AN extra half a million pounds for filling potholes and highway maintenance is being made available due to a £3m council underspend last year.
The cash is the result of a £3.34m surplus at the end of the 2025/26 financial year which will mostly be used to top up reserves.
Torfaen Borough Council will reduce the amount it holds in an assurance reserve so it can instead put the money towards highway maintenance with the aim of reducing claims for damages to vehicles.
Head of finance Rob Green told the council’s Labour cabinet, which approved the transfers to reserves: “The insurance reserve wasn’t ultimately required. We feel we had enough and that will hopefully reduce, or avoid, the claims we would have received on insurance.”
The council is releasing £400,000 from its asset reserve, which it is able to do by reducing the amount held in the insurance fund, and adding a further £100,000 from its members choice reserve, used for discretionary spending to be agreed by councillors, to provide the additional half a million pounds for the highway network in this year’s capital budget that covers one-off and large spending commitments.
The cabinet was presented with the financial outturn report for the 2025/26 financial year, that finished at the end of March, at its Tuesday, June 2 meeting at the Civic Centre in Pontypool. The report shows the total amount spent against the £248m budget agreed in March 2025.
The £3.34m underspend, or surplus, which is a variance of only 1.34 per cent against the net budget was described as “good news” by chief financial officer Andrew Lovegrove.
He said: “It is my pleasure to report we had an underspend, it is always good news for the council, a revenue underspend of about £3m.”
Mr Lovegrove said the surplus puts the council in a “good position” for the current financial year and likely financial pressures.
Pontnewydd councillor Sue Morgan said the world is facing a “period of instability” and asked: “Are we confident this level of reserve prepares us well for the next 24 months, a very volatile period?”
Mr Lovegrove said the council anticipates pressure on energy prices but has taken steps such as forward buying and said: “I’m confident we’ve got enough reserves to counter that.”
Only the council’s neighbourhood and environment service, which covers refuse collections and recycling, and its housing benefit fund finished the year in the red. The £471,000 overspend on housing benefit is due to high-cost temporary homeless accommodation which isn’t fully covered by the fixed rate paid by the UK Government’s Department of Work and Pensions.
The largest underspent against the budget is due to a £2m fund set aside to cover the cost of changes within children’s social services, which has seen a reduction in the number of children in care.
The fund was intended to support the changes after the department’s costs were constantly over budget in 2024/25 but the cabinet was told there had been significant improvement and changes introduced much quicker than expected.
Mr Green said: “Only £53,000 of the £2m transitional fund that was available for the year was used.”
The council is using the surplus to boost six existing reserve funds, and one renamed fund due the separation of two directorates, and will also put £750,000 into a new reserve to support The Deal, which is its approach to supporting community groups and volunteers, and a new economy and place reserve.
Following the allocations to specific funds the council has £61,000 left which will be added to its general reserve and overall the council holds £45,590m in reserve.
Vacancies across the council and the receipt of grant payments late in the year also contributed to the surplus.