URL: https://cmttpublic.cheshirewestandchester.gov.uk/ieDecisionDetails.aspx?ID=2014

Decision Maker: Cabinet

Outcome: Recommendations Approved

Is Key Decision?: No

Is Callable In?: Yes

Purpose:

Content: Cabinet considered the report of the Chief Operating Officer and the Director of Finance which outlined the strategic approach that the Council was taking to manage its financial matters. It set out the specific financial challenges facing the Council over the next four years and how it plans to meet these.   Members were informed that the Medium Term Financial Strategy (MTFS) sought to achieve a balanced budget to enable the Council to be fit for the future and have a roadmap to financial sustainability. It provided an update on the approach to setting the Council’s four-year revenue budget and four-year capital programme for the period 2026-30.   Members noted that the MTFS had been prepared against a backdrop of increasing volatility and challenge for local authorities in respect of inflation, uncertainty over the level of change in national level funding which included the Fair Funding Review that was due, increased demand and society changes.  Members were reminded that many councils were reporting financial difficulties with an increased number in receipt of exceptional financial support.   Members acknowledged that there had been ongoing and significant cost and demand pressures in Adult Social Care. In addition, the detail of the Local Government Finance Settlement was not yet known and funding allocations were not expected to be announced until late December 2025.  Members further noted that, based on the latest information, the council was facing an estimated funding gap over the next four years of in the region of £356 million. It was noted the gap would need to be bridged from generated additional income and savings proposals.  A significant programme of council transformation was also reported as underway which sought better outcomes as well as increased financial sustainability. A review of the overall shape and scale of the council would also be undertaken to address budget gaps in a sustainable manner.   Councillor Carol Gahan, Cabinet Member for Finance and Legal, led the discussion on the item as proposer and the item was seconded by Councillor Louise Gittins, Leader of the Council.   Visiting Members:  Councillor Charles Hardy spoke in relation to the item.   Cabinet Members welcomed the report and acknowledged the significant challenges that the Council faced, both nationally and locally. They recognised that the Council was in a relatively strong position compared to other local authorities, however this was increasingly difficult with demand-led pressures across social care.   Members noted the difficulty in councils being expected to deliver a balanced budget when the final financial settlements were not expected until late December. This required Finance officers to make educated assumptions, although it was recognised that officers had consistently delivered good financial management to date.  A review of Fair Funding was due to be concluded shortly which would assess how local authorities were funded in different areas and this included areas such as how local schools were funded compared to those nationally. It was hoped that this would ensure that the borough received a ‘fairer deal’.  The introduction of a multi-year settlement was welcomed and would result in service areas being able to plan for the longer term which would give more sustainability and allow the council to deliver more proactive solutions rather be reactive to issues that arise.   DECIDED:     That   1)            The Medium Term Financial Strategy as detailed in this report, including the development of a budget package for the period 2026-30 and a full review of existing reserves and balances, be noted; 2)            The latest estimated funding gap for the Council for the period 2026-30 (paragraphs 4.15 – 4.20) be noted; 3)            The stakeholder engagement process currently taking place on the Council’s budget plans for 2026-30 (paragraphs 4.28 – 4.29) be noted; and 4)            The Council’s position in relation to its financial resilience (paragraphs 4.36 – 4.44) be noted.   Reason for Decision   1)            In approving the recommendations laid out in this report, the Council will continue to ensure resources are well managed and reflect the key priorities of the residents of Cheshire West and Chester borough. 2)            It is not considered appropriate to seek approval for a Medium Term Financial Strategy at this stage, given the significant changes to the national funding landscape (Fair Funding Review and business rates reset) and continued cost and demand pressures to the Council’s financial position that could arise between now and the time the budget is set in February 2026. This report is therefore being presented as an update to the Cabinet at this stage and the plan is that the Medium Term Financial Strategy will instead be approved by Council as part of the Budget Report in February 2026.   Alternative Options   No other option is being proposed as it is considered good practice that the Council sets out medium term financial forecasts in this way and outlines the approach that it will take in managing its resources over the next four years.

Date of Decision: November 12, 2025