PO11- 5 Year Medium-Term Financial Plan 2023-24 to 2027-28
North Lanarkshire Council · 29 September 2022
Back to Policy and Strategy Committee — 29 September 2022 and its agenda
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North Lanarkshire Council Report Policy and Strategy Committee Does this report require to be approved? ☐ Yes ☒ No Ref EK/KS/VR Date 29/09/22 PoW 11; 5 Year Medium Term Financial Plan 2023/24 to 2027/28 From Elaine Kemp, Head of Financial Solutions E-mail kempe@northlan.gov.uk Telephone 01698 302408 Executive Summary This report provides an update on the five year financial forecast and outlines the challenges faced by the Council in maintaining medium term financial stability, whilst achieving the strategic priorities of the Council. Taking the 2022/23 budget as the new baseline, this plan updates financial planning assumptions in relation to future revenue grant and other funding sources, along with increased cost pressures arising from employee costs, inflation and policy decisions. A range of risk-based scenarios have been considered, resulting in envisaged, pessimistic and optimistic positions, as set out in Appendices 1 to 3. As in previous years, the level of local government funding and potential pay awards remain two of the main variables which have the greatest scope to impact financial plans and the Council’s ability to set a balanced budget. However, this financial plan also recognises the more recent adverse impact and the volatility of inflation and rising energy costs. Whilst the envisaged scenario remains the most appropriate for planning purposes, it is important to note the budget gap range, reflecting other potential scenarios the Council may face. Table 1 below includes the optimistic and pessimistic scenarios and demonstrates the volatility and the extent of the fluctuation possible over the period of this plan. Table 1 below summarises the Council’s forecast financial position, with the envisaged scenario indicating a budget gap of £108.947 million over the five year planning period and £74.817 million for the three year budget period, 2023/24 to 2025/26. Reflecting the other planning scenarios, the budget gap is estimated to range between £58.703 million and £226.534 million over the five year period, and £43.624 million and £145.944 million over three years.
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1. Background 1.1. Longer term planning is integral to the Council’s Financial Strategy and the strategic approach to budgeting. Effective decision making relies on robust financial planning and the Medium Term Financial Plan (MTFP) assists in ensuring resources are aligned to the key priorities outlined in The Plan for North Lanarkshire and that the Programme of Work is affordable and sustainable. Elected Members require robust information to support decision making to ensure medium term financial sustainability for the Council. The MTFP reflects the financial risks that may impact on the Council’s ability to continue to provide high quality services focussing on the strategic priorities, whilst balancing the budget. 1.2. This plan continues to consider a range of scenarios and highlights the associated forecast budget position. Taking the 2022/23 position as the new baseline, updates to financial planning assumptions in relation to future revenue grant and other funding sources, along with increased cost pressures arising from employee costs, inflation and other commitments, are reflected in this plan. A range of risk-based outcomes are In line with the principles of the Revenue Resources Budget Strategy, the Council will work towards finding solutions to address the potential budget gap and ensure its statutory obligation to set balanced budgets are met. Recommendations It is recommended that Policy Strategy Committee: (1) Acknowledges the updated Medium Term Financial Plan 2023/24 to 2027/28. (2) Acknowledges that this plan will be subject to ongoing review with changes reported through future Financial Outlook reports. (3) Recognises, as per paragraph 5.5, engagement with elected members is required to ensure options to address the budget gap in each financial year are identified, to enable the Council to set a balanced budget. A series of budget briefing sessions will be arranged as required between October 2022 and January 2023 to progress this work. The Plan for North Lanarkshire Priority All priorities Ambition statement (25) Ensure intelligent use of data and information to support fully evidence based decision making and future planning Financial Year Budget Gap Optimistic (£000) Budget Gap Envisaged (£000) Budget Gap Pessimistic (£000) 2023/24 24,613 37,897 63,844 2024/25 12,170 20,620 44,260 2025/26 6,840 16,300 37,840 2026/27 7,430 16,880 39,610 2027/28 7,650 17,250 40,980 TOTAL 58,703 108,947 226,534 3 Year Gap 43,624 74,817 145,944 Table 1 General Fund
