Agenda item

Consideration was given tot a report of the Director of Finance which provided Cabinet 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.

The report set out the Council’s Medium Term Financial Strategy (MTFS) for the period 2022/23 to 2026/27, 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 this period.

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 both its revenue budget for 2022/23 and Medium Term Financial Strategy to 2026/27.

It was important to note that the Government has 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, therefore, based on a series of assumptions and must be considered indicative at this stage. The notification of detailed allocations of grant funding for one year had caused uncertainty and hindered effective planning by the Council both financially and operationally as futureGovernment 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 its best estimate of the present financial challenge were outlined in this report.

The MTFS highlighted the plan to deliver significant savings from the financial year 2023/24 onwards linking into the budget report elsewhere on the Agenda which outlined the proposals for the financial year 2022/23. 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. There were budget reductions agreed within the 2021/22 budget that had an impact on 2022/23 and beyond and proposed budget reductions for 2022/23 that had an impact on 2023/24 and beyond.

In total it was anticipated that these budget reductions would impact on 2023/24 at a value of £6.817m, £1.450m in the financial year 2024/25 and further £0.303m in the financial year 2025/26.

The budget reduction requirement for subsequent years after the delivery of approved budget reductions and the use of reserves was forecast to be £16.711m for 2023/24, £8.117m

for 2024/25, £8.384m for 2025/26 and £5.682m for 2026/27. However, given the level of anticipated, these estimates would be kept under constant review and would be subject to amendment and porvdied a starting position from

which more detailed financial and operational plans could be developed.

The Council’s approach to balancing its budget was to embark on an ambitious transformation programme based upon the Delivering a Sustainable Future (DaSF) concept and shape programme supported by appropriate investment which would aim to deliver long term recurring savings whilst improving the efficiency of service delivery. This was developing the

work established in the 2021/22 to 2023/24 MTFS, largely aligned to the themes established and approved at Budget Council in March 2021. The following DaSF core themes were

summarised below:

• 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

Presentation of this report to the Policy Overview and Scrutiny Committee on 27 January 2022 was a key stage in the budget consultation process. The Committee scrutinised the report and the other reports on the agenda that formed a core part of the Council’s strategic financial planning framework. The Committee was content to commend the report to Cabinet without additional comment.

Options/alterantives considered

Option 1 – Cabinet accepts the assumptions and resulting financial forecasts

presented within the report.

Option 2 – Cabinet proposes amendments to the assumptions which would change the resulting budget reduction requirement and financial forecasts.

Option 3 – Cabinet requests that further work was undertaken on some or all of the budget estimates and the approach to reserves and balances and that Cabinet considers a revised position.

RESOLVED – That Cabinet agreed and commended to Council

1. The policy landscape and economic context in which the Council was 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 £16.711m for 2023/24, £8.117m for 2024/25, £8.384m for 2025/26, and £5.682m 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.