Agenda item

Medium Term Financial Plan 2023/24 to 2024/25

To submit a report by the Director of Function (Resources)/Section 151 Officer.

Minutes:

The report of the Director of Function (Resources)/Section 151 Officer incorporating the Council’s requirement to put in place a robust system to monitor and control its revenue budget and a key element is a Medium Term Financial Plan was presented for the Executive’s consideration.

 

The Director of Function (Resources)/Section 151 Officer reported that this is usually a three year Plan but due to the uncertainties it was not considered that an estimate for 2025/26 would be of any value, given that it would require a significant number of assumptions to be made, with little or no evidence to support them.  An update on the UK economy and the Government’s economic strategy was provided to Members.   He referred to the main budget pressures facing the Council over the term of the plan as can be seen at 5.2 within the report i.e. Pay increases – non-teaching and teachers pay; Local Government and Teachers’ Pension Contributions; Major Service Contracts; Energy Costs; Elderly, Nursing, EMI and Residential Care Home Fees; Domiciliary Care Contract; Children’s and Adults’ Services; Homelessness; School Transport; Council Tax Reduction Scheme; Capital Financing Charges and General Price Inflation.  The Director of Function (Resources)/Section 151 Officer said that the indicative all Wales Settlement of a 3.6% increase in funding, previously announced by Welsh Government will not be sufficient to fund the financial pressure the Council is facing due to inflation and increasing demand for services, in particular Social Care and Homelessness.

 

The Director of Function (Resources)/Section 151 Officer reported that the initial estimate show that the Council’s budget will increase from £158m to around £176m, which is an increase of 11.5%.  Reference was made to Table 3 of the report which highlights the impact on Council Funding for Changes in AEF and Council Tax for 2023/2024 and shows that a 10% increase in both Welsh Government funding and Council Tax would be insufficient to fund the estimated budget requirement for 2023/2024.   The Council holds general balances to have sufficient funding to meet any unexpected expenditure which may arise during the year which now stands at £11m with £23m in the earmarked reserves. He noted that the Council does have some capacity to use general balances and reserves to help reduce the funding gap, but using reserves has risks in so far as they are not a recurring sources of income and using reserves does not eliminate the need to bridge the funding gap in the long term. 

 

Councillor Ieuan Williams, in the Chair, said that he considered that an Elected Member Briefing Session needs to be arranged to discuss the Medium Term Financial Plan and to highlight the pressures on the budget that Council will faced due to the uncertainties in the global economy.

 

It was RESOLVED:-

 

·      That the Council is required to put in place a robust system to monitor and control its revenue budget, and a key element of that system is a Medium Term Financial Plan (MTFP). The plan sets out the Council’s budget strategy over the next two year period and sets out the assumptions which will be taken forward to the annual budget setting process;

·      to note the contents of the plan, to approve the assumptions made and to consider how to bridge the funding gap identified in the report as part of the process to set the 2023/24 revenue budget as detailed in Appendix 1 of the report.

 

Supporting documents: