Proposals for the Isle of Wight Council’s future approach to the management of its budget have been published this week. The report illustrates a robust and strategic approach to tackle the council’s recent budget challenges and the budget setting process, with the creation of a brand new Medium Term Financial plan.
This new approach would shape the authority’s ambitions to 2020; creating space to transform the organisation to better meet the financial challenges that it has faced in recent years.
The ambition of this approach is to embed a strategic Financial Framework that:
• Promotes longer term financial planning
• Encourages responsible spending
• Improves financial decision making
• Better aligns the responsibility for the delivery of services with the financial accountability for those services and improves the financial discipline of the council.
The Medium Term Financial strategy also demonstrates how the council aims to overcome some of the challenges posed in recent years by the national austerity agenda, as well as planning and building resilience for the Island’s future.
“We all know about the predicament the council has been facing due to the austerity agenda in recent years and we have been working hard to find long-term solutions that will support and benefit the future sustainability of the Isle of Wight.
“This new strategic direction includes some new ideas; including taking a ‘payment holiday’ from some of our debt repayments, which has the effect of enabling us to smooth out budget reductions we have to make over a longer period. For example, when the Full Council set the Council’s budget in February 2016, we did so in the expectation that in the coming year we would have to save around £12.8m more; but from where? Hence the very real concerns expressed at that time of not being able to make the books balance in 2017. However, due to the opportunity to take a debt repayment break proposed in the medium term financial strategy, we could instead be facing a reduced figure of £8.7m, which, while still a huge amount, is £4m less than we expected.
“Our financial challenges are not gone. We still need to save £24 million in the next few years to balance our budget; this strategy gives us more time to make the change we need – it removes the pressure of having to cut large sums straight away and would even out the savings over time.
“Stabilising our position in the short term would give us time to transform the organisation and to start to feel the benefits of growth. It would also allow time for the outcomes of the Fair Funding review to be known, which will hopefully provide a positive impact to our financial position in the longer term.”
The council is already committed to a new strategic direction that will be built upon the pillars of regeneration, growth and productivity to enable growth in the Island’s economy; when the recruitment of a new Regeneration team was agreed earlier this year.
This new financial strategy would support and enable the new team to maximise the capital resources available, in order to stimulate the local economy, create jobs, develop appropriate housing and consequently provide positive impacts to the council’s base budget. Some initial projects under active consideration are regeneration areas of Sandown Bay, Ryde seafront, Newport Harbour and marine economy investment around the river Medina.
Service delivery innovations would also be “pump primed”, with ‘spend to save’ (revenue) and ‘invest to save’ (capital) schemes, through the creation of a new Transformation Reserve of £1m. Further this new approach would allow the ‘Asda’ money from the sale of land at St George’s Way to be retained; making sure it will be available for future capital investment as previously proposed.
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