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modelled highlighting optimistic, envisaged and pessimistic scenarios. In the past, the two main variables which have the greatest potential to impact financial plans and the Council’s ability to set a balanced budget have been the level of funding provided by the Scottish Government and pay inflation. However, with more recent potential material adverse impacts of non-pay inflation and rising energy costs, this plan recognises the risks and volatility of such, and forecasts the potential financial implications. Therefore, whilst the envisaged scenario remains the most appropriate for planning purposes, it is important to note the budget gap range, reflecting the other potential scenarios the Council may face. The envisaged, pessimistic and optimistic scenarios are shown in Appendices 1, 2 and 3, respectively, demonstrating the volatility and the extent of the fluctuation possible over the period of this plan. 1.3. The Scottish Government published its Resource Spending Review in May 2022, which set out high level parameters for future Scottish budgets up to 2026/27. This identified a flat lining of resource funding for Local Government at 2022/23 levels, over the next three financial years, with a small increase forecast in 2026/27. However, it is unclear if this position comes with additional commitment to new policies or additional responsibilities. The Spending Review further confirmed that more detailed spending plans will be set out in the 2023/24 Scottish Budget and subsequent annual budgets, meaning that the difficulties in forecasting beyond one year to any degree of certainty remains. However, the Spending Review did confirm that the £120.000 million announced as part of the Stage 1 Budget Bill for 2022/23, originally provided as a one- off resource, will be baselined and provided on a recurring basis. The Council’s share of this was £7.687 million. This MTFP assumes that the Council has the discretion over its use on a recurring basis. 1.4. In addition, the Scottish Government’s commitment to establishing a National Care Service has resulted in further financial uncertainty in respect of Adult Social Care services and Local Government as a whole. Continuing the approach taken in 2022/23, it has been agreed through collaborative working that financial pressures facing adult social care services provided to the IJB will be managed by the IJB through use of reserves or implementation of savings where necessary. Therefore, the Council’s MTFP continues to exclude any potential future financial impacts of providing Adult Social Care Services in the overall Council financial planning position. 1.5 It is considered that a five year medium term plan remains reasonable and appropriate for financial planning purposes. 2. Report A Strategic Approach to Budgeting 2.1 The Revenue Resources Budget Strategy, approved by Policy and Strategy Committee, sets out the key principles and framework to facilitate a robust and strategic approach to financial planning. The Strategy has been successfully implemented and embedded in the development of financial plans since 2020/21 and continues to underpin the budget the financial planning and budget setting process. 2.2 The previous MTFP indicated a three year gap for the period 2023/24 to 2025/26 of £66.234 million (2023/24, £20.827 million, 2024/25 £26.777 million and £18.630 million 2024/25). The planning assumptions have now been reviewed to ensure the plan is updated for changes in legislative, political, social, economic and demographic factors, recognising the impact these may have on the demand for services, resources, and other cost pressures.
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2.3 Appendices 1 to 3 provide summaries for three planning scenarios across the five year planning period, highlighting the anticipated budget gap for the three year budget period 2023/24 to 2025/26. Whilst three planning scenarios have been presented reflecting sensitivities & volatility in forecasting, the remainder of this report primarily focuses on assumptions in relation to the envisaged scenario. These are contained within sections 3 and 4 below. 