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Decision details

MEDIUM TERM FINANCIAL STRATEGY 2019/20 - 2022/23

Decision Maker: Cabinet

Decision status: For Determination

Is Key decision?: Yes

Is subject to call in?: No

Purpose:

·         Updating Cabinet on the current and projected future financial position of the Council and any relevant decisions

Decision:

Cabinet:

(1)                noted the revised assumptions contained in the MTFS at Appendix 1 of the report;

(2)                noted the potential funding gap of net £4.458 million in 2020/21 comprising the following elements:

Ø  £1.0 million in efficiencies already approved at February 2019 Cabinet

Ø  £3.5 million from one-year delay to business rates reset which can be resolved through use of reserves (see paragraph 2.1.3 of the report)

Ø  £1.0 million service pressures to be funded (see paragraph 2.1.4 of the report)

Ø  £0.4 million inflation on salaries and third-party contracts (see paragraph 2.1.5)

Ø  £0.4 million arising from a 3% general uplift on Fees and Charges

Ø  £1.5 million additional parking income surplus

(3)                noted the continuing uncertainty resulting from the potential delay of the Spending Review, Fair Funding Review and Business Rates reset and the risk of a £3.5 million gap in 2020/21 (to be resolved through use of reserves);

(4)                noted potential service pressures of c£1.0 million in 2020/21 which will be reviewed further before the 2020/21 budget is approved;

(5)                noted the c£0.4 million additional estimated inflationary costs for salary and third-party contract inflation;

(6)                noted the government’s intention to move to an alternative business rates retention funding mechanism, including 75% retention and business rates reset; all planned for implementation in April 2020 but carrying a risk of a delay by one year;

(7)                noted the assumption that faced with uncertainty around the timing of unding changes, major grants are modelled to continue on an uninflated in 2020/21;

(8)                noted that the London Business Rates pooling pilot is expected to cease in 2019/20;

(9)                delegated to the Director of Finance and Governance the authority to distribute any contingency budgets and/or reserves as per the Council’s financial ground rules approved by Cabinet in July 2019;

(10)             agreed that service controllable income budgets will be increased by 3% and that all services will review their fees and charges to achieve the full year impact in 2020/21; and

(11)             agreed that services must address any on-going problem budgets identified in the current financial year, with sustainable mittigating proposals for 2020/21 with any cabinet decisions either put through the regular financial monitoring reports or if appropriate a separate report to cabinet.

 

OPTIONS & ALTERNATIVES CONSIDERED

The Council has a legal duty to set a balanced budget and to develop a financial strategy for the medium term.  The revised MTFS sets out potential challenges facing the Council in future years.

The Council established the Redefining Waltham Forest programme in response to significant financial challenges.  This is now known as Creating Futures and the recommendations from the programme will feature in future reports to Cabinet over the coming months.

 

Report author: Alison Thomas

Publication date: 05/09/2019

Date of decision: 05/09/2019

Decided at meeting: 05/09/2019 - Cabinet

Accompanying Documents: