Agenda item

The Cabinet considered a report of the Director of Corporate Resources regarding the Council’s proposed Medium Term Financial Strategy for 2023/24 to 2026/27 (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.

 

Comments from Mr. S. J. Galton CC regarding the proposed reduction in bus service subsidy funding are also filed with these minutes (minute 211 below also refers).

 

The Director said that the final Local Government Settlement was received on 6 February 2023. The only change affecting the MTFS was an additional £0.1m for the Services Grant. He added that based on the latest review of proposed service reductions in the MTFS it was now not expected that the full amount of the £1m contingency in 2023/24 would be required, and hence £0.4m of the balance could be released. He suggested that this be added to the £0.1m above to provide additional investment for highways maintenance of £0.5m.

 

Mr Breckon CC said that the whilst the County Council had been able to produce a four year financial plan, the latest Local Government Settlement had left the County Council with no choice but to make difficult choices which would allow the maximum level of resources to be targeted at those who needed it most. The Authority would continue to pursue fair funding and other initiatives to help the County. He added that responses to the public consultation indicated support for a rise in council tax and the continued push for fair funding. It was noted representatives of the County Council would be meeting with the Chancellor in the spring to discuss the Council’s financial difficulties.

 

Mr Bedford CC said the Government needed to recognise the pressures the County Council faced and the urgent need for a fairer allocation of funding. He added that the Authority was taking difficult decisions in order to deliver a balanced budget and continue to be able to provide vital services for its residents.

 

Mrs Taylor CC said the Children and Family Services Department had significant savings to make which would be extremely difficult at a time when the numbers of children requiring additional support were growing. In reference to the high needs budget deficit which continued to grow each year, she said that the Authority was working with the Department for Education and external consultants to try to address the issue whilst continuing to push Government for changes in the sector. She added that the Authority had secured £1m of funding to deliver a family hubs model in the County which would enable the offer of additional online support and local hubs to support families.

 

The Leader said that whilst the approval of the proposed budget would result in some difficult decisions, including a rise in Council Tax at a time when many people were struggling, it would enable the Authority to continue to protect the most vulnerable people.

 

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 2023/24 totalling £512.1m as set out in Appendices A, B and E of the 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 2024/25, 2025/26 and 2026/27, 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 to achieve 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 reserves as set out in Appendix K be noted and the use of those earmarked reserves 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 2023/24 be as set out in Appendix M (including 2% 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 approval be given to the 2023/24 to 2026/27 capital programme as set out in Appendix F;

 

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:

 

	2023/24 £m	2024/25 £m	2025/26 £m	2026/27 £m
Operational boundary for external debt
i)  Borrowing	262	262	275	309
ii) Other long term liabilities	1	1	1	1
TOTAL	263	263	276	310
Authorised limit for external debt
i)   Borrowing	272	272	285	319
ii) Other long term liabilities	1	1	1	1
TOTAL	273	273	286	320

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 2023/24 to 2026/27:

 

               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 20% 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 2023/24, subject to the prudential limits in Appendix N;

 

m)  That the Treasury Management Strategy Statement and the Annual Investment Strategy for 2023/24, 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), Investing in Leicestershire Programme Strategy (Appendix H), Risk Management Policy and Strategy (Appendix I), Earmarked Reserves 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 2023/24;

 

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 22 February 2023;

 

q)    That the Leicestershire School Funding Formula is subject to capping and scaling and continues to reflect the National Funding Formula for 2023/24;

 

r)     That the funding rates for Early Years providers, as set out in paragraph 114 of the report, be approved.

 

s)    That an additional investment of £0.5m for Highways Maintenance be made utilising £0.4m from contingency and the additional £0.1m received for the General Services grant.

 

(KEY DECISION)

 

REASONS FOR DECISION:

 

To enable the County Council to meet its statutory requirements with respect to setting a balanced budget and Council Tax precept for 2023/24, to allow efficient financial administration during 2023/24 and to provide a basis for the planning of services over the next four years.

 

To enable early work to be undertaken on the development of new savings to address the worsening financial position.

 

Continuing an unchanged Leicestershire School Funding Formula for 2023/24 will ensure that it fully reflects the National Funding Formula.

 

To enable rates to be set for Early Years providers for 2023/24.