Issue - meetings

REPORT OF THE SERVICE DIRECTOR – RESOURCES

To consider the Medium Term Financial Strategy

RESOLVED: That the Committee note and comment on the Medium Term Financial Strategy, including the recommendations that will be made to Cabinet.

RECOMMENDED TO CABINET: That Cabinet recommends to Full Council the adoption of the Medium Term Financial Strategy 2023-28

REASON FOR DECISIONS: Adoption of a MTFS and communication of its contents will assist in the process of forward planning the use of Council resources and in budget setting for 2023/24 to 2027/28. This will support the Council in setting a budget that is affordable and aligned to Council priorities.

Audio recording – 1:27:32

Ian Couper, Service Director – Resources, presented the report entitled Medium Term Financial Strategy.

·         This report will go to Cabinet next week and will be recommended to full Council.

·         The purpose of this report is to set out forecasts of where the budget will be in future years. This is used to set a strategy of how we will manage that.

·         We now have the double impact of covid-19, which we still haven’t recovered from, and now high inflation as well.

·         A positive in the report is that we start out with a high general fund balance. We also have some other reserves which are safe to release into the general fund. This gives some mobility to smooth some bumps that may come along the way

·         Page 176 of the report covers the covid-19 impacts and we’re still going to set an amount aside in 23/24 to help with the continued recovery of covid-19. This will be roughly half the amount of the 22/23 amount.

·         Some areas are recovering well. Short stay car parks have recovered, but season tickets and long stay car parks have taken a hit in ongoing income. Leisure has recovered well but may decrease with the cost of living crisis. Recycled materials has been doing well as mentioned in the last report and there has been some provisions made for future years as it is highly varied

·         There is a section looking at the impacts of inflation. We have costs of providing our contractor services, pay inflation for staff, policies around fees and charges, eligibility for Council Tax Reduction Scheme (CTRS), and the interest rate increases.

·         We are looking at just under 10% increase in waste contracts moving into this current year – May 2022. There has been a forecast of a similar increase for next year. The increase this year has been driven primarily by fuel inflation. We are expecting this to go back to normal levels from May 2024 and settling around 2%.

·         Pay inflation is the offer from employers to the unions. There is a forecast of another 4% increase in 23/24. This could be a fixed rate for all rates or it could be more evened out. By 24/25 we may get back to more normal rates at around 2% inflation.

·         With the inflation, our old policies around fees and charges no longer work. We are looking at what to model here. This is linked to staff costs in terms of the cost of providing those services. We are looking at increases of around 4%. It is fair to continue with a cost recovery basis for our fees and charges and therefore modelling a 4% increase on those.

·         In some areas we have previously made decisions to keep those fees and charges at a different rate, this is for parking and the garden waste charges which is currently paid at a 2% increase per year so the modelling assumes this will continue

·         We think that the market can  ...  view the full minutes text for item 53