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Councillor calls for more use of ‘rainy day funds’

20 Feb 2024 3 minute read

Elgan Hearn Local Democracy Reporter

A councillor is calling for more use of “rainy day funds” to bring down the Council Tax burden for residents who are “on their backsides”.

On Monday, February 19, at a meeting of the Corporate and Performance Scrutiny Committee, Blaenau Gwent County Borough Councillors had a first look at the draft budget proposals for 2024/2025

This follows a public consultation on proposals during January, which finished on February 8.

Council tax rise

Councillors were told that Council Tax needs to rise by five per cent and that a minimum of £6.27 million worth of efficiencies and cuts are needed to plug a funding gap.

In Blaenau Gwent one per cent of Council Tax equates to £380,000.

The council’s medium term financial strategy is now based on planning for a four per cent Council Tax increase each year up to March 2029, but finance chiefs are recommending this year that Council Tax go up by five per cent.

The council is already saying that it will use £2.1 million of its reserve funds to ensure next year’s budget answers the legal requirement of being balanced.

Cllr Julie Holt said: “Reserves are for rainy days and at the moment I think the public are having a monsoon.

“It’s absolutely appalling.”

“In the grand scheme of things, one per cent is £380,000 out of reserves.

“I know it’s not sustainable to do that every year.”

Residents “on their backsides”

Cllr Holt asked if “all options” to protect both services and the public had been exhausted.

Cllr Holt said: “Residents that I speak to are on their backsides basically.

“They are using foodbanks, they can’t afford their rent, there’s more people homeless, it’s just an appalling situation.

“I would like to think that we could use some reserves for the monsoon we have at the moment and pray to God that something will give soon, and we’ll have some better news in the future.”

Cllr George Humphreys pointed out the population changes highlighted in the report that are having a negative impact on the council’s funding settlement from the Welsh Government.

The Blaenau Gwent population has shrunk by 1.7 per cent compared to a Wales average of 0.4 per cent.

Benefit rise

The number of residents receiving some form of government “not in employment” benefits has gone up by 13.9 per cent.

Cllr Humphreys said: “Can we please be mindful of the people out there that are in desperate need of support.”

Earlier resources chief officer Rhian Hayden told councillor that this will be the second year that the use of reserves has been required.

Council agreed to use £4 million worth of reserves to balance the 2023/2024 budget – but this use is expected to drop to £2 million giving the council “more “flexibility” in its reserve use.

Ms Hayden said: “The continued use of reserves to balance the budget is not sustainable in the long term, only providing one-off in year funding and increasing the funding gap in the following financial years.”

Committee agreed that the draft budget moves on to be debated by Cabinet members on Wednesday, before being finalised at a full council meeting on Tuesday, February 27.

The reserve at the end of this March is predicted to have £12.77 in the “general reserves” pot and £17.22 million in the “usable earmarked reserves” which gives a total of £29.99 million.

The council predicts that by March 31, 2025, they will still have £12.77 million in their “general reserves” pot and £15.15 million in their “usable earmarked reserves” pot which gives a total of £27.92 million.

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Mab Meirion
Mab Meirion
4 months ago

What a novel idea, Councils not looking after No 1, 2 ,3, 4…themselves !

Linda Jones
Linda Jones
4 months ago

Councils should do all they can to keep the tax as low as possible. However, Council tax and the banding system is inherently flawed and needs to be changed. It can never be right that low paid people in modest housing pay a far higher percentage of their income on council tax than high earners in luxury homes. In many instances low earners in modest Welsh homes pay more more council tax than multi millionaires in houses in London worth £millions. The Thatcher council tax system is corrupt in favour of the well heeled.

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