Agenda item

At its meeting on 29 November 2023, the Executive Committee considered the Medium Term Financial Strategy 2024/25-2028/29 and RECOMMENDED TO COUNCIL that it be ADOPTED.

74.1           At its meeting on 29 November 2023, the Executive Committee considered the Medium Term Financial Strategy 2024/25-2028/29 and recommended to Council that it be adopted.

74.2           The report which was considered by the Executive Committee had been circulated with the Agenda for the current meeting at Pages No. 28-50.

74.3           As Chair of the Executive Committee, the Leader of the Council proposed the recommendation of the Executive Committee and it was seconded by the Lead Member for Finance and Resources.  The Leader of the Council indicated that Members would be well aware of the financial challenges faced by all local authorities and Tewkesbury Borough Council, having a particularly low Council Tax, was no exception to this.  It was important to understand that, although the report referred to a budget deficit of £6.14m over the next five years, that was based upon a set of assumptions which at this point were unknown.  Many Members would have attended other sessions in the past two weeks on this key piece of financial planning for the Council, either in a stand-alone briefing, at Executive Committee or the Transform Working Group.  It was very important at this point to note the comment at Page No. 31, Paragraph 1.5 of the report, which stated that the Council was not in immediate danger of a S114 notice being required and that the next two budgets looked manageable as long as a range of sensible and careful decisions were made.  The Lead Member went on to explain that this was an update to the MTFS approved at Council in January 2023 and reflected the latest information and financial assumptions.  The strategy had been brought forward to set the scene for Members ahead of the 2024/25 budget round which was about to begin in earnest.  He stressed that it was merely a financial forecast and its approval did not bind the Council to anything, for example, setting Council Tax for the next five years or staffing budgets.  Local government funding continued to remain uncertain with no assurance over any funding stream in the medium term and the MTFS focused on a ‘likely’ funding scenario based on previous government communication and consultations which resulted in a £3.5m funding ‘cliff edge’ in 2026/27.  Given uncertainties, there were potentially many different scenarios – some worse but many better.  Costs had been projected forward using latest estimates of inflation and reflecting known unavoidable cost increases such as external audit and the Materials Recovery Facility (MRF) gate fee.  Whilst the Council had a £3m reserve which could support the financial challenges faced, 2026/27 going into 2027/28 looked particularly challenging based on current funding projections.  This Council, along with many others, would be reliant on the government finding a longer term solution for funding.  The Chancellor’s Autumn Statement had indicated that no additional funding would be coming forward to help local government and an article in The Times on Monday had focused on the “Council crisis being faced in an election year” which made claims that the Local Government Association had written to the Chancellor sharing that 90% of Councils would need to dip into reserves to maintain statutory services; since 2010, Council budgets had been cut by an average of 27%; and a wave of local authorities were expected to declare in 2024 that they could not balance the books – Tewkesbury Borough Council was clearly not alone in facing this and Nottingham City Council had effectively declared itself bankrupt when this item was being discussed by the Executive Committee last month; undoubtedly, more would follow.

74.4           A Member asked how this information would be communicated to the wider public and what communication strategy was proposed in that regard.  In response, the Leader of the Council advised that this question had been raised in other arenas and it had been recognised it would need to be handled sensitively.  Challenges were faced across the board after many years of austerity and there were other Councils making the point that this was not over for local authorities.  Tewkesbury Borough Council did have reserves so, whilst the position was not comfortable, it was not at immediate risk of collapse as some Councils would be facing.  The Executive Director: Resources confirmed that a press release would be issued immediately, should the MTFS be approved by Members this evening, followed up by a further press release in the New Year, with communications further built up as budget approval approached. 

74.5           During the debate which ensued, a Member commended Officers on this extremely important piece of work and felt that the rolling programme of work in terms of looking at the Council’s strategy and finances was important for residents to know that the Council took its duties extremely seriously and invested the appropriate time in assessing its position.  There was nationally recognised uncertainty and a debate about how Council services would be financed in the future whatever the political landscape.  He felt it was worth recognising that Tewkesbury Borough Council was in a position of relative strength with a sound financial position having been wise in its past judgements of not exposing the authority to risks others had in terms of investments.  The overall message in his view was that there was financial uncertainty but the Council was starting from a strong position and needed to continue to be wise in its decision making and not take risks which would benefit short term finances but expose it to greater uncertainty in the long term.  The Leader of the Council agreed that Tewkesbury Borough Council certainly had long term challenges, particularly due to the low Council Tax which dated back to the 1990s and had also been a problem for the previous administration and lost planning appeals which had cost the Council over £500,000 in the last year.  Some decisions were external and faced by all Councils but others had been made by Tewkesbury Borough Council, albeit in good faith at the time, and it was important they did not take their eye off the ball and to take care regarding finances going forward.

74.6           Upon being put to the vote, it was

RESOLVED          That the Medium Term Financial Strategy be APPROVED.