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Medium Term Financial Strategy - Update

Meeting: 27/06/2018 - Policy and Resources Committee (Item 24)

24 Medium Term Financial Strategy 2019/20-2023/24 - Initial Scoping and Assumptions pdf icon PDF 160 KB

Additional documents:

Minutes:

Mr Mark Green, the Director of Finance and Business Improvement, introduced his report setting the scene for updating the Medium Term Financial Strategy (MTFS) and rolling it forward to cover the five year period 2019/20-2023/24 in parallel with the development of the new Strategic Plan to cover that period.  Mr Green explained that:

 

·  The report described the issues and risks involved, starting with the Council’s current financial position.  It set out key assumptions to be made in preparing the MTFS and concluded by setting out the subsequent steps involved in developing an updated MTFS, including an outline timetable.

 

·  Local authority funding was currently subject to a four year national settlement announced in 2016.  It was difficult to predict the funding situation after 2020.  Because of this uncertainty, projections were being prepared based on three different scenarios: Favourable, Neutral and Adverse.

 

·  The strategic revenue projections underlying the current MTFS suggested that a small budget gap, having taken account of savings already planned, would arise in 2019/20, increasing to £1.5m by the end of the five year period.  The projections were based on a neutral scenario and assumed that Council Tax increases would be at the referendum limit and this limit would be 2%, being the Government’s medium term target rate of inflation.

 

·  A report would be submitted to the November meeting of the Committee with proposals to plug the gap together with any growth proposals.

 

In response to questions by Members, Mr Green explained that:

 

·  The Council Tax base had increased steadily in recent years reflecting the number of new housing developments in the Borough.  The projected increase in the number of dwellings in 2018 compared with the previous year was 1.5%, but this figure would be reviewed in October taking into account performance against the Local Plan target for the delivery of new homes.

 

·  The current MTFS revenue projections 2018/19-2022/23 showed zero Business Rates growth in 2020/21 because the baseline would be reset that year.

 

A Member wished to place on record the understanding of the Committee that the assumptions described in the report were not a commitment to a 2% Council Tax increase at this point in time and that other scenarios such as a 0% increase could be examined.  Mr Green advised the Committee that the effect of a 0% Council Tax increase could be modelled.

 

RESOLVED:

 

1.  That the issues and risks associated with delivering the budget for 2018/19 and updating the Medium Term Financial Strategy be noted.

 

2.  That the assumptions described in the report of the Director of Finance and Business Improvement for planning purposes and to establish the remit for detailed budget development be noted.

 

3.  That the approach outlined to development of an updated Medium Term Financial Strategy for 2019/20 – 2023/24 and a budget for 2019/20 be agreed.

 

Voting:  13 – For  2 – Against  0 – Abstentions

 


 

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