Cabinet will shortly receive a draft Budget Strategy for the Council that sets out the financial position for Rhondda Cynon Taf in 2023/24, following the provisional Local Government Settlement announced by Welsh Government in December.
At their meeting on Monday, January 23, Cabinet Members will consider the draft Budget Strategy report that will outline recommendations of the Council’s Senior Leadership Team in relation to setting a legally-balanced budget for next year. If agreed, phase two of the budget consultation process will ask residents for their feedback on the draft Budget Strategy.
The budget process for 2023/24 is set against the backdrop of unprecedented financial challenges and is a position all Councils across Wales are facing in the short and medium term. This is due to significant increases in demand for Council services as residents, business and communities are supported to recover from the pandemic; the ongoing Cost of Living Crisis; rising costs in delivering council services with the level of inflation at a 40-year high; and external factors having a continuing adverse impact – such as the conflict in Ukraine.
The provisional Local Government Settlement that was announced by Welsh Government in December 2022 amounts to an increase in funding of 6.6% for Rhondda Cynon Taf for next year. Although this is higher than the range estimated and reported by the Council in early autumn 2022, due to significant cost pressures the Council still faces a budget gap of £38.3m.
As a result, the Senior Leadership Team has considered and proposed budget-saving measures across all areas, as part of a draft Budget Strategy that targets funding towards the delivery of key services, applies a responsible approach to the level of council tax for next year and maintains the financial stability of the Council.
Councillor Andrew Morgan OBE, Leader of Rhondda Cynon Taf Council and Cabinet Member for Infrastructure and Investment, said: “This is an incredibly-challenging time for Local Government, with all councils in Wales having to make difficult decisions on their finances. The report that will be presented to Cabinet on Monday outlines the financial position for next year, as well as considerations on how we could set a balanced budget for 2023/24.
“The scale of the challenge faced in Rhondda Cynon Taf was reported in our Medium Term Financial Plan in September, outlining a £36.5m budget gap for 2023/24. Even with a more favourable provisional settlement, the impact of ongoing cost increases has resulted in an updated budget gap of £38.3m, and this position formed the basis of the budget review work undertaken by the Senior Leadership Team.
“However, the Council has a history of making responsible financial decisions, and I’m confident our continual forward planning has put us in a strong position to tackle the challenges faced in the short and medium term. Work started very early on the forthcoming budget, standing us in good stead. Every service has been looked at in detail, to consider how we can reduce the budget gap.
“The report demonstrates how we could deliver a balanced budget for 2023/24 without compulsory redundancies, and with only marginal service delivery changes in comparison with other councils. Once again, we’ll look to deliver multi-million pound efficiency savings and what is likely to be one of the lowest council tax increases in Wales – well below the expected average rise – while fees and charges increases are proposed to be significantly below the rate of inflation to protect service users.
“Another important area that will continue to be protected is Education, with our Schools Budget having already increased by 28% over the past 10 years. The Council will fund all of the pressures on our schools for 2023/24 that relate to pay, inflation, energy costs, pupil number changes and Additional Learning Needs – and against this position we will need to contribute towards balancing the budget, albeit at a far lower level than other Council services.
“Cabinet Members could decide for the draft Budget Strategy to be consulted upon in phase two of the Council’s annual budget consultation, with phase one having been undertaken in November and December 2022. If agreed, residents would have the opportunity to have their say on the draft strategy in the weeks ahead, and the feedback we receive will help inform the final budget that will be reported to full Council in March 2023.”
Monday’s Cabinet report also presents the feedback received in phase one of the Council’s budget consultation. It was hosted on the Let’s Talk engagement website, supported by social media and public engagement events, and focused on key service priorities. In total, 1,300 people were engaged, including 515 survey responses and 525 ‘quick poll’ responses received.
In total, 72.6% of respondents agreed the Council should fully-cover increased pay and non-pay costs in schools, while 91.7% felt the current approach to efficiencies is a good strategy. In addition, 84.3% said that individual reviews of fees and charges is a reasonable approach, while 68.3% felt that protecting services through a reasonable council tax increase was preferable. A full summary of the feedback is included in an Appendix to the Cabinet report.
