Welsh council has unveiled plans for next years budget including a 4% council tax rise

Anthony Lewis, Local democracy reporter

Rhondda Cynon Taf Council has unveiled plans for its budget next year which currently include a 4% council tax rise.

A report to cabinet on Monday, February 2 said that the initial provisional local government settlement would have meant a further increase in the level of council tax would be needed for next year.

But in light of the budget agreement reached and the more favourable settlement, it is proposed that the level of council tax for next year can now be kept at the currently modelled level and set at an increase of 4%.

The report said that this would align with the expectations of the cabinet in terms of avoiding excessive increases in council tax levels and the desire to maintain as many services as possible.

On schools, the strategy now proposed will see them allocated funding next year to cover in full all of their pay and non pay inflationary costs plus service
pressures which will see the schools budget fully funded for next year, the report said.

It also said that a further £1m has been included to enhance capacity across ALN and special school provision and this will see the schools budget increase by £10.4m for next year, or 4.8%.

The report said this is above the level of increase in funding which the council receives in the final settlement and that the individual schools budget will be further adjusted to reflect the implications of transfers into the settlement and requirements for employee and non-employee costs.

In terms of efficiencies, the report said that measures worth £6.33m have been identified including £3.03m of general efficiencies/cost reduction measures, £976,000 of non pay expenditure freeze, £1.26m in service restructuring and vacancy management and £1.06m in the use of external funding and recharges.

Officers have said in the report that the measures proposed can be delivered operationally and with any detrimental impact on front line services being appropriately mitigated.

In terms of fees and charges, a standard 5% increase is proposed with some areas having their own specific treatment and this would bring in an extra £412,000 in income.

With the changes being made by Welsh Government to business rates, RCT is proposing to increase the level of business rates relief in its own local scheme to £625 for 2026/27 with a view to a further increase to £750 for 2027/28 which would cost the council £230,000.

Following the Welsh Government budget agreement in December, it was announced that RCT would receive a 4.5% increase in funding for next year, rather than the 2.9% included in the provisional local government settlement.

The additional funding of £16.96m from the final settlement combined with the updated council tax base means the council has received £17.19m in additional resources.

There are a number of updates to the council’s base budget which total £1.13m

These include £1.75m in social services pressures such as adult Social care specialist and residential placements and children’s social care costs associated with the eliminate profit agenda and associated residential care costs.

Also included is £349,000 in other base budget updates such as ALN transportation, highways drainage, ALNCo (additional learning needs co-ordinator) pay increases and licence cost increases across services offset by reductions in energy costs and the implications of the senior management structure changes previously agreed.

There’s a reduction of £1.96m in the updated employee base budget requirement with the cost of the increase in the rate of the real living wage, NJC and teachers pay and national insurance funding shortfall offset by pension contribution levels.

And there’s £1m in specific grant funding risk with uncertainties persisting across many specific grant funding streams including the transition from the Shared Prosperity Fund to the Local Growth Fund.

The budget gap for next year was previously reported to be £22.49m but when taking into account the additional resources of £17.19m and the base budget updates of £1.13m this drops to £6.42m.

When the extra £1m for additional learning needs and special schools, the £6.33m in efficiencies, the £412,000 income from fees and charges and the £230,000 cost of increasing the local business rates relief are taken into account, this reduces the budget gap to £911,000.

The plan to cover the remaining budget gap is to use £911,000 from the council’s transition funding reserve which currently stands at £4.74m, having been replenished during this year, and so this proposal would leave it at £3.83m.