Agenda item

The report gives the Policy Review Committee the opportunity to comment on the Medium-Term Financial Strategy (MTFS).

The Committee received the report of the Chief Finance Officer which asked Members to provide comments on the Medium-Term Financial Strategy.

Then Committee noted that the report presented an update to the Medium-Term Financial Strategy (MTFS), covering both the General Fund and Housing Revenue Account (HRA) prior to consideration by Council on 22 July 2021. It considered the budget pressures and issues facing the Council over the next 3 years and beyond, in light of the on-going financial impacts of Covid-19 and local government re-organisation in North Yorkshire.

Members acknowledged that 2020/21 was a year of major uncertainty as the effects of the Covid-19 pandemic unfolded and the Government’s plans for potential re-organisation in North Yorkshire were announced. The Government’s proposals for a reviewed Local Government funding system were delayed, and once again 2021/22 was a one-year settlement. Against this backdrop of uncertainty, the key drivers for the financial strategy remained unchanged, although the level of risk had undoubtedly increased. The strategy identified a range of emerging issues, including the government’s waste strategy. The MTFS also set out the Council’s reserves strategy which sought to set aside sums to cover known commitments and financial risk as well as earmarking resources to support delivery of the “Council Plan”.

The Committee noted that, based on the assumptions within the mid-case MTFS, the savings requirement was estimated to rise to £2.8m within the next 3 years, although this was heavily dependent upon future local government finance settlements. The worst case showed the gap rising to nearly £4m over the next 3 years. Given on-going Covid and local government re-organisation (LGR), capacity was focussed on direct delivery of services and projects, and it was proposed that savings were deferred a further year to 2024/25 with reserves being used to bridge the gap in the meantime. It was also proposed that £11.9m be held in the Business Rates Equalisation Reserve for this purpose, with £8m available for alternative use.

Members were also informed that a modest level of savings was assumed over the next 3 years, but in the longer-term income generation would be key, with charging for green waste and alternative use for the Summit to be brought forward for consideration in due course. Local Government Reorganisation (LGR) also presented the opportunity for further service transformation and efficiency. As part of this refresh the General Fund and HRA capital programmes had been reviewed to ensure they were deliverable and some reprioritisations are proposed, including withdrawal of the General Fund housing development programme and extension of the HRA to ensure maximisation of s106 spend.

Officers explained that the Programme for Growth had also been reviewed, with the allocation of funds to carbon reduction work reduced to cover those elements that could be delivered within the next 2 years, with £950k available for alternative use. Additionally, a further £8m was proposed for release from the Business Rates Equalisation Reserve to the Programme for Growth from 2021/22. Several proposals for these funds were put forward for consideration, including an additional allocation to the Selby Station Gateway Project (subject of a separate report).

The Committee understood that despite the uncertainty, the MTFS reaffirmed the Council’s commitment to the people of Selby District to support the district to be a great place to live, to enjoy life and to grow, delivered by a Council whose focus was to continue to achieve the best value for money for residents. The MTFS aimed to provide financial sustainability, resilience and capacity for the Council in pursuing its objectives, ensuring its commitments were delivered and enabling a smooth transition to any new authority.

An extract from the minutes of the Executive meeting held on 8 July 2021 had been circulated to the Committee.

Members asked numerous questions of Officers and the Lead Executive Member for Finance and Resources was in attendance. The queries covered a few matters within the MTFS, including the Selby Station Gateway Project, the Council’s low carbon goals, including the potential projects and the need for a steer from the Executive on these, the use of savings and reserves, risks such as the possible loss of funds from Drax Power due to LGR, the future of the Summit Sports Centre and economic assumptions regarding interest rates and inflation.

Regarding the Selby Station Gateway, Officers explained that substantial grant funding had been received through the government’s Transforming Cities Programme, which had to be spent by March 2023, but that further funding would be required as some elements of the project would not be ready for delivery by then due to matters such as land acquisition.

The Lead Executive Member recognised the need for the Council to look more at carbon neutrality and how it had to be prioritised; however, the balancing of the budget and appropriate use of funds were also vital. Members noted that should the decision on LGR be for a single unitary authority across the whole county, the low carbon group already established by North Yorkshire County Council would take forward the information collected by Selby District Council’s Low Carbon Working Group.

The Committee accepted that decisions on the future of the Summit Sports Centre were difficult to take until it had finished being used as a vaccine centre for the pandemic, and that any changes in interest rates would have an effect on the MTFS, but a modest cap had been included on investment interest in order to mitigate this, no new borrowing was proposed and current external debt rates had been fixed for their term.

Overall, the Committee were content to recommend the MTFS to the Council for approval.

RESOLVED:

The Policy Review Committee recommended the Medium Term Financial Strategy to full Council for approval.