Issue - items at meetings - FP935 Review of Medium Term Financial Strategy

Issue - meetings

FP935 Review of Medium Term Financial Strategy

Meeting: 17/09/2019 - Cabinet (Item 41)

41 Review of Medium Term Financial Strategy (Forward Plan Reference FP935) pdf icon PDF 179 KB

Report of the Corporate Director (Resources, Environment and Cultural Services) seeking endorsement of the updated Strategy.

Decision:

The report was noted and the principles to be adopted for the 2020/21 budget setting process, approved and in particular that the 2020/21 budget setting process should focus on closing the indicative budget gap beyond next year.

Minutes:

Report of the Corporate Director (Resources, Environment and Cultural Services) summarising the review of the Strategy as the opening stage of the 2020/21 budget setting process. The report also set out the broad principles and objectives for setting the next budget and examined the key issues facing the Council in the medium term.

 

(1)       The Decision Taken

 

RESOLVED:

 

That the report be noted and the principles to be adopted for the 2020/21 budget setting process, as highlighted in section 3.3.8 be approved and in particular that the 2020/21 budget setting process should focus on closing the indicative budget gap beyond next year.

 

(2)        Reasons for the Decision

 

The Council was starting the 2020/21 budget process in a strong position, as commented on in the recent Peer Review.

 

Nonetheless, the Strategy adopted in February 2019 indicated that, at that time the Council faced the prospect of a budget gap of £1.5M in 2020/21 rising to £1.8M in 2021/22.

 

Options had since been identified to address this budget gap highlighting the potential for £700,000 of savings from resetting the baseline position, as recommended by the Peer Review. Against this, further re-phasing of the crematorium project would create an offsetting pressure of £400,000 in both years under review.

 

The Government announced a one year Spending Review on 4 September 2019. Two key positive points arising from this were the removal of the negative Revenue Support Grant for 2020/21 and the announcement of additional funding for homelessness. However, the Fair Funding Review had been deferred until 2021/22 and there remained a number of uncertainties within the Spending Review announcement for 2020/21.

 

A 1.5% increase in Council Tax for each of 2020/21 and 2021/22 was currently assumed.

 

Within the Housing Revenue Account (HRA) for 2020/21 onwards, the Government imposed rent reductions had ended and rents would now rise at Consumer Price Index plus 1% per annum. The HRA and associated borrowing would be managed to support the Council’s Affordable Housing Programme whilst maintaining working balances of approximately 5.4% of turnover.

 

The capital programme had been structured to enable delivery of the business plans for the Council and the HRA over the medium to long term. No amendment to the capital programme had been factored in at this stage for any development options that might be considered following the outcome of the Queensway House, Hatfield review.

 

A revised starting point on the budget gap would be drawn up once Officers had studied savings and growth options in more detail and further clarity was obtained on certain items within the spending review.