RISKS around energy prices and pay increases are concerning councillors in Torfaen – which is preparing a budget “likely to be the envy” of many Welsh councils.
The council’s funding from the Welsh Government is set to increase by 3.24 per cent for the 2024/25 financial year which is above the Welsh average of 3.1 per cent it been planning for.
Councillor Sue Morgan, the cabinet member for finance, told members of the borough council’s resources scrutiny committee the council’s financial position is in a “broadly positive” position.
The Pontnewydd Labour councillor said: “In the context of a settlement that provides a small uplift over levels we assumed would be coming from Welsh Government is not going to be sufficient to meet the considerable pressures that we, like all local authorities, are facing.
“That said we are moving towards a balanced position and will probably be the envy of many local authorities, sadly.”
In November the council estimated it would £2.8 million short of what it needs to fund services based on a 4.95 per cent rise in council tax and the expected three per cent increase from the Welsh Government.
It has since identified savings to reduce that and chief financial officer Nigel Aurelius said officers are £70,000 off producing a balanced budget.
“That is virtually balanced and it will be balanced by the time it is reported to cabinet in February,” Mr Aurelius told the committee.
The £70,000 figure has increased, from £38,000 in January, as the officers had underestimated, by £32,000, the amount the council will have to pay in a levy to fund the coroner’s service.
Labour member for Upper Cwmbran Steve Evans asked what a one per cent pay increase, on top of the four per cent rise budgeted for, would mean for the council and was told it would cost about an extra £1.2m.
Mr Aurelius said he would recommend any additional money the council receives should be used to stabilise the reserves.
It is also expected energy costs, which were met from reserves in the current year, due to the spike in prices, will reduce over the coming year.
Cllr Morgan said the installation of solar panels across council properties, and including those planned for the roof of the Glantorvaen car park in Pontypool that is to be refurbished, are also helping address rising energy prices.
She said: “The scale which the council is introducing solar panels not only sits well with the declaration of a climate emergency but helps with the optimism to address financial pressures in the medium term. The car park is one example and solar panels on schools is another really productive area.”
Faiwater Labour councillor Rose Seabourne said she was concerned at a cut of £10,000 for the play service which director Jason O’Brien said was the result of a loss of a grant which would be reviewed.
He told Cwmbran Two Locks councillor, Colettee Thomas, a number of savings around looked after children were related to reducing the number of high cost care placements used and the Welsh Government’s “eliminate agenda” which is to remove for profit providers from children’s care.
Committee chairman, Pontnewydd Labour councillor Stuart Ashley, he believed the finance report looked “relatively benign” but noted members’ concerns about the risk of energy prices and pay increases.
The committee also recommended public comments on the budget should be included in a report for the council and use of reserves should be put in context of how they were used in the current year’s budget.