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
response to questions by Members, Mr Green explained
·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.
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.
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 –
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