3. Forecast Resources 3.1 The largest element of the Scottish Budget is the Scottish Block Grant provided by the UK Government through the Barnett formula. The UK Spending Review is the process by which the UK Government sets out its plans for public spending. This provides vital information for the Scottish Government’s planning assumptions and budget. The UK Autumn Budget and Spending Review 2021 was published in October 2021 and set out funding for the Scottish Budget at a time when inflation was low and not expected to rise significantly. The Spring Statement in March 2022 provided an update on the economy, OBR forecasts and progress since the Autumn budget. However, despite the reality of significantly high inflation the UK Government has not, as yet, adjusted their spending plans. No date has yet been set for the next spending review however it is expected to be announced in the Autumn. Therefore, it should be noted that there is the potential for adjustments to both UK and Scottish Government budgets 3.2 As outlined above, whilst the Scottish Government’s Resources Spending Review indicates flat cash settlements for Local Government for 2023/24 to 2025/26, with a minor increase in 2026/27, there is insufficient detail to give clarity and certainty over funding at individual Council level and whether this funding will come with additional spending commitments. There are also a number of other variables and uncertainties which may impact on this position including Scottish Government’s commitment to support priority areas such as health, care, education and children, with the potential to impact on funding levels for other departments including Local Government. Aggregate External Finance (AEF) 3.3 The Council’s revenue funding consists largely of government funding, known as Aggregate External Finance (AEF), which equates to approximately 82% of the total funding, and is made up of General Revenue Grant, Specific Grant and Non Domestic Rates Income, based on the Scottish Government’s assessment of overall spending needs. 3.4 As previously noted, estimating future years’ funding with any degree of certainty is problematic, and a slight variation on funding level can have a significant impact on the Council’s forecast financial position. Therefore, it is important to be mindful of this when considering the range of scenarios presented. 3.5 All three scenarios have been re-baselined to include additional recurring funding received from Scottish Government of £7.687 million, which was originally allocated on a one-off basis, as part of the 2022/23 budget setting. The envisaged scenario assumes no movement in the re-baselined 2022/23 core grant for the duration of this plan i.e. flat cash, as indicated in the Scottish Government’s Resource Spending Review. Both the optimistic and pessimistic scenarios have been flexed to 1% increase/decrease respectively. Therefore, the overall net impact over the 3 year budget period is a £7.687 million increase in resources for 2023/24. Council Tax 3.6 Income from Council Tax accounts for around 17% of the Council’s revenue resources with the estimated income based on a combination of Band D equivalent value, householder base and the expected rate of collection.
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3.7 In setting the 2022/23 budget, the Council decided that Council Tax would be increased by 3%, increasing a Band D charge to £1,257.89. 3.8 The Community Investment Programme is funded from ring-fencing future growth in Council Tax income from regeneration activities and the Council’s ambition, along with 1% of future increases in Council Tax charges. Therefore, this plan reflects the commitment to increase Council Tax by 1% to support the Community Investment Programme, which equates to £8.600 million of additional resources over the five year planning period and £4.900 million over the 3 year budget period. Any further increases in Council Tax rates will be a decision for Elected Members to take and will be considered as part of the solutions in closing forecast budget gaps. 3.9 Also, in line with the Council’s Programme of Work, a Community Investment Fund Annual Update is presented as part of this agenda, with the revised forecast reflected in the approved five year Community Investment Programme. The updated Community Investment Fund report reflected the economic uncertainties created by the Covid-19 pandemic and continues to be based on pessimistic projections for future Council Tax ambition growth. This pessimistic scenario has been reflected in the MTFP envisaged forecast. Use of Reserves / Resources 3.10 The Revenue Resources Budget Strategy allows for prudent and controlled use of balances, with the Change Management Fund supporting the one-off costs of approved budget savings. In recent years and in line with its Reserve Policy, the Council has utilised one-off resources to support multi-year budgeting as well as allowing time to develop and implement savings over time, or to resource one-off service enhancements. There is currently no additional planned use of reserves as a result of this plan. However, it was deemed prudent on finalising the 2021/22 annual accounts to earmark one-off resources to support the anticipated additional financial burden arising from current challenging economic environment, expected to impact materially on current budgetary provision in respect of strategic workforce planning costs, non- pay inflation and energy costs. 