Agenda item

Report E/20/16 asks the Executive to agree that, subject to consultation with Policy Review Committee, the revised estimates for 2020/21 and the Medium-Term Financial Strategy be submitted to Council for approval.

The Executive Lead Member for Finance and Resources presented the report which asked the Executive to submit to the Council for approval the Revised Estimates for 2020/21 and the Medium-Term Financial Strategy, subject to consultation with the Policy Review Committee.

The Executive Member explained that the report presented a revised Budget for 2020/21 and an update to the Medium-Term Financial Strategy (MTFS), covering both the General Fund and Housing Revenue Account (HRA) prior to consideration by Council later in September 2020.

Members acknowledged that Covid-19 had, and continued to have, a significant impact on the Council’s finances. As at the end of July 2020 the full year forecast for 2020/21 totalled £3.8m. The key assumptions that underpinned the strategy had been updated, and the Policy Review Committee would be consulted prior to Council consideration.

The Executive Member explained that the MTFS highlighted further delays to the Fair Funding Review and the reform of the Business rates Retention system, as a result of Covid-19. It is assumed therefore that the settlement for 2021/22 would be another roll-forward, which could result in a further year of the renewable energy business rates windfall. Should the Local Government Finance Settlement be announced early, any necessary changes would be incorporated into the draft Budget as part of the process during the autumn.

Members noted that the MTFS identified risk and uncertainty around business rates retention, on-going reductions to Government funding, wider economic uncertainty at the prospect of a no-deal Brexit and local government re-organisation on the back of a potential devolution deal. In spite of the uncertainty, the MTFS confirmed the Council’s strategic approach to continuing to invest ‘one-off’ or finite resources to stimulate local economic growth and achieve sustainable income through Council Tax and Business Rates growth, whilst reducing its base revenue budget.

The Executive were informed that the MTFS also set out the Council’s reserves strategy which sought to set aside sums to cover known commitments and cover financial risk, as well as earmarking resources to support delivery of the “Council Plan”.

The Executive Member also explained that following the district elections in May 2019, a number of emerging cost pressures had been identified which would, if they materialised, increase the requirement for on-going savings. Some resources were available from the Business Rates Equalisation Reserve to support in the shorter term, although a top-up of this reserve was required.

The Committee understood that the progress against savings targets had been delayed as a result of Covid-19 and therefore additional drawdown from the Business Rates Equalisation Reserve was expected. Based on the assumptions within the MTFS, the savings requirement was estimated to rise to between £2.4m and £2.9m over the next 3 years. With savings of £848k p.a. already planned, a further £2m would need to be identified.

The Executive accordingly proposed, seconded and unanimously agreed the recommendation set out in the report before them.

RESOLVED:

The Executive agreed that, subject to consultation with Policy Review Committee, the Revised Estimates for 2020/21 and the Medium-Term Financial Strategy be submitted to Council for approval.

REASON FOR DECISION:

To reflect the latest financial issues within the budget for 2020/21 and to set the framework for the 2021/22 budget and Medium-Term Financial Plan to 2023/24.