A COUNCIL which says it has avoided cuts this year has warned it is still braced for a £30 million spending gap over the coming years.
A balanced budget which avoids the need for cuts to services and sticks to the previous commitment for a 1.95 per cent council tax rise has been prepared in Torfaen, which the councillor responsible has called “good news”.
But members of the borough council’s cross-cutting scrutiny committee have been told over the medium term, through to 2027, the authority must still be prepared for rising prices and increased demands on its services that could amount to £30m.
Councillor Sue Morgan, the Labour run council’s cabinet member for finance, told the committee the budget proposed by the leadership for the 2023/24 financial year doesn’t require cuts to services and said it “is a good news story as far as you can have a good news story in the current climate”.
She said soaring energy costs and inflation have created cost-of-living pressures facing the council and “every resident of Torfaen, business and member of staff.”
But she said a better-than-expected funding award from the Welsh Government, and careful financial planning for the current year’s budget, have helped achieve the balanced position without taking the axe to public services as it was feared in November when a £12m shortfall in 2023/24 was predicted.
She said: “We have managed to have a very limited impact on services, we are not talking about cuts as some local authorities are and is a tribute to the way we have approached things in Torfaen. That isn’t to say over the medium term we haven’t got challenges but this has given us time to look at them in a more strategic and considerate way.”
The committee was told work undertaken when a financial shortfall was anticipated will now help shape its response to the medium-term pressures.
The council’s top finance officer Nigel Aurelius told the committee: “Over the medium term there are £30m of challenges and we are still working on them.
“The increased (funding) settlement for 2023/24 gives us time to work these things through in a more sustainable way rather than having to have them ready for April 1 this year.”
The council has instigated “project Apollo” to look at its workforce, spending and the council’s partnerships, the demands on its services, how it can better use technology and boost its income.
It will also look at energy savings with the council using reserves to fund large increases in its utility bills anticipated in the coming year.
Mr Aurelius said: “In 20 years as treasurer I’ve never been a supporter of using a significant amount of reserves to underpin budgets but this year I felt it just seemed wrong to be cutting services to fund energy prices that may not be at that level in the future.”
The council will also use reserves to fund energy saving measures to reduce future bills while any savings if this year’s pay awards less than the 5.5 per cent budgeted for will be used to rebuild the reserves.
Schools will have to use their reserves to meet additional energy costs this year, estimated as much as £1.9m, but the committee was told there will still be more than £1m left in the fund.
Mr Aurelius said the headteacher’s forum, and the council’s trade unions, have given the proposed budget their support.
The scrutiny committee has backed the approach to the budget but has said it wants to be updated on the medium-term Apollo project and has cautioned on the future use of reserves and the need for them to be rebuilt.