Medium Term Financial Strategy (MTFS) 2021/22- 2025/26

The 2019/20 Revenue Outturn position was reported to Cabinet on 23 June 2020. A full review of strategic reserves was conducted to ensure balances are fit for purpose, contributing to long term financial sustainability and the purpose for being held is fully transparent. Several changes were made to strategic reserves. The outcome on the Council element of the general fund reserve was a remaining balance of £11.059m. This equates to 5% of 2020/21 net revenue budget. At outturn total useable reserves are £59.9m (£19m ring fenced) An explanation of each reserve and balances as at 31 March 2020 can be found in the council's audited statement of accounts for 2019/20. The Strategic Director, Corporate Resources reviewed the level of the general reserve and considers levels to be appropriate given the current level of risk and uncertainty.

Local authorities must consider the level of reserves needed to meet estimated future expenditure when calculating the budget requirement. The Strategic Director, Corporate Resources is required, as part of the budget setting process each year, to provide a statement on the adequacy of reserves that is subject to an external audit review to assess value for money and a going concern opinion. This will be reported into Cabinet in February as part of the budget and council tax setting report.

The council's policy on reserves is contained within the MTFS principles, is as follows:

• the council will maintain its general reserve at a minimum of 5% of the net revenue budget to cover any major unforeseen expenditure. The council will aim to balance its revenue budget over the period of the MTFS without reliance on the use of the general reserve
• the council will maintain earmarked reserves for specific purposes which are consistent with achieving its key priorities. The use and level of earmarked reserves will be reviewed annually
• the council's general reserve is available to support budget setting over the period of the MTFS and usage should be linked to the achievement of financial sustainability over the medium term