4. Forecast Expenditure Requirements Employee Cost Pressures 4.1 Employee costs remain the largest single element of the General Fund budget, accounting for around 54% of General Fund budgeted expenditure in 2022/23. Cost pressures arising from the workforce are therefore material and another key variable with the potential to impact significantly on the forecast plan. The forecast employee cost pressures are outlined below; 4.1.1 Pay Awards A 2.5% uplift was previously assumed for financial year 2022/23. However, at the time of writing, the pay offer, which has still to be agreed, is estimated to cost the Council an additional net 1% or £4.700 million, which has been reflected in this plan. It should be noted this position reflects an assumed share of additional recurring Scottish Government funding of £140.000 million, estimated to be the equivalent of a 1.5% uplift across Local Government. The plan also assumes a share of a further £120.600 million the Scottish Government has committed to, which will be received as additional capital grant for 2022/23 and 2023/24. From 2024/25 onwards, the Scottish Government has given assurances this funding will be baselined in the revenue grant. Discussions are ongoing with Scottish Government to determine the options in
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applying the additional capital grant to fund revenue commitments. The Scottish Government continues to review the potential for additional flexibilities to assist with funding the remaining burden on councils. However, to date there has been no confirmation or agreement in this respect so it remains prudent to provide for the additional burden of £4.700 million. 4.1.2 In relation to 2023/24 to 2027/28, an estimated 2.5% increase has been assumed, to reflect the element of the pay awards expected to be managed within Council resources, with any uplift above this level assumed to be funded from additional government support. The financial implications of this assumption are £12.000 million, £12.300 million, £12.600 million, £12.900 million, and £13.200 million, across the five years of the plan (on a 22/23 baseline cost which will change subject to the pay uplift agreed). Therefore, it should be noted that in the event of an uplift greater than 2.5% and no additional government support, the envisaged forecast gap could potentially change materially. 4.1.3 Pension Costs Pension contributions paid by the employer are set by the fund actuary at each triennial valuation, or at any other time as instructed to do so by the administering authority. The Scheme is a multi-employer defined benefit plan and employers’ contributions are determined so that employee and employer rates are standard across all participating Local Authorities. The latest triennial valuation saw no increase to the employer rate of 19.3%, with the next valuation due to take place in March 2023, for application from 2024/25. Previously it was envisaged that the employer rate could increase as a result of the impact of the McCloud case, however on the basis that the fund is currently 106% funded this assumption has been reversed with no change to the employer rate now anticipated. Non Pay Inflationary Pressures 4.2 Historically a non-pay inflationary uplift has generally only been provided where it was deemed material and contractual in nature, based on forecast relevant inflationary indices. This continues to be the case in this update to the MTFP. However, it is acknowledged that in the current challenging financial economic environment with rising inflation and energy costs, it will be even more difficult for services to manage budgets for which no inflationary uplift is provided. Non pay inflation will remain under review with updates provided as necessary through subsequent Financial Outlook reports. A more detailed analysis of the impact of inflation is provided separately on this agenda. 4.3 To reflect the upward trajectory of inflation, the 2022/23 budget was set with an additional recurring funding of £2.417 million for contract inflation. This is currently being held centrally until there is evidence of the actual inflationary pressure being experienced by services, which is being monitored throughout the year. However, as inflation for 2022/23 was forecast by the Office for Budget Responsibility in March 2022 to be closer to 8%, a further recurring provision of £5.710 million has been built into the baseline budget, to bring the overall additional provision for contract inflation in 2022/23 to £8.127m. Whilst this is lower than the current level of year on year inflation being reported at the time of writing, there is pressure on both UK and Scottish Government to take action to support such material pressures on public service budgets. This will continue to be monitored and any further material changes arising, will be considered and reflected as appropriate, in future financial outlooks, as we work towards annual budget setting.
