County Council heads for budget underspend

Powys County Council has revealed that it will set aside money from last year's budget to pay for any salary increases for teachers and council staff that may come from national wage negotiations.

At a recent Cabinet meeting, it was reported that the council is predicted to post an £888,000 underspend on its 2022/2023 budget, an improvement from its previous forecast of a £2.4 million overspend. This is due to money from specific reserve budgets and grant funding from the UK and Welsh Government arriving towards the end of the financial year.

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The report also shows that Adult Social Care has reported a £1 million improvement in its budget, as historic debts between the council and Powys Teaching Health Board were "settled," and care providers implemented the living wage, costing £300,000 less than expected.

Cllr David Thomas, Cabinet Member for Finance, explained that drawing down £2.5 million from specific reserves would "support expenditure" as "planned" and increase the overall underspend to £3.4 million. He said:

"It is proposed that the remaining underspend achieved is set aside in a specific reserve to fund the expected shortfall in the budget to support the nationally agreed pay awards for 2023/2024"

The council will spend £1.5 million for every percentage point above the five and five and a half percent salary increases the council has already planned for.

The Cabinet voted unanimously to note the budget position and grants received, to set up the budget reserve for pay and approve virements that move money between council accounts.