Agenda item

Draft Medium Term Financial Plan 2020/21 - 2025/26

To consider the draft Medium Term Financial Plan 2020/21 -2025/26.


The Finance and Resources Portfolio Holder, Councillor Andrew Jarvis, provided a highly detailed presentation on the draft Medium Term Financial Plan (MTFP).  The Plan was a key element of the Council’s corporate planning framework to ensure that the Council had sufficient financial resources in the short to medium-term to deliver its statutory responsibilities and its Council Plan priorities.


Due to the impact of Covid-19, the report included high-level projections based on the information available as at early July 2020.  The situation was, however, changing significantly and quickly.  The projections would be regularly reviewed and reported during the 2021/22 budget preparation process.  The Council was required by statute to set a balanced budget in February 2021.


Based on current projections within the report, the impact of Covid-19, combined with budget deficits reported in February 2020, meant that the Council would need to find revenue savings (including potential additional income) of between £1m and £1.5m in order to set a balanced budget for 2021/22.  Further recurring savings of £1m would need to be identified by February 2022.


Due to reasonable General Fund balances and reserves at the start of the pandemic, robust financial management practices and a good track record in achieving efficiency savings, the Council was in a positive financial position overall compared to many local authorities, but now had a substantial challenge to correctly predict and then offset the budget deficit.


The MTFP, once approved, would form the basis of the budgets to be prepared during the remainder of 2020/21 for approval in February 2021.  However, the MTFP and the Budget Strategy provided only the broad framework; individual decisions, particularly the level of Council Tax, would be approved during the budget process based on the latest projections available.


Options to balance the budget in both the short and medium term would be prepared for the 2021/22 Budget to be approved in February 2021 and for the 2022/23 Budget to be approved in February 2022.  The size of the projected deficits might require solutions that would take some time to identify and implement.  It would be important to ensure adequate consultation on proposals was carried out.  The Commissioning Strategy would be used to identify how the resources of the Council could be used to improve outcomes for South Lakeland residents in the most efficient, effective, equitable and sustainable way.


Overall, the Council’s financial position had been weakened significantly by Covid-19, despite robust financial management processes and a good track record in achieving efficiency savings.  There were challenging times ahead to identify and decide upon options that would provide the solution to remaining revenue deficits.


The Overview and Scrutiny Committee had given consideration to the MTFP at its meeting on 17 July 2020 when a number of comments had been raised, details of which Councillor Jarvis provided, including a suggestion for a workshop for all Members to ideas on how to address deficits.  In addition, at its meeting on 22 July 2020, Cabinet had recommended the draft Plan to Council for approval.


Councillor Jarvis closed, pointing out that the outlook was challenging and that sacrifices would need to be made in future years to offset the costs of Covid-19.  He stressed, however, that the crisis also highlighted the benefit of the Council’s prudent management of its finances over the last decade.  He commended the tireless work of the Finance Team in keeping the Council's finances under control and in delivering the additional grants and services required at this time and offered his deepest thanks to that Team.  Councillor Jarvis moved the recommendation contained within the report and was seconded by Councillor Robin Ashcroft.


During discussion, Member raised the need to lobby the Government to provide more assistance in relation to the Covid-19 crisis.  They commended the savings being made by the Customer Connect Programme and pointed out how this and the Council having built up its reserves was assisting in addressing the crisis.  The Council was entering uncertain times, with residents and businesses facing tremendous financial upheaval.  A rise in poverty had been seen in South Lakeland as a result of the crisis and Members commended the work being carried out by the Council to help residents to rebuild their lives and businesses.  It was acknowledged that the MTFP built on the strong financial position that the Council had been in at the beginning of the year thanks to prudent financial management, with the Council continuing in its responsible approach, supporting key areas of the economy.  Members reinforced the serious situation the both the district and the country was in.


In response to a query as to whether there had been any changes in car park use or an increase in visitor numbers in the past few weeks, Councillor Jarvis explained that, in the first couple of weeks of July, car park income had been one third below that of previous years.  It had been particularly weak in towns, although stronger in the National Park area.  Councillor Jarvis advised that he had not been updated since the report on the agenda had been issued in the previous week.  The situation would, however, be monitored on a week by week basis and assumptions changed as necessary.  However, Councillor Jarvis pointed out that, for this year, this would have relatively little impact upon the full year outlook.  Although grateful for the 75% relief provided by the Government, he pointed out that if car park income picked up faster than expected, it would be the Government that gained the benefit.  Councillor Jarvis replied to a further query regarding car park permits and as to whether work had been carried out to calculate the statistics excluding annual permits, a large number which would have been purchased prior to the start of the Covid-19 crisis.  He explained that the Council was either giving a rebate or only charging for the part of the year during which the Council’s car parks were open.  This had been taken into consideration in the figures and was one of the reasons why income had been down 95% in the first quarter.


The Chairman asked the meeting if the motion was agreed.  There being no dissent, it was


RESOLVED – That the Medium Term Financial Plan 2020/21 – 2025/26 be approved.

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