Agenda item

Budget 2023/24 Medium Term Financial Strategy (MTFS)


That having considered the Medium Term Financial Strategy and Budget 2023/24 report, the Committee confirms that there are no specific matters to be reported back to Cabinet when it considers the report on 12 July.


The Chief Executive and Strategic Finance Manager (Strategy and Insurance) presented a report on the first stage of the Medium Term Financial Strategy and the budget requirement for 2023/24.  The report set out the revised forecast prior to cost pressures and efficiency proposals being reviewed by Overview & Scrutiny committees and Member workshops during the Autumn.


The updated forecast indicated a minimum budget requirement of an additional £16.503m of revenue resources for 2023/24, which excluded the impact of the outcome of the pay modelling exercise to be undertaken in 2022/23.  Whilst indicative funding figures for 2023/24 and 2024/25 had been provided as part of the 2022/23 Local Government Settlement, these were at a considerably lower level than the previous two years and would increase the amount to be met from other sources.  There were significant challenges in the economic outlook, with inflation estimates on energy and fuel highlighted as a key risk likely to increase the forecast.  Other cost pressures related to changing service demands mainly within Education & Youth and Social Services.


A further risk remained around the outcome of national pay awards for 2022/23 where any increases above the budgeted 3.5% uplift would mean utilising reserves in year, and would also add an additional pressure to the forecast for 2023/24.


The cost pressures were categorised in section 1.04 of the report and Members were advised that figures were likely to change over the Summer as further information was received and reviews continued.


The Chief Executive said that the report summarised work undertaken to date on presenting the first forecast for the budget requirement for 2023/24.  He said that the volatility of the current economic situation created more challenges in financial planning and that officers were continuing to work through the detail to refine the forecast.


Councillor Paul Johnson spoke about significant risks on the impact of inflationary and energy increases on which the Council had no control.  In highlighting the need to consider the impact of decisions on future years, he reiterated core principles in decision-making ensuring that the Council continued to meet its statutory duties and upheld quality standards.


As one of the main risks, Councillor Ian Roberts referred to the potential unfunded impacts of nationally agreed pay awards for teachers and non-teachers in 2023/24.  He spoke about challenges in Social Services including out of county placements where the Council was working to re-establish itself as a provider of direct care and exploring regional options.


In raising a number of questions, Councillor Alasdair Ibbotson pointed out that not all the pressures included a range of variances.  The Strategic Finance Manager explained that as work was continuing, an update on all the variances would be shared at the September workshop.  In answer to the question regarding a new post in Streetscene Enforcement shown on the appendix to the Cabinet report, it was confirmed that this was due to a new post approved as part of the budget in 2022/23 part of which was time limited.


In response to Councillor Ibbotson’s query about the lack of medium-term forecasted financial pressures on carbon reduction, the Chief Executive explained that this would be reflected in the development of the Capital Programme on which work was underway, as well as the Asset Management Plan which was due to be considered in September.


On the summary of pressures, the Chairman considered the national resolution pressures, national funding requirements and strategic decisions to be key risks as they were generally outside the control of the Council.  He suggested reiterating to Welsh Government (WG) that councils should not be expected to increase Council Tax to address pressures involving national decisions.


When asked about predictions for low/medium/high variances to the forecast, the Chief Executive said there was no certainty at this stage due to volatility and that even a small percentage increase could greatly affect the budget position.  The Strategic Finance Manager agreed and gave assurance that more detail on all cost pressures would be provided to Overview & Scrutiny committees.  As requested by the Chairman, she would provide a summary of movements of the forecast since the report to County Council in February.


The Chairman asked about service reform changes referenced in the report and was advised that the outcome of a review across portfolios would be shared at the Member workshop in September.


The recommendation was moved and seconded by Councillors Richard Jones and Jason Shallcross.




That having considered the Medium Term Financial Strategy and Budget 2023/24 report, the Committee confirms that there are no specific matters to be reported back to Cabinet when it considers the report on 12 July.

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