OFFICERS at a Welsh council have said it is “inevitable” that the resources available for next year are not going to be enough for it to continue to fully fund and maintain all services at their current levels.
Rhondda Cynon Taf Council is facing a budget gap of nearly £26m for next year following the Welsh Government’s local government settlement funding announcement in December.
An updated report to full council on Wednesday, January 17, says the previous projected budget gap was £36m but this has been reduced to £25.9m with agreed budget cuts worth more than £10m. Council officers are warning “difficult decisions and choices will need to be made”.
In the provisional local government settlement last month, it was announced that RCT would receive a 2.8% funding increase, which is below the Welsh average of 3.1%
Following the funding announcement, council figures showed a £36.6m budget gap when taking into account the decrease in revenue support grant from 3.1% to 2.8% adding £1.8m to the gap, the social services workforce grant reduction adding £815,000, and the council tax base reducing the gap by £983,000.
The £10.7m worth of budget cuts include £8.24m in early budget reduction measures, £841,000 in budget adjustments, £220,000 from learning disability day services, £544,000 from the supported living service for people with a learning disability, £753,000 from domiciliary home care and £140,000 from day services for older people.
When the £10.7m is taken into account alongside the £1.64m added to the gap from the provisional settlement and tax base implications, the remaining budget gap stands at £25.9m.
In preparation for the 2024-25 local government settlement, the council has calculated base budget requirements for the next financial year which take into account employee costs, pension costs and national insurance contribution levels, non-pay (ie goods and services) inflationary implications, including energy and fuel, corporate financing requirements and levies, and full year effects of any additional burdens imposed on the council and the implications of demand-led pressures.
The provisional settlement indicates that RCT’s 2024-25 revenue support grant and non-domestic rates funding will total £484.1m.
The council’s general capital funding allocation is set to be reduced by £86,000 to £13.8m.
The council report said senior finance officers have worked alongside service managers to identify efficiencies and changes which it says helped to deliver the early budget reduction measures.
But it said: “The scale of the challenge remains significant especially following the £38m budget gap which was balanced for the current financial year, the largest which this council has ever faced.”
It said it is “inevitable” the resources available for next year are not going to be sufficient for the council to continue to fully fund and maintain all services at their current levels and “difficult decisions and choices will need to be made.”
But it said the council does have a track record of making decisions early and on an ongoing basis and uses its reserves “proportionately and pragmatically” as part of setting balanced budgets each year.
