Agenda item

Consideration was given to a report of the Director of Finance which provided the Committee with the forecast budget reduction requirement estimates for the period 2022/23 to 2026/27 having regard to the three-year Indicative Spending Review published on 27 October 2021, key Government Policy

Documents (such as the two White Paper on the future of Adult Social Care entitled Building Back Better and People at the Heart of Social Care) and the Provisional Local Government Finance Settlement published on 16 December 2021.

This report set out the Council’s Medium Term Financial Strategy (MTFS) for the period 2022/23 to 2026/27. The report advised Members of the key financial challenges and issues which would be faced by the Council over the forecast period and set out the estimated budget reduction requirement for the period 2022/23 to 2026/27.

The report presented the purpose and scope of the Medium Term Financial Strategy and how it had a vital role to play in enabling the translation of the Council’s ambition and priorities into action.

It also advised of the national policy landscape and economic context in which the Council was setting its revenue budget for 2022/23 and Medium Term Financial Strategy to 2026/27.

Members noted that, as the Government had only provided certainty in a one-year settlement for the financial year 2022/23 and an indicative settlement as per the Spending Review for a further two years. The MTFS estimates for 2023/24 to 2026/27 were based on a series of assumptions and therefore must be considered indicative only. This had generated significant uncertainty and hindered effective planning by the Council both financially and operationally, as future Government funding intentions such as those planned in the Levelling Up Agenda were difficult to assess. This position, together with the transformational and organisational plans for change that the Council would implement to address the financial challenge, were outlined in Section 11 of the report.

The MTFS highlighted the plan to deliver significant savings from 2023/24 onwards. Whilst it was anticipated that the Council would continue to rely on the use of reserves to support the revenue budget in 2023/24 and 2024/25 at a value of £9.932m, additional budget reductions were expected to be achieved as part of the Council’s transformation programme. The 2022/23 budget reductions had implications for future financial years, with savings of £6.817m in 2023/24, £41.450m in 2024/25 and a further £0.303m in the financial year 2025/26.

Having allowed for the use of reserves and already assumed budget reductions, the targets to be addressed were £17.427m for 2023/24, £8.087m

for 2024/25, £8.574m for 2025/26 and £6.142m for 2026/27.

The Council’s approach to balancing its budget was the transformation programme based upon the Delivering a Sustainable Future (DaSF) concept. The themes of the DaSF were as followed:

·         Enablers for Transformation

·         Placed Based Integration/ Communities

·         Children’s Transformation Programme

·         Adult Social Care Transformation Programme including Health and Care Integration

·         Economy and Public Realm (including the Creating a Better Place Strategy)

In addition, there were a range of Cross Cutting initiatives that had been identified that would complement the transformational programmes indicative targets had been assigned although there had to be some flexibility given the uncertainty that underpinned financial planning for the future years.

Given the importance of delivering budget reductions and embedding the programme of transformational change, during 2022/23, there would be a regular review of the progress of existing change programmes against the delivery milestones and financial targets. It would also ensure that there was continuous emphasis on the delivery of change and the achievement of the budget reductions required in line with the five-year strategy.

RESOLVED that the Policy Overview and Scrutiny Committee considered, accepted and commended to Cabinet, the following:

1.    The policy landscape and economic context in which the Council is setting its Medium Term Financial Strategy to 2026/27;

2.    The impact of Oldham Council Policies and Strategies on the Council’s budget setting process and the development of its Medium Term Financial Strategy;

3.    The financial forecasts for 2022/23 to 2026/27 having regard to the Provisional Local Government Finance Settlement, three-year indicative Spending Review, key White Papers and associated funding announcements;

4.    The key issues to be addressed in continuing to respond to the financial challenges facing the Council;

5.    The proposed use of £6.000m of reserves to support the 2023/24 budget and £3.932m of reserves to support the 2024/25 budget; and

6.    The revised estimated budget reduction targets of £17.427m for 2023/24, £8.087m for 2024/25, £8.574m for 2025/26, and £6.142m for 2026/27 after the use of reserves (as at recommendation 5) and the impact of budget reductions agreed for 2021/22 and 2022/23.