Powys residents look set to face a five per cent increase in their council tax bills next year, as Powys County Council sets out its budget plans for next year.
But the authority has insisted that the plans will mean there will be no library or leisure centre closures, and that it has focused on protecting frontline services despite a need for cuts and savings worth £16.4 million over the course of the year.
The council says the budget give it time to plan ahead for more substantial cuts required in two years' time, which it blames on Liz Truss' budget in the autumn.
Labour portfolio holder for finance, Cllr David Thomas will outline proposals for next year’s council budget at a cabinet meeting next Tuesday, January 17.
The plans are likely to face scrutiny at a series of meetings over the next six weeks.
In its draft budget the council has calculated that it will need an extra £24.7 million to balance the 2023/2024 budget – which is set to rise from £301.9 million to £326.6 million.
This follows a much better than expected 8.7 per cent increase in funding from the Welsh Government who have allocated Powys an extra £18.3 million for 2023/2024.
The report states: “Balancing the council’s 2023-24 budget is dependent upon a five per cent increase in the council tax in 2023-24, generating £4.6 million and £1.8 million."
In a separate press statement, the council says this is made up of a 3.8 per cent rise in tax for council services, with another 1.2 per cent increase needed to cover a £1.1 million increase in the levy by the Mid and West Wales Fire and Rescue Service.
The report stresses that the five per cent figure, which is calculated as the required annual increase in longer term financial planning for the council, could change as discussion of the council budget is discussed at a full council meeting on February 23.
The report said: “The setting of council tax is not subject to approval as part of this report, as this is a matter for full council determination.
“However, the report recommends the level of council tax to be included in the budget.”
Head of finance Jane Thomas said: “The significant impact of current inflation, rising costs and additional service pressures have all added substantial financial pressure to the council’s budget and the level of cost reduction required in 2023-24 is again a significant challenge.
“When this is coupled with the ongoing need for improvement and the identification of further potential pressure in some services, a prudent approach must continue to be adopted to support financial stability.
“The position going forward will require reserves to be maintained at a prudent level.”
Ms Thomas said that she expects that there will be a need to deliver savings in the “years ahead”.
Of the extra funding the council will receive next year from the Welsh Government, Ms Thomas said: “This is welcomed and will go some way to help fund the significant pressures we face whilst the proposed increase in council tax will help mitigate the position.”
On the £16.445 million in cuts and savings needed, Ms Thomas said: “These reductions have focused on delivering services that are more efficient or that can be delivered at a reduced cost, alternative sources of income and increased fees and charges have also been implemented.”
According to Ms Thomas the purpose of the cuts and savings has been to protect front line services “wherever possible.”
Council Leader, Cllr James Gibson-Watt said: “This has been the most difficult budget-setting process the county council has ever experienced. The impact of over 10% cost inflation, the consequent need to increase staff pay to meet the cost of living crisis and a huge increase in demand for social care as a result of flu, Covid-19 and the crisis in the NHS, have combined to create an extremely difficult position."
He added: “The economic turmoil produced by Brexit and the UK Government’s actions last Autumn has left a legacy that means that we cannot continue with business as usual. It has been a hard task for cabinet colleagues to balance the books for the coming year.
“We now begin the even harder challenge, working with our local communities and partner organisations, to protect future services while delivering balanced budgets in the face of a hugely unstable future.”
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