Meeting documents

To consider report of the Director of Resources.

The Cabinet considered a report containing the Council’s Medium Term Financial Strategy which is integral to complying with the Prudential Code that will enable the Council to undertake external borrowing as part of the financing of the Strategy.

Members recognised the need to have a clear financial strategy to tackle the challenges to be faced in the coming years and discussed the importance of adapting to a new and different funding regime due to Central Government grants being withdrawn by 2020 and the introduction of an "additional tariff" to be paid back to the Treasury.  It was discussed that if no action was taken to address this change, it would result in a funding gap of up to £1.6m by 2019/20.

As the financial strategy will require capital investment for the authority in excess of available capital resource there would be a requirement to undertake Prudential Borrowing, which would require the authority to meet the requirements of the Prudential Code.

The key principles underpinning the strategy are:

§    The matching of expenditure and income in the medium term

§       Optimising the use of Council assets to deliver or help finance Council priorities

§    Aligning new expenditure to key Council priorities and to continue to provide value for money

§    Having in place sound financial processes to control and monitor expenditure

§    Awareness of the financial risks facing the authority and using this to inform the authority’s level of financial reserves

The financial forecast in the Strategy assumes grant funding and tariff levels as included in the last Financial Settlement data.  The Government had made an offer to local authorities that they can ask for these figures to remain unchanged over the period of the current spending review (i.e. until 2020/21).  It was proposed that the Council accepts this offer on the basis of providing some certainty for planning purposes.

In response to the Government request, a joint efficiency plan had been produced for South Bucks and Chiltern District Councils.

The Medium Term Financial Strategy was the main driver for the Council’s Treasury Management Strategy, especially as the authority was proposing to move from being debt free to Prudential borrowing, in light of this, it was noted the Treasury Management Strategy will need to be updated as part of its normal annual review, to reflect the new Medium Term Financial Strategy.   

Following a question and answer session, it was clarified, if agreed, that the updated Medium Term Financial Strategy and Treasury Management Strategy would take effect from its Council Meeting in February 2017 and kept under annual review.

Members welcomed the strategy and it was

RESOLVED that:

1.       The Treasury Management Strategy be updated to reflect the implications of the Medium Term Financial Strategy.

2.       Council indicates its interest in taking up the Governments Four Year Funding Offer, and the Joint Efficiency Plan produced with Chiltern DC (Appendix B to the report), be agreed.

Furthermore it was RECOMMENDED to Council that the

1.    Medium Term Financial Strategy (shown as Appendix A to the report) be updated.