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4.4 Contract inflationary pressures from 2023/24 onwards have been provided for using most recent and relevant forecast inflationary indices, totalling £5.890 million in 2023/24 and £17.630 million over the five year period. 4.5 Due to the real uncertainty around the potential increased inflationary pressures in relation to energy supplies for 2022/23, a review to determine the likely recurring impact on fuel budgets is ongoing. At this stage a further £10.700 million has been provided for as an additional recurring burden. 4.6 Other inflationary pressures in respect of energy and non-domestic rates increases from 2023/24 onwards have also been reflected totalling £1.140 million in 2023/24 and £4.000 million across the five year panning period. Other Cost Pressures 4.7 Other cost pressures totalling £13.920 million over the five years are also provided for in this plan. This predominantly relates to unmanaged burdens within Education, Children & Families, which are subject to ongoing review. Also included are anticipated increased cost of Council Tax Reduction Scheme, other minor cost burdens, including recurring impacts of COVID-19, and unachievable savings. 4.8 In addition, although not reflected in this Plan, Committee should note there are other potential cost pressures of £2.000 million in relation to the delivery of previously approved Active and Creative Communities savings, which will be the subject of a future report to this Committee. Other Commitments 4.9 There is provision for loan debt costs in relation to the Community Investment Programmes, including City Deal, which equate to £2.290 million in year 1 of the plan and £13.850 million across the planning period. 5. Updated Medium Term Financial Forecast Approved Savings / Advanced Action 5.1 In line with the Revenue Resources Budget Strategy and the commitment to consider a three year rolling revenue budget, a three-year savings programme totalling £58.784 million was approved by Council on the 24 February 2020, in relation to 2020/21 to 2022/23. These savings result in delivery of a minor saving of £0.176 million for 2023/24 in respect of the acceleration of a previously approved saving in relation to the Reconfiguration of Secondary Schools Management structure, which fell outwith the original 3 year savings programme to 2022/23. 5.2 This plan assumes all other previously approved savings will be fully achieved. Committee should note that any updates in this regard will be provided to future meetings and amendments to the Financial Plan will be made accordingly. Summary – Medium Term Financial Forecasts 5.3 The table below summarises the envisaged budget gap across the five year period of the plan and the forecast position in relation to the three year budget period 2023/24 to 2025/26, after accounting for the advance action discussed above;
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5.4 The envisaged scenario indicates a budget gap of £108.947 million over the five year planning period and £74.817 million for the three year budget period 2023/24 to 2025/26. Further details are contained within Appendix 1. Appendices 2 and 3, summarising the forecast pessimistic and optimistic scenarios indicating the gap could range between £58.703 million and £226.534 million, over the five years. 5.5 In line with the principles of the Revenue Resources Budget Strategy, Council officers will work with Elected Members to ensure options for potential solutions are presented to enable the Council to address the budget gap in each financial year and to meet its legal obligation to set a balanced budget. As in previous years, budget briefings will be arranged to support Elected Members in this regard. This will also be informed by the results of engagement with Community Boards. In addition, Committee is asked to note that the development of a Sales, Fees and Charges policy is underway to support the principle of achieving full cost of recovery for services provided. 6. Risks and Uncertainties 6.1 Whilst the assumptions applied to income and expenditure projections in this financial plan are based on the best information available at the time of writing, they are inherently uncertain. The key factors which are likely to impact upon the Council’s assumptions and future financial plans have been discussed throughout the report, including the significant uncertainty in relation to the Council’s funding settlement, volatility in assumed inflationary uplifts including those in relation to pay awards. There are also a number of political factors which may impact on planning assumptions, including the Scottish Government’s commitment to a National Care Service and the financial consequences of this on Local Government, along with climate change commitments. 6.2 Other current notable risks include; 6.2.1 Ash tree dieback linked to a disease which could cause significant damage to the UKs ash population. As has been previously reported to Committee, there may be a significant financial cost to managing the diseased species, including identifying ash trees, assessing their condition and where necessary removal of trees and a programme of replanting. The Council is in the process of developing a proposed action plan to manage the position, therefore, it is not possible to estimate the cost at this stage. 6.2.2 Committee should also be aware that the Scottish Government is undertaking a review of Capital Accounting arrangements and statutory mitigations in respect of such. Statutory interventions override the CIPFA Code of Practice for Local Authority Accounting, and the Scottish Government has decided to review them to make sure they remain fit for purpose. The independent review will Financial Year Budget Gap Envisaged (£000) 2023/24 37,897 2024/25 20,620 2025/26 16,300 2026/27 16,880 2027/28 17,250 Total 108,947 3 Year Gap 74,817
