Agenda item

Medium Term Financial Strategy (MTFS) EXE21-056

Reporting Person – Julie Fisher


Councillor Ashall, Portfolio Holder for Corporate Financial Planning and Policy, introduced the report which provided a forecast of the financial position of the Council for the four years to 2024/25 and outlined the approach to aligning the budgets of the Council with the priority outcomes defined within the Corporate Plan.  Councillor Ashall stated that the Council faced significant financial challenges arising from the impact of the Covid pandemic and that there was significant uncertainty around the speed of recovery of the economy and Government funding.  Councillor Ashall reported that the Council had received confirmation this week from the Ministry of Housing, Communities and Local Government (MHCLG) that it would not support the Council’s request for Exceptional Support for 2020/21 and 2021/22.  It was noted that the reasons that MHCLG was not supporting the Council’s request were that the Council’s overall financial position, including current levels of reserves, did not meet the criteria for support, the Council was not facing an immediate unmanageable cost pressure, and there were a range of actions that the Council could take to help manage its financial position in coming years.

Attention was drawn to the proposal to establish a “Fit for the Future” Programme which would drive out and maximise the benefits from the Council’s investments into the regeneration of Woking, as well as ensuring that the Council remained a lean, efficient and digitally modern Council.  The Fit for the Future Programme would be in support of the Council’s commitment to engage with its communities on establishing priorities and their delivery.  It was noted that the Finance Task Group and the Overview and Scrutiny Committee would be involved with formulating the details of the Programme.  The Executive heard that the Programme would complement and not duplicate the assurances from the Council’s independent auditors and its statutory Section 151 Officer.  The Portfolio Holder stated that he would ask the Chief Executive to write to the Council’s independent auditors requiring them to commit to a timetable to get their audit of the Council’s accounts back on timetable.  The Executive was reminded that the independent auditors issued an unmodified audit opinion on the financial statements on 26 November 2020.  The Portfolio Holder proposed four additional resolves (ix to xii) which were agreed by the Executive.

Following a question regarding the impact of the reduction in government grants, the Executive was advised that table 7.1 in the report assumed a reduction in general grants and New Homes Bonus of £1.874m by 2024/25.  Regarding the Investment Programme, it was noted that the project list would be part of the programme of reviews and that priorities would be set following engagement with residents in developing the Corporate Plan.  The Director of Finance explained that should the conditions be met for the loan to GolDev to be progressed, the Council would borrow the money from the Public Works Loan Board (PWLB) and that the margin on the loan to GolDev would provide additional income to the Council for a short period during the development.  It was noted that the forecasts in the report had not been specifically amended to reflect the closure of Victoria Arch.


That  (i)    the evidence base on demographics (Appendix 1) be noted;

          (ii)   the priority outcomes, in the Corporate Plan which form the basis of the Council’s business and financial planning set out in Section 3,be reviewed through the process highlighted within the report;

          (iii)  the target for areas of search to identify further efficiency and savings proposals (Section 7) be noted;

          (iv)  the development of a four year Medium Term Financial Strategy drawing from the Corporate Plan priority outcomes be agreed;

          (v)   it be agreed to continue to develop activity and financial plans through the Fit for the Future programme to deliver the savings and resource realignment needed in each of the next four years to operate within the resources available;

          (vi)  the development of the engagement and consultation plan to embed a culture of this way of working into decision making processes be continued;

          (vii) reports be received on more detailed plans for the next four years in November 2021;

          (viii) a £500k budget for external support for the Fit for the Future programme, to be funded by revenue reserves or the Flexible Use of Capital receipts where the criteria for this flexibility are met, be approved;

          (ix)  the confirmation from the Ministry of Housing Communities and Local Government (MHCLG) that they are not supporting our request for Exceptional Support for 2020/21 and 2021/22 be noted;

          (x)   the reasons MHCLG are not supporting our request, highlighted below, be noted:

       the MHCLG assessment of the Council’s overall financial position, including current levels of reserves, does not meet the criteria for support.

       the Council is not facing an immediate unmanageable cost pressure.

       there are a range of actions that the Council could take to help manage its financial position in coming years.

          (xi)  a letter from the Chief Executive to our independent auditors stressing:

       the critical role that they have in their independent audit of our accounts

       and the reliance we place on their audit as part of our strategies and our fit for the future transformation programme

requiring them to commit to a timetable to complete the outstanding audit of accounts so that we can place the required assurance and reliance on our established governance arrangements be agreed; and

          (xii) to note that in order to ensure the independent audit of our accounts and the fit for the future programme are aligned and complimentary, a comprehensive assessment of the following will be commissioned from independent advisors and made available to our independent auditors:

a.      The current net realisable value of each of the assets

b.      Full details of borrowing including their terms and conditions

c.      Full details of all preferential creditors and the amounts owed

d.      Full details of outstanding contractual obligations involving future income to be received and expenditure to be incurred

e.      Details of any fixed or floating charges on any assets

f.       Full details of any grants, loans or other contracts which contain performance conditions which, if not met today, would incur financial penalties for the Council or any of its companies

Monthly reports of progress on this will be provided to the Lead Councillor for Finance and to the Standards and Audit Committee

The independent advisors and auditors shall have full and unfettered access to all information

The Council shall seek completion of this audit work by 31 December 2021 as part of the Council’s Medium Term Financial Strategy (MTFS).

Reason:   To update Members on the issues which need to be taken into account in the priority and budget setting process for 2022/23 – 2024/25 and beyond.

Supporting documents: