Agenda item

To consider the report

Following consideration of the officer report and discussion, the Executive approved the Medium-Term Financial Strategy (MTFS) for 2024/25 to 2026/27 and the approach for the medium term of the following proposals:

·       An early review of 17 key areas that are the main building blocks of the budget and financial framework

·       A three-year approach and framework for balancing the budget to develop the Service Budget Options

·       Reviewing and challenging all MTFP assumptions

·       A review of the capital programme

·       The criteria for any new scheme;

And the Executive noted:

·       That the reserves position for the Somerset Council has not yet been completed pending finalisation of all five authorities Statement of Accounts.

The Leader of the Council and Lead Member for Governance and Communications, Cllr Bill Revans, invited the Deputy Leader and Lead Member for Resources and Performance, Cllr Liz Leyshon, to introduce the report.

The Deputy Leader and Lead Member for Resources and Performance, Cllr Liz Leyshon, introduced the report highlighting; that the 2024/25 budget preparations and proposals had been considered at the Scrutiny Corporate and Resources Committee, 6 July 2023; the budget and performance monitoring changes; including the new software to aid this reporting and the planned work to increase the joined-up working, understanding and communication of performance, budget monitoring and risk understanding, leading to risk management route for reports including Audit Committee and all Scrutiny Committees; the importance of rapid implementation of proposed savings in an ever-changing financial environment, including  increased demands, increased inflation, increased interest rates and a hot labour market; that the paper sets out the clear scale, depth and breadth of challenge; the composition and role of the internal MTFP Board; the importance of action to identify significant savings with the need to take decisive action, including the 17 key areas that are the main building blocks of the budget and financial framework.

The Executive Director for Resources and Corporate Services, Jason Vaughan, further added to the above points, highlighting key points including: the forecast three year budget gap of £98.8m; setting out the size of the financial challenge for the revenue budget, with a need to save £100m over the next three years;  pressure areas, including the Housing Revenue Account, Capital, the Dedicated Schools Grant, including the High Needs Block, with statutory override provided by the Government due to end 31 March 2026; the Statement of Accounts for the 2022/23 financial year of the five predecessor councils, the publication  dates and the review of reserves.

The Leader of the Council and Lead Member for Governance and Communications, Cllr Bill Revans, invited comments from other Members present, questions and points raised included: the reporting and monitoring of the 17 targeted areas of concern within the report including committee reporting and Member briefings; the national picture and the use of networks to lobby Government to increase awareness of the challenges faced by Local Government; the lack of funding and increasing demand to deliver services; communicating the Council’s financial challenges and ambitions to Somerset’s residents; the complex financial Local Government picture, both locally and nationally; the number of Councils across the country that have received and are at risk of receiving Section 114 notices; the reporting of reserves and key indicators of the financial direction of travel; and the reporting, monitoring and delivery of identified cost savings for adult social care.

In response, the Chief Executive, Duncan Sharkey, summarised the complex situation in that this Council and Councils nationally were spending more year on year in absolute terms, however, due to increased costs, demands and funding that has not kept pace, it has been necessary to dedicate funding to the protective services areas and protecting people’s lives, particularly social care.  The Chief Executive continued, that this scale of the challenge has limited the Council in the ability to innovate, the capacity to do different and the capacity to work locally to mitigate the financial position, and that if Central Government fails to adequately address the current threat to Local Government finance and services, as they currently operate and exist, there is a risk to the future financial viability of some services, resulting in Local Authorities reaching the point where they only have funds to provide statutory responsibilities. The Chief Executive summarised that this Council's work on prevention and early intervention is essential to make plans quickly and deliver quickly and to lobby Government to focus on the future of Local Government and what it will look like next year and beyond.

The Executive Director for Resources and Corporate Services, Jason Vaughan, further added to the above points,  highlighting that currently there is no comprehensive Government support package for dealing with the forecast financial situation over the next few years.

The Deputy and Lead Member for Resources and Performance further added to above points commenting on the extraordinary and unique set of circumstances and paid tribute to Council staff for their work through this challenging time.

The Executive approved the Medium-Term Financial Strategy (MTFS) for 2024/25 to 2026/27 and the approach for the medium-term of the following proposals:

• An early review of 17 key areas that are the main building blocks of the budget and financial framework
• A three-year approach and framework for balancing the budget to develop the Service Budget Options
• Reviewing and challenging all MTFP assumptions
• A review of the capital programme
• The criteria for any new scheme;

And the Executive noted:

• That the reserves position for the Somerset Council has not yet been completed pending finalisation of all five authorities Statement of Accounts

ALTERNATIVE OPTIONS CONSIDERED: As set out in the officer report.? 

? 

REASON FOR DECISION: As set out in the officer report.