Medium-Term Financial Strategy (MTFS) explained, how to read your council’s 3 to 5-year plan fast

Ever looked at a council budget document and thought, “How am I meant to make sense of this?” You’re not alone. Councils publish piles of papers, but the medium term financial strategy is the one that tells you where things are heading.

Think of the MTFS as the council’s sat-nav for money. It shows what they expect to bring in, what they plan to spend, what they’ll cut or change, and what could blow the plan off course. If you support Reform UK, it’s also one of the quickest ways to spot waste, weak priorities, and whether the council is living like it’s spending its own money.

What a Medium-Term Financial Strategy actually is (in plain English)

An MTFS is usually a 3 to 5-year financial plan that sits behind the annual budget. It answers four basic questions:

• How much money is coming in? (Council tax, business rates, grants, fees)
• What services will that money pay for? (Day-to-day spending)
• What big projects are planned? (Capital spending, like roads or buildings)
• How will the council stay solvent if costs rise or funding drops? (Reserves, savings plans, risk allowances)

Most councils publish a public-facing MTFS page like Wakefield Council’s medium term financial strategy, with links to the main report and appendices.

Here’s the key point: the MTFS is not just “accounting”. It’s the council’s statement of intent, with numbers attached.

The MTFS is part of a pack (know what to ignore, and what to grab)

Councils rarely put everything in one neat PDF. The MTFS usually links to:

Revenue budget: day-to-day service spending (staff, contracts, bins, social care).
Capital programme: long-term projects (roads, housing schemes, buildings).
Treasury management: borrowing, investments, interest rate risk.
Reserves strategy: what’s in the piggy bank, and what they plan to spend it on.

If you want a clear example of how councils tie these together, look at Basingstoke and Deane’s MTFS 2025/26 to 2028/29, which sets out the funding uncertainty and how it links to property, assets, and borrowing.

A one-page mental model: what you’re really scanning for

Most MTFS reports are 40 to 150 pages. You don’t need to read them end-to-end. You’re hunting for a few “stress points” that determine whether the plan is honest.

The 10-minute skim method (works on almost any council MTFS)

Step 1: Find the headline funding gap

Look for a table that shows a budget gap or funding shortfall by year. This is the difference between what the council expects to raise and what it expects to spend.

If they don’t show a gap clearly, that’s a warning sign on its own.

Step 2: Check the assumptions (the plan’s hidden foundations)

Assumptions often sit near the front or in an appendix. Scan for:

• Inflation forecasts used for contracts and pay
• Demand growth assumptions (adult social care, children’s services)
• Government funding expectations (often uncertain year to year)
• Council tax rise assumptions (many councils plan to go up to the cap)

A plan that depends on “best-case” assumptions is a plan built on sand.

Step 3: Identify what’s driving cost pressure

Across the UK, MTFS papers routinely show the same big pressure points, especially adult social care and children’s services. Don’t just note the numbers. Check whether the council explains why demand is rising and what they’ll do about it.

Step 4: Follow the savings plan (this is where the truth lives)

Savings are often labelled as “efficiencies”, “transformation”, or “service redesign”. Read this section with a sceptical eye.

Good savings plans:

• name the service area,
• show a cash figure,
• give a delivery date,
• explain the mechanism (contract re-tender, process change, fraud reduction).

Weak savings plans:

• rely on vague wording,
• push decisions into “future work”,
• repeat the same “efficiency” line each year.

Step 5: Look at reserves like you’d look at a household emergency fund

Councils use reserves to smooth shocks, but they can also use reserves to mask bad budgeting.

Scan for:

• General reserves level (cash for the unexpected)
• Earmarked reserves (set aside for specific aims)
• planned drawdowns (spending reserves to balance the books)

If reserves are falling every year with no recovery plan, the council is eating its seed corn.

Reading an MTFS through a Reform UK lens (what to look for fast)

If you believe, as Reform UK supporters often do, that councils should stop waste and make money stretch further, the MTFS gives you specific places to check.

Where “waste” tends to hide in plain sight

Senior pay and management layers: Look for staffing structures, “growth” in central teams, and any sign of high executive costs that don’t link to service results.
Agency and contractor spend: MTFS papers sometimes admit reliance on agency staff or expensive outsourced contracts. That’s where “rip-off” costs creep in and become normal.
Productivity choices: If a council is flirting with reduced working weeks or softer working patterns, it should show hard evidence of service outcomes and value for money, not slogans.

Whether the council is putting residents first

Even when a council can’t change national rules, you can still check whether the MTFS backs up local priorities with budget choices:

• Housing: Is there clear spend on homelessness prevention and social housing delivery, and do they explain who benefits?
• Community safety: Do they fund visible enforcement and neighbourhood responses to anti-social behaviour?
• Roads and basics: Potholes, waste, street cleaning, routine upkeep, these are often where residents feel decline first.
• Local economy: Do they talk about helping smaller firms through business support or sensible fees and charges?

An MTFS that spends heavily on “strategy” while the basics slide is sending you a message.

A quick reality check using recent UK MTFS patterns (2025 and beyond)

In 2025 MTFS cycles, a few patterns show up again and again:

• Councils often plan near-maximum council tax rises to balance budgets.
• Many rely on a mix of savings and reserves to close gaps.
• Children’s services overspends appear frequently, with “recovery plans” attached.
• Funding uncertainty stays high, because settlements can be short-term.

You can also see how “medium-term strategy” works at a national level in Scotland via the Scottish Government’s Medium-Term Financial Strategy ministerial statement. It’s a useful reference for how assumptions, forecasts, and risks shape public budgets.

The takeaway: if your council’s MTFS reads like everything will be fine as long as nothing changes, it’s not a plan, it’s hope.

Questions worth asking at budget time (useful in meetings and emails)

When your council consults on the budget or MTFS, these questions cut through the noise:

1. What’s the funding gap each year, and what closes it?
2. Which savings are already delivered, and which are still just proposals?
3. How much is spent on senior management, and how has it changed in 3 years?
4. What’s the trend in agency staff costs and outsourced contracts?
5. Which services drive overspends, and what is changing operationally?
6. Are reserves being used for one-off shocks, or to prop up routine spending?
7. Which assumptions would break the plan first (inflation, demand, grants)?
8. What will residents notice improving next year (not in five years)?

Conclusion: read the MTFS once, see the council clearly

A medium term financial strategy tells you whether the council is facing reality or hiding it in paperwork. Look for the gap, test the assumptions, follow the savings, and watch the reserves. If you want better basics, less waste, and clearer priorities, the MTFS is where those choices show up in black and white.

Next time your council publishes its budget pack, don’t start with the press release. Start with the MTFS, and decide if the plan respects the people paying for it.