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County Council could face £82m shortfall

As a worst case scenario Powys County Council might need to find over £82million in cuts and savings over the next five years.

10 months ago   3 minutes read   1,546 views

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By Elgan Hearn
Local Democracy Reporter

As a worst case scenario Powys County Council might need to find over £82million in cuts and savings over the next five years.

At a meeting of council’s Cabinet on Tuesday September 19, finance chiefs painted a bleak picture as they set out the latest version of the Medium Term Financial Strategy (MTFS).

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This sets out the financial strategy for the council up to the end of March 2028.

Finance portfolio holder Labour’s Cllr David Thomas said: “The first minister Mark Drakeford has issued a statement outlining the significant financial pressure the Welsh Government are facing. “He stated that this is the toughest financial situation we face since devolution.”

Cllr Thomas explained that as government ministers review their departmental budgets it is not yet known how this will impact local authorities.

Also cuts to NHS spending could also have a knock on effect on areas of overlapping responsibility such as Social Services.

Cllr Thomas added that “overall” inflation has fallen but prices are not reducing but rather “rising more slowly”. He explained that other councils are already considering “ceasing” all non-essential services and reducing core services, cutting back on building schemes and looking to increase Council Tax, other fees, and charges, “in line with inflation or even higher.”

Cllr Thomas said:

“I think we’re fortunate in perhaps being a step ahead in starting on our programme of Sustainable Powys which will hopefully address many of these issues we face."

“Our revised modelling creates a £16.3 budget gap for next year and a cumulative gap of £43.4 million.

“The worst case scenario sees the cumulative figure increase to £82.3 million at the end of year five, but I emphasise this is a worst case scenario hopefully it won’t come to pass.”

He explained that the response to the challenge would be the remagining of council services now called “Sustainable Powys.”

Cllr Thomas said:  “Our work has gained momentum over the summer months. “As this work progresses throughout the autumn, proposals will be developed for consideration before inclusion in our budget plan.”

The report shows that Council Tax increases are modelled to be five per cent each year, but Cllr Thomas stressed that the cabinet had “not yet discussed” the level it will be set for next year’s budget and the figure is for “illustrative purposes at this stage.”

Head of finance, Jane Thomas said:

“Financial resilience has to be at the forefront of our activities. “A consequence of the under spends we have seen last year has been our ability to shore up some of our usable reserves. “That strengthened our resilience for the pressures that are likely to materialise, and we are already drawing on those to support this year’s budget plan.

“It will be key to understand the one off nature of those funding streams.”

She said that while Powys reserves have increased the council is in the “bottom quartile” when compared to other Welsh local authorities.

Cabinet member for a Connected Powys, Liberal Democrat Cllr Jake Berriman said:

“This makes sober reading."

“We saw through good financial management that we’re on track for a £3.7 million surplus based on the first quarter, that can disappear in the blink of an eye.”

Cabinet agreed the report and also to delegate power to the chief executive, in consultation with the council; leader and finance portfolio holder to implement any saving proposal in advance of next year’s budget: “where no policy recommendation is required.”

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