor Ric Metcalfe, on behalf of the Executive, thanked the Chief Finance Officer and her team for the huge amount of work they had done in relation to the Medium Term Financial Strategy and budget.