‘Inevitable’ that budget pressures will hit Cardiff services – an interview with council leader Huw Thomas

Ted Peskett, local democracy reporter

The leader of Cardiff Council said it is “fairly inevitable” that the authority will have to change the way that some services are operated due to financial strain.

It was revealed this month that Cardiff Council will have to find £23.5 million in savings and income generation instead of the £53 million it was anticipating in October.

Like all local authorities across the UK, Cardiff Council is facing huge financial pressure due to spiralling inflation.

Ahead of a winter that looks set to be one of the toughest in a number of years, the Local Democracy Reporting Service went to speak to Cardiff Council’s leader, Cllr Huw Thomas, about what the authority’s biggest challenges have been so far and what might be the biggest challenges ahead.

In his office at County Hall in November, Cllr Thomas talked about what the council’s budget pressures will mean for ordinary people, Cardiff’s housing crisis and the protection of Cardiff’s green spaces.

Funding challenges

When asked what he thinks the three biggest challenges have been for him as council leader over the past months, Cllr Thomas said: “What has built up a head of steam and is number one, two and three is the funding challenges that we face. I think it is important to stress that they are not unique to Cardiff, but each council has to approach them in their own way.

“There is both the in year pressures, and you would have seen from month six in-year budget pressures of around £7 million. That is a combination in the main of the pay award for our staff. That reflects the higher level of inflation than what we were budgeting for in February.

“It reflects a really tough level of demand, particularly within children services and then there is still a Covid hangover, particularly in some of our income generating areas – the Castle, City Hall – where we have not returned to the level of income that we were seeing pre Covid and we make contingencies for that, but nevertheless it is a challenging picture in year.”

A better than expected 9% increase in funding from the Welsh Government is responsible for the greatly reduced budget gap that Cardiff Council faces.

However, the authority’s cabinet member for finance, modernisation and performance, Cllr Chris Weaver, cautioned earlier this month that there is still a “big gap to balance”.

Cllr Thomas said the £53 million budget hole which was originally anticipated would have been the “biggest this authority has ever faced”.

The Leader added at the time of the interview: “If we put council tax up 5%, and that is probably the highest I can remember us ever putting it up in one go, that only covers half of our increased energy bill.

“First and foremost we are going to try and protect front line service delivery and we will do that through back office efficiency savings, carefully calibrated increases in council tax, use of reserves, but I guess what it is increasingly looking like, [is] if we just did those measures it is not going to be enough.

“So, I think it is fairly inevitable… that we will have to change the way some services are currently operated.

“We will still look to protect those services in some way, so they may be delivered differently, but that said there are lots of services that we have already transformed. Take the New Theatre, that has been outsourced.

“A lot of our sport development work. That is now delivered in partnership with Cardiff Met.

“So there are fewer and fewer big ticket items that can deliver a big contribution to the overall savings that we in Cardiff and other councils now have to look at.”

Cardiff’s housing crisis

Last month, Cardiff Council revealed that there were more than 8,200 people on the housing waiting list.

The authority also revealed that it receives 400 new applications a month, but only 1,600 properties each year become available to let.

A second housing partnership programme was recently approved by Cardiff Council, which could pave the way for the construction of 1,700 new homes.

However, existing homes in the city which are lying empty are also part of the problem.

Last year it was reported that there were more than 1,300 empty properties in Cardiff.

The council has helped to bring 121 properties back into use since April last year but there are still more than 1,200.

Cllr Huw Thomas said: “There are additional powers in terms of additional council tax premiums that the council can levy on empty homes and on second homes.

“As part of the budget setting process, we will be looking to see whether now is the time to increase those premiums, or in the case of second homes, introduce those those premiums.”

When asked for his thoughts on Cardiff’s housing crisis more generally, the leader added: “I think there is a disconnect between people agreeing in principle that we need more housing and then agreement on specifics when it comes to building more housing.

“I would be deaf if I wasn’t aware that there are people in parts of the city who are raising objections to building on greenfield even though that greenfield helps to deliver 30% of affordable housing.

“There has also been plenty of objection to building residential towers in the city centre even though that is largely building on brownfield, high density, transport orientated developments.

“The same voices in general are saying there is a housing crisis. I guess sitting here as a decision maker in effect it is quite frustrating when you see what needs to be done – we need to build more housing of every type and every tenure, but there are then local concerns and biases that then come into play to try and slow that process down.”

‘Frustrating’

Another issue that the council sometimes has on its hands is housing developers making attempts to back out of section 106 contributions.

Section 106 contributions are financial contributions that developers make towards social housing or other amenities and infrastructure that a community needs when undertaking a new project.

Cllr Thomas called the issue a “source of frustration”, adding: “On a brownfield site, as a matter of policy that we have set, we will try and achieve 20% social housing contribution.

“There is a particular process that the developer can go through to demonstrate whether that is viable or not. That is an independent process with a district valuer – nothing to do with the council – takes a view and then submits that view to the planning committee, who if they don’t follow that advice chances are they will have an appeal on their hands.

“It is frustrating from my perspective because we want that contribution towards affordable housing because of the need. We want the contribution towards transport contributions or open space contributions to enhance the city.

“What you then have to balance though is if a development is made unviable and then doesn’t go ahead, what do you end up with?

“You end up with no development and no improvement in your housing supply at all.”

Protection of green spaces

Campaigners across the city have questioned the current council administration’s pledge to look after green spaces in recent years due to the approval of a number of developments.

Notably, plans for the new Velindre Cancer Centre in Whitchurch, which could mean the loss of Northern Meadows; the approved expansion of Cathays High, which could lead to the loss of Maindy Park; and Welsh Water’s plans for a sewage pumping station on land at Hailey Park, which residents fear could mark the slow chipping away of their local green space.

The Stronger, Fairer, Greener strategy – a five year plan outlining how the current administration wants to govern the city – says the council’s One Planet Cardiff programme “takes a lead on responding on the climate emergency” and “celebrates and nurtures biodiversity”.

When asked how the council can balance championing the protection of green space with allowing the loss of it at places like Hailey Park, Cllr Thomas said: “Welsh Water have statutory powers to access and put that pumping in.

“The rationale for issuing the lease is that it gives the council marginally stronger powers to manage the impact on that park and mitigate against disruption, but you go through the planning reports – the percentage of land that is actually being built on is something like 0.2% of the park.

“It is at the margins and Welsh Water would argue that what they are doing is mitigating against the risk of sewage discharge into the river.

“I think we can all support those principles, but it is for Welsh Water ultimately to decide what is the most appropriate place for them to put that infrastructure in.”

Residents campaigning against the plans for a sewage pumping station are seeking a judicial review of the council’s decision to approve the plans.

Cllr Thomas added: “Welsh Water have statutory powers to access and put that pumping in.

“The rationale for issuing the lease is that it gives the council marginally stronger powers to manage the impact on that park and mitigate against disruption, but you go through the planning reports – the percentage of land that is actually being built on is something like 0.2% of the park.

“It is at the margins and Welsh Water would argue that what they are doing is mitigating against the risk of sewage discharge into the river.

“I think we can all support those principles, but it is for Welsh Water ultimately to decide what is the most appropriate place for them to put that infrastructure in.”

An independent committee was set last month up to make a decision on whether or not to make a recommendation to the council’s cabinet for the approval of land exchange involving Maindy Park.

If approved, the land exchange, which now only involves land at Caedelyn as a potential option, would pave the way for the already approved expansion of Cathays High.

The council decided to set up the independent committee after it realised that there was a conflict of interest with it being the planning and education authority.

Cllr Thomas was asked by the LDRS why it had taken so long for the Maindy Park Trust Committee to be set up.

Legal advice

He said: “As I said I think in response to a question in council on this, it wasn’t immediately appreciated that there was a covenant on that land.

“It was searches by council lawyers that revealed that fact. I have said all along, we want to ensure that we take decisions in a manner that is legal.

“We took legal advice on the best way of ensuring that and that is where the advisory committee came about.

“In terms of time frames, and again it is frustrating because it slows the process down and it impacts on the delivery of a new school which is what we are committed to doing and what we have a mandate frankly from the electorate to deliver, we have to go through a process that is legal, so we will see what the advisory committee says.

“But, once the issue is identified, there wasn’t any delay in the process we went through to arrive at the decision to create that advisory committee.”

But what should happen to the planned school expansion if the committee decides not to recommend the land exchange, or indeed, if the Charity Commission opposes it?

To this questions, Cllr Thomas said: “I haven’t got a clear answer to that yet and we are being very careful in terms of the use of public money to not spend money unnecessarily on plans that we may not need.

“I am clear in my mind that that school building needs replacing and that is to secure the education environment for over 1,000 children, many of whom are from some really challenging backgrounds.

“If there is no way of delivering a school as planned on that site, we will reflect and see what other options are available to us.

“I fear that will come with more delay and more disruption to the pupils in that school and I think that feels pretty unfair, but we will see where we are.”