Cabinet takes first steps on setting next year’s budget and council tax

Cabinet takes first steps on setting next year’s budget and council tax

A report on Bath & North East Somerset Council’s financial outlook is set to be examined by cabinet next week.

At its meeting on September 9th the cabinet will be asked to approve the council’s Medium Term Financial Strategy (MTFS). This sets out the financial direction for the council and the challenges it faces over the next five years as it sets its budgets and lives within its means.

The MTFS also updates on the council’s financial recovery following the loss of parking and heritage revenue due to Covid and highlights the uncertainty resulting from the government’s spending review set for later this autumn. The report says that – even assuming council tax rises over the 5-year strategy period in line with last year’s- the council will need to save £15.95m over this period to balance its budget and deliver local services.

The MTFS also kicks off preparations for the budget and Council Tax setting for 2022/23 which will lead to final decisions being made by the council in February 2022.

Councillor Richard Samuel, Deputy Council Leader and Cabinet Member for Economic Development & Resources, said: “We currently think we will need to make £8.48m in savings for our 2021/22 budget. We can be confident that our track record in cutting costs and improving value for money will stand us in good stead for delivering our priorities within these limited resources. However, until the Government announces its spending review I am not making any assumptions about the funding available to us or the new burdens that may be placed upon us.

“I also remain very concerned about the ongoing impact of Covid on our commercial income, including from heritage and parking services, at the same time as pressure on council services and inflation is higher.

“The after-effects of the pandemic will be affecting the council’s finances for many years to come and this means residents can expect that this will limit the council’s ability to take on new projects and spending.  However, Bath & North East Somerset has managed the crisis better than many authorities and we remain fully committed to balancing the books every year.”

To manage financial risks the council holds £12.58m of unearmarked reserves. If this is not used in 2021/22 the MTFS proposes that the council continues to hold a commitment of £5m of this reserve for unbudgeted financial pressures that may arise from Covid.

To fund all service inflationary and demand pressures with no further savings the council would need to spend £30.05m of its reserves. This is 2.4 times the £12.58m of un-earmarked general reserves the council holds. In addition, to balance the budget the council would need to deliver £24.2m of recurrent savings in 2024/25.

Read the full report on the MTFS going before cabinet here https://democracy.bathnes.gov.uk/documents/s68004/E3316%20MTFS%20Cover%20Report.pdf

Community engagement on key aspects of the strategy will take place later this autumn.

The overall aims of the Medium Term Financial Strategy are to:

  • Set out and deliver the council’s priorities within affordable and sustainable financial constraints;
  • Ensure that the council’s strategic priorities are reflected in its capital programme and also that the capital programme is affordable;
  • Ensure that cash flows are adequately planned so that cash is available when required and the council can meet its capital spending obligations; and
  • Set a sound financial planning framework to underpin the effective financial management of the council.

The MTFS principles are:

  • That the council will seek to maintain a sustainable financial position over the course of the planning period and balance the budget on a two year rolling programme;
  • That the council will make provision for pressures, demographic changes, and inflation where appropriate with new priorities added only if “headroom” is achieved;
  • The deployment of the council’s limited resources will be focused towards essential services and those that contribute to the delivery of the Corporate Strategy, tackling the Climate Emergency and giving residents a bigger say.
  • Council tax increases have been included within the term of the MTFS to support essential services.
  • New sustainable income opportunities are to be identified and maximised wherever possible while maintaining current income streams through current economic uncertainty.

Cabinet meets on September 9 at 6.30pm. View the webcast live or watch later on the council’s YouTube channel.

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