Agenda item

Executive Member for Financial Sustainability submitted a report that set out the Medium-Term Financial Plan (MTFP) which was based on the expectation of local government experiencing a further round of austerity.

The Executive Member for Financial Sustainability talked about the assumptions that had shaped an earlier version of the 2023/24 budget and the MTFP for 2023. He said one assumption was that council tax would be applied at the maximum of £5. Members were reminded that the Autumn Statement from the Chancellor permitted an application of council tax at £5 or 2.99% and 2.99% equated to £5.50 for East Herts. The Executive Member said that this translated to an additional income of £33,000 for an additional penny a week on council tax bills.

The Executive Member for Financial Sustainability said the Head of Strategic Finance and Property had adjusted the figures in the report following the receipt of the provisional settlement just before Christmas. He said that the overall net cost of services had not changed significantly and neither had the savings target for 2023/24.

The Executive Member for Financial Sustainability referred to diligent work of the Leadership Team in producing a set of savings detailed in the report which equated to £866,000. He said the savings target for 2023/24 had been overachieved and he detailed some examples of how the savings had been achieved.

The Executive Member for Financial Sustainability said the savings taken together equated to £930,000 which was £108,000 more than the required savings target of £822,000. He said the £108,000 would be put towards the savings that would need to be found from 2024 onwards.

The Executive Member for Financial Sustainability talked about the cautious use of reserves on a temporary basis and the full detail of the timescales were in the report. He spoke at length about the capital programme and talked about the MTFP and the allowance that had to be made for the minimum revenue provision.

Councillor Huggins asked for some clarity as to how the figure of a 10% increase in local council tax support cases had been reached. The Executive Member said this prediction was based on the experience and knowledge of the Head of the Revenues and Benefits Shared Service.

Councillor Bell said the Citizens Advice Bureau (CAB) reduction in funding could result in an increase in costs elsewhere for the council where the CAB could not deal with issues due to the loss of income. The Executive Member said the CAB had reduced the costs of its operations as there were no face-to-face facilities.

Councillor Huggins asked about the contract rate for the IT Shared Service. The Head of Strategic Finance and Property said that the council had made central provision for inflation in respect of major contracts and the IT Shared Service was a major contract.

The Head of Strategic Finance and Property responded to questions in respect of business rates and capital projects. Members received the report.

RESOLVED – that (A) Members noted that the proposed budget would make use of the flexibilityfrom Government to increase Council Tax by 2.99%, which wouldresult in a Band D Council Tax increase of £5.50 which is 50pence a year more than the planned £5 increase included in the March 2022 Medium Term Financial Plan;

(B)   Members noted that Leadership Team would proceed with the savings plan for 2023/24 for changes under delegated authority and that do not directly impact residents or all of local businesses;

(C)   Members noted that in order to smooth the delivery of the substantial savings targets over the Medium-Term Financial Plan that the General Reserve and the Interest Equalisation Reserve are used as reported;

(D)   Members noted that a temporary use of £400k of the New Homes Priority Spend Reserve, repayable in 2027/28 and 2028/29, may be used to assist with smoothing the delivery of savings as reported;

(E)   Members noted that the pausing of non-essential capital schemes to prioritise completion of the major projects; provide essential capital financing for the purchase of food waste caddies and changes to Buntingford Depot as part of the new contract fuel and energy strategy;

(F)   Members note the pausing of the £9.6 million of capital spend will reduce revenue costs of Minimum Revenue Provision and interest by £719k per annum on rebased capital financing charges using current interest rates;

(G)   Members noted the savings requirements, that will need to be delivered to balance the budget in the Medium Term, the delivery profile of which has been smoothed using earmarked reserves, are:

·               2023/24 £822k

·               2024/25 £2,170k

·               2025/26 £2,192k

·               2026/27 £2,053k

·               2027/28 £567k.

(H)   Members noted the level of budget reductions required to balance the budget in the medium term is beyond further efficiency measures alone and instructs Leadership Team to commence preparations for the Reconciling Policy, Performance and Resources exercise that the new Council, elected in May 2023, will need to undertake alongside the new Corporate Plan, to balance the budget over the medium term.