medium-term financial strategy

Medium-Term Financial Strategy

A financial strategy with a term longer than the short term but shorter than the long term. The exact length varies according to the usage; it could be a few weeks or a few years. In general, however, a medium-term financial strategy outlines investment and other financial goals for any time between roughly six months and one year.

medium-term financial strategy (MTFS)

a monetarist strategy (see MONETARISM) employed by the UK government to control the economy from 1980 down to the early 1990s. The MTFS set out a target range for the growth of the MONEY SUPPLY and target values for the PUBLIC-SECTOR BORROWING REQUIREMENT, expressed as a percentage of GROSS DOMESTIC PRODUCT. The purpose of the medium-term financial strategy was to provide a known firm base for the operation of government MONETARY POLICY, to assist in the control of public expenditure and to influence the public's expectations about future rates of INFLATION. See alsoMACROECONOMIC POLICY, MONEY SUPPLY/SPENDING LINKAGES.
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The Audit Commission's draft report - leaked to the Evening Telegraph - criticised the council for not making it clear it had pounds 90m in reserves, not having a medium-term financial strategy and not putting all the facts and figures before councillors in its budget-setting process.
Since the early 1980s, fiscal policy has been framed in terms of a medium-term financial strategy. The intermediate targets of the MTFS have evolved substantially over time, but its central theme remains to achieve sound medium-term public finances.
Thus our forecasts are not constrained to produce the totals for spending or for borrowing implied by the Medium-term Financial Strategy. In fact we are forecasting a PSBR of [pounds]35.3 billion for the present financial year, a little below the Treasury figure of [pounds]38 billions, followed by a further significant fall in 1995-6.
Maintaining a consistent medium-term financial strategy still remains essential to safeguard sustainable medium-term growth, but it provides a formidable challenge.
If that hasn't been built into the medium-term financial strategy that will have an impact across all areas of the council, unless there is a way that education can balance its budget to cover that PS2m, which I think is highly unlikely." Other concerns highlighted by councillors involved the schools which did not form part of the modernisation programme.
Next year's budget for the unitary Northumberland Council is a critical one, as it will require around pounds 28m in savings to launch the authority on its medium-term financial strategy.
Mr Nicklin's report to councillors said: "The council has taken effective action over the past two years to ensure that its medium-term financial strategy, budgets and capital programme are soundly based and are designed to deliver its priorities."
The Delors Report seems to have been influenced by the philosophy of the UK's Medium-term Financial Strategy as developed in the early 1980s.
A Medium-Term Financial Strategy (MTFS) report from chief executive Darren Mepham and interim head of finance Gill Lewis, which is due to be considered by cabinet members today, states the increase in council tax is "in order to generate additional income to provide flexibility to mitigate the impact of some of the proposed budget reductions on the citizens of Bridgend based on the outcome of consultation with the public and members".
The report says: "The 4.63pc increase takes into account the financial standing of the authority, the need to use earmarked reserves to smooth pension costs, the spending pressures identified in the medium-term financial strategy, and the threat of capping."
APPRAISAL When the first Medium-Term Financial Strategy (MTFS) was presented in 1980 it set out a clear statement of policy aims and how they were to be achieved.
In reality, the last Plaid administration froze council tax before the 2011 Assembly and 2012 local elections but built a council tax rise of 2.35% into their medium-term financial strategy for this non election year.

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