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Agenda item

Medium Term Financial Strategy 2020-21 to 2023-24

Minutes:

The Interim Head of Finance and Section 151 Officer presented a report, the purpose of which, was to seek Council approval of the Medium Term Financial Strategy 2020-21 to 2023-24, attached at Annex 3, which includes a financial forecast for 2020-24, a detailed revenue budget for 2020-21 and a Capital Programme for 2019-20 to 2029-30. This is dependent on Cabinet approval on 25 February 2020.

 

She advised that the allocation of budget determines the extent to which the Council’s well-being objectives can be delivered. The Corporate Plan and Medium Term Financial Strategy (MTFS) identify the Council’s service and resource priorities for the next four financial years, with particular focus on 2020-21.

 

This report was presented to Council to provide details of the Council’s Medium Term Financial Strategy for the four year period 2020-21 to 2023-24. The MTFS is complimentary to the Council’s Corporate Plan, and looks to provide the resources to enable the Council’s wellbeing objectives to be met. The MTFS outlines the principles and detailed assumptions which drive the Council’s budget and spending decisions, outlines the financial context in which the Council is operating, and tries to mitigate any financial risks and pressures going forward, at the same time as taking advantage of any opportunities arising.

 

The Interim Head of Finance and Section 151 Officer, explained that the announcement of the final local government settlement for 2020-21 was approximately two months later than previous years, due to the changing Brexit deadline and then the UK general election, and as a result this budget is being proposed on the basis of the provisional settlement received in December 2019. Whilst we do not anticipate any significant change in funding between the provisional and final settlement, how the Authority will deal with any changes, would be made clear in the Medium Term Financial Strategy and reported back to Council at a later date. It was not envisaged that any changes will impact upon council tax.

 

The report outlined the financial issues that Council is requested to consider as part of the 2020-21 to 2023-24 MTFS. The Council’s Section 151 Officer was required to report annually on the robustness of the level of reserves. The level of Council reserves was sufficient to protect the Council in light of unknown demands or emergencies and current funding levels. It must be emphasised that the biggest financial risks the Council is exposed to at the present time relate to the uncertainty of Welsh Government funding, the increasing difficulty in the delivery of planned budget reductions, as well as the identification of further proposals. Therefore, it was imperative that the Council Fund balance is managed in accordance with the MTFS Principle 9, as set out in the MTFS, and it is essential that revenue service expenditure and capital expenditure is contained within the identified budgets.

 

The Section 151 Officer was further required to report to Council if they do not believe that they have sufficient resource to discharge their role as required by S114 of the Local Government Act 1988. Members should note explained the Interim Head of Finance and Section 151 Officer, that there is sufficient resource to discharge this role.

 

The Interim Head of Finance and Section 151 Officer, then referred to the reports Appendices and gave a resume of some of these for the benefit of Members. This supporting information was a follows:-

 

  • Annex 1 – Equality Impact Assessment
  • Annex 2 – Wellbeing of Future Generations (Wales) Act 2015 Assessment
  • Annex 3 – MTFS 2020-21 to 2023-24
  • Appendix A – 2020-21 Budget Pressures
  • Appendix B – Budget Reduction Proposals 2020-21 to 2023-24
  • Appendix C – Fees and Charges proposals 2020-21
  • Appendix D – Directorate Base Budgets by service area 2020-21
  • Appendix E – Directorate Base Budgets in line with Wellbeing Objectives
  • Appendix F – Reserves and Balances Protocol
  • Appendix G – Capital Programme 2019-2030
  • Appendix H – Cabinet response to Corporate Overview and Scrutiny on Budget Issues
  • Appendix I – Corporate Risk Assessment

 

The Deputy Leader wished that his thanks be placed on record to the Interim Head of Finance and Section 151 Officer, for all the hard work they had committed, in order to ensure that the Council had set a balanced budget for 2020-21.

 

BCBC had had already reduced its services since austerity and this had equated to £68m during this time. A further £26m in savings was planned for the next 3 years he added. The Council were still intent however, on delivering high quality services whilst at the same time meeting its objectives as outlined in its Corporate Plan.

 

The Deputy Leader also extended his thanks to Members of Overview and Scrutiny Committees and the Budget Research and Evaluation Panel (BREP) and those constituents who had taken part in the budget consultation. He also thanked Welsh Government for the extra funding it had committed to local authorities such as BCBC.

 

The Council he added, as part of the MTFS, had given a financial commitment to Schools, including Special Educational Needs (SEN) and towards the recruitment of apprentices. £2m had also be committed to the Public Realm to assist in the Council’s Infrastructure and to assist the ever increasing problem with flooding due to a change in climate conditions.

 

A Member noted from the report that there were underspends in the Chief Executives Department and the Communities Directorate, the latter of which had received a considerable number of cuts to its budget during the years that formed the recession. So she questioned an under spend in a Directorate that had been subjected to such significant budget cuts in the last good few years. The Education and Family Support Directorate had  over spent, whilst the Social Services and Wellbeing Directorate had over spent by a significant amount. This is, in addition to the Directorates allocation of savings it was required to make in the next financial year. Presently in the Social Services and Wellbeing Directorate, £175k of budgeted savings do not have robust plans and are rated red, ie at present, unaccounted for. 

 

The Chief Executive responded to the question about the under and overspends from the Chief Executive directorate perspective. He explained that the under spend had arisen as a result of a combination of factors, both the inability to recruit, plus the holding of posts whilst anticipating a worse settlement than BCBC actually received. He explained that he had undertaken an exercise with Finance Officers, to identify where the vacancies were and the reason for those vacancies. Going forward a review would be undertaken to determine whether or not these posts are still required. In terms of the Communities Directorate underspend, he stated that this wasn’t that large and that it is impossible to get the spend exactly to budget. He referred to the over spend in Education and handed over to the Corporate Director - Education and Family Support who outlined the reasons for these overspend pressures in his Directorate, which related to Home to School Transport and Out of County placements as a result of demands on these services or legislative requirements, both of which it was incumbent upon the Authority to meet. The Corporate Director – Social Services and Wellbeing added that these reasons also largely applied to the overspend that had occurred in her Directorate, ie statutory demands on certain key service areas, some of which were to a degree out of her control.

 

A Member asked if there was any further updates as part of the MTFS, with regards to Community Asset Transfer in relation to Clubs, Associations and other Organisations taking over the responsibility for Sports Pavilions and Playing Fields etc, previously subsidised by the local authority.

 

The Leader advised that the Council would honour any Expressions of Interest shown by Clubs etc, in the taking over of these assets with any charges for the operation and/or maintenance of them being financially supported by the local authority. This commitment may not be given he added in terms of the long term future, but such a financial commitment had been set aside up until the next local elections.

 

Members then asked for an electronic vote to be undertaken, with a view to having a recorded vote on the recommendations of the report. Following this vote taking place, it was unanimously agreed by Council to have a recorded vote on the MTFS proposals, the result of which was as follows:-

 

   

 

   

Supporting documents:

 

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