Agenda item - MEDIUM TERM FINANCIAL STRATEGY 2025-30

REPORT OF THE SERVICE DIRECTOR – RESOURCES

To consider the Medium Term Financial Strategy.

RESOLVED:

(1) That Council agreed the adoption of the Medium-Term Financial Strategy for 2025-30, as attached at Appendix A.

(2) That Council noted that the development and implementation of savings proposals were needed by April 2026 in order to start addressing the forecast shortfall in 2026/27 onwards.

(3) That Council instructed the Executive Member for Finance and IT to prepare a range of feasible, quantified savings options including the increased use of shared services.

(4) That engagement would take place with the Opposition Group Leaders and Finance leads on the process and specific options for any public budget consultation by June 2025.

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 2025/2026 to 2029/2030, culminating in the setting of the Council Tax precept for 2025/26 in February 2025. Alongside the Council Plan, this will support the Council in setting a budget that is affordable and aligned to Council priorities.

Audio recording – 3 hours 21 minutes 50 seconds

The Leader of the Council, Councillor Daniel Allen presented the referral from Cabinet and stated that:

· The Medium Term Financial Strategy (MTFS) was a guide to help the business planning process and would be used when setting the budgets for 2025-26 and beyond.

· Ideally the MTFS would be for a period longer than 5 years however, due to many funding uncertainties, this strategy was for the next 5 years. The strategy may be amended should further funding information be obtained.

· The Council could only deliver those projects that were affordable as stated in the Council Plan.

Councillor Ian Albert, Executive Member for Finance and IT presented the report ‘Medium Term Financial Strategy 2025-30’ and stated that:

· The report focussed on expenditure, income and funding, due to the funding uncertainties, the strategy was only for 5 years.

· There was a pay award pending with no current agreement.

· The budget for 2025-26 would be set in February 2025, and was likely to include the use of reserves.

· The Council had higher than expected treasury returns and excess retained business rates, which would help balance some of the 2025-26 budget.

· There would be a public consultation in Summer 2025 on spending priorities with the information being used to help form the budgets for 2026-27 and 2027-28.

· The Council had an excellent record with its shared services.

· There were uncertainties regarding future government funding.

· The Local Government Association had been lobbying for additional funding and for spending reviews.

· There was a need to make significant savings over the 5 years.

· The majority of the budget was spent on delivering statutory services.

· The strategy included how the budget was set and the pressures and options used when prioritising spending.

· Councillor Paul Ward had proposed amendments to the recommendation which had been published as a supplement. Two of those - A and B had been accepted.

· The third amendment recommendation C proposed by Councillor Ward highlighted the importance of cross party working to deliver the best outcomes for the residents.

· Savings were not about cutting crucial services.

· There were difficult financial decisions to be made and this policy was a step in the right direction.

· Work would be required on an ongoing basis to balance budgets and generate income.

· There would be a review of parking charges and the costs for collecting garden waste.

· The Council Tax Reduction Scheme (CTRS) had been more successful than anticipated and had cost more than forecasted, in the long term this would need to be reviewed.

· Working was ongoing to improve staff recruitment and retention.

· The new waste collection contract had been awarded and thanks were given to Councillors Amy Allen and Tom Tyson and Officers, for their hard work.

Councillor Ian Albert accepted the additional recommendations A and B that Councillor Paul Ward had proposed as published as a supplementary document.

Councillor Ian Albert subsequently proposed an alternative to recommendation C to read ‘to engage with the Opposition Group Leaders and Finance leads on the process and specific options for any public budget consultation by June 2025’.

Councillor Paul Ward accepted the amended recommendation.

N.B Councillor Ruth Clifton left the Chamber at 22:55 and did not return, Councillor Bryony May left the Chamber at 22:58 and did not return.

The following Members took part in debate:

· Councillor Paul Ward

· Councillor Ralph Muncer

Points raised in debate:

· The MTFS was very detailed and highlighted an unsustainable financial future.

· Savings of £1.8M were required in 2026-27 and £2.5M for years 2027-28 onwards.

· The savings equated to 12% of the predicted budget.

· There had been a 46% decline in funding since the 2010s.

· Forming a Hertfordshire Unitary Authority would deliver savings.

Councillor Ian Albert proposed and Councillor Daniel Allen seconded and, following a vote, it was: