Decision Maker: Cabinet
Decision status: Recommendations Approved
Is Key decision?: Yes
Is subject to call in?: Yes
To propose a Medium Term Financial Plan (MTFP)
The Leader introduced the report of the Chief Officers Executive (previously circulated) requesting that consideration be given to the Medium Term Financial Plan (MTFP) for 2023/24 to 2026/27 (also previously circulated) for consultation, including setting a budget and council tax increase for 2023/24.
The submitted report stated that the current economic climate presented significant challenges to the Council’s budgets; rising inflation, interest rates and energy costs and post-Covid demand in social care were putting significant pressures on the Council’s finances; and that unless further government funding was forthcoming the Council would need to undertake a fundamental review of its services over the course of 2023 to decide what and how services would be delivered in the coming years.
Reference was made to the fact that the Local Government Finance Settlement was not anticipated until the week commencing 19 December, the consequence of which was that the draft 2023/24 Budget and MTFP had an eye to future years but did not seek to presume what the future would look like.
It was reported that the Council would set a legal budget in 2023/24 and continue to provide the core offer level of services to the residents of Darlington; it would deliver a balanced position until 2024/25 utilising reserves as per the financial strategy; there was an annual budget deficit which was not sustainable and would need to be addressed; unless further funding was forthcoming the Council would need to both reduce expenditure and increase income to ensure a stable position moving forward; planning beyond the current year was extremely difficult, given the uncertainty around future funding; and that current planning suggested that reserves would be depleted in 2025/26 and there would be a budget deficit of approximately £10M.
Details of the projected expenditure and income, budget pressures and savings, schedule of fees and charges, assumptions used to prepare estimates, projected Revenue Outturn 2022/23 and proposed Capital Programme, were also appended to the submitted report.
Discussion ensued on the percentage of the budget spent on social care; to the high percentage of staffing costs and the implications of implementing the living wage; the implications on the rise in Council Tax on those families who were already struggling; and to the way that the Council received funding from the government. The Leader and Group Director of Operations responded thereon.
RESOLVED - That the Revenue Medium Term Financial Plan (MTFP) and the Capital Programme, as set out in Appendices 6 and 7 respectively of the submitted report, be approved for consultation, including:-
(a) a Council tax increase of 2.99 per cent plus a two per cent Adult Social Care Precept to fund social care for 2023/24; and
(b) the Schedule of Charges, as set out in Appendix 3 of the submitted report.
REASONS - (a) The Council must set a budget for the next financial year.
(b) To enable the Council to continue to plan services and finances over the medium term.
(c) To ensure decisions can be made in a timely manner.
(d) To ensure investment in the Council’s assets is maintained.
Report author: Gail Banyard
Publication date: 16/12/2022
Date of decision: 13/12/2022
Decided at meeting: 13/12/2022 - Cabinet
Effective from: 24/12/2022