Vale of Glamorgan Council unveils initial budget proposals
The Vale of Glamorgan Council has spelled out the stark financial position it is facing following a decade of austerity and the significant impact of Covid-19.
Increased service costs are causing pressures at a higher rate than in previous years.
Cost pressures for the coming financial year are estimated at just under £27 million and that is having a major effect on budget planning.
Though the financial settlement awarded to the Council from Welsh Government is not yet known, even the most optimistic outcome will likely still leave a significant shortfall in funding.
That means the Authority is contemplating some difficult decisions as it plans the budget for 2022/23.
Cllr Neil Moore, Leader of the Vale of Glamorgan Council, said: “This is the toughest financial position we have ever experienced.
“I want to be completely clear on that point and the fact we are facing unpalatable choices as we bid to maintain the vital services on which people rely.
“Although the amount of funding received from Welsh Government last year was higher than anticipated, it did not address the legacy of the previous 10 years during which Local Authority funding was consistently cut.
“That coupled with the financial burden of the coronavirus has left the Council in an extremely challenging predicament.
“I want to be open and honest with residents over the reality of the situation and stress that their views will play a vital part in deciding the best way forward.”
An initial draft report to be considered by the Council’s Cabinet on Monday sets out the impact of the pandemic in the form of both lost income and additional expenditure.
Funding has previously been provided by Welsh Government to cope with those costs, but that is not expected to continue beyond this financial year.
A number of other factors are also expected to negatively affect the Council’s financial position, including inflationary pressures such as increasing energy prices and changes to National Insurance payments.
The Vale also has an ageing population and growing number of children with complex and Additional Learning Needs, groups that importantly require greater service provision.
The report includes projections made for a range of possibilities in the Welsh Government settlement, from a one per cent reduction to a 4.42 per cent increase, which would be the same rise as last year.
In each of those scenarios, the predicted impact of Council Tax increases of 3.2 and 3.9 per cent have been factored in. The report also highlights that it would take an increase of 7.05 per cent to bring the Vale in line with the average Council Tax for Wales.
Even with these rises, there would still be a shortfall in funding that would require the Council to make reductions in spending in some areas.
A consultation exercise on the budget and rate of Council Tax will begin shortly to establish residents’ preference in relation to service provision.
Budget proposals will be discussed by Cabinet and scrutiny committees before being finalised at a meeting of full Council in March.