Issue - meetings

Medium Term Financial Strategy

Meeting: 13/07/2015 - Corporate Resources Overview & Scrutiny Committee (Item 19)

19 Medium Term Financial Strategy pdf icon PDF 99 KB

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            That the report be received and noted.                                              




The Chief Executive introduced a report to present part one of the latest revision of the Medium Term Financial Strategy (MTFS) which set out the financial forecast for the Council for 2015-2018. 


                        He commented on the recent Member Workshop on the Medium Term Financial Plan (MTFP).  There was currently no indication of the amount of the Revenue Support Grant (RSG) that the Council would receive for 2016/17 and this, and the budget gap, would be considered as part 2 of the Strategy.  The period of the Plan was for three years from 2015/16 to 2017/18 which would take the Council to the end of the first year of its new electoral cycle with the next local elections due in May 2017.  The Chief Executive added that following the Welsh Government (WG) elections, it may be possible to consider a five year plan.  It was anticipated that there would be a significant gap in funding for 2016/17 and at this stage, the Council did not have a set of options to close the gap.  The Chief Executive commented on the amount of funding that had been allocated to the Health Service. 


                        The Corporate Finance Manager advised that the projected ‘gap’ for 2015/16 to 2017/18 was £52.8m and reiterated the comment that there was uncertainty over the funding from WG.  The figure of £52.8m was based on an assumption of 3.5% reduction in the RSG but a 1% difference on this could result in a shift of £2m.  Expenditure consisted of national, local and workforce pressures along with inflation and income was received from the RSG and Council Tax.  The Corporate Finance Manager commented on an additional workforce costs which were accumulating. 


                        The Leader of the Council & Cabinet Member for Finance said that the magnitude of the cuts that the Council faced was significant.  It was important that Members had an understanding of the impact of 30% cuts in each department which could increase depending on the level of ring-fenced funding for Education and Social Care.  He expressed significant concern that the Council would not be able to provide a balanced budget without undertaking extremely difficult and unprecedented reductions in services. It was also anticipated that the RSG settlement figure would not be known as early as it had in previous years.  If the details were not known until early February 2016 as had been suggested, this would create significant difficulties in terms of the timeline for setting the budget. 


            Councillor Ron Hampson asked about the Council’s assets and whether the best price was being achieved.  The Chief Executive indicated that the Council had an Asset Strategy and that some assets were being retained as they generated an income for the Council.  He reminded Members that a capital receipt from the sale of an asset could only be received once and that capital receipts were used to co-fund the capital programme and not annual revenue expenditure.


                        Councillor Richard Jones felt that the details contained in the strategy was a predictive forecast and  ...  view the full minutes text for item 19