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The Medium Term Financial Plan (MTFP) sets out the Council’s strategic approach to the management of its finances and presents indicative budgets and Council Tax levels for the medium term. It covers the General Fund Revenue Account, the Housing Revenue Account and the Capital Programme, and includes grant funded projects. It also comments on the significant risks facing the Council in the forthcoming years and explains what the Council is doing to reduce those risks.
The Medium Term Financial Plan can not exist in isolation. The costs of the Council are driven by the broad range of services it provides and statutory activities that it undertakes and so linkage to the Council’s business planning activity is fundamental to its development. The MTFP therefore represents a robust model of the financial requirements of the Council for its planned levels of service delivery in the medium term. As a result, the Council can look to the future in the knowledge that its Corporate Plan and individual Service Plans are able to be adequately resourced.
The previous Medium Term Financial Plan was approved for the period 2009/10 to 2011/12.The principles outlined within this Plan were used to develop the Council’s budgets for 2009/10 and enabled financial projections to be made for the following two years. However, no environment remains static - in particular, the current economic climate has had considerable impact on the Council. While the whole of local government has been hit by the recession, district councils have arguably suffered more than other tiers because of their strong reliance on revenue from interest on reserves and fees and charges. The Council has seen reduced investment receipts following a reduction in the Bank of England base rate to an historic low of 0.5%. A number of income streams have also been affected by the recession, particularly planning fees, building control and land charge income, Port income, car parking and green waste income. In the current economic climate, selling assets does not necessarily represent value for money for the taxpayer and so the Council’s ability to generate savings from releasing capital resources has been severely limited to the detriment of the Council’s capital programme. The Council’s MTFP has therefore been reviewed and updated to reflect these pressures, as well as to reflect new developments and changes to internal policies and practices.
In order to be able to deliver the Council’s aspirations as set out in its Corporate Plan, meet its statutory responsibilities, and at the same time be attentive to the needs of its communities, the Council must take a very proactive approach to managing its resources effectively so that it can adequately fund its business plans yet keep Council Tax increases as low as possible. The Medium Term Financial Plan is seen as a key tool for proactive financial management. It is used as the basis of the annual budget setting process to ensure that the Council’s resource needs for the forthcoming year are sufficient and aligned to the correct services; but also allows for future projected funding requirements to be identified far enough ahead so as to be able to take appropriate action to deal with any anticipated funding shortfalls.
Separate five-year plans have been developed that accord with the respective budget strategies for each of the Council’s separate financial accounts, namely; the General Fund Revenue and Capital Accounts and the Housing Revenue Account. The objective of these plans is a safe and sustainable budget that will deliver the aspirations of the Council over the medium term.
Next: Executive Summary
Financial Services
E-mail:
accountancy@ thanet.gov.uk
Tel: 01843 577000