Medium Term Financial Strategy 2014/2017
- Meeting of Budget Meeting, Cabinet, Wednesday, 12th February 2014 6.15 p.m. (Item 146.)
- View the background to item 146.
The Director of Resources presented the Medium Term Financial Strategy 2014/2017, which was a strategic, financial document that set out the Council’s financial approach for the planning period 2014/2015 to 2016/2017. It also incorporated the Treasury Management and Investment Strategy for 2014/2017 in accordance with the CIPFA Code of Practice for Treasury Management in Public Services.
The Director commented that over the next three years the services the Council provided faced a very challenging financial future with a £44m anticipated funding gap. This had led the Council to consider how the total financial resources of the Council and its partners would need to be maximised, prioritised and channelled to the right areas and activities. The Medium Term Financial Strategy focused on ensuring that resources were matched to priorities as identified in the Corporate Plan, whilst ensuring that statutory functions were provided in the most efficient way.
The Chair noted that the savings introduced in the four year period Spending Review 2010 (SR10) 2011/2012 to 2014/2015 represented the largest reduction in public government spending since the second world war. In addition, local government would face further funding reductions in real terms and it was anticipated that further reductions due to austerity would continue until at least 2017. The Medium Term Financial Strategy as well as providing financial background, set out the Councils budget strategy, the aim of which was not to give provisional budget figures, but to provide the Council with a framework with which to support planning considerations for the medium term.
The report stated that the Treasury Management Strategy remained a key area of the financial strategy, especially with low interest rates and limited investment opportunity. It was incorporated in the Medium Term Financial Strategy and was subject to approval by the Council at the same time as the budget. She set out the CIPFA definition of treasury management as “the management of the organisation’s investments and cash flows, its banking, money market and capital market transactions; the effective control of the risks associated with those activities; and the pursuit of optimum performance consistent with those risks.”
The Council had endorsed the definition and had acknowledged that effective treasury management would provide support towards the achievement of its business and service objectives. It was, therefore, committed to the principles of achieving value for money in treasury management and to employing suitable comprehensive performance measurement techniques, within the context of effective treasury management.
A That in respect of the Treasury Management Strategy 2014/2017 –
(1) The Treasury Management Strategy for 2014/2017 be approved
(2) The Prudential Indicators be adopted
(3) The Council’s Minimum Revenue Provision policy be approved
(4) The Council Officers listed in Appendix G of the Director’s report be authorised to approve payments from the Council’s bank accounts for all treasury management activities.
B That is respect of the Medium Term Financial Strategy 2014/2017 –
(1) The Medium Term Financial Strategy be approved
(2) Regular updates of the Medium Term Financial Strategy be reported to Cabinet