Agenda item

Medium Term Financial Plan (MTFP) - Key Decision

Report of the Portfolio Holder for Finance, Growth and the City Centre


The Chair of the Committee / Board agreed that this item, although not on the agenda, could be considered as a matter of urgency in accordance with Section 100B(4)(b) of the Local Government Act 1972, because he business cannot be deferred because it requires approval by Full Council on 9 March. The MTFP report requires approval at Full Council in order to set the Council Tax for 20/21. It is a legal requirement that Council Tax is set by 11 March 2020


The Board considered the report of the Portfolio Holder for Finance, Growth and the City Centre presenting the Council’s Medium Term Financial Plan (MTFP). This report comprises the revenue budget and capital programme for both the General Fund and the Housing Revenue Account (HRA). The following points were highlighted during discussion:


(a)  Nottingham City has seen a decade of cuts from Central Government that has necessitated approximately £0.25Billion in savings in that time. The funding from government has reduced from around £120m per year to £25m a year.


(b)  At the same time as significant cuts to funding there is an increased demand for services from the most vulnerable citizens;


(c)  The MTFP proposes £15.6m savings for 2020/21. Despite these cuts the Authority has worked hard to protect front line services for the most vulnerable citizens where possible.


The Leader of the Council offered his thanks to Portfolio Holders and Officers for their hard work on the MTFP. Portfolio Holders echoed their thanks to Officers during the process.


Resolved to:


(1)   2019/20 Forecast Outturn (Annex 1)

a. To note the current forecast outturn for the 2019/20 General Fund, HRA revenue budgets and capital programmes.


b. To approve budget virements and reserve movements set out in Appendices B and C.


(2)   MTFP 2020/21 2022/23 Revenue Element (Annex 2)

a. To note the General Fund revenue aspects of the MTFP.


b. To note, endorse and release savings totalling £15.623m, £13.411m as set out in the December Budget consultation report and a further £2.212m as detailed in this report and set out in Table 8 and detailed within Appendices A of the report for public consultation


c. To note, endorse and recommend to City Council:

i.   The General Fund net budget requirement for 2020/21 of £248.059m

ii.   Council Tax level (Band D) of £1,808.31 that will raise a total of   £121.807m (a basic increase of 1.99% and 2.00% increase for   Adult Social Care Precept)

iii.   Delegated authority to the Corporate Leadership Team to   implement all proposals after undertaking necessary   consultation

iv.   Delegated authority to the Chief Finance Officer (CFO) to approve   payment of the pension deficit lump sum based on the best value   approach for the Council


(3)  MTFP 2020/21 2024/25 Capital Programme Element (Annex 3):

  Note, endorse and recommend to City Council:

a.  The Capital Programme as detailed in Appendix D


b.  The additional key principle for the governance and management of the capital programme as set out in Section 5 and Section 8


c.  The extension of the rolling programmes as set out in revised General Fund Capital Programme Table 3


d.  The revised Local Transport Programme as set out in Appendix C


(4)  MTFP 2020/21 2022/23 HRA Element (Annex 4):

a. To note the following changes that impact on the HRA’s financial sustainability include:

i.  Increase of social housing rents by 2.7%

ii.   Stock reduction of 248 resulting from new build stock, acquisitions and Right to Buy sales

iii.   Continued roll out of Universal Credit and end of benefits freeze

iv.   Impact of Grenfell Tower Public Enquiry and Hackitt review of building regulations and fire safety


b. To approve the:

i.  Proposed rent increase of 2.7% for 2020/21

ii.  Continuation of the tenant incentive scheme of up to £100 per annum with a budget of £2.000m

iii.  Proposed increase in general service charges of 1.7%, in line with Consumer Price Index (CPI)

iv.  A working balance of £7.727m to provide for the effects of Universal Credit and to support the new build programme

v.   Delegation of authority to Nottingham City Homes (NCH) to award capital contracts up to the value of the scheme/programme as set out in Appendix B of Annex 4 of the report


c. To note, endorse and recommend to City Council the 2020/21 HRA budget


(5)   Robustness of the Budget (Annex 5):

  To note, endorse and recommend to City Council the recommendations of the Chief Finance Officer (CFO) in respect of the robustness of the estimates within the budget and the adequacy of reserves. Specifically delegating authority to the CFO includes:

(a)  Conduct a fundamental review of reserves, balances and provisions to create a resilience reserve. The reserve is to be sufficient to cover risks highlighted within the report and to give authority to review and amend the reserve in year based on any new or emerging risks.

(b)  Update the MTFS principles to take into account the Council’s reduced budget flexibility as a result of the continued use of one off measures to reduce overspends and present a balanced budget

(c)  Review and update the current MTFP practices and amend as necessary to align with CIPFA Financial Management Code

(d)  Produce a detailed 3 year MTFP to address the budget gaps in years 2 and 3 which will require a thorough transformation plan and strategy in order to balance the medium term financial position



(6)   Budget Consultation 2020/21 (Annex 6):

  To note the outcomes of the budget consultation and communication


Reason for Decision

The meeting of Full Council on 9 March 2020 will set the budget and Council Tax rates for 2020/21. By setting the HRA elements of the report and endorsing the MTFP this

Other Options Considered

There were numerous individual different options considered throughout the budget process too detailed and numerous to list as distinct options. The MTFP presented to the Board shows the final overall package of detailed proposals that see to balance levels of investment, cost reduction and an appropriate level of income.

Supporting documents: