Agenda item

To consider the Medium Term Financial Strategy.

Councillors S Duckett and J Mackman left the meeting at this point and did not return.

The Lead Executive Member for Finance and Resources, Councillor Lunn, introduced the item which asked the Council to consider and agree the recommendations as set out in the report.

Members acknowledged that the report presented an update to the Medium-Term Financial Strategy (MTFS) covering both the General Fund and Housing Revenue Account (HRA). 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 reorganisation (LGR) in North Yorkshire.

The Council were informed 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 reorganisation 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 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’.

Members noted that the savings requirement was estimated to rise to £2.8m within the next 3 years, although this was very much dependent upon future local government finance settlements. The worst case showed the gap rising to nearly £4m over the next 3 years. Additionally, given on-going Covid and local government reorganisation, 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 proposed that £11.9m be held in the Business Rates Equalisation Reserve for this purpose, with £8m available for alternative use.

The report also detailed 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 also presented the opportunity for further service transformation and efficiency.

The General Fund and HRA capital programmes had been reviewed to ensure they were deliverable, and some reprioritisations were proposed, including withdrawal of the General Fund housing development programme and extension of the HRA to ensure maximisation of s106 spend.

Members understood 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. In addition, a further £8m was proposed for release from the Business Rates Equalisation Reserve to the Programme for Growth from 2021/22, and following discussion at the Executive meeting on 8July 2021, a further £1m capital receipts. Several proposals for these funds were put forward for consideration.

The Council also acknowledged that 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 its residents. The MTFS aimed to provide financial sustainability, resilience and capacity for the Council in pursuing its objectives, ensuring its commitments were delivered and to enable a smooth transition to any new authority.

Lastly, consultation with the Policy Review Committee had taken place at its meeting on 20 July 2021; comments from the committee had been given earlier in the meeting under agenda item 10 – Reports from Committees.

Members debated the report in full and had several comments and queries; these related to the need to progress low carbon work and ensure appropriate funding for such work was available, and to consider Programme for Growth projects that may not be completed by the time the changes from LGR were implemented.

The prudent management of funds and presentation of a balanced budget over the next couple of years was emphasised by the Executive Member for Finance and Resources. The Chief Finance Officer made it clear to the Council the impact on the MTFS of the carbon reduction project budget and increasing the Community Legacy Fund investment from £1m to £2m. Members were also warned that the Council could not always rely on receiving funds from Drax power station through green energy taxes; as such, the Council should not commit to funding projects with monies it may not have.

The recommendations as set out in the report were proposed and seconded, and a vote was taken.

RESOLVED: The Council

a)    received the Executive recommendation as notice signed by five Councillors pursuant to Council Procedure Rule 18, to enable consideration of the matters at (b) notwithstanding that it would rescind a decision made by Council within the past six months; and

b)   approved

i.       the Medium-Term Financial Strategy;

ii.      the revisions to the General Fund and HRA capital programmes;

iii.    the release of £8m from the Business Rates Equalisation Reserve and £1m from Capital Receipts for the Programme for Growth;

iv.    the supported capital and Programme for Growth bids within the funds available; and

v.      delegation of the approval of Business Cases to the Chief Executive, in consultation with the Lead Executive Member for Housing, to expedite delivery of the housing delivery programme.