03/28/2024

Wales News Online

Local & National News for Wales

Rhondda Council facing £45-75m budget gap says council leader

RHONDDA Cynon Taf Council is facing a potential £45m-£47m budget gap next year, the council leader has said.

Speaking at the latest meeting of full council on Wednesday, October 19, Councillor Andrew Morgan told councillors that next year is looking difficult.

The medium term financial plan previously said there could be a gap in funding of about £36m but this has grown.

Cllr Morgan said: “This is an unprecedented figure even compared to the years of austerity. This is practically double what even in the worst year of austerity we faced.”

He also said the council could be facing a £21m overspend this year, which is partly due to pay awards but also inflation.

He said this is similar to other authorities of a similar size, adding that across Wales, local government could end up overspending by £257m this year.

He said this potential financial gap is stark and the budget from the Chancellor “doesn’t look positive” and there is undoubtedly now going to be spending cuts.

Cllr Morgan said this means the 3.5% revenue support grant the council has factored in from the provisional local government settlement is likely to go down and that every 1% it goes down is worth more than £4m.

He said that means if they only get a 1.5% uplift rather than 3.5%, that adds around £9m to the budget gap.

Cllr Morgan said the scale of this is “quite unprecedented”.

He said between 70% and 80% of the budget goes on staff so if they have to deal with this sort of budget gap, it will be inevitable that the headcount in the authority goes down.

He said they’ve got a very good working relationship with the trade unions who are heavily involved in the discussions whenever they have to make service changes and the council is looking to hold meetings with local branch representatives shortly.

He reminded councillors that they have a statutory responsibility to set a legally balanced budget which means next year is going to be “very, very challenging”.

Cllr Morgan said they will continue to provide cross party updates with group leaders and bringing updates to council and cabinet.

He said: “The chaos over the last six weeks at a UK level has poured fuel on the fire.

“We were looking at a large budget gap with the pressures as it is with the way the economy is, the inflation, the utility costs but the fact that we are now facing public spending cuts in addition it is really something that even six weeks ago we were not expecting.

“The continuous U-turns in the positions and the course of the UK Government is making it more challenging to budget not just for public services but it goes absolutely for private businesses because we don’t know what’s happening with energy costs next year and of course for families as mortgage rates are going up and the average household mortgage is likely to rise by around £500 a month.”

He thanked officers for the work that is ongoing and said they’ll try to involve members as much as possible.

He said he’s never seen anything like the difficulties at national level in terms of U-turns on tax cuts, spending cuts and resignations, adding “the UK Government is obviously falling apart and it will be a case again of probably changing the captain of the ship.

“My real concern is that the ship is going to be run on to the rocks before there’s a new captain on board.

“It is going to be really challenging and I think many of us are going to face decisions in the coming months that when we stood for election in May we absolutely thought we’d never be making again.”

He said they will be delivering on the promises they made to the public and their manifesto commitments.

 

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