To consider a report by County Councillor Aled Davies, Portfolio Holder for Finance and Transport.
Minutes:
Cabinet considered the draft Medium-Term Financial Strategy for 2021-26, which included a Financial Resource Model for 2021-26,a draft revenue budget for 2021-22 and a draft capital programme for 2021-22 to 2030-31.
The Portfolio Holder explained that the Coronavirus pandemic and the ongoing measures imposed continued to have an unprecedented detrimental financial impact on the Council and that this was likely to continue through 2021-22 and into future years. The additional financial support provided by Welsh Government during 2020-21 had been instrumental in sustaining the Council’s financial position with £9.2 million of support for additional costs incurred and £2 million for lost income. Further support was expected to be available into 2021-22 but at what level and for how long was yet to be confirmed so significant risk remained.
The Cabinet and Executive Management Team (EMT) had reviewed and updated the Councils Medium Term Financial Strategy (MTFS) and ensured it was aligned to the Vision 2025 Plan. The draft MTFS included the:
· principles that will govern the strategy and a five-year Financial Resource Model (FRM), comprising detailed proposals for 2021-22 and outline proposals for 2022-23 to 2025-26.
· Capital Financing Strategy and the Treasury Management Strategy; and
· Capital Programme for 2021-22 to 2030-31.
The draft MTFS provided a set of clear principles which would drive the Council’s budget and spending decisions over 2021-26 and which Members and others can examine and judge the Council’s financial performance against. The budget was supported by the Capital and Treasury Management Strategy (Appendix F of the report).
The draft budget proposed included some £19.5m additional funding to meet inescapable budget pressures but would also require services to meet £11.828 million of cost reduction proposals, the detail of which was provided at Appendix C to the report, with Impact Assessments on each of the proposals also attached. The Senior Leadership Team had provided assurance to Cabinet that they could deliver the cost reductions within the required timescales, whilst also reflecting on any risks.
The 2021-22 provisional settlement gave Powys Council a cash increase of £7.343 million (4%) on 2020-21 which was 8th highest in Wales and a significant improvement on previous years. Income from fees and charges made a significant contribution (£60 million+ per annum) to the Council’s budget and the budget proposed for 2021-22 included increasing of fees and charges in line with inflation, where permitted, and where appropriate, the principle of full cost recovery had been applied. The balancing of the budget was dependent upon a 3.9% increase in the Council Tax in 2021-22, generating £3.33 million and £285,000 delivered through changes to the tax base. This would amount to an increase of £53 per annum on a Band D Property. In proposing this increase, consideration had been given to the impact of the pandemic and affordability for Powys residents together with the ongoing need to meet increasing demand and inescapable cost pressures on vital local services.
The Section 151 Officer gave her opinion that the estimates used in the budget proposal for 2021-22 were adequately robust but significant risk remains. Based on the assessment of reserves the overall level was adequate but remained at the lower end of acceptability given the scale of savings required, the ongoing impact of the pandemic and the financial uncertainty facing the Council over the medium term.
RECOMMENDED to Council to approve the: |
Reason for Recommendation:
|
1. MTFS for 2021-2026 as set out in Appendix A to the report be agreed in principle. |
To aid business planning and development of the budget over a three-year period |
2. Draft Revenue Budget for 2021-22 with the inclusion of a 3.9% increase in Council Tax shown in the Financial Resource Model in Appendix B and Table 4 of this report. |
Statutory Requirement |
3. Fees and Charges Register in Appendices D and E. |
To comply with Powys County Council Income Policy |
4. Capital Strategy and Capital Programme for 2021-31 shown in Appendix F. |
Statutory Requirement |
5. Minimum Revenue Provision Statement as set out on Appendix F. |
Statutory Requirement |
6. Treasury Management Strategy and the Annual Investment Strategy in Appendix F. |
Statutory Requirement |
7. Authorised borrowing limit for 2021-22 as required under section 3(1) of the Local Government Act 2003 at £492 million as set out in section 3.7 of this report. |
Statutory Requirement |
8. Prudential Indicators for 2021-22 as set out in section 3.66 to 3.73 of the report and Appendix F. |
Statutory Requirement |
Supporting documents: