To consider a report by County Councillor Aled Davies, Portfolio Holder for Finance and Transport.
Minutes:
The updated draft Strategy captured the financial, regulatory and policy drivers affecting the council and identified the Council’s service and resource priorities for the next five financial years. It delivered a balanced budget for 2022/23, and indicative budgets for the following 4 years to March 2027.
The draft MTFS included the principles that would govern the strategy and a five-year Financial Resource Model (FRM), comprising detailed proposals for 2022-23 and outline proposals for 2023-24 to 2026-27, the Capital Financing Strategy and the Treasury Management Strategy and Capital Programme for 2022-23 to 2026-27.
The Portfolio Holder noted that over the last ten years the Council’s finances had been significantly impacted from funding settlements that did not cover the cost of inflation and service pressures which resulted in savings being required to balance the budget. This year the cost of responding to COVID-19 had caused additional and unprecedented pressures. Additional financial support had been provided by Welsh Government during the last 2 years to support the Council’s costs and loss of income which had been instrumental in sustaining the financial position over this period. Funding to support the Council’s ongoing costs in response to the pandemic had now been included in the annual revenue settlement and would be managed within the Revenue Budget from 2022/23.
The 2022-23 provisional settlement gave Powys County Council a cash increase of £18.374 million (9.6%) on 2021-22.The settlement ensured that the Council could meet the increased demand for services, increasing inflationary costs, and support investment in improvement and transformation and in services that underpin the priorities set out as part of Vision 2025.
The Council also funded its expenditure by generating income from grants, fees and charges and council tax. The balancing of the Council’s 2022-23 budget was dependent upon a 3.9% increase in the council tax in 2022-23, generating £3.45 million, and £0.71 million delivered through changes to the council tax base, by £7.7 million of cost reduction proposals and by increases in fees and charges as set out in the report. The recommended 3.9% council tax increase was lower than the 5% assumed in the MTFS approved by Council in 2021.
The proposed Capital Programme totalling £371 million (including the Housing Revenue Account) reflected the existing commitments made in previous years as well as new schemes already approved. Maintaining the capital programme had a significant regeneration impact for the economy of Powys alongside the direct effect of better infrastructure to deliver services. Capital investment also had a significant input into the delivery of revenue cost reductions, and it was essential that both budget strategies are developed in tandem.
The Section 151 Officer gave her opinion that the estimates used in the budget proposal for 2022-23 were adequately robust but a level of risk remained. 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.
In moving the recommendations the Portfolio Holder for Finance and Transportation thanked the Head of Finance and her team and his Cabinet colleagues for their work on the budget.
RECOMMENDED to Council to approve the |
Reason for Recommendation:
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1. MTFS for 2022-2027 as set out in Appendix A to the report be agreed in principle. |
To aid business planning and development of the budget over a five-year period |
2. Draft Revenue Budget for 2022-23 with the inclusion of a 3.9% increase in Council Tax in 2022-23 shown in the Financial Resource Model in Appendix B and Table 3 of the 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 2022-23 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 2022-23 as required under section 3(1) of the Local Government Act 2003 at £492 million as set out in section 3.70 of the report. |
Statutory Requirement |
8. Prudential Indicators for 2022-23 as set out in section 3.66 to 3.70 of the report and Appendix F. |
Statutory Requirement |
Supporting documents: