Corporate Strategy 2023-2028

Funding into the Medium Term

The Medium Term Financial Plan 2023-24 to 2026-27 was agreed by Council at its 2 March 2023 meeting.

The better than anticipated settlement from Welsh Government for 2023-24 and the increase in the indicative settlement for 2024-25 will assist with our longer term financial planning.

A projected funding gap of between £36.3m (best case) and £67.1m (worst case) for 2023-24 to 2026-27 has been assessed having regard to the re-pricing of the base budget, estimating future AEF and Council Tax base changes, the potential pay and non-pay inflation rates and the potential ongoing impact of the COVID-19 pandemic and the Cost of Living crisis. Current expectations as at March 2023 is the ‘most likely’ budget assumptions of a £51.7m projected funding gap over the term of the MTFP. The assumptions and estimates are reviewed and revised on an ongoing basis, so the projected funding gaps will change.  The MTFP outlines its assumptions and how changes in these assumptions will impact on the projected funding gap.

The following table summarises how the most likely budget scenario of £51.7m will play out over this year and the following three years.  A combination of budget savings, additional income from a Council Tax ‘Band D’ increase, continued use of the Second Homes Council Tax Premium or the potential use of reserves will be required to bridge the projected funding gaps identified for the MTFP.

Development of the MTFP is an iterative process and it is kept under regular review to ensure it reflects most recent information and captures emerging issues.  The November 2022 edition of the Corporate Risk Register notes that the creation of a live MTFP is still not complete and is scheduled for September 2023.

 Most Likely Scenario  2023-24 (£'m)  2024-25 (£'m)  2025-26 (£'m)  2026-27 (£'m)
 Total Aggregate External Finance (AEF) (16.5)  (6.6)  (6.8)  (7.0) 
 Total Council Tax Base Change* 0.1  0.0  0.0  0.0 
 Total Service Pressures 32.5  17.5  14.1  14.0 
 Total Other Pressures 2.5  5.0  1.8  1.1 
 Projected Funding Gap 18.6  15.9  9.1  8.1 

*Whilst there will be a Council Tax Base Change for 2024-25 to 2026-27, it is not known what it will be but any increase will reduce the projected funding gap

ID: 10919, revised 06/10/2023