Issue - meetings

Medium Term Financial Strategy (MTFS) - Forecast 2019/20

Meeting: 25/09/2018 - Cabinet (Item 226)

226 Medium Term Financial Strategy (MTFS) - Forecast 2019/20 pdf icon PDF 94 KB


As detailed in the recommendation.


The Chief Executive introduced the Medium Term Financial Strategy (MTFS) – Forecast 2019/20 report which was the first report outlining the financial picture for 2019/20.


            Two Member Budget Workshops had been held in July and one in September where Members were provided with updated information on the latest local financial forecast in the context of the national picture.


            The Council would need to identify efficiencies of £13.7m to balance the budget for 2019/20, with £13.1m needed on a recurring basis.  The strategic budget solutions had been developed in the three areas of corporate, service and national solutions and were summarised in Table 3 in the report.


            The Welsh Local Government Association (WLGA) was working with all 22 Councils in Wales to make the case to Welsh Government (WG) for an uplift in Revenue Support Grant (RSG) to meet critical funding needs.  After taking into account efficiencies identified to date, and with an estimated hypothetical Council Tax increase of 4.5%, the Council would need a minimum increase in its RSG of 3%.  This could rise to an estimated 4% to be able to meet the anticipated shortfall in funding for the additional teachers’ pay award and pension costs.


            He emphasised the risks associated to the teachers’ pay award which would add a further £1.9m to the forecast, which was not included currently included, as it should be a nationally funded cost pressure.  The UK Government had recently announced that there would be some funding available to Wales to meet the costs of the teachers’ pay award in 2018/109 and 2019/20, however it was estimated that this would only meet approximately half of the estimated costs.  Negotiations were ongoing with WG on the funding of the remaining costs. 


In addition, there was a likelihood that teacher pension employer contributions could rise significantly in 2019/20 which would further significantly impact on costs.  The rise could be up to 7% which would result in a substantial pressure.  A solution to fund the pressure was being looked into by the Local Government Association from 2020/21 however that would leave a potential remaining gap of 7 months where funding would be required.


The Provisional Welsh Local Government Settlement would be received on 9th October with the final Settlement on 19th December.  The date of the Chancellor’s Autumn Statement was to be announced but was expected to be in December.


The Corporate Finance Manager provided full details of the information contained within the tables in the report on the projected gap, pressures included in the forecast and strategic budget solutions.


Members expressed their concerns on the risks relating to teachers’ pay award and teacher pension employer contributions, commenting that such things should be funded nationally and not locally.


Councillor Shotton commented on the amount of work that had been undertaken to identify the considerable efficiencies over recent years. However, those local solutions were not enough and national ones were needed.  He said it would be a failure of UK Government if it did not meet  ...  view the full minutes text for item 226