Agenda item

The Cabinet considered a report of the Director of Corporate Resources concerning the Council’s proposed 2022/23 to 2025/26 Medium Term Financial Strategy (MTFS), following consideration of the draft MTFS by the Overview and Scrutiny bodies and receipt of the Local Government Finance Settlement.  A copy of the report, marked ‘Agenda Item 4’, is filed with these minutes.

 

The Director reported that the Council was in a slightly improved position following the Local Government Finance Settlement announced in December, which had reduced the shortfall in 2023/24 from £11.5m to £7.9m.

 

Mr. Breckon CC said that the Council would continue to work hard to close the funding gap and deliver the required savings which would have been far greater had the 3% Council Tax rise not been proposed. He added that responses to the budget consultation indicated a good level of support for the proposals which committed the Authority to continue to protect the most vulnerable whilst supporting important initiatives such as the SHIRE Community Grants Scheme and a Tree Nursery to help the Authority deliver upon its pledge to plant 700,000 trees in the County. He concluded that the Council would continue to work with Leicestershire MPs to push for fair funding.

 

Mr Shepherd CC said that whilst he welcomed the reduction in the projected shortfall as a result of the improved Government Settlement, it was clear from the report that difficult decisions would still need to be made in order for the Council to be able to continue to deliver its statutory services. 

 

Mr Bedford CC welcomed the success of the Council’s Corporate Asset Investment Fund which had provided a regular income stream to offset some of the additional costs faced by the Authority. He welcomed the comments of the external auditors, Grant Thornton, which recognised the sound management of the Council’s finances.

 

Mrs Taylor CC said that the high needs block element of the school funding budget had a deficit of £9.1m for 2021/22 which added to existing deficits would total over £26m in the current financial year, rising to over £62m by the end of the four year MTFS. This was a position that could not continue and the Government needed to consider quickly how this national issue could be addressed. 

 

The Leader welcomed the allocation of funding to support the SHIRE Community Grants scheme, the closure of roads to facilitate street parties to celebrate the Queens Jubilee and a new Tree Nursery. He added that the significant increase in inflation and fuel costs, which was impacting the County’s residents, was also affecting the Council and therefore the proposed rise in Council tax was needed in order for it to help manage the gap in funding.

 

RESOLVED:

 

      I.          That the comments of the Overview and Scrutiny Committees and the Scrutiny Commission as set out in Appendix Q to the report be noted;

 

     II.          That the following be recommended to the County Council:

 

a)      That subject to the items below, approval be given to the Medium Term Financial Strategy (MTFS) which incorporates the recommended revenue budget for 2022/23 totalling £471.7m as set out in Appendices A, B and E of this report and includes the growth and savings for that year as set out in Appendix C;

 

b)      That approval be given to the projected provisional revenue budgets for 2023/24, 2024/25 and 2025/26, set out in Appendix B to the report, including the growth and savings for those years as set out in Appendix C, allowing the undertaking of preliminary work, including business case development, consultation, and equality and human rights impact assessments, as may be necessary towards achieving the savings specified for those years including savings under development set out in Appendix D;

 

c)      That approval be given to the early achievement of savings that are included in the MTFS, as may be necessary, along with associated investment costs, subject to the Director of Corporate Resources agreeing to funding being available;

 

d)      That the level of the general fund and earmarked funds as set out in Appendix K be noted and the use of those earmarked funds as indicated in that appendix be approved;

 

e)      That the amounts of the County Council's Council Tax for each band of dwelling and the precept payable by each billing authority for 2022/23 be as set out in Appendix M (including 1% for the adult social care precept);

 

f)        That the Chief Executive be authorised to issue the necessary precepts to billing authorities in accordance with the budget requirement above and the tax base notified by the District Councils, and to take any other action which may be necessary to give effect to the precepts;

 

g)      That the 2022/23 to 2025/26 capital programme as set out in Appendix F be approved;

 

h)      That the Director of Corporate Resources, following consultation with the Cabinet Lead Member for Resources, be authorised to approve new capital schemes, including revenue costs associated with their delivery, shown as future developments in the capital programme, to be funded from funding available;

 

i)        That the financial indicators required under the Prudential Code included in Appendix N, Annex 2 be noted and that the following limits be approved:

          

	2022/23 £m	2023/24 £m	2024/25 £m	2025/26 £m
Operational boundary for external debt
i)  Borrowing	263	263	311	340
ii) Other long term liabilities	1	1	1	1
TOTAL	264	264	312	341
Authorised limit for external debt
i)   Borrowing	273	273	321	350
ii) Other long term liabilities	1	1	1	1
TOTAL	274	274	322	351

 

 

 

 

 

 

 

 

 

 

 

 

 

j)      That the Director of Corporate Resources be authorised to effect movement within the authorised limit for external debt between borrowing and other long-term liabilities;

 

k)     That the following borrowing limits be approved for the period 2022/23 to 2025/26:

                                (i)       Upper limit on fixed interest exposures 100%;

                                (ii)       Upper limit on variable rate exposures 50%;

                                (iii)      Maturity of borrowing:-

 

	Upper Limit	Lower Limit
	%	%
Under 12 months	30	0
12 months and within 24 months	30	0
24 months and within 5 years	50	0
5 years and within 10 years	70	0
10 years and above	100	25

 

 

 

 

 

 

 

 

(iv) An upper limit for principal sums invested for periods   longer than 364 days is 10% of the portfolio.

 

l)      That the Director of Corporate Resources be authorised to enter into such loans or undertake such arrangements as necessary to finance capital payments in 2022/23, subject to the prudential limits in Appendix N;

 

m)   That the Treasury Management Strategy Statement and the Annual Investment Strategy for 2022/23, as set out in Appendix N, be approved including:

 

                                                         I.        The Treasury Management Policy Statement, Appendix N; Annex 4;

 

                                                        II.        The Annual Statement of the Annual Minimum Revenue Provision as set out in Appendix N, Annex 1; 

 

n)    That the Capital Strategy (Appendix G), Corporate Asset Investment Fund Strategy (Appendix H), Risk Management Policy and Strategy (Appendix I), Earmarked Funds Policy (Appendix J) and Insurance Policy (Appendix L) be approved;

 

o)    That it be noted that the Leicester and Leicestershire Business Rate Pool will continue for 2022/23;

 

p)    That the Director of Corporate Resources following consultation with the Cabinet Lead Member for Resources be authorised to make any changes to the provisional MTFS which may be required as a result of changes arising between the Cabinet and County Council meetings, noting that any changes will be reported to the County Council on 23rd February 2022;

 

q)    That the Leicestershire School Funding Formula remains unchanged, reflecting the National Funding Formula for 2022/23.

 

(KEY DECISION)

 

REASONS FOR DECISION:

 

To enable the County Council to meet its statutory requirements with respect to setting a budget and Council Tax precept for 2022/23, to allow efficient financial administration during 2022/23 and to provide a basis for the planning of services over the next four years. 

 

Continuing an unchanged Leicestershire School Funding Formula for 2022/23 will ensure that it fully reflects the National Funding Formula (NFF).