Agenda item

Medium Term Financial Strategy And Draft Budget Update


The Director of Finance & IT addressed Members of the Committee notifying them of the latest version of the Medium Term Financial Strategy (MTFS), the potential financial impact of increasing council tax to 2.99% and  the impact of agreed changes to the calculation of the Minimum Revenue Provision (MRP).


The Chair asked whether the £4million deficit was liable to become much larger.  It was difficult to answer since work was still underway to ensure the correct assumptions were made, however it would still be a challenge.  Without creating a need to significantly impact upon services delivered by the Council there were two years in which to make a significant change.  Cash investments were quick but larger investments, such as property, required more time and therefore targeted work would begin in the next few months.


The Chair continued to question when the Council would reach the point of no grant funding from the Government.  There would always be funding from the Government such as reimbursement for Housing benefits, but in terms of the General Core Grant it was estimated to cease in 2021, though it would be intertwined with the Business Rate Retention outcomes.


Councillor Duffin queried whether Corporate Overview and Scrutiny Committee could call upon Cabinet or the Portfolio Holder for Finance to progress work on long-term investments.   The Chair supported the notion of calling for work on moving towards a 5-year view to be realised as soon as possible. 


The Chair noted an area of concern for the Committee previously had been the achievability of certain savings, particularly those around reduction of agency staff, absence management and overtime.  He sought assurance that the estimated level of savings could be achieved.  The Director of Finance and IT was confident it was achievable.  The majority of savings had been achieved within this financial year and the overspend related to cost of placements in Children’s Services or issues within Environment.  Based on a year’s evidence he was more confident, and the target had been reduced since the previous meeting of the Committee reflect achievability. 


The Chair highlighted that Appendix 2 showed a saving of nearly £1million in each of the three years and asked what fell within those areas.  Section 3.2 of the report gave a clearer breakdown.  All services would be subject to the review process however the timetable was being reset to prioritise larger items.  ‘Transport’ covered all areas of the Council’s transport including schools, social care and subsidised transport, everything within the realm of Highways.  The Chair clarified it would be a case of optimising within the spend rather than removing the budgets entirely.  Members heard that it was about achieving the best value from services, not taking them away.  There was also a need to review business resources and support processes. 


The Chair moved to proposals regarding Council Tax and the recommendation that the Council should progress with the maximum possible increase; he queried whether the projected increase would cover the pressures within Adult Social Care.  There were only minor pressures shown within the service in the current year; there had been a 3% increase already and the Committee had also recommended a 3% increase in 2018/19 however that was only a recommendation which required approval at Full Council.


There had been no indication from the Administration as to what their recommendation to Council would be regarding the general council tax increase, however the Director of Finance and IT would recommend the 2.99% increase and Cabinet would decide accordingly.


The Chair felt Council Tax was a less progressive form of tax and was interested to see the recommendation Cabinet would make to balance service delivery with protecting residents from financial hardships.


Councillor Ojetola asked what the alternative plan was, should Council opt against the 2.99% increase.  The Committee was advised that the 2.99% was not necessary for the next two years, which made the decision harder, it would be an investment for the future.  At present there was shown to be a £4million deficit which assumed no further financial pressures, the additional increase would reduce the deficit by one third, and proposals to bridge this gap could only come through increased income or reduced expenditure.  Thurrock’s Council Tax was currently 3rd lowest of all Unitary Authorities and, given its proximity to London, this reality was a slightly worse position.  As Government support reduced it was necessary to look beyond the next two years.  The Chair emphasised the point that the sooner five year information was easily accessible the better, to allow Members to understand the implications of any decision


RESOLVED That the Corporate Overview and Scrutiny Committee:


1.    Considered the options around the level of council tax increase and:


2.    Commented on the draft budget as set out within this report to inform final budget proposals at Cabinet on 7 February 2018.

Supporting documents: