A COUNCIL tax rise of just under 5% is being considered as Rhondda Cynon Taf (RCT) council makes plans to deal with a budget gap of almost £26m for next year.
The authority has set out its draft budget proposals for 2024/25 including the proposed 4.9% council tax hike, which it said would bring in just over £1m extra.
The proposals say that after absorbing non-pay inflationary costs, as all other council services need to, schools would have to contribute to balancing the overall budget gap through a 1.3% cut (£3.4m).
The proposals say schools will be allocated funding next year to cover their pay pressures and the council will provide a further £1m base budget toward non-pay costs.
The council says this will see the schools budget increase by £11.9m for next year, or 6.4%.
The council says the Welsh Government has not provided additional funding for the costs of increased teacher pay awards for the current year but costs associated with teachers’ pensions are still expected to be covered by the UK Government.
In the provisional Welsh Government settlement announced last month, RCT received a 2.8% increased in funding with its general capital funding reduced by £58,000 to £13.82m.
The Welsh Government also said the social care workforce grant is set to reduce from £45m to £35m across Wales – a reduction of £815,000 for RCT.
The total revenue support grant and non-domestic rates funding for the council next year is expected to be £484.1m.
This left the council with a budget gap of £36.6m but with already agreed cuts totalling £10.7m to things like learning disability, supported living and day services, this gap was reduced to £25.9m.
The council’s cabinet is due to discuss theproposals at a meeting on Wednesday, January 24.
Here’s how the council is proposing to make savings:
Reduction in energy spend
The council is proposing to cut its energy spending by £4.47m. The current year increases for RCT’s energy costs were around 283% for gas and 147% for electricity.
At the time the council set the budget, forecasts were projecting lower costs for 2024-25, and an energy reserve of £5m was set up to fund any extra costs in 2023-24.
The spike in cost for the current year did happen and so the council said it is able to reduce its budget for next year.
It also said the development of a proposed council-owned solar farm is progressing with completion anticipated during the 2024-25 financial year.
Childcare charge proposal
Council plans to charge £1 a day for childcare which is provided alongside free breakfast clubs would reduce the council’s budget by £495,000 in a full year and this would be ring-fenced to be reinvested into the schools budget.
Fees and charges
The council’s proposed fees and charges for 2024-25 would see a standard 5% increase, with some areas having individual proposals, and this would generate an extra £452,000.
Funding through capital rather than revenue spend
The council is proposing to fund some things which are currently funded through revenue through capital spending instead.
These include IT software licence costs and vehicle purchases, which would result in a £500,000 revenue budget reduction.
Updates to the budget
The council said it will be able to cut spending by £1.33m as a result of some budget updates. These include graduates and apprentices being funded by service areas as part of workforce planning, income generated from the staff benefits scheme, updated contribution levels to joint arrangements, updates to the council’s internal audit service, and up-to-date case load and demand pressures for the council tax reduction scheme.
The proposals say officers have found £5.2m worth of efficiencies for next year, which include £2.1m in cost reductions or additional income, £1.08m in service restructuring and vacancy management, £905,000 in operational service changes, and £1.15m in the recharge of costs and use of external funding. The council says these measures can be delivered operationally and without a significant detrimental impact on front line services.
The operational service changes would involve reducing after-school provision from two evenings per week to one for the youth engagement and participation service, remodelling home and group tuition, children’s services changes, care package reviews in adult services, and the withdrawal of dedicated mayoral support.
Use of reserves
These proposals would reduce the budget gap to £8.95m, which would be met through the use of the council’s transitional funding reserves.
The council said this reserve stands at just over £7m but the council has identified £2.5m from earmarked reserves which can be used, taking the transitional funding reserves to £9.5m.
Using the £8.95m towards addressing the remaining budget gap would then leave £576,000 in that pot.