To update Cabinet on the provisional Local Government Finance Settlement and to seek the views of Cabinet on the draft Medium Term Financial Strategy (MTFS) and the current planning assumptions and emerging proposals in the budget for 2013/14. The comments will then inform the final version to be presented for agreement to Cabinet on 5 February 2013 alongside the views from Overview and Scrutiny as part of the budget.

THAT Cabinet:

          (a)       Commented on the draft Medium Term Financial Strategy (MTFS) shown at Appendix A to the report;

(b)          Noted the assessment of the Provisional Local Government Finance Settlement announced on 19 December and the impact on Herefordshire; and

(c)          Endorsed a strict cash limit approach to budget management for future years.

1          The Council has a legal obligation to set a balanced budget as required by the Local Government Finance Act 1992. The proposed MTFS provides a framework to help deliver this over the coming years.

2          The requirement that the cash limits form the overall control on financial expenditure is an important discipline to help control expenditure.

1.         The MTFS plays a key role in budget setting as it contains a number of planning assumptions.

2.         The Council can operate without a MTFS but this makes planning beyond an annual cycle more difficult as there would be no overall framework. The MTFS helps support the requirement to set a balanced budget. Cabinet could change the current planning assumptions in the MTFS.