Agenda item

The Council's Medium Term Financial Plan was approved for the period of 2025/26 - 2027/28.

Commission the Chief Executive to establish and lead on ranges of work packs and measures, as outlined in part 4.6 of the report, to prepare for addressing the significant gap in our budget over the next three years.

The report was submitted by Cllr. Paul Rowlinson.

DECISION

The Council's Medium Term Financial Plan was approved for the period of 2025/26 - 2027/28.

To commission the Chief Executive to establish and lead on a range of measures and work packages, as outlined in part 4.6 of the report, to pre-prepare for dealing with the significant gap in our budget over the next three years.

DISCUSSION

The report was submitted to the Cabinet following the financial challenges that faced the Council, to be proactive to plan to deal with the financial squeeze.

It was explained that finding cuts in the Council's budget and services was not a new process as cuts had been presented annually for 18 years. It was commended that the Council had managed to maintain services despite the reduction in the departments' budgets but the need to bring some services to an end in the future was acknowledged.

It was confirmed that the budget for this year was set and a significant lack of Council income by 2027/38 was anticipated therefore, work was underway to try and fill the gap through a factual plan. Emphasis was given to the fact that the assumptions were based on information of recent years, and it was a preliminary plan to address the medium- term budget.

Reference was made to the summary of the plan by noting that it elaborated on the known factors that impacted the Council's financial situation during the medium-term (between 2025/26 until the end of 2027/28). It was detailed that inflation was anticipated on the salaries of Council staff in addition to the prices of goods, as well as the increase of levies impacting the Council's budget within this period. However, it was emphasised that there was no agreement to increase salaries with the unions at present.  Emphasis was also given to the fact that there was no detailed consideration given to adapt the Council tax levels, and that any adaptions would need the approval of the Full Council. It was noted that officers had anticipated an increase of 5% within the plan to address this risk for the budget, but it was anticipated that the increase to salaries would be less than that rate.

It was explained that the rate of inflation that was used in the Plan was based on the outlook of the Bank of England and advice by Arlingclose company, which were the Council's treasury advisers.  It was noted that the officers had based the anticipated inflation rate at 2% for the number of years in the medium term to plan to address that gap. It was acknowledged that an annual demand for an additional budget above inflation in some fields and it was anticipated that there would be a need for £3 million a year to deal with this demand. It was emphasised that it was a prudent provision, not an expenditure target and any financial bid would receive careful consideration.

It was reported that the Plan suggested a financial gap of £36,000k (before considering any Council Tax increase and savings that were already identified) during the medium term based on assumptions and objectives. It was confirmed that the hope was to present various options on the next steps in the future and the need to find a balance between maintaining services and adapting the levels of Council tax was noted. The Cabinet’s permission was requested to research all the departments' services to draw up options and Members were asked to give detailed consideration to their departments' services in consultation with the relevant officers.

It was emphasised that there was a need to be considerate of Council staff well-being when moving towards the future, especially those staff who deliver statutory services on behalf of the Council, by ensuring that clear communication continued with all staff. The three step procedure was outlined and submitted to try and protect statutory services:

1.    Get expenditure in order, by freezing expenditure in some fields and receive early warnings if some services overspend early in the year.

2.    It was intended for every Department to come before the panel of members and officers to go through each activity of those in their departments' teams, their costs, the impact and the impact of bringing the services to an end. It was noted that those meetings' results would be shared with the Cabinet. ⁠It was confirmed that every effort would be made to prioritise on the basis of risk and the residents' needs.

3.    To ensure consideration in every aspect and equivalent to ensure that no stone was left unturned.

Frustration was expressed that the Government was not likely to increase the grant settlement total because that would be of huge benefit to fill the gap in the Council's budget.

The Finance Department was thanked for their thorough work whilst preparing the report.