Agenda item

The Portfolio Holder for Finance and Efficiency, Councillor Stephen Sweeney, introduced the report on the Medium Term Financial Strategy (MTFS).  The report had been endorsed by Cabinet on 11^th November 2020 when a budget ‘gap’ of £1.790m was predicted in respect of the budget 2021/22.  This gap would need to be closed to produce a balanced budget and how this would be achieved was the subject of the next item on the agenda. 

The Council had received significant additional support from Government in terms of Covid grants as well as a compensation scheme for lost income from fees and charges.  The impact of Covid-19 remained uncertain as did the support for local government funding.  The Council had developed scenarios to enable planning along with a full risk assessment of the Council reserves.  The 10 year capital strategy approved in February 2020 had been reviewed and updated.  Councillor Sweeney explained that key priorities would be progressed including the refurbishment of Kidsgrove Sports Centre and the town centre regeneration schemes; for which the Council had Advanced Town Deal funding in the sums of £1m for Newcastle and £0.75m for Kidsgrove.

Members raised queries and issues as follows:

-       Could an explanation be given as to why there were increased costs for employees listed for 2021/22?  The Committee was advised that staff would still receive increment rises where applicable and this was reflected in the additional cost figure.

-       A figure of £430,000 was listed for ‘pressures’ and an outline was sought of what these pressures referred to.    Members were advised that this figure included Microsoft licences, housing benefits which accounted for £300,000, additional costs towards provision for homelessness – it was expected that additional funding would be received from Government towards homelessness support so the figures would be revised as necessary. 

-       It was noted that the figure for Business Rates reserve had greatly increased from the position at 31 March 2020 and an explanation requested.   The Committee was advised that this was a forecast figure and as the position with the pandemic progressed into next year and the situation with Business Rates and Council Tax became clearer then this figure would be revised.

-       Members asked whether the Council could reclaim all the costs of housing benefit support and why was the figure so high?  It was explained that this related to homelessness support for which the Council needed to make some allowance as the total amount could not be recovered.  The Council paid an amount to providers of temporary accommodation but there was a gap between this figure and the amount that could be recovered from Government.  This situation had been ongoing for a number of years but in the past it had been possible to meet the gap from elsewhere within the Council’s budget but there was now less room for manoeuvre alongside increased demand.  The Council had received some grant funding towards homelessness costs and additional funding had been announced as part of the Comprehensive Spending Review for homelessness costs but the full details were awaited.  The Chair noted that a draft Temporary Accommodation Policy had been considered by Health, Wellbeing and Partnerships Scrutiny Committee and asked whether this was taken into account in the MTFS.  It was thought this was the case but it would be checked. 

Resolved: that:

(a)  the Medium Term Financial Strategy 2021/22 to 2025/26 be noted;

(b)  the funding gap of £1.790m in 2021/22 and £5.911m over the 5 year period covered by the MTFS be noted; and

(c)  the current uncertainty regarding the medium term impact of Covid-19 and local government funding and the need for scenario planning and identification of savings options for best, worst and medium case scenarios, be noted.