Agenda item

Report of the Leader and Executive

Meeting of Full Council, Tuesday, 23rd April, 2024 2.00 pm (Item 83.)

To consider the report that was discussed by the Executive on 8 April 2024 on the Medium Term Financial Strategy 2025-26 to 2029-30.

Decision:

Councillor Liz Leyshon proposed the recommendations which were seconded by Councillor Bill Revans.

Having been duly proposed and seconded, the Council RESOLVED to approve the Medium-Term Financial Strategy (MTFS) for 2025/26 to 2029/30 and the savings targets for 2025/26.

At the Executive Meeting held on 8 April 2024, the Executive further agreed:

· That the Council continued with the aim of avoiding a section 114 notice by taking all of the necessary actions and continuing to operate as if one had been issued.

· To receive an updated Medium-Term Financial Plan in September 2024 which sets out the latest forecasts of future service costs, income and funding from 2025/26 to 2029/30.

· To continue actively campaigning for the reform of funding of councils and greater local freedoms.

· That the Financial Control Boards continued to operate in 2024/25 as set out in Appendix 3.

Minutes:

The Deputy Leader of the Council and Lead Member for Resources and Performance, Councillor Liz Leyshon, introduced the report on the Medium-Term Financial Strategy (MTFS) for 2025-26 to 2029-30 which the Executive considered and endorsed at its meeting on 8 April 2024.

The report detailed the MTFS as a strategic document that set out the financial context, significant challenges, and priorities over the medium[1]term and was used as a basis to build the Council’s Medium-Term Financial Plan 2024-25 (MTFP). The MTFP, approved as part of the annual budget process, provided a detailed breakdown of how the Council plans to manage its finances to create a balanced budget and achieve its objectives. The MTFP included detailed projections of forecast income, expenditure, borrowing, savings and pressures over the medium-term. Reference was made to the 6 key objectives of the MTFS and the need to update this following Council’s approval to the MTFP 2024-25 in February 2024. Councillor Leyshon highlighted the MTFP 2025-26 development timetable in the report and the regular budget monitoring undertaken by the Executive and Scrutiny Committee for Corporate and Resources.

The Council discussed the report and the following points were raised:

· Councillors highlighted the work carried out by the Audit Committee on the MTFS.

· Councillors highlighted the increased workload on the MTFS this year due to signing off 5 sets of accounts from the predecessor councils.

· Concern was raised on the actions arising from the work and councillors wanted assurance that the actions would be completed.

· Councillors highlighted that the report detailed that officers were operating as if a Section 114 Notice had been issued and councillors wanted it confirmed that there was prohibition in place on council policies.

The Section 151 Officer advised that if a Section 114 Notice was issued, it would only be in place for a short period of time, but it would put an immediate stop on new spend and non-statutory spends and that the report did refer to the process that would be followed.

· Concern was raised that the report proposed cuts in services, reductions in staff and an increase in Council Tax, but it did not address the reduction in the budget gap.

The Lead Member for Resources and Performance advised that the Council had raised its Council Tax by the maximum amount allowed by Central Government and acknowledged it was a huge budget gap to fill. She advised that the Council had implemented Spend Control Boards who were operating as if a Section 114 Notice had been issued. She further advised that capitalisation could be used if other borrowing was avoided and that the Council could also use their commercial investments. The Lead Members were still passionate about delivering services in Somerset to support their residents.