I want to dedicate my message this week to the Council’s financial situation, ahead of some important upcoming meetings.
On Monday 10 February the Resources and Delivering Value Scrutiny Board will be presented with an update on the Council’s Medium Term Financial Strategy (MTFS) covering the next three years. This is a document that sets out how we plan to manage our finances in the coming years. Since the approval of our last MTFS a year ago, our gap between our estimated spending and income has grown significantly from £12.584 million to £33.68 million.
Like last year, the budget round has continued to be very challenging. Funding pressures are still rising across our services, against a backdrop of severely constrained resource.
I would like to explain more to help you understand what we are dealing with.
In December we heard the outcome of the provisional local government finance settlement. This allocated £218 million for Solihull to spend on services. This is proportionately considerably less than many other local authorities. It is disappointing as it does not take into account the contrasting demographic pressures within our borough. For example, we have an ageing population alongside our significant responsibilities for children in care. Ultimately, most of this £218 million goes on providing crucial services for both of these groups.
To add to this, we were hoping to receive a share of the recent £600 million Recovery Grant. This is for local authorities up and down the country, however, we were one of only three metropolitan councils not to receive a penny.
Further pressures have also arisen from a reduction in business rates income, alongside the increasing number of people presenting as homeless, which is something being seen across the country.
Our external auditors and the Chartered Institute of Public Finance & Accountancy (CIPFA) have both independently judged that our Council has effective governance and good financial management. This has historically held us in good stead.
However, the scale of the financial challenge over the next few years is such that we must continue to look at doing things differently. Both our auditors and CIPFA acknowledged that the situation we find ourselves in is extremely difficult, with CIPFA recommending that we make an application to government for exceptional financial support (EFS). They also commented that we are one of a few councils not currently charging for garden waste collections and we must take steps to address this. As agreed by Cabinet in December, we will be introducing this later in the year.
We do recognise the pressures and financial strain that residents are already facing, therefore as part of our EFS application we have not requested the ability to raise council tax above government approved levels, albeit we have one of the lowest council tax rates in the country.
We will find out later in February whether our EFS application has been successful.
Council Scrutiny Board members will provide comments and feedback on the MTFS. An updated version will be presented to our Cabinet on 13 February, who will then be asked to make a recommendation to Full Council to approve the final budget and MTFS on 27 February.
This is without doubt challenging for us to deal with.
However, I am confident that our ambitious approach to our economy, our bold environmental programme, vibrant communities, passionate and committed staff and elected members and good partnerships will provide a firm footing for getting us through these uncertain times.
I will continue to keep you updated as we endeavour to move to calmer waters.
Councillor Ian Courts, Leader of Solihull Council.