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Rhondda Cynon Taf Council proposes measures to close budget gap

BUDGET plans including a council tax rise of just under 5% in Rhondda Cynon Taf (RCT) are the best they can probably expect in “one of the most challenging” budget setting years, the council leader has said.

Councillor Andrew Morgan gave his thoughts as the council’s initial budget proposals for 2024/25 were set out for cabinet on Wednesday, January 24 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%.

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.

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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.

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

The council has just agreed 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.

Efficiency cuts

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.

Cabinet’s thoughts

Councillor Morgan said this year’s budget has been “one of the most challenging” in his time as leader and that every year it seems to get more difficult with pressures being high and the savings not being there to be made.

He said what is being proposed is a fair reflection and “the best we can probably expect” and that the council is maintaining all statutory services and in many cases well above their statutory duties.

He said they’re trying to be as fair as possible on fees and charges while setting a “reasonable” council tax rise.

He said: “Nobody likes to see a council tax rise but at the same time we have to try and fund schools, social care and all those other services.”

He said there are very few services where anybody would agree they’d like to see cuts because they all rely on valued public services.

He said: “It’s a real balancing act every year we do a budget and this year has been extremely difficult.”

He said what officers have put forward is a “reasonable approach.”

Councillor Christina Leyshon said she’s pleased residents in the consultation showed that the wider public understand the financial challenges the council faces now and in the future.

The deputy leader Councillor Maureen Webber said 75.6% who responded in the public consultation said that protecting services at current levels with a reasonable increase in council tax was preferable adding that the proposals would still mean council tax in RCT among the lowest in Wales.