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Cabinet agrees 2024/25 budget strategy following consultation

The Council’s Cabinet has agreed its budget strategy which will now be presented to full council, proposing a balanced budget for 2024/25. The agreed strategy follows a further period of public consultation. 

Cabinet Members recently considered the consultation feedback that was received, at their meeting on Wednesday, February 21. They agreed the draft strategy that was consulted upon, with an amendment to include additional one-off funding of £500,000 for next year’s Schools budget. This follows the announcement of additional £25m funding for Wales. Elected members will consider the strategy at the full council meeting on March 6.

All councils in Wales are facing significant challenges to set legally-balanced budgets by March 2024. This is being driven by factors including the high level of inflation, the ongoing Cost of Living crisis, and pressures across key services that must be protected as far as possible – like schools and social services. 

Key elements of the budget strategy approved by Cabinet

The provisional Local Government Settlement provided for a 2.8% funding increase for Rhondda Cynon Taf, resulting in an initial budget gap of £36.65m. Early budget reduction measures and previously-agreed proposals have reduced the gap to £25.91m – the position against which the budget strategy has been determined.

The Council always takes a responsible approach to setting council tax levels, balancing the need to protect key services and residents’ ability to pay. Every council in Wales will need to raise council tax next year due to budget pressures, and Cabinet have agreed to recommend to Council an increase of 4.99% for the next financial year. The proposed increase from the 4.9% consulted upon will support public transport provision across the County Borough.

The proposed budget that was consulted upon would see schools allocated funding to cover all pay pressures in full, and a further £1m budget provided towards non-pay cost pressures. This represents an overall funding increase of £11.9m for schools, which is a 6.4% uplift. The extra £500,000 funding that has now been agreed by Cabinet is in addition to these proposals.

Senior Officers have also identified further efficiency savings of £5.24m, which can be implemented without impacting upon frontline services. This brings the total efