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A 1% council tax rise is included in Merthyr Tydfil Council’s budget proposals for next year.

A council report set to be considered by cabinet and full council on Wednesday, March 2 recommends the increase.

The proposals also include the use of £703,000 of the 2021-22 projected revenue surplus to plug the remaining budget gap.

The 1% rise in council tax would see Band D households pay £1,746.27 for 2022-23, which is an extra £17.29 for the year or 33p per week.

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The report said 84% of the properties within Merthyr Tydfil are valued at bands A to C so a “significant proportion” of council taxpayers will pay less than £1,746.27.

It also mentioned the council tax reduction scheme which provides support with council tax payments for those who are eligible.

The proposed increase in council tax for next year ranges from 22p per week at the lowest band A to 78p per week at the highest band I.

The 1% increase resulted in a net loss of income of £641,000, resulting in the budget surplus of £503,000 turning into a budget deficit of £138,000. The remaining deficit is set to be funded through the projected revenue surplus for 2021-22.

The report said the Welsh Government has decided not to financially support the “pre-booking” of temporary accommodation in 2021-22 for the whole of the 2022-23 financial year.

Despite the Covid-19 Hardship Fund coming to an end on March 31, the Welsh Government has agreed to fund £1.85m of the £2.06m pre-booked temporary accommodation costs, leaving £208,000 needing to be funded by the council.

Further costs of £357,000 need to be met by the council on further temporary accommodation requirements and security costs, resulting in total costs of £565,000 for Merthyr Tydfil Council.

The report said the chief finance officer stated at council on February 2 that this cost would not exceed £600,000 and would be financed through the projected revenue surplus for 2021-22, which is predicted to be £1.5m based on third quarter projections.

The opening budget deficit of £5.26m has been closed thanks to a £5.36m impact from the settlement, £4m in budgeted demands, £1.85m from the hardship fund, £1.43m in efficiencies and the £703,000 use of the revenue surplus.

This is despite £5.23m in additional demands, a £1.43m pay award projection, £782,000 towards the real living wage for care workers and the £641,000 cost of the council tax decision.

The council’s budget requirement, if agreed, would be just over £143m next year with the proposed capital programme being worth £30.82m and £72.87m for 2022-23 to 2025-26.

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