Agenda item

The Cabinet considered a report of the Director of Corporate Resources setting out the proposed Medium Term Financial Strategy (MTFS) for 2025/26 to 2028/29, for consultation and scrutiny.  A copy of the report, marked ‘Agenda Item 4’, is filed with these minutes.  A supplementary report was circulated separately and a copy is also filed with these minutes.

Mr Breckon CC noted that, despite the Council having a firm grip of its finances and the work undertaken to drive down costs being effective, the financial position remained very challenging and the four year proposals highlighted rapidly rising demand for services with increasing costs.  Mr Breckon CC also stated that, despite being the lowest funded County Council, Leicestershire was high performing, although there was now a greater reliance on Council Tax to fund vital services.  He emphasised that it was vital that there was an overhaul of local government finances to ensure that major issues were tackled rather than a focus purely on deprivation, which would disadvantage rural counties.

Mr Poland CC reiterated that the County Council had faced considerable funding pressures but funding levels had not kept pace with demand, and as such, current funding levels did not enable the Council to address the main issues it was facing.  He stated that a funding reform was required to enable the County Council to deliver what was required locally.

Mr Pain CC stated that report had indicated a provisional £56m of growth for the Children and Families department and queried whether any assessment had been undertaken of the impact on the budget of needing to find school placements for children who had been in independent schools.  The Director responded that some initial work had been undertaken and there would be an expected shift from independent schools into mainstream schools if the provision became more expensive.  However, it was felt that this would be gradual and the situation would continue to be monitored.

Mrs Taylor CC noted that preventative work was key and expressed concern that charities/voluntary sector organisations would be passing a cost on to the County Council.  She urged as many people as possible to respond to the consultation on the MTFS proposals.

RESOLVED:

a)         That the proposed Medium Term Financial Strategy, including the 2025/26 draft revenue budget and capital programme, be approved for consultation and referred to the Overview and Scrutiny Committees and the Scrutiny Commission for consideration;

b)         That the Director of Corporate Resources, following consultation with the Cabinet Lead Member for Resources, be authorised to:

i.               Agree a response to the provisional Local Government Finance Settlement;

ii.              Decide on the appropriate course of action with regard to the Leicester and Leicestershire Business Rates Pool in 2025/26 and, subject to agreement by all member authorities, to implement this;

c)          That each Chief Officer, in consultation with the Director of Corporate Resources and following consultation with the relevant Lead Member(s), undertake preparatory work as considered appropriate to develop the savings set out in the draft MTFS and to identify additional savings in light of the financial gap in all four years of the MTFS, to enable the Cabinet and Council to consider further those savings to be taken forward as part of the MTFS and implemented in a timely manner;

d)         That a further report be submitted to the Cabinet on 7 February 2025.

(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 2025/26 and to provide a basis for the planning of services over the next four years.

To ensure that the County Council’s views on the provisional Local Government Finance Settlement are made known to the Government.

To enable the County Council (alongside the pooling partners) to respond to the Ministry of Housing, Communities and Local Government (MHCLG) in respect of the Business Rates Pool within 28 days from the draft Local Government Finance Settlement.

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

To consider feedback from consultation on the draft MTFS and the views of the Overview and Scrutiny bodies and the final recommendations to be made to the County Council.