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Council leader urges responsibility amid warnings Newport faces gloomy financial picture

The Civic Centre in Newport (Pic: Google)

NEWPORT is heading into “uncharted territory” as councillors prepare to tighten the purse strings to keep essential services running.

That was the warning from the city council’s leadership this week, when a forecasted overspend of more than £3.6 million was announced for the running of the authority’s services, excluding schools – which have also overspent.

The council has been able to offset the £3.6m because of underspends in other areas not linked to the running of services.

At a meeting on Wednesday September 13, one cabinet member blamed the UK Government’s economic policies for putting councils’ budgets under pressure.

Children’s services are contributing heavily to these outgoings, owing to expensive out-of-area and emergency placements.

Council leader Jane Mudd said these outgoings – laid out in the cabinet’s first budget monitoring report of the year – were “simply the authority fulfilling its statutory duties” and “there is no choice around this expenditure”.

And spending on homeless services has also dented the council’s coffers, as Newport responds to new Welsh Government policies for ending rough-sleeping.

Schools, meanwhile, will need to make “significant levels of savings” over the next year. While this year’s overspend can be “offset by available surplus balances”, according to a council report, “there is a risk that this level of recurring expenditure in excess of budget will result in certain individual schools entering a deficit budget position”.

Cllr Mudd said council officers would “closely monitor schools’ balances” in an effort to avoid any further overspending.

Driving home the seriousness of the council’s wider financial situation, she told cabinet colleagues that it was “really important that all of us in the authority keep a tight focus on ensuring that service areas really, really, focus on managing their finances” and try to achieve balanced books by the end of the year.

“New issues and opportunities” could arise within that time, and Cllr Mudd said it was possible Newport would be less able to rely on grant funding from the Welsh Government, which also has to prepare to deal with the gloomy economic outlook.

“There remains the possibility that this position could worsen as the year progresses,” Cllr Mudd warned.

Deputy leader and cabinet member for education Deb Davies said it was “extremely concerning” that the city’s schools were under such budget pressures, and Newport was entering “uncharted territory” and faced a “bleak picture”.

She said families were in “desperate need of help and support as the cost-of-living bites into their lives”.
“We’ve had to deliver a balanced budget while being forced to make substantial cuts in service delivery,” Cllr Davies added. “The setting of next year’s budget will see us being forced to make substantial cuts when we already know funding will reduce even further – this was a promise made to us by our Tory government, [and] by Jeremy Hunt when he announced his autumn statement last year”.

After announcing the spring budget this year 2023, the UK Government said its policies would “set out a fiscally responsible path to getting debt falling as a share of the economy, protecting vital public services, and prioritising the needs of the most vulnerable”.