Agenda item

Purpose of Report

To consider the draft Medium-Term Financial Strategy for the period 2023?2028; the draft budget and council tax proposal for 2023-24; and the draft Capital Strategy 2023-2028.

Decision

(1)         That the Draft Medium Term Financial Strategy 2023?2028, and the Draft Capital Strategy 2023-2028 be approved for consultation and scrutiny.

(2)         That it be noted that the Draft Medium Term Financial Strategy 2023?2028, and the Draft Capital Strategy 2023-2028 included the following specific elements:

(a)         a proposed council tax Increase of 2.9% for 2023/24;

(b)         a proposed housing rent increase of 6.5% for 2023/24;

(c)          the Council’s membership of the Lincolnshire Business Rates Pool in 2023/24;

(d)         the draft General Fund Revenue Forecast 2023/24 - 2027/28, detailed in Appendix 1 of the report, and the main basis on which this budget had been calculated, as set out in section 4 of the report;

(e)         the draft General Investment Programme 2023/24 - 2027/28, detailed in Appendix 2 of the report, and as the main basis on which the programme had been calculated, as set out in section 6 of the report;

(f)           the draft Housing Revenue Account Forecast 2023/24 -2027/28, detailed in Appendix 3 of the report, and as the main basis on which this budget had been calculated, as set out in section 5 of the report; and

(g)         the Draft Housing Investment Programme 2023/24- 2027/28, as detailed in Appendix 4 of the report, and as the main basis on which the programme has been calculated, as set out in section 7 of the report.

(3)         That the Chief Finance Officer be delegated authority to approve the final Business Rates Base for the financial year commencing on 1 April 2023 and ending 31 March 2024 and submission of the base (via the NNDR1 return) to the Department of Levelling Up, Communities and Housing by 31 January 2023, with changes to the base estimated in the Draft Medium Term Financial Strategy 2023/28 being reported to the Executive as part of the Final MTFS 2023-28 on 20 February 2023.

Alternative Options Considered and Rejected

As detailed throughout the report.

Reasons for the Decision

Much had changed since the Council approved the previous MTFS, with spiralling inflation, soaring energy prices and nationally agreed pay proposals set to add significant cost pressures to its budgets. These were in the main caused by national issues, which were beyond the Council’s control and impacting all Councils.

In addition, the Council faced growing demands for some of its key services for those more vulnerable in the city, a client group that was impacted the hardest during Covid19, and looked to the council for support as the cost-of-living crisis hit household incomes.

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, together, had the ability to fundamentally alter the course of the MTFS. Although it had now been confirmed that these fundamental reforms would not be implemented until 2025/26 at the earliest, and the Autumn Statement announced some much-needed additional funding for local authorities for the next two years (providing some limited and short-term stability), there could be no certainty beyond 2024/25.

As a result of these factors, the financial landscape for local government continued to pose an unprecedented challenge to the Council and was set in the context of this significant, inherent uncertainty.

Prior to submission of the MTFS 2023-2028 and budget and council tax proposal for 2023/24 to Full Council, on 21^st February 2023, this initial draft would be subject to public consultation and member scrutiny.