Issue - meetings

Presentation by the Director Finance

The Director Finance presented an update on the current progress in the development of the Medium Term Financial Plan (MTFP) which was either as the result of a Council decision or due to elements outside of the Council’s control, such as decisions governed by Central Government. He reported the reductions required to form a balanced budget over the MTFP which had increased from the previous figure of £6 million to £7.5 million up to the period 2024/25. The increase was made up of a £600,000 expectation prior to Covid in relation to the Leisure budget, and a £900,000 budget in respect of the decision taken by improving the waste collection service and the introduction of a food waste collection service.

The Director Finance further explained the important influences on the process which included the following:-

·           challenges projected outside the Council’s control in terms of the Business Rate re-set, New Homes Bonus and additional income;

·           the given projected challenges of inflation, additional services pressures and additional debt repayment; and

·           Year by year total pressures.

The pressures were offset by a potential £1.1 million of additional income.

·           Business Rate re-set              £2.4 million

the Government’s intention was to reset the rates with the £2.4 million potentially shared out across the rest of the country, and an anticipated share of around £300,000 for Exeter. It was anticipated the Government reset would take place within the period of the Council’s MTFP and tie in with the revaluation of business rates for businesses around the country in 2023. 

·           New Homes Bonus                 £1.9 million

the Government had announced the end of New Homes Bonus (NHB) and despite consulting on a replacement scheme, have not announced its replacement or of the future opportunities for generating future income.

·           Inflation                                    £1.5 million

Inflation was a significant pressure, driven by the rising fuel prices as part of the goods and supplies needed for service delivery and was likely to impact on the Council’s budget.

·           Additional Services costs         £1.7 million

additional services costs such as the decision to bring back Leisure in-house in the middle of a Pandemic has resulted in income having been significantly impacted, but as the service seeks to recover, it will be part of the solution as well. The additional cost of delivering a new waste service with food collection in the city was also included.

·           Additional debt repayment      £1.1 million

the debt repayment process included repaying borrowing for historic decisions when money was set aside from the NHB so as to minimise service reductions.

In addition, the following savings would be made over the next three years which included an additional £2 million in 2022/23; £3.6 m in 23/24 and £1.9m in 24/25 (reserves of £600k will reduce the impact of the £3.6m figure)

The following was also highlighted –

• Leisure Services  - and the aim to deliver a cost neutral service in the future in the lifetime of years 2 and 3 of the MTFP.

• an organisational change programme will look at the way we deliver  ...  view the full minutes text for item 3

Presentation by the Director Finance