Medium Term Financial Plan (MTFP)
The Council has a long established process of operating a medium term approach to its financial planning. In line with this it reviews the plan at least on an annual basis when it firms up the following year, by approving a detailed budget and Council Tax level for the year.
In doing this, the Council also takes due consideration of future year demands on its resources and establishes its firm proposals for the coming year with due regard to prudent financial management in the medium term. The Council has a successful track record of managing its resources in this way.
The financial pressures on the public sector as a whole and the Council has been significant over the last couple of years in the aftermath of Covid. This came on the back of a decade of significant financial challenge following the economic downturn and the reductions in public sector spending.
Through good leadership, governance, and financial management, coupled with value for money service delivery, the Council has weathered the storms well rising to the challenge by continuing to provide vital core services to the residents of Darlington, and investing the resources available in growing our economy to deliver success for the benefit of all.
The current economic climate presents new and significant financial challenges to the Council’s budgets. This includes;
- rising inflation and interest rates,
- energy costs,
- post Covid demand in social care,
- and national living wage rises
are putting significant pressure on affordability and unless additional government funding is forthcoming the Council will need to undertake a fundamental review over the next couple of years to decide what and how services will be delivered in the coming years.
The Council’s key ambition is to grow the Darlington economy and attract companies into the area. This will create more and better paid jobs to ensure all our residents will benefit.
The Council has been successful in attracting some major employers to the town with several central government departments making Darlington their northern base and other companies wanting to relocate to the area on the back of this. Darlington is definitely a place for business and this economic growth will help Darlington to thrive and meet its ambitions.
The Local Government Finance settlement confirmed funding allocations for the Council for the two years remaining of the spending review. This includes extra grant funding for social care. Changes to the Council tax referendum limits were also announced. This has increased to 3% for Council Tax and 2% for Adult Social Care Precept.
Future years funding beyond this period have not been confirmed. As a result of this the 2023/24 – 2026/27 MTFP has an eye to future years but does not presume what the future will look like. The MTFP aims to ensure that the Council can set a legal budget for 2023/24 and continue to provide our core offer level of services to the people of Darlington.
The Council’s MTFP reflects the Local Government Finance settlement and includes council tax increases of 2.99% plus 2% Adult Social Care Precept (4.99% in total) for 2023/24.
The Council’s General Fund balance as at 1st April 2023 is estimated to be £23.397m
The Council has set a revenue budget of £119.967m for 2023/24 which is summarised below:
|Chief Executives Office & Economic Growth
|Joint venture - Investment return
|Council wide pressures/(savings)
|Council wide contingencies
|Total net revenue budget
Budget funding breakdown
|Business rates retained locally
|Top up grant
|Revenue support grant
|New homes bonus
|Improved better care fund
|Adult Social Care Support Grant
|Spending Review 21 Government Funding
|2022/23 Services Grant
|New Social Care Grant
|Supporting Families Grant
|Use of Reserves
The Chief Officers Executive (COE) presented a detailed report to Cabinet on 13 December 2022 for consultation.
The Economy & Resources Scrutiny Committee fed back their views to Cabinet on 7 February 2023.
The results of the consultation and other updates were considered at the meeting and the budget was recommended to Council on 16 February 2023.
The Council has an extensive capital programme with significant resources invested to purchase, improve, protect and maintain our assets. This will enable the Council to deliver its priorities. For example;
- purchasing land to enable road improvements
- investing in modernising school buildings and housing.
The Council continues to deliver a significant capital investment programme. This is mainly funded from the Housing Revenue Account (HRA) and grant or other external funding which is targeted at specific schemes and programmes such as Transport and Schools. Furthermore, investment from the Tees Valley Combined Authority (TVCA) along with other external funding sources are being used for economic growth initiatives.
The Council can also supplement these funding sources with its own resources such as capital receipts or prudential borrowing where there is a need. However, as capital receipts are limited and prudential borrowing comes with future revenue implications there must be a strong case for doing so.
The MTFP includes planned capital investment of £111.440m between 2023/24 and 2026/27.
In setting the budget the Council has regard to public expectations and demands for services and the impact on Council Tax.
Government support in the form of Formula Grant is determined by national formulae. It does not vary with local spending decisions.
£1,777.33 is the amount paid to the Borough Council for band D properties excluding the average Parish Precept. The percentage increase for 2022/23 is 4.99% which is made up of 2.99% for Council Tax and 2% for Adult Social Care Precept.
In addition to the Council’s own requirements, Council Tax bills include;
- the Office of the Durham Police Crime and Victims’ Commissioner precept (£255.24 for Band D)
- Durham and Darlington Fire and Rescue Authority precept (£114.69 for Band D)
- parish areas the Parish Council’s precept (ranging from £13.60 to £59.40 for Band D)
Cabinet approved the latest version of the Medium Term Financial Plan on 7 February 2023. It was then approved by Council on 16 February 2023.
See the agenda and minutes.