Cambridge City Council is a well-managed authority, rated as excellent by the Audit Commission in the 2003 Comprehensive Performance Assessment and with a current assessment of ‘well above minimum standards’ for use of resources. The council initiated a 25-year medium term financial strategy (MTFS) in 1996 as a means to further improve its managerial capacity, when the council was already well managed.
The MTFS is a comprehensive document of over 300 pages and is a tool to determine sustainable long-term spending plans, plan efficiency savings, finance invest-to-save projects from reserves, assess risks facing the council, plan its use of assets and rationalise its property portfolio. Members' confidence in the MTFS has been reflected in the setting of agreed target levels for Housing Revenue Account and General Fund reserves. The targets gradually reduce from £12m to about £2m in 2012, accompanied by effective plans to use funding above the target levels to improve services.
The construction of the MTFS is carried out with the involvement of members as well as officers across the council. The council’s 'constitution' gives opposition parties rights to consult with officers and obtain financial information, but requires those parties to table their budget amendments in advance of the final budget-setting council meeting, so as to ensure they are fully costed and sustainable, using modelling based on the MTFS. The council has exceeded the Gershon targets in efficiency savings and has achieved balanced budgets each year since the adoption of the MTFS, through effective use of a cash limit system.