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build upon the work taken forward by Directors of Finance in March 2022 but will also consider the statutory framework for capital accounting. There is growing concern among Directors of Finance that the aim is to remove the statutory mitigations, leaving Councils exposed to the financial consequences on revenue budgets and ultimately potentially impacting on capital investment programmes or create volatility which would have implications for Council taxpayers. Should any such changes be proposed, indications are that these will be applied going forward with transition arrangements put in place. The final proposals are currently scheduled for completion in November 2023, which should give much needed certainty for local authorities, as we manage the already significant challenging forecast budget gaps. Community Empowerment (Scotland) Act 2015 6.3 This Act requires councils to embed community participation in the design and delivery of public services, and to build community capacity to give people the skills and confidence required to be involved, while recognising the particular needs of communities facing multiple social and economic challenges. In line with previous financial years the Council will engage in a budget consultation exercise. The outcome of the consultation will inform members’ decisions around the solutions to ensure the Council meets its statutory requirement to set a balanced budget. 7. Measures of success 7.1 Measures of success will include: • Development of solutions aligned to the Council’s strategic objectives outlined in the Plan for North Lanarkshire • Setting of a balanced budget for 2023/24 and subsequent years • Successful and timeous implementation of approved solutions 8. Supporting documents Appendix 1 Envisaged Scenario Appendix 2 Pessimistic Scenario Appendix 3 Optimistic Scenario Elaine Kemp Head of Financial Solutions
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9. Impacts ( http://connect/report-template-guidance ) 9.1 Public Sector Equality Duty and Fairer Scotland Duty Does the report contain information that has an impact as a result of the Public Sector Equality Duty and/or Fairer Scotland Duty? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? If Yes, has an assessment been carried out and published on the council’s website? https://www.northlanarkshire.gov.uk/your-community/equalities/equality-and-fairer- scotland-duty-impact-assessments Yes ☐ No ☐ 9.2 Financial impact Does the report contain any financial impacts? Yes ☐ No ☒ If Yes, have all relevant financial impacts have been discussed and agreed with Financial Solutions? Yes ☐ No ☐ If Yes, please provide a brief summary of the impact? 9.3 HR policy impact Does the report contain any HR policy or procedure impacts? Yes ☐ No ☒ If Yes, have all relevant HR impacts have been discussed and agreed with People and Organisational Development? Yes ☐ No ☐ If Yes, please provide a brief summary of the impact? 9.4 Legal impact Does the report contain any legal impacts (such as general legal matters, statutory considerations (including employment law considerations), or new legislation)? Yes ☐ No ☒ If Yes, have all relevant legal impacts have been discussed and agreed with Legal and Democratic Solutions? Yes ☐ No ☐ If Yes, please provide a brief summary of the impact? 9.5 Data protection impact Does the report / project / practice contain or involve the processing of personal data? Yes ☐ No ☒ If Yes, is the processing of this personal data likely to result in a high risk to the data subject? Yes ☐ No ☐ If Yes, has a Data Protection Impact Assessment (DPIA) been carried out and e- mailed to dataprotection@northlan.gov.uk Yes ☐ No ☐ 9.6 Technology / Digital impact Does the report contain information that has an impact on either technology, digital transformation, service redesign / business change processes, data management, or connectivity / broadband / Wi-Fi? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact?
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Where the impact identifies a requirement for technology, has an assessment been carried out (or scheduled) by the Enterprise Architecture Governance Group (EAGG)? Yes ☐ No ☐ 9.7 Environmental / Carbon impact Does the report / project / practice contain information that has an impact on any environmental or carbon matters? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? 9.8 Communications impact Does the report contain any information that has an impact on the council’s communications activities? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? 9.9 Risk impact Is there a risk impact? Yes ☐ No ☒ If Yes, please provide a brief summary of the key risks and potential impacts, highlighting where the risk(s) are assessed and recorded (e.g. Corporate or Service or Project Risk Registers), and how they are managed?
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Envisaged Scenario Appendix 1 2023/24 2024/25 2025/26 2026/27 2027/28 £000s £000s £000s £000s £000s Anticipated Cost Pressures 45,870 21,330 16,910 17,590 17,960 Pay Award 12,000 12,300 12,600 12,900 13,200 Pension Costs 0 0 0 0 0 Other Employee Costs; additional recurring impact of 2022/23 pay award 4,700 0 0 0 0 Contract Inflation 11,600 2,650 2,810 3,100 3,180 Energy Costs inc. additional provision for unbudgeted 2022/23 price increases 11,180 360 380 420 390 NDR Costs 660 260 330 360 360 Other Cost Pressures 5,730 5,760 790 810 830 Other Commitments 2,290 2,490 2,790 2,990 3,290 Capital Investment Commitments inc. City Deal 2,290 2,490 2,790 2,990 3,290 Community Investment Fund Total Cost Pressures 48,160 23,820 19,700 20,580 21,250 Less: Resource forecasts 10,087 3,200 3,400 3,700 4,000 AEF adjustments - Core 7,687 0 0 0 0 1% Council Tax Increase; CIF 1,600 1,600 1,700 1,800 1,900 Net Council Tax Growth inc. rebaselining adj in year 1 800 1,600 1,700 1,900 2,100 Budget Gap before advanced action 38,073 20,620 16,300 16,880 17,250 Advance Action (176) 0 0 0 0 Approved Savings (176) 0 0 0 0 Revised Budget Gap 37,897 20,620 16,300 16,880 17,250 3 year total (22/23 to 24/25) 74,817
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Pessimistic Scenario Appendix 2 2023/24 2024/25 2025/26 2026/27 2027/28 £000s £000s £000s £000s £000s Anticipated Cost Pressures 64,450 37,670 31,400 33,230 34,670 Pay Award 23,900 25,100 26,300 27,700 29,000 Pension Costs 0 3,900 0 0 0 Other Employee Costs; additional recurring impact of 2022/23 pay award 4,700 0 0 0 0 Contract Inflation 12,110 2,990 3,320 3,640 3,750 Energy Costs inc. additional provision for unbudgeted 2022/23 price increases 16,470 450 470 520 500 NDR Costs 900 400 450 490 510 Other Cost Pressures 6,370 4,830 860 880 910 Other Commitments 2,580 2,880 2,980 3,180 3,380 Capital Investment Commitments inc. City Deal 2,580 2,880 2,980 3,180 3,380 Community Investment Fund Total Cost Pressures 67,030 40,550 34,380 36,410 38,050 Less: Resource forecasts 3,010 (3,710) (3,460) (3,200) (2,930) AEF adjustments - Core 610 (7,010) (6,860) (6,800) (6,730) 1% Council Tax Increase; CIF 1,600 1,700 1,700 1,700 1,700 Net Council Tax Growth inc. rebaselining adj in year 1 800 1,600 1,700 1,900 2,100 Budget Gap before advanced action 64,020 44,260 37,840 39,610 40,980 Advance Action (176) 0 0 0 0 Approved Savings (176) 0 0 0 0 Revised Budget Gap 63,844 44,260 37,840 39,610 40,980 3 year total (23/24 to 25/26) 145,944
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Optimistic Scenario Appendix 3 2023/24 2024/25 2025/26 2026/27 2027/28 £000s £000s £000s £000s £000s Anticipated Cost Pressures 38,860 19,280 13,840 14,410 14,700 Pay Award 9,600 9,800 10,000 10,200 10,400 Pension Costs 0 0 0 0 0 Other Employee Costs; additional recurring impact of 2022/23 pay award 4,700 0 0 0 0 Contract Inflation 11,030 1,890 2,180 2,430 2,480 Energy Costs inc. additional provision for unbudgeted 2022/23 price increases 5,800 270 270 320 290 NDR Costs 0 0 0 0 0 Other Cost Pressures 7,730 7,320 1,390 1,460 1,530 Other Commitments 3,090 3,390 3,690 4,090 4,390 Capital Investment Commitments inc. City Deal 3,090 3,390 3,690 4,090 4,390 Capital Investment 0 0 0 0 0 Community Investment Fund Total Cost Pressures 41,950 22,670 17,530 18,500 19,090 Less: Resource forecasts 17,160 10,500 10,690 11,070 11,440 AEF adjustments - Core 14,760 7,300 7,290 7,370 7,440 Reversal of Use of Reserves/Resources in previous year 0 0 0 0 0 1% Council Tax Increase; CIF 1,600 1,600 1,700 1,800 1,900 Net Council Tax Growth inc. rebaselining adj in year 1 800 1,600 1,700 1,900 2,100 Budget Gap before advanced action 24,790 12,170 6,840 7,430 7,650 Advance Action (176) 0 0 0 0 Approved Savings (176) 0 0 0 0 Revised Budget Gap 24,614 12,170 6,840 7,430 7,650 3 year total (23/24 to 25/26) 43,624