Agenda item

To receive a report from the Deputy Chief Executive (S151) presenting to Member’s the updated Medium Term Financial Plan (MTFP) which covers the period 2026/27 to 2028/29 and to discuss initial options for cost pressures/savings or income related to the services covered by this Policy Development Group (PDG).

The Group had before it a report * from the Deputy Chief Executive (S151) presenting the updated Medium Term Financial Plan (MTFP) which covered the period 2026/27 to 2028/29 and which discussed initial options for cost pressures/savings or income related to the services covered by the Policy Development Group.

A summary of the report and the relevant factors was provided as follows:

·         The report was a little different to that provided in previous years. This was due to theraft of changes expected from 2026/27 and the longer term restrictions placed upon the Council byLocal Government Reorganisation (LGR). The report didn’t give a forecast shortfall to beaddressed. Instead it highlighted the unprecedented level of uncertainty faced by all councils inrespect of funding from 2026/27 onwards and estimated a range that the shortfall could fallwithin.

·         The Chancellor’s Autumn Budget would not be available until the end of November 2025. This would have a knock on effect of delaying the detail at individual local authority level. The uncertainty regarding future funding could not be overstated.

·         Over the summer officers had identified a range of budget options to address the budgetshortfall, using the Red, Amber and Green (RAG) assessment, which were being presented tothe relevant Policy Development Groups for discussion, with the recommendation to support the Green and Amber options.

Discussion took place regarding:

·         A definition of EPR (Extended Producer Responsibility) was provided which in basic terms meant that the Council would receive funding based upon the amount of packaging it collected. The draft budget included an estimated figure of how much that was likely to be.

·         Devon County Council Shared Savings funding would cease to be paid after 2025/2026, this would be a pressure.

·         The PDG walked through each of the cost pressures under its remit:

o   Solar panels on top of the waste depot provided a large proportion of the electricity needed to charge the electric vehicles it used, therefore no significant savings could be found there.

o   The Council bought its fuel in bulk and at the cheapest price at the time in order to reduce costs. Alternative cheaper solutions were being investigated such as HVO (homogenised vegetable oil).

o   The Governments emissions tax from 2028/2029 onwards.

o   Many of the cost pressures were outside of the Council’s control.

·         The PDG then discussed each of the savings options identified by officers in Appendix 3. This assumed that Option 1 (generally green) would be considered and Options 2 and 3 were included separately should the PDG wish to recommended the savings proposals be stretched even further. Option 2 (Amber) were recommended by officers but were proposed with a health warning. Option 3 (Red) were ‘doable’ but not recommended by officers:

o   There was no guarantee of a full year’s income in relation to the tennis/paddle court.

o   The proposed increase of 5% in car park fees had been discussed by the Car Parking Consultative Group.

o   Capacity issues in each of the Tiverton car parks.

o   There was no correlation between an increase in fly tipping costs and the amount that was subsequently fly tipped.

o   Uncertainty of fuel prices in the future.

o   Concerns regarding the impact on town centres of a 5% increase in car parking fees and the sensitivity around leisure upgrades.

o   Whether at the current time there was an appetite for Options 2 and 3?

o   It was still early in the budget setting process and the draft budget would need refining and further discussion at the next meeting. Additional savings may need to be discussed at that time.

RECOMMENDED to the Cabinet that:

a)    The updated MTFP position be NOTED.

b)    Savings Option 1 in Appendix 3 be approved.

(Proposed by the Chair)

Reason for the decision

By undertaking regular reviews of the MTFP the Council can ensure that its Corporate Plan priorities are affordable. The implications of the budget gap are set out within the paper. Many areas require greater clarity, particularly around national funding and possible changes to Government Policy. Therefore a number of key assumptions underpin the reported position, which will be refined as greater clarity is received through the budget setting process.

Note: * Report previously circulated.