Agenda item

To consider the Medium Term Financial Strategy.

The Head of Finance explained that the report on the Medium Term Financial Strategy (MTFS) was based on estimates because the impact from the future of business rates and the Fair Funding Review in the 2020/21 budget settlement had been delayed by the Government’s parliamentary election and until the UK’s relationship with the European Union was resolved.  The funding for the 2020/21 budget year was therefore prepared on a ‘same as last year’ basis.  With the existing political and financial uncertainty being exceptionally high, the actual budget and the Medium Term Financial Strategy the Council would set in February 2020 for 2020/21 might well change.

There was a discussion around the following issues:

·      The Council might have to collect food waste which would have an associated cost and potentially alter recycling rates.  The cost of introducing a food waste collection was anticipated to be a one off cost at the present time but there would be an ongoing increased cost of collection.

·      Whether the Government could expect District Councils to have all the responsibility for the collection of funds and the difficulty of maintaining a balanced budget if the Council had to increasingly rely on revenue which it had raised itself.  There was a discussion around whether the Overview and Scrutiny Committee should request the Leader of the Council, in conjunction with other councils in West Sussex, write to the new government requesting clarification on the future funding of local government. 

·      The specific reserve used to fund a sum of £770,000 being allocated for safeguarding wildlife and the carbon agenda.  It was stated that it would come from general reserves. It was further explained that a sum of approximately £325,000 which was allocated for the Digital Transformation Programme would come out of the Transformation Reserve.

·                The net expenditure on statutory services only.  The Director of Corporate Resources explained that it was hard to neatly split out what was statutory and what was non statutory because there were often non-statutory elements to statutory services.  It was noted that the whole of Communities and Leisure was a non-statutory service.   The Director of Corporate Resources stated that our residents’ survey showed it was the non-statutory services which residents valued most highly.

·                The MTFS did not include any assumptions of cyclical recession. If there was a recession there was a lag before the effects were felt by the council.  There was a question around whether the levels of the Council’s reserves were high enough at approximately £6 million.  The Director said that represented more than six month’s money and was higher than many councils held for this purpose.

·                Whether there was anything the Council could do to reduce the cost of bed and breakfast accommodation used to house homeless people.  The Head of Finance said the Council had tried to do this and had built more temporary accommodation in recent years.  However, the number of homeless people had risen at the same rate.

·                The Chairman of the Overview and Scrutiny Committee wanted the Audit Committee to request a section of their reports confirm the value of Horsham District Council retail assets as at the end of 2019. 

RESOLVED

That the Overview and Scrutiny Committee request that the Leader of the Council, in conjunction with other Councils in West Sussex, write to the Government requesting that they eliminate the uncertainty on future local government funding.