Agenda item

The Executive Member for Finance and Governance submitted a report for Executive’s consideration.

 

The purpose of the report was to set out the financial framework and timetable within which officers would work with the Mayor and Executive to develop the 2024/25 budget and MTFP to 2026/27.

 

The report also included the proposed Reserves Policy which for consideration by Executive which would also be referred to Council for approval (Appendix one).

 

In common with all local authorities, the Council continued to operate within a difficult and uncertain economic environment. Inflationary drivers continued to place significant pressure upon service budgets and there was uncertainty in relation to future financial support from Central Government over the medium term.

 

The long-term impact of COVID-19 and the Cost of Living Crisis continued to impact adversely upon the demand for Council services and upon the cost of goods, works and services that were required to provide the wide range of services to the people of Middlesbrough.

 

The report was the first stage of the budget development strategy for the three year period 2024/25 to 2026/27 and built upon the MTFP approved by Council on 27 February 2023. It set out the financial framework and timetable within which Officers would work with the Mayor and Executive to develop budget proposals to deliver the new Council Plan. The report incorporated the proposed Reserves Policy for referral to Council for approval.

 

A non-Executive Member commented that any prospective increase to Council Tax levels should be viewed with caution given the current Cost of Living Crisis.

 

ORDERED that Executive:

 

1.    Note the increase in the forecast budget gap for 2024/25 to £14.204m rising to £24.522m over the term of the MTFP to 2026/27 (Table two and paragraphs 23 to 49 of the report);

2.    Agree that the Leadership Management Team (LMT) in consultation with the relevant Executive Member prepare detailed plans and budget proposals in accordance with the Council’s priorities and proposed budget strategy (paragraphs 21 and 22) taking account of periodic updates in MTFP assumptions;

3.    Agree the proposed Reserves Policy as contained in Appendix one and recommend this to Council for approval; and

4.    Note the budget preparation timetable (Table 11 and paragraph 54) and that

5.    proposals would be presented to Executive for approval in November 2023 as part of the draft MTFP and Budget Consultation.

 

OPTIONS

 

The Council was required by law to set a balanced budget and this report set out the development process and timeline for achieving that objective. Therefore, no other options were feasible.

 

REASONS

 

The Council was required to set a legally balanced budget for 2024/25 and achieve a financially sustainable position through a balanced MTFP to 2026/27. The budget development process required significant measures to be taken to develop transformed and redesigned services that delivered improved outcomes that were affordable within available resources over the medium term.

 

The Council continued to face significant budget pressures and uncertainty, including the continuing level of support from Central Government over the medium term.

 

Additionally due to increased demand for services, the long-term impact of COVID-19 and the current backdrop of economic uncertainty and inflation, council services continued to operate in a challenging environment.

 

The report was part of the Council’s continuing budget setting and business planning processes and built on the previous MTFP position recommended by Executive on 14 February 2023 and approved by Council on 27 February 2023.

 

The report set out the updated MTFP projections and proposed budget strategy for 2024/25 to 2026/27 so that officers could prepare detailed proposals for Member consideration as part of the annual budget-setting cycle in line with the timetable in paragraph 54.

 

The overarching objective of the budget strategy was to set a priority-led budget over the medium term that was balanced and realistic; and supported by achievable saving plans.

 

However, it must be recognised that meeting the significant budget gaps as that set out in the report would mean transforming the way we deliver services, doing some things differently and possibly stopping some services.

 

LMT would work closely with the Elected Mayor and Executive Members to develop plans that met the Mayor’s priorities within available resources over the period of the

MTFP.