A COUNCIL that had faced a potential £2.5 million gap in its upcoming budget has seen the position “flipped” with extra funding announced.
Rather than having to find savings or cuts Torfaen Borough Council will now have £2.5m more than expected available to it.
A deal on a proposed Welsh Government budget between the ruling Labour Party and Plaid Cymru opposition has provided additional funding for local authorities with all 22 now set to receive at least a four per cent increase in funding with an average uplift of 4.5 per cent.
Torfaen council’s spending is now planned around it receiving a 4.5 per cent increase which will be an extra £8.6m in cash for the 2026/27 financial year, and £3.8m more than it had expected to receive when it worked on the assumption its funding would only increase by 2.5 per cent.
Council officers have also identified funding for service demands and pressures, ranging from home to school transport, increased demand for foundation phase places in schools for three and four year olds and increasing housing support costs, totalling £630,000.
An assumed 4.95 per cent council tax increase, and an increase in the number of homes in the borough generating more council tax receipts, has also helped the council close the gap.
‘Flipped’
Head of finance Rob Green told the Labour cabinet’s Tuesday, January 13 meeting: “The updated budget position has flipped from a £2.5m gap to a £2.5m surplus.”
He said the council will have to decide how to use the surplus with £1.531m earmarked for “de-risking” the proposed budget which would see £700,000 used for a pay review “at the lower end”.
Real Living Wage increases has seen “compression” at the lower end of the pay scale, said Mr Green.
It will also allocate £600,000 towards preparing for nationally agreed pay rates so the council is prepared for a potential 3.5 per cent rise, having already set aside funds for a three per cent increase.
It will also put £231,000 put towards “writing out” digital and energy efficiency savings that he said have been “difficult to isolate” from the 2025/26 budget.
That will leave £1.06m available for other spending and suggestions will be put in a report for the council’s scrutiny committee to discuss in February. The final budget must be agreed by March.
The council will also hold a public consultation on its budget proposals.
Mr Green said the council expects final confirmation of its funding for the new financial year when the Welsh Government budget is approved by the Senedd on Tuesday, January 20.