Developing the Council’s Financial Plans
This part of this MTFP sets out the resource
considerations surrounding the achievement of the aims of the
Council given the changing environment in which it operates.
It covers the development of the budgets for the General Fund and
Housing Revenue Accounts over the medium term which outline the
financial resources needed to support the day to day activities of
the Council as well as planned investment in its assets.
Medium Term Financial Planning Councils are
required by law to set their budgets in advance of a financial year
so to enable the Council Tax to be set. A budget is simply a
plan expressed in financial terms. Medium term financial
plans recognise the need to plan for longer timeframes and present
indicative budgets for a number of years. To align with the
Government’s three-year timeframe for the publication of the
financial settlement, we too have prepared out financial estimates
for three years from 2008 to 2011.
Given the relatively long time between when
the MTFP is drafted and the final year that it covers (year 3) the
budget projections within it are provisional and will need to be
reviewed as part of subsequent years’ budget setting
processes. The main reasons why more firm estimates are not
able to be produced are:
- Timescales for
implementation – all plans are drawn up based on the best
available information at the time of drafting and as time passes
these plans need to be reviewed and at times revised. Where a
budget is associated with a change in policy or process, any delay
can have significant implications for the budget.
- Government targets and
policies – instructions can come from a number of external
government agencies which the Council has little choice but to
respond to, for which there can often be cost implications of doing
so.
- Market forces – The Council
sources many of its supplies and services through competitive
processes which enable us to keep our price increases to a
minimum. But even so, there are times when it can not avoid
high price increases, especially for essential services and utility
charges (such as electricity and gas). Often these can not be
anticipated with any accuracy very far in advance.
The figures that follow in this Plan represent best estimates using
available cost information, uplifted for inflation (where
appropriate) and planned implementation timeframes. Where
assumptions have been used the basis of these has been
explained.