£53m hole in Welsh council budget
Ted Peskett, Local Democracy Reporter
A council tax rise in Cardiff could be part of the solution to dealing with a major hole in the city authority’s budget for next year.
Cardiff Council revealed that it will have to find £53m in savings and income generation next year instead of the £29m it was anticipating.
The financial gap, which one council cabinet member called the biggest the authority has seen in 10 to 12 years, has come about as a result of spiralling inflation, increased demand on services and lower than anticipated income levels.
Speaking about the “worrying” gap, cabinet member for finance, modernisation and performance Cllr Chris Weaver, said: “I would say, given how large this gap is, it would be very difficult for council tax not to be part of the solution, but at the same time we are aware that many families are really suffering with the cost of living.
“It is a decision we will make in months ahead. But, unfortunately, with a gap this wide, it will probably be a combination of a council tax increase and savings.”
Cllr Weaver added that a decision on council tax won’t be made until next year, once the council has been given a provisional settlement from the Welsh Government – this is the money given to local authorities across the country in order for them to plan their budgets.
He also cautioned that council tax “only raises about a quarter of our funding”.
“The majority of our funding comes through grants from the government, so council tax wouldn’t be able to close this gap,” he added.
The council also revealed that budget savings to bridge the gap could have an impact on services.
Cllr Weaver said the crisis is one the public sector across the UK is facing and gave some reassurance to service users, adding: “It is still worth pointing out that we are a very large council and whilst the budget gap is at that size, we do still have significant funds to carry on our services.”
When asked what the council is doing to deal with the situation at this moment in time, Cllr Weaver said: “We are looking at where there might be savings opportunities, where there might be ways to work differently, where there might be different sources of funding for services and what income potentially we can raise.”
A budget gap is calculated by comparing predicted funding (the grants the council receives from government and revenue generated through charges like council tax and parking) from its predicted spend on delivering services like education, social care, libraries and hubs, street cleansing, street lighting, road maintenance etc.
Currently, Cardiff Council delivers about 700 services to residents across the city.
Most of the council’s current £744m annual budget – about two thirds – goes on paying for schools and social services.
When asked where the biggest cutbacks might be seen, Cllr Weaver said: “It is a difficult challenge and it is a bit too early to say specifically where. At the moment, we are looking at all our services to see where we can save money.”
An emergency budget update report will be presented to the council’s cabinet when it meets on Thursday, October 20.
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Is this the same Council that doubled Director pay to well in excess of £100,000 to entice the best Directors to help run the Council efficiently?! They’re laughing all the way to the bank at Council Tax payers expense. Or is this the Council that’s spending approx £50million purchasing the Red Dragon Centre only to knock it down?! Incompetent fools.
I wonder how much money has been spent on cycle paths in Wales and whether there has been a check as to how many use it.
It shows too. I was in Caerdydd yesterday and the day before. It is getting really shabby again. Queen Street is entirely unpoliced. It honks of illegal drugs (stronger than weed). A regular gang of confident, cocky smackheads strutting around the place. Stoners openly smoking weed and bickering / fighting outside the cafes. More beggars than the tourist market in Tunisia. Passive ones sat down with signs, met in equal numbers with active ones who will approach any unaccompanied women who dare to sit on a bench for a rest. Oh and at least two mentally ill people roaming the… Read more »