A COUNCIL is putting an additional £1.1 million aside this year as a result of lower than feared costs in the past financial year.
Torfaen Borough Council set up a reserve for the 2023/24 financial year so it could meet an expected spike in energy costs but its financial results have shown the additional fund wasn’t required.
Financial services director David Lilly said the cash will now be used to support the authority’s “financial stability”.
Torfaen had a net budget in 2023/24 of £222.8 million, funded by £172.2m from the Welsh Government and £50.6m from council tax, and after making the £3.5m payments it had planned to reserves was left with a surplus of £227,000.
Some services still finished in an adverse financial position including children’s social care, which was £430,000 over budget, while the economy and environment directorate was £1.26m over budget.
Mr Lilly said that had resulted in having to place children “in more costly solutions” and the economy and environment overspend was from “additional costs running waste and recycling services related to additional vehicles and crews.”
The council spent £1.54m in additional residential and “unregulated” placements for children.
Both services swallowed up unauthorised funds from the council’s existing reserve last year.
Mr Lilly said staff turnover and unfilled roles across the authority have also contributed to underspends.
As well as the saving from the reserve for energy bills that wasn’t needed the council has had a £342,000 boost from interest earned on Shared Prosperity Funding – money from the UK Government to replace grants previously provided by the European Union.
That will be held in a special reserve until the council is clear on any conditions attached to it while it will also increase its pay contingency, so it is prepared for a pay rise of up to five per cent being awarded this year. Consideration of pay awards, that are agreed nationally, will also form part of its medium term financial planning.
It has also created a £342,000 reserve to plug a shortfall in school funding due to an unexpected reduction in the Pupil Deprivation Grant from the Welsh Government in thie financial year. It will be used to maintain the funding at last year’s level and Mr Lilly said it will be considered as part of the medium term plan and talks will be held with the Welsh Government to understand the reduction.
The council also achieved 99 per cent of the £8.6m of the cuts and savings it planned, it fell short by £54,000 as it hasn’t carried out the findings from a home to work transport review and lower than anticipated building applications meant new higher fees didn’t provide the predicted revenue.
The authority has just under £32m in total reserves while its school reserves reduced last year to £5.9m, from £8.9m the previous year, but Mr Lilly said only three schools are in a deficit position “and that’s a small level as well”
The council’s audited accounts are expected in September.