Agenda item

Financial Prospects 2019-20 to 2023/25

The Council’s Medium-Term Financial Strategy (MTFS) covering the period up to 2024/25 rolls forward the data in the existing approved MTFS. The strategy amends certain assumptions contained in it to reflect changes in the Council’s circumstances and other issues that have a strategic bearing on the Council’s financial prospects.

 

Decision:

The Deputy Leader of the Council and Cabinet Member for Corporate Support, Councillor Oppler, introduced this item and stated that this covered the financial forecast for the Council for the next five years.  Of major concern was the significant financial challenges that the Council would be facing as core Government grant funding was being eroded and replaced with more volatile and uncertain funding based around the growth of the District.

 

The Group Head of Corporate Support then worked through the highlights of the report re-stressing that local government was facing an unprecedented level of financial uncertainty around the funding available to it.   The timing of this report had been difficult as it had been announced in August that the three-year spending review had been delayed, the one-year review would be announced on 4 September 2019.  It was felt that it would be unlikely that this would provide any detail for individual authorities and that Councils would have to wait until just before Christmas for more detailed information.  It therefore had to be recognised that it was not possible to make projections now with any level of certainty.

 

Despite this, the significant assumption had been made that the business rates reset would not happen now until 2021/22.  The Council would therefore not lose its business rate growth until then which was one year later than originally anticipated.  Some other general assumptions around the economy had been set out in the report at Paragraph 1.3.

 

            Other general assumptions had been set out in Paragraph 1.3 of the report.  Cabinet were advised that allowances had been made within the Strategy for a modest capital programme, however, it was important to stress that this had to cover all infrastructure and estate matters as well as any new iniatives.  A further assumption made was around the payments from WSCC in terms of recycling credits.  A cut of £186k had been made in this financial year and it was anticipated that the remainder of the £857k would be cut in 2020/21.  This would have a significant effect on the Council’s financial position and future spending plans.

 

Members’ attention was then drawn to the risk element of the report; these were mainly around local government funding, as highlighted earlier.  The Group Head of Corporate Support’s only real mitigation was to ensure that the Council held a reasonable level of balances to cushion against any significant reductions in funding.  It would also be essential to ensure that a robust business case be undertaken for any significant investments. 

 

 It was stressed that the figures identified could only be considered as indicative as explained earlier.  Given the fact that information was continually emerging it was important that the Financial Strategy remained dynamic and was regularly updated and where needed significant changes made.

 

 

 

             

 

            Following a question relating to the Council’s PA system, which was answered at the meeting, the Cabinet

 

            RESOLVED – That

 

(1)  the core assumptions set out in the Medium-Term Financial Strategy and the current financial position be agreed;

(2)  the significant risks to local government finance that have been clearly outlined in the report be noted and agreed; and

(3)  the Medium-Term Financial Strategy be used to set the Budgetary framework in preparing the 2020/21 budget.

 

The Cabinet then confirmed its decision as per Decision Notice C/016/020919, a copy of which is attached to the signed copy of the Minutes.

 

(During the course of the discussion on this item, Councillors Dr Walsh, Oppler and Purchese all declared their Personal Interests as Members of West Sussex County Council in relation to the update provided on the West Sussex County Council recycling credits.)

 

Minutes:

The Deputy Leader of the Council and Cabinet Member for Corporate Support, Councillor Oppler, introduced this item and stated that this covered the financial forecast for the Council for the next five years.  Of major concern was the significant financial challenges that the Council would be facing as core Government grant funding was being eroded and replaced with more volatile and uncertain funding based around the growth of the District.

 

The Group Head of Corporate Support then worked through the highlights of the report re-stressing that local government was facing an unprecedented level of financial uncertainty around the funding available to it.   The timing of this report had been difficult as it had been announced in August that the three-year spending review had been delayed, the one-year review would be announced on 4 September 2019.  It was felt that it would be unlikely that this would provide any detail for individual authorities and that Councils would have to wait until just before Christmas for more detailed information.  It therefore had to be recognised that it was not possible to make projections now with any level of certainty.

 

Despite this, the significant assumption had been made that the business rates reset would not happen now until 2021/22.  The Council would therefore not lose its business rate growth until then which was one year later than originally anticipated.  Some other general assumptions around the economy had been set out in the report at Paragraph 1.3.

 

            Other general assumptions had been set out in Paragraph 1.3 of the report.  Cabinet were advised that allowances had been made within the Strategy for a modest capital programme, however, it was important to stress that this had to cover all infrastructure and estate matters as well as any new iniatives.  A further assumption made was around the payments from WSCC in terms of recycling credits.  A cut of £186k had been made in this financial year and it was anticipated that the remainder of the £857k would be cut in 2020/21.  This would have a significant effect on the Council’s financial position and future spending plans.

 

Members’ attention was then drawn to the risk element of the report; these were mainly around local government funding, as highlighted earlier.  The Group Head of Corporate Support’s only real mitigation was to ensure that the Council held a reasonable level of balances to cushion against any significant reductions in funding.  It would also be essential to ensure that a robust business case be undertaken for any significant investments. 

 

 It was stressed that the figures identified could only be considered as indicative as explained earlier.  Given the fact that information was continually emerging it was important that the Financial Strategy remained dynamic and was regularly updated and where needed significant changes made.

 

 

 

             

 

            Following a question relating to the Council’s PA system, which was answered at the meeting, the Cabinet

 

            RESOLVED – That

 

(1)  the core assumptions set out in the Medium-Term Financial Strategy and the current financial position be agreed;

(2)  the significant risks to local government finance that have been clearly outlined in the report be noted and agreed; and

(3)  the Medium-Term Financial Strategy be used to set the Budgetary framework in preparing the 2020/21 budget.

 

The Cabinet then confirmed its decision as per Decision Notice C/016/020919, a copy of which is attached to the signed copy of the Minutes.

 

(During the course of the discussion on this item, Councillors Dr Walsh, Oppler and Purchese all declared their Personal Interests as Members of West Sussex County Council in relation to the update provided on the West Sussex County Council recycling credits.)

 

Supporting documents: