Neath Port Talbot Council is facing a tougher than expected task in reaching a balanced 2024/25 budget.
It follows a big increase in the Mid and West Wales Fire and Rescue Service annual levy, lower than expected funding from the Welsh Government to run council services and cuts in specific all-Wales grants.
Also, while the council faces £30.5m in new cost pressures, the actual amount the Welsh Government is proposing to give the authority is estimated to increase by only around £7m.
On 22/01/24, members of the council’s Cabinet were given an update on the Provisional Local Government Settlement 2024/25 – announced last month. The provisional settlement is the amount of spending power given to the council annually from Welsh Government.
The final settlement (detailing how much the council will actually get in the coming financial year) will be announced next month.
The update report by council officers says the result of the settlement is that the budget gap detailed in the council’s draft budget proposals of £2.7m has now increased to around £3.5m.
The report says: “This gap will require funding either from additional Revenue Support Grant (RSG) from Welsh Government in the final settlement; additional savings/income generation proposals, increased Council Tax, or a combination of these.
The report adds: “The draft budget proposals assumed an increase in RSG of 3.1% in line with Welsh Government indications. However, the actual increase for Neath Port Talbot is proposed to be 2.8%, below the Welsh average of 3.1% (some councils get more than others in RSG based on various elements of need).
The financial impact of the reduced provisional settlement is that the Council will receive £650,000 less in RSG than anticipated. In addition to this shortfall the Chief Fire Officer has confirmed that the Mid and West Wales Fire Authority level will be 9.4% which creates an additional budget pressure of £183,000.
In terms of specific all-Wales grants, the majority have remained ‘cash flat’ which represents a cut in real terms but there a number which have seen significant reductions.
These include the Social Care Workforce Grant (a cut in NPT of around £500,000), the Children in Communities Grant (cut in NPT by £312,000) and Communities for Work (£709,000).
Cllr Nia Jenkins, Cabinet Member for Education and Early Years, told the meeting she would like the Welsh Government to reconsider the cuts saying: “Given the 2,800 job losses just announced by Tata Steel these are the kind of services we need more than ever.”
Council Leader Cllr Steve Hunt added that he was now urging all members to continue lobbying the Welsh Government over funding before the announcement of the Welsh Government’s final settlement for local authorities due in February.
In common with other Welsh councils, Neath Port Talbot Council has just completed a public consultation exercise to gather public views on what the budget priorities should be and detailed proposals, including a recommendation on Council Tax, will be drawn up in the coming weeks.
In setting its 2024/25 budget the council has been facing one of the most difficult financial situations in its history. Just like households, the cost-of-living crisis, soaring energy costs and inflation are having a huge impact on the council’s budget.
