Medium Term Financial Strategy Report Presented to Full Council
Thursday, 29 September 2022 13:32
A report on the development of Dumfries and Galloway Council’s Medium Term Financial Strategy and budget process was discussed by Councillors at a meeting of Full Council today (Thursday 29 September).
Elected Members were asked to note and discuss the work being undertaken to develop the strategy, which takes into account volatility of current projections regarding pay increases, inflation and Scottish Government funding.
The report highlights the following:
• The Council faces an estimated five-year (financial year 2023/24 to 2027/28) funding gap of £50 million and must plan accordingly.
• There is a “very significant level of uncertainty” regarding financial projections due to a range of factors including inflation, pay, and UK and Scottish Government funding plans.
• The annual grant funding settlement from the Scottish Government represents around 82% of the total funding of the Council’s net revenue budget and has a fundamental influence on the Council’s Financial Strategy. Since 2013/2014 the proportion of the Scottish Government budget going to local government has fallen from 34% in 2013/14 to 28% in 2022/23.
• *Non-pay inflation will cost the Council an estimated £4.87 million this financial year, with increased energy costs being the main contributor.
• The recent inflation rises have increased pressures for pay awards beyond the level of resources available to local authorities.
• Since 2010/11, Dumfries and Galloway Council has identified, agreed and delivered savings of £116 million.
• Dumfries and Galloway Council has managed to set aside “a significant level of non-recurring resources, which…will provide the opportunity to invest in the changes required over the upcoming period and to take a strategic, medium-term approach to addressing these challenges.”
The report goes on to set out a timetable for developing the Council’s Medium Term Financial Strategy and agreeing the Budget, Council Tax and Capital Investment Programme for the three-year period 2023/24 to 2025/2026 by 30 March 2023. Subject to revision, this timetable was agreed by Full Council.
Members also agreed that plans should be developed as part of that process to address the funding gap.
Council Convener and Co-Leader Stephen Thompson said: “These are challenging times. People in Dumfries and Galloway are experiencing unprecedented cost-of-living pressures due to price inflation along with significant rises in energy bills, and local authorities across Scotland are similarly facing serious funding pressures and increased costs. Against this difficult backdrop, our Council needs to make its medium- to long-term plans and the report we discussed today sets out how we will achieve this.”
Depute Convener and Co-Leader Linda Dorward said: “Over the coming months, elected members will be faced with tough decisions as we plan for the next three financial years. Underpinning these decisions will be the setting of balanced budgets that are sustainable over the long-term and clearly linked to the achievement of agreed Council priorities.”
The report can be viewed in full at Agenda for Dumfries and Galloway Council on Thursday, 29th September, 2022, 10.30 am - Dumfries and Galloway Council (moderngov.co.uk)
The Council has a dedicated webpage providing cost-of-living support Cost-of-Living Support - Dumfries and Galloway Council (dumgal.gov.uk)
Elected Members were asked to note and discuss the work being undertaken to develop the strategy, which takes into account volatility of current projections regarding pay increases, inflation and Scottish Government funding.
The report highlights the following:
• The Council faces an estimated five-year (financial year 2023/24 to 2027/28) funding gap of £50 million and must plan accordingly.
• There is a “very significant level of uncertainty” regarding financial projections due to a range of factors including inflation, pay, and UK and Scottish Government funding plans.
• The annual grant funding settlement from the Scottish Government represents around 82% of the total funding of the Council’s net revenue budget and has a fundamental influence on the Council’s Financial Strategy. Since 2013/2014 the proportion of the Scottish Government budget going to local government has fallen from 34% in 2013/14 to 28% in 2022/23.
• *Non-pay inflation will cost the Council an estimated £4.87 million this financial year, with increased energy costs being the main contributor.
• The recent inflation rises have increased pressures for pay awards beyond the level of resources available to local authorities.
• Since 2010/11, Dumfries and Galloway Council has identified, agreed and delivered savings of £116 million.
• Dumfries and Galloway Council has managed to set aside “a significant level of non-recurring resources, which…will provide the opportunity to invest in the changes required over the upcoming period and to take a strategic, medium-term approach to addressing these challenges.”
The report goes on to set out a timetable for developing the Council’s Medium Term Financial Strategy and agreeing the Budget, Council Tax and Capital Investment Programme for the three-year period 2023/24 to 2025/2026 by 30 March 2023. Subject to revision, this timetable was agreed by Full Council.
Members also agreed that plans should be developed as part of that process to address the funding gap.
Council Convener and Co-Leader Stephen Thompson said: “These are challenging times. People in Dumfries and Galloway are experiencing unprecedented cost-of-living pressures due to price inflation along with significant rises in energy bills, and local authorities across Scotland are similarly facing serious funding pressures and increased costs. Against this difficult backdrop, our Council needs to make its medium- to long-term plans and the report we discussed today sets out how we will achieve this.”
Depute Convener and Co-Leader Linda Dorward said: “Over the coming months, elected members will be faced with tough decisions as we plan for the next three financial years. Underpinning these decisions will be the setting of balanced budgets that are sustainable over the long-term and clearly linked to the achievement of agreed Council priorities.”
The report can be viewed in full at Agenda for Dumfries and Galloway Council on Thursday, 29th September, 2022, 10.30 am - Dumfries and Galloway Council (moderngov.co.uk)
The Council has a dedicated webpage providing cost-of-living support Cost-of-Living Support - Dumfries and Galloway Council (dumgal.gov.uk)