Medium Term Financial Plan 2008 - 2011
Introduction
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 so that the MTFP
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 principles outlined within this Plan have
been used to develop the Council’s budgets for 2008/09 and enable
financial projections to be made for the following two years.
However, no environment remains static, not least that of a Council
following a rigorous improvement programme, and so this document
will be reviewed annually, to reflect new developments and changes
both to internal policies and practices as well as in the external
environment.
The previous Medium Term Financial Strategy,
which covered the years 2007 to 2011, identified substantial
budgetary shortfalls that were predicted based on the factors at
play at the time of its development. This revised version,
reports on the steps that have been taken since the last report,
and provides an updated position in respect of the future financial
health of the Authority.
The Three-Year Financial Strategy
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 three-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 which is a safe and sustainable budget that will
deliver the aspirations of the Council over the medium
term.