In February 2022, an update to our Medium Term Financial Strategy 2022–2027 highlighted that the 2022/23 to 2026/27 cumulative budget gap for the Council was projected to be £57m.
Taking account of the latest information available to us, the assumptions made in the February 2022 report have been updated to reflect current situation. We found that in some cases this caused the gap to increase while in others, particularly around grant funding levels based on the recent Resource Spending Review, this caused the gap to reduce.
The volatility of the economy means and the impact on the ability to provide certainty in terms of long term forecasts means that assumptions will be reviewed on an ongoing basis and updates to our Strategy and the resultant budget gap will be provided at specific points. The introduction of an in-year recurring pressure from the 2022/23 pay offer means that there is an increased level of complexity in calculating the budget gap. This is due to the timing in identifying the recurring funding to meet the cost of the pay award.
Risk scenario
The level of uncertainty that currently exists means that the projected budget gap through to 2027 will be based on a range of assumptions and on a series of low, medium or high risk scenarios:
- low risk (best case scenario) – a budget gap of £29m
- medium risk (average case scenario) – a budget gap of £39m
- high risk (worst case scenario) – a budget gap of £61m
Our Medium Term Financial Strategy will proceed on the basis of a medium risk scenario based on the assumption of a cumulative budget gap of £39m by 2027.
Review of funding
An early task for Finance and ICT will be to review all funding and liaise with budget holders to seek to close the in-year gap for 2022/23 wherever possible given that this will reduce the 2023/24 savings target that will be applied to all services.
However we recognise that an assumed budget gap of £10m for 2023/24 is significant and far higher than previous gaps that services and budget holders have had to achieve.
Strategies and plans
Comments and suggestions
Get in touch if you have any comments or suggestions on the Council Strategic Framework and its strategies:
Comments and suggestions