FUNDING for schools and a scheme to help pensioners with their council tax could be cut, charges introduced for post-16 school transport and waste fines increased in Merthyr Tydfil in order to save more than £9m.
A report due to go before the council’s governance and audit committee on Monday, February 26, sets out some of the proposals being considered which would be worth £9.43m towards closing the budget gap of £12.52m which, along with some other “realignments”, would leave the remaining gap at £1.71m.
The plan for schools includes budget cuts of £1.98m but the report said this applied after increasing the schools budget base for increased pupil numbers, pay awards, energy cost increases, new demands and inflationary impacts.
It said that, although there was a real terms reduction of 3.9% year on year, the schools budget was increasing in cash terms by £1.7m.
The original contribution proposed from schools was £2.1m but this was reduced to £1.9m through the use of grant money.
But the schools budget forum voted to reject the proposal to reduce schools funding and a consultation was then carried out with schools.
However the method of finding the savings by reducing each individual schools’ funding by 3.9% was approved by the schools budget forum.
The total planned education budget reductions of £2.46m would also include £27,000 in savings from post-16 home to school transport which would involve introducing a charge for post-16 transport from September 1, 2025.
The business case said this achieved significant savings whilst securing sustainable long-term provision of post-16 transport. This would apply to all students starting a post-16 course of study from September, 2025.
Students who began a course before the 2025/26 academic year and were continuing their course in September, 2025, would not be charged.
Social services spending cuts of £2.89m are being proposed, £1.21m from neighbourhood services, £1.31m from economy and public protection and £1.29m from governance and resources.
The savings in neighbourhood services would include things like the creation of a new sustainable drainage design engineer post through an invest to save proposal which the council expects will lead to an overall saving of £50,000 as it will support the current team with their statutory duties together with carrying out additional private design work to generate income.
There’s also an invest to save proposal for a new street lighting electrician leading to an overall saving of £49,000 as it will provide additional resource to undertake work that will generate income and allow savings to be made as well as benefiting other departments by “providing a more efficient and streamlined process to fulfil their duties.”
And there’s a plan to increase the current fine for breaches of the side waste policy from £100 to £300, in order to encourage residents to recycle more, leading to a saving of around £7,000 based on the 34 fines that were served in 2022/23.
The governance and resources cuts would include reducing the council’s Contact magazine by one issue per year, saving £5,000.
The business case said that, as local authorities moved towards more digital forms of communication, Merthyr Tydfil was now one of a handful of local authorities in Wales that printed a residents’ newspaper and that it was an added pressure to the increased workload within the communications and consultation team.
The business case said that to work more efficiently in producing Contact and with the team now having the expertise to do the design, going forward, it would be produced entirely by the communications and consultation department.
There’s also the plan to remove the Help for Pensioners scheme, saving the council £30,000. This scheme provides financial support up to a maximum of £50 per qualifying claim or 96p per week and the council said that claimants would still continue to receive support through the council tax reduction scheme.
The reason given by the council for cutting the help for pensioners scheme is: “Given the financial challenges that the authority faces in setting a balanced budget, it is not deemed an appropriate use of public funds to continue with this discretionary policy, particularly given the support available through the council tax reduction scheme and the fact that all other local authorities in Wales have ceased operating the scheme.”
The savings included across all these areas totals £9.18m with the additional reduction of £253,000 within the education department adding up to £9.43m.
The budget proposals assume a 4.7% council tax increase with every 1% increase to the budgeted council tax providing the council with a net additional £280,000 but the report said work continued to determine the appropriate levels of council tax and use of earmarked reserves in order to set a balanced budget for 2024/25.
The proposals also assume the use of £1.5m of earmarked reserves which is the equivalent underspend in 2022/23 revenue budget.
The council’s medium term financial plan (MTFP) initially indicated an indicative budget deficit of £10.51m for 2024/25 and a cumulative budget deficit of £23.34m over the period of the MTFP.
The Welsh Government’s provisional settlement indicated an increase in funding for Merthyr Tydfil of 3.4% (£4m) from an adjusted 2022/23 amount of £118.9m to £122.9m.
On February 7, Welsh Government announced an additional £25m of funding for local government, which resulted in additional funding of £500,000 for the council with £215,000 restoring an earlier cut to the social workforce grant and the remaining £285,000 being allocated through the revenue support grant.
The report said that this resulted in a revised deficit of £12.52m for 2024/25, the highest deficit in recent years and it added that this highlighted the challenge faced by the council in addressing unprecedented additional, unavoidable, external financial pressures.
Service areas were given budgetary targets to work towards and tasked with finding savings to achieve those targets.
The report included detail of proposed savings totalling £9.43m with the impact of this and other “realignments” being a revised budget deficit of £1.71m.
Special cabinet and council meetings on February 28 will consider savings proposals, together with the use of earmarked reserves and the council tax rate for 2024/25 in order to set a balanced budget.
The final Welsh Government budget for 2024-25 will be published on February 27.
