TORFAEN Borough Council could finish the financial year in surplus following extra funding from the Welsh Government.
At the end of September, the council was predicting it would be £3.5m in the red by the end of March.
But it said it now anticipates it will be able to balance its budget and is also in line for a boost for the 2025/26 financial year following the announcement of the Welsh Government’s funding settlement for local government in December.
The council’s outgoing chief financial officer, Nigel Aurelius, attending his final cabinet meeting on Tuesday, January 14 told councillors: “We would like to get to a balanced position at the end of the year, even a modest underspend.”
He said the council’s improved financial position is “largely due to significant in year funding from the Welsh Government which is welcomed.”
Some of that funding had been anticipated but some is greater than what the council was expecting.
Despite the improved outlook at the end of November the council’s total spending was still £1.3m more than it had budgeted for at the start of the year but that has reduced from £2.6m at the end of September.
Children’s social care continues to be the largest pressure, mainly due to high-cost care placements rather than an increase in the total numbers of youngsters taken into care, and was £3.7m over budget at the end of November.
The cabinet has approved a two-year plan to transform the service intended to bring its budget under control as well as reining in current spending.
Increased demand for adult social care has also meant that service had been £146,000 over its £2.3m annual budget but staff shortages continue to offset the overspend and the November figure could be further reduced from the additional in-year grants received from the Welsh Government.
In-year funding for pay awards has also boosted the council’s centrally held budgets account by £2.2m and as the council had agreed a pay contingency, when setting the current budget, it can use some £1.6m of the pay award to support its overall position.
Council leader Anthony Hunt said under the previous Conservative UK Government’s budget the council only expected the Welsh Government would be able to increase funding for local government by no more than one per cent.
The Labour councillor said Torfaen’s funding will increase by 4.8 per cent next year, which works out at a £8.776m cash increase for the council from April while changes to some grants, previously provided for specific purposes, will see an another £4.654m added directly to the council’s overall funding pot.
The Panteg councillor said he wanted to thank the UK and Welsh Government for additional funding, despite the “challenges” they face, and said: “This extra funding will make a real impact.”
Torfaen will use £5m in the new financial year to “keep staff in classrooms”, provide more funding for additional learning needs and school transport, support social care providers with the increase in the Real Living Wage and continue to fund an apprenticeship scheme “for the next generation of local government workers”.
Cllr Hunt said: “We’ve had one of the lowest council tax rises in Wales over the last three years and hopefully this year too.”