Agenda item

To consider the Medium Term Financial Strategy Autumn 2023 Update.

(1)  That approval be given to the Medium-Term Financial Strategy and embedded Medium-Term Financial Plan as an estimate of the Council’s current financial position as at October 2023 noting that the figures will change as further updating takes place.

(2)  That the Director of Finance be authorised to commence a period of consultation regarding the savings opportunities referred to in Annex 6.

(3)  That the Guiding Principles be approved as a framework for financial planning for the period of the Medium-Term Financial Strategy.

(4)  That the Capital Planning Principles be approved to guide the preparation of the Capital Programme in the years ahead.

(5)  That the planned development of the Transformation Programme to date and through 2024/25 be noted and approval be given to endorse the extension of the transformational approach to other services of the Council.

(6)  That the Budget Timetable be noted.

(7)  That approval be given to submit to the Department for Levelling Up and Homes and Communities a proposal for the flexible use of capital receipts in financial year 2023/24 to support transformation and to delegate the approval of this proposal to the Portfolio Holder for Finance and Interim Director of Finance together with the Assistant Chief Executive and the Monitoring Officer.

(8)  That the Council be recommended to approve the Autumn 2023 update of the Medium-Term Financial Strategy at its next meeting

Approval was sought to the Medium-Term Financial Strategy and Medium-Term Financial Plan.

The Chair of the Economy, Skills, Transport and Environment Scrutiny Board inquired as to how the quality of service delivered and how this would be measured, how the consultation would reach all communities across Sandwell, how reduced budgets would impact services, how measures would ensure the consultation received adequate responses, how methods of debt recovery would be financially viable and how the pressures and technical adjustments continued to increase.

The Cabinet Member for Finance and Resources advised that the priority had been and continued to be delivering the best possible outcomes for residents. Sandwell was no different to other local authorities who faced significant financial pressures. Although the Council were in a fortunate position to have options to achieve a balanced budget, difficult decisions would need to be made. The Council was required to meet legal requirements but had the ability to make choices in how services were delivered. The Council’s approach to the consultation on the specific savings proposals had been designed to ensure the voices of residents, communities and businesses was captured, the Council would encourage as many people as possible to engage in the consultation through the online survey.

The Council recognised the impact of the cost of living emergency and would only pursue debts through court processes or enforcement agents as a method of last resort. The Council had duty to use reasonable means to recover debt and encouraged individuals and businesses to engage early with the Council if they were struggling to pay any debt that was owed.

The majority of the increase in costs that the Council incurred from one year to the next related to price inflation, pay inflation and demographic growth. 

The Chair of the Safer Neighbourhoods and Active Communities Scrutiny Board asked if the options to be considered by Cabinet could be provided to Scrutiny ahead of the proposed meeting to look at the draft Budget in January.

The Cabinet Member for Finance and Resources advised that the session of the Budget and Corporate Scrutiny Management Board in January would include the detail of all the savings proposals that had been developed and selected by that date which would be included in the papers.

Reason for Decision

The Local Government Finance Act 1992 required the Council to set a balanced, risk assessed budget each year and approve a Council Tax precept by 11 March.

The Council had a duty to consult with those who were liable to pay council tax or non-domestic rates, as well as those who use or are likely to use services provided by the authority. A public engagement exercise on the Council’s budget had been conducted in the Summer 2023 seeking residents’ views on how the Council should reduce spend in order to deliver a balanced budget. In order to set a balanced budget for 2024/25, the Council had developed a long list of savings options which, if adopted for 2024/25, would impact residents and businesses in the Borough.

The Medium-Term Financial Strategy and accompanying Medium Term Finance Plan following a detailed and extensive review indicated that there was an estimated Budget shortfall of £13m in 2024/25. The figure had changed in the course of financial year 2023/24 and reflected the expected refinement and testing of initial planning assumptions.

From analysis presented it was indicted that the Council must select savings which amounted to £13m to balance the 2024/25 Budget and that the overwhelming proportion of these must be recurring in nature to remove the relevant costs in years following and to prevent the avoidable growth of future budget shortfalls.

Alternative Options Considered

The Council was legally required to set a balanced budget during March 2024. There were no alternative options.

Resolved:-

(1)          that approval be given to the Medium-Term Financial Strategy and embedded Medium-Term Financial Plan as an estimate of the Council’s current financial position as at October 2023 noting that the figures will change as further updating takes place;

(2)          that the Director of Finance be authorised to commence a period of consultation regarding the savings opportunities referred to in Annex 6;

(3)          that the Guiding Principles be approved as a framework for financial planning for the period of the Medium-Term Financial Strategy;

(4)          that the Capital Planning Principles be approved to guide the preparation of the Capital Programme in the years ahead;

(5)          that the planned development of the Transformation Programme to date and through 2024/25 be noted and approval be given to endorse the extension of the transformational approach to other services of the Council;

(6)          that the Budget Timetable be noted;

(7)          that approval be given to submit to the Department for Levelling Up and Homes and Communities a proposal for the flexible use of capital receipts in financial year 2023/24 to support transformation and to delegate the approval of this proposal to the Portfolio Holder for Finance and Interim Director of Finance together with the Assistant Chief Executive and the Monitoring Officer;