Council forecasts £59.7m underspend on major projects

Richard Youle, local democracy reporter

A local authority has revealed it is on course to spend tens of millions of pounds less on major projects than planned this year and more money on day-to-day costs.

Big projects, such as the Pentre Awel healthcare and research development in Llanelli, are classed as capital expenditure – and Carmarthenshire Council is due to spend £59.7 million less on this than the £145 million net figure it agreed when the budget was set.

These numbers, though, are a snapshot from June 30 and could well change before the end of the 2023-24 financial year. When it comes to the day-to-day costs of running council services Carmarthenshire is forecast to overspend by £4.5 million, but this number will change in the coming months.

CllrAlun Lenny told cabinet colleagues that the forecast expenditure on Pentre Awel was £28.8 million less than expected due to delays – known as slippage – but that the council still anticipated spending £43 million on the scheme this year. “Good progress is being made on site,” said Cllr Lenny, cabinet member for resources.

Pentre Awel will comprise a new leisure centre, plus clinical, business and research space, accommodation for hundreds of people who need varying levels of care, a hotel and housing. The £200 million development will cover an 83-acre site at Delta Lakes, and is being funded by the public and private sectors.

Towy Valley Path

Other projects showing an under-expenditure include the Towy Valley Path linking Carmarthen to Ffairfach, by Llandeilo. The projected £3.9 million underspend this year is due to land acquisition delays.

Meanwhile, ongoing discussions about the layout of the new Carmarthen Hwb at the town’s former Debenhams store have led to a £3.4 million slippage. There is also a projected £5.1 million underspend on new schools and school upgrades because the council was waiting for Welsh Government approval.

The capital programme also includes £19.6 million on new or repurchased council houses, and this remains pretty much on track. New homes, said Cllr Lenny, were being built “at pace”.

Another project on track is the new Amman Valley all-weather sports pitch and associated facilities, which Cllr Lenny said was due to be completed this year.

He said reasons for the forecast £4.5 million overspend on day-to-day services included increasing and more complex demands from people with learning disabilities or mental health challenges.

Another area of concern was rising agency staff and out-of-county residential placement costs in children’s services. Cllr Lenny said an action group had been set up within children’s services to review expenditure and “implement urgent actions”.

While the £4.5 million over-expenditure forecast is a small proportion of the council’s net revenue budget of £450 million, Cllr Lenny described it as a “truly concerning situation” because of existing and imminent financial pressures. These include more demand for services, a drop in income, and nationally-agreed pay awards for staff being higher than councillors had anticipated when the budget was set.

According to Cllr Lenny, of Plaid Cymru, the council was £120 million worse off in real-terms compared to 12 years ago due to UK Government austerity measures.

Council leader Darren Price said people were aware of the pressures facing councils after a small number of English ones had issued notices banning new expenditure except on statutory services. “If we value public services then we have to invest in them,” he said.

Further updates on capital and day-to-day spending will be given to cabinet in the months to come, and the budget for 2024-25 – including council tax – will be set by councillors in February or March next year.