Councillors met in Pontypool this afternoon to review the budget the council needs to run services in 2024/25.
The members of the cross-cutting resources and business overview and scrutiny committee quizzed officers on a report about the revenue budget forecast for the next financial year. The revenue budget is the money needed to run services, including staff salaries, and also takes into account any government grants.
Cllr Sue Morgan, the executive member for resources, told councillors that the 24/25 estimates were based on a “steady state”, meaning just to provide a “continuation of services”. The estimated budget needed is £234.921 million, an increase of £11.92 million or 5.34% on the 23/24 budget.
She said that £977,000 predicted saving for 23/24 “provides us a buffer”. She added: “Unlike many councils and Welsh Government, our position for 23/24 is stable and provides us a buffer. But we won’t just rest on that buffer. We still face a gap which will need to be met through savings or increased revenue.”
The increased forecast was made using several assumptions including a three per cent pay rise for staff (plus a further one per cent for ‘contingency’), inflation for contracts, and 6.1% increase in running council buildings.
The council aims to save £5.2 million through a programme it started in February 2023. These include change to the adult services reablement service (to save £1m), and admin and business support service (to save £840,000) and a buildings review (to save £160,000)
Today’s report says a further £2.75m of cuts and savings will made ready for 24/25.
£4m shortfall
Officers used a figure of 4.95% for a council tax increase, and said that this was underneath the last average percentage rise across Welsh councils. The report says that the “Executive are keen to keep council tax levels as low as possible, given our track record over the past two years of two of the lowest rises in the UK.”
Councillors were told the Welsh Government has indicated a rise of funding rise of three per cent and this is the figure used for the report. This showed a total predicted income of £230,680 million which gave a funding shortfall of £4.241 million.
Nigel Aurelius, the council’s deputy chief executive, said there “was a lot of uncertainty at a national level and a Welsh Government budget level” with “rising pay inflation” and “significant other inflations”.
He said they are “heavily reliant” on external grants and for 24/25 as they don’t have information from all the funders in many cases they’ve used the same amount for 23/24 to give a total of £75.4 million. His report says that any changes to amounts from grant funders will need to be “reflected” in decisions on how those services are delivered.
Councillor questions
Cllr Alfie Best, Pontnewynydd and Snatchwood, asked if they were “expecting a drop-off” from the income from recycling. Rachel Jowitt, the council’s strategic director for economy and environment, said they were confident the income from the sale of items including plastics, cans and cardboard could be “increased by £100,000”. She added it was: “Conservative but realistic.”
Cllr Lucy Williams, Upper Cwmbran Ward, asked when the savings from changes to the adult services reablement service would be made. David Leech, the council’s strategic director for adults and communities, said the savings would be made in the next financial year.
Cllr Alan Slade, Llantarnam Ward, had a “concern” as he understood that grants were for “discretionary services” and if they are cut that expenditure could be “transferred” to budgets. He said: “We should be looking to make savings where the grant is being cut.” He added that if a grant was funding a team on a project then “those people should be made redundant” to avoid the cost coming back to the council.
Mr Aurelius said he would “challenge the overall assumption that every grant is for discretionary services” and used the example of waste management, “without which we wouldn’t be providing a refuse service” without a grant. He said there were a “number of significant grants, particularly in education, underpinning core services”
He told Cllr Slade that when a grant ends the council’s policy isn’t to “absorb it within the revenue budget” but to ask whether it is a “core service” that the council wants to keep going or whether it can be allowed to “collapse” or “reduce”.
Cllr Slade said: “Well you learn something new every day. I had no idea that core services were an optional expenditure for the Welsh Government. I thought they were fully funded but there you are. Thank you.”
Cllr Elizabeth Haynes, St Dials Ward, asked if the Welsh Government’s review of council tax banding due to bring in changes from April 2025 had been taken into account. Mr Aurelius said it was “a good point” but “too early to really get into and consider it”. He added that it wasn’t about “raising extra revenue” but “making it fairer”.
Recommendations
Cllr Haynes commented that she was concerned at the level of the council tax rise used for the calculations and said: “I can’t say I won’t support at this time but it is significantly higher than last year.” She added that she was also concerned about redundancies and couldn’t endorse the full report.
Cllr David Williams, Llanyrafon Ward, said that this was an early stage of the budget setting process, ahead of the autumn statement and other funding announcements, but a legal process would be followed with any redundancies.
The council’s scrutiny officer said Cllr Haynes’ concerns couldn’t be a recommendation as they weren’t discussed in the meeting for Cllr Morgan or officers to respond to, but they would be noted in the meeting’s report.
In January, the council’s cabinet will be given a report of proposed savings.