Agenda item

Middlesbrough Council Long-Term Financial Sustainability


A report of the Director of Finance was submitted, the purpose of which was to inform the Corporate Affairs and Audit Committee of the publication of the new CIPFA Financial Management Code (FM Code) which was applicable in shadow form during 2020/21, with the first full year of compliance being 2021/22. 


An initial self-assessment that had been undertaken of the Council’s assessed level of compliance compared to the Standards contained within the CIPFA Financial Management Code and the associated actions arising to ensure full compliance was attached at Appendix 1 to the submitted report.  The results of the CIPFA Financial Resilience Index 2021 and a comparison and analysis with other Local Authorities, was attached at Appendix 2 to the submitted report.


The Director of Finance advised the Committee that the report had already been approved by Executive and it would beneficial for all Members to be aware of its contents.


Members were also advised that despite requisite systems in place to manage issues, staffing in this area had been impacted over the previous 10 to 15 years.


The levels of Council reserves were discussed during which it was clarified the s.151 officer assessed reserve levels based on budgetary activity year to year. 


In terms of Middlesbrough’s council tax base; it was confirmed that Middlesbrough was oversubscribed with properties with lower Council Tax bandings. It was important for Middlesbrough to grow its council tax base by increasing the number of homes with a council tax band of either D, E or F. It was also commented that despite being the fourth best improver for council tax collection, more improvement was required. 


Borrowing levels were discussed during which it was confirmed the Council’s current levels of borrowing stood at £218 million. The Director of Finance agreed to supply further details on spend against borrowing to Members outside of the meeting.


Members discussed how due diligence was carried out with stakeholders and how scenario testing was involved in this process. It was clarified that due diligence was robustly carried out, but could be strengthened in places.  Scenario testing had been carried out for a number of years informally, and informed the Medium Term Financial Plan (MTFP). However this needed to become formally embedded in the process.  


Members queried if there was a limit to the number of houses to be built in order to satisfy financial need. It was clarified house building would have a limit but it was important to try and reach a normal mix of housing type across the town. Members were also advised that, where appropriate, they would always be involved in future decisions regarding house building in the town.


The Chair queried what the ideal level of reserves were and it was clarified reserves currently stood at £11.5 million and the s.151 officer was comfortable with this level.



AGREED that the following were noted by the Committee:


1.  the contents of the report.

2.  the key points of the CIPFA Financial Management Code (FM Code) and the initial self-assessment of compliance with the Code, the associated actions arising to ensure full compliance, and the next steps.

3.  the results of the analysis of the CIPFA Financial Resilience Index 2021.

Supporting documents: