Agenda item

To consider the three year projections of income and expenditure for the Council ahead of formulating its 2025/28 Revenue and Capital Budgets.

Recommended                     -   That consideration be given to the report.

The Portfolio Holder for Resources, Councillor Alexander, submitted a report giving the Council’s Medium Term Financial Position for 2025/26 to 2027/28.  The report had been submitted to Cabinet on 12^th February 2025 and the report and the accompanying Medium Term Financial Strategy as set out in the report, had been approved. 

The Strategy was appended to the report and set out the three year projections of income and expenditure for the Council ahead of formulating its 2025/28 Revenue and Capital Budgets.  The Strategy provided a summary of the main issues taken into account when setting the budget including:-

-        The continuation of delivering the Council’s major capital projects including Levelling Up/Town Centre regeneration, Leisure transformation and securing funding to facilitate the development of over 1,800 new homes at Huncoat.

-        The consequence of both national and global issues. 

-        The Council’s own financial position including inflationary pressures and energy costs.

-        The financial forecasts over the next 3 years including the uncertainty around the impact of any Government Financial reforms and increased pressures on spending or other financial challenges which could create a significant variance around the forecast.         

As a consequence of the issues raised above, there is a real possibility that Government funding would continue at current levels over the next few years and therefore, this would present the Council with two very different future budget scenarios.  These scenarios are modelled in the report with the most severe scenario being the Pessimistic model and the other the Standard model.  A third model was also presented, the Optimistic model, which was provided should the Council’s financial position be boosted with a cash injection from the Government, although this was considered very unlikely. 

The appendix attached to the report also provided more detail on:

·        Elements of the MTFS

·        Background

·        Resources

·        Government Grant

·        Council Tax

·        Business Rates

·        Changes in Costs

·        Budget Pressures

·        Capital Costs

·        Growth

·        Reserves

·        Other Assumptions

·        Scenarios and Scenario Breakdowns

·        Robustness of the Forecast

·        Overall Net Position

·        Details of each of the 3 scenario models

Members submitted two questions in advance of the meeting, in respect of finding out more about when Local Government Reforms were likely to take place and the impact on the Council and how the Council was able to plan when there was uncertainty around Government plans in respect of the amount of business rate income retained by Local Government.

Members were informed of the Government’s intention to redress the imbalance of funding and minimise future uncertainty by introducing multi year settlements and that the Council had considered its options around positive and negative impacts by producing the 3 model scenarios: Optimistic, Pessimistic and Standard.  The Committee was also informed that the Council could not plan financially, with certainty, until Government reform plans had been revealed.

Members also raised the following issues:

·        Use of Mercer Hall

·        The new food waste service and waste transfer costs and site.

·        Financing of grass cutting

Responses were provided in respect of provision of funding for these items.

Cabinet recommended that the report and accompanying Medium Term Financial Strategy was approved.

Resolved                               -  That the report be received and noted.