Issue - meetings

Further to Minute 84(ii) (21 February 2022), the Cabinet Member for Finance, Growth and Core Services introduced a report on the Council’s draft Medium Term Financial Strategy (MTFS) and Reserves Policy for the period 2022/23 to 2026/27 in relation to General Fund expenditure.

The Cabinet Member explained that the draft MTFS had been developed against the backdrop of the financial uncertainty caused by the cost-of-living crisis, inflation, delays to Fair Funding reforms and Business Rates retention arrangements, whilst also taking into account other anticipated demands and pressures.  He also pointed out that the Borough had the second highest population growth in London and the third highest in the country as well as a deprivation level showing that 48% of children were living in poverty, which only reinforced the need for Fair Funding reforms to be implemented to ensure that Barking and Dagenham received the appropriate level of funding from Government to support the local community.

The MTFS identified a cumulative funding gap of £14.8m over the five-year period, which represented a significant reduction on the £26.3m gap identified in the report to the February meeting.  To ensure an ongoing financially balanced position, the intention was to close the gap through savings, the continued implementation of transformation programmes to deliver sustainability in the longer-term and the identification of new investment opportunities.  The Cabinet Member stressed, however, that with so many uncertainties at the present time, the current position must be treated with caution.  On that issue, attention was drawn to examples within the report which included the local government pay award, which had been budgeted at 2% per annum but was likely to be significantly above that figure in view of the current level of inflation.

The report also set out principles for a robust reserves policy, although the Cabinet Member referred to the earlier discussions regarding the cost-of-living crisis which, in the absence of appropriate additional funding from Government, would inevitably impact on reserves.

Cabinet resolved to approve the Medium Term Financial Strategy and Reserves Policy 2022/23 to 2026/27 as set out in Appendices A and D to the report and the proposed approach to ensure the financial health of the Council over the medium term.