Agenda item

To receive the final recommendations in respect of the Council’s Medium Term Financial Strategy.

The Cabinet Member: Finance, Governance & Customer Services presented the report of the Director: Finance & Human Resources. The report detailed the Revenue Budget, medium term Capital Strategy and Programme, the Investment and Treasury Management Strategies and Prudential Indicators.  The report sought approval of the Council’s Medium-Term Financial Strategy for the four years 2023/24-2026/27.

 

On 3 March 2022 the Council approved the current Medium Term Financial Strategy (MTFS) for the four year period up to 2025/26. Since the Strategy had been set, there had been a significant increase in demand for key services and higher costs relating to these services, particularly around adult social care and energy costs.

 

There were significant financial challenges nationally; the continuing impacts of the coronavirus pandemic, the war in Ukraine and the cost of living crisis.

In view of this significant uncertainty over the future of local government finance and what resources may be available to the Council beyond the following year, and the uncertainties caused by these issues and the local elections in May 2023, a detailed budget for 2023/24 within the context of the four year MTFS was proposed.

 

The report identified key strategies including:-

 

·                   No increase in the general Council Tax precept, however, the Government’s 2% Adult Social Care precept would be applied, which would raise £1.588m towards the additional investment required in Adult Social Care services.

·                   Extra net investment of £7.26m into Adult Social Care Services and an additional £2.5m into Children’s Safeguarding.

·                   A programme of capital investments totalling more than £364m as set out in the Capital Strategy and Capital Programme reports which included:-

·                   £70m investment into NuPlace and Telford & Wrekin Homes

·                   £70m to support further Growth Fund initiatives which would bring new employment opportunities into the Borough

·                   £40m for education capital projects, including investment in school expansion projects to increase pupil places

·                   £40m for transport and highways schemes

·                   £8.7m for a swimming pool in the Dawley area

·                   £1.8m into the Stronger Communities project

 

The Council continued to provide a comprehensive package of support for residents to help with the cost of living.

 

Since 2009/10, the Council had delivered savings of £141m per annum. The report put forward additional proposals to deliver further savings and generate additional income.

 

Attached to the report were a number of appendices, including a robustness statement from the CFO, analysis of base budget movements, and details of Reserves and Balances.

 

The Capital Strategy report was a requirement of the Prudential Code for Capital Finance in Local Authorities. The aim of the strategy was to give an overview of the long-term context in which capital expenditure and investment decisions were made and to highlight the consideration given to risks and rewards as well as the achievement of Council priorities.

 

Recommendations by Cabinet would be considered at Full Council on 2 March 2023 as Full Council was responsible for setting the overall revenue and capital budget framework.  At that meeting the Council Tax for 2023/34 would also be set.

 

The Chair of the Business & Finance Scrutiny Committee presented the Scrutiny Committee’s response to the proposals. The Committee thanked officers for their work in completing the budget and noted that no opposition budget had been received. The majority of scrutiny Members had supported the proposed freeze on the general council tax levy and the proposal to increase the adult social care levy by 2% as assumed by central government. Scrutiny had noted the one year financial settlement from government and the high levels of uncertainty around this.

 

Cabinet Members welcomed the report and expressed their disappointment that central government had not delivered the two year financial settlement that had been proposed. Cabinet Members welcomed the proposals to not increase the main portion of Council Tax, and to only apply to 2% Adult Social Care Precept as assumed by central government.

 

Cabinet Members noted discussed that the proposals meant that the Council would continue to have one of the lowest Council Tax demands in the country, yet the Council continued to deliver high quality services for residents.

 

The Leader of the Liberal Democrat Group noted the uncertainty regarding the financial settlement and raised his concern regarding this.

 

The Leader of the Conservative Group stated that the Council had choices on what to spend its resources on, however, noted the issues that were having a world-wide impact, such as coronavirus and the war in Ukraine.

 

 

RESOLVED to: -

 

a)    RECOMMEND TO COUNCIL the following:

a.    The Medium-Term Financial Strategy (MTFS) for 2023/24 – 2026/27 and the budget framework for 2023/24 set out in this suite of reports;

b.    The second year of the freeze of the general Council Tax level announced last year;

c.    The application of the Government’s 2% Adult Social Care Precept in 2023/24;

d.    The net investment of a further £7.26m into Adult Social Care in 2023/24;

e.    The budget savings listed in Appendix 10 of the report totalling £7.931m in 2023/24;

f.     The continuation of work with partner organisations, including Town & Parish Councils and Voluntary Sector and Community Groups to seek to identify ways to mitigate the impact of some of the cuts to services that we can no longer afford to deliver and to note the availability of the Invest to Save / Capacity Fund which is available to support partnership working;

g.    The base budget in Appendix 8 of the report;

h.    The policy framework for Reserves and Balances and their planned use outlined in Appendix 6 of the report;

i.     The Risk Register included at Appendix 14 of the report;

j.     The endorsement of the Council Tax Reduction Scheme, a link to which is included with Appendix 16 of the report, for adoption by Full Council on 2 March 2023, ready for implementation from 1 April 2023;

k.    The continuation of a Council Tax Reduction Hardship Assistance Policy including an addendum for 2023/24, also within Appendix 16 of the report;

l.     The revenue implications of the medium-term capital programme for the period 2022/23 – 2026/27 set out in the Capital Strategy and Programme reports also on this agenda;

m.  That Authority be Delegated to the Director: Finance & Human Resources, after consultation with the Cabinet Member: Finance, Governance & Customer Services, to action any virements required following the final allocation of the Dedicated Schools Grant and other Grants and following completion of the NNDR1 and final estimates of Business Rates Income;

n.    That Authority be Delegated to the Executive Director: Adult Social Care, Health Integration & Wellbeing, after consultation with the Cabinet Member: Adult Social Care & Health, Integration and Transformation, to enter into appropriate Section 256 and Section 75 Agreements under the NHS Act 2006 (as amended);

o.    The Director: Policy & Governance be authorised to execute all necessary contract documentation including the affixing of the common seal of the Council as appropriate to enable the Council to enter into appropriate Section 256 and Section 75 Agreements under the NHS Act 2006 (as amended);

p.    This suite of Medium-Term Financial Strategy reports as the Council’s Efficiency Strategy for 2022/23 and 2023/24, including the document at Appendix 13 of the report, to enable new capital receipts to be used to fund the revenue costs of transformation and efficiency projects as assumed throughout these reports;

q.    That Authority be Delegated to the Director: Finance & Human Resources, after consultation with the Cabinet Member: Finance, Governance & Customer Services, to amend the use of balances in 2023/24 and to make any other associated adjustments to accommodate any difference in funding between that currently assumed and final grant allocations when received;

r.     That Authority be Delegated to the Director: Finance & Human Resources, after consultation with the Cabinet Member: Finance, Governance & Customer Services to make changes to the Medium-Term Financial Strategy with immediate effect to reflect all grants received from Government with authority to incur associated spend;

s.    The Pay Policy for 2023/24 included as Appendix 17 of the report;

t.     The application of a 100% Council Tax premium to second homes from 1 April 2024 and that the premium of 100% on long-term empty homes should be applied after 12 months rather than 24 months from 1 April 2024 provided that the necessary legislation is in place by that date and that Authority be Delegated to the Director: Finance & Human Resources, after consultation with the Cabinet Member: Finance, Governance & Customer Services, to finalise the detailed policies required;

u.    The additional recommendations contained in the other reports included in this suite of Medium-Term Financial Strategy reports included on this agenda;

v.    the Capital Strategy for 2023/24 be approved;

w.   the Medium Term Financial Strategy 2023/24-2026/27: Capital Programme Report and associated capital estimates for 2022/23 and 2023/24 to 2026/27, which incoporates the Capital Programme (Appendix A of the report), the Planned Building Maintenance Programme (Appendix B of the report) and the two year Highways and Transport capital investment programme (Appendix C of the report) be approved;

x.    the planned building capital maintenance programme for 2023/24 be approved;

y.    the planned Highways and Transport Capital investment programme for 2023/24 – 2024/25 be approved;

z.    that responsibility be delegated for agreeing any variations or changes to schemes in the capital programme that remain within overall approved budget limits to the Director: Neighbourhood & Enforcement Services, in consultation with the Cabinet Member: Neighbourhood Services, Regeneration & The High Street and the Cabinet Member: Housing, Enforcement & Transport;

aa.  the Investment Strategy for 2023/24 be approved;

bb.                 the treasury management activities to 31 December 2022 (Appendix A of the report) be noted;

cc. the Treasury Strategy 2023/24 (Appendix B of the report), including the Annual Investment Strategy, together with the Minimum Revenue Provision Statement (Appendix B of the report, section 3.0, which will apply from 2022/23 onwards) and Treasury Management Prudential Indicators (Appendix Bii of the Report) be approved;

dd.                 the Treasury Management Policy Statement (Appendix B, section 4.0 of the report) be noted;

ee.  the prudential indicators proposed in the 2023/24 Prudential Indicators report be approved.

 

b)   The following be noted:

a.    The initial projections for the potential budget gap included in this report through to 2026/27 and that these will continue to be update as additional information becomes available and that work will commence to identify options for how the future budget gaps can be bridged;

b.    The CFO’s robustness statement in Appendix 15 of the report;

c.    The very high level of uncertainty relating to the medium-term financial outlook for the Council due to:

·         National and International economic pressures resulting in an extremely challenging financial outlook for UK public services;

·         Rapidly rising costs including energy, food and interest rates which place pressure on the Council’s own budgets;

·         The impact of rising interest rates, the highest levels of inflation for 40 years and a potential economic recession on our residents and businesses resulting in the Council declaring a cost-of-living emergency at Full Council on 10 November 2022;

·         The cost-of-living emergency resulting in escalating demand for many Council services adding to the financial pressures facing the Council;

·         The Government’s one-year provisional Local Government finance settlement not extending beyond the end of March 2024;

·         The significant potential changes to the Local Government finance system which have now been discussed by the Government for many years are now unlikely to be introduced before the next general election but remain a major uncertainty, as does the potential impact of Adult Social Care funding reforms which have been delayed until October 2025.

d.    That this high level of uncertainty requires the Council to retain flexibility by limiting new ongoing investments to our highest priorities whilst identifying additional budget savings to ensure a balanced budget for next year and over the medium term;

e.    The considerable level of uncertainty together with local elections due in May 2023, which may result in a new Administration with a new mandate, combine to make it appropriate to set only a one-year detailed budget for 2023/24 within the wider context of this overall Medium-Term Financial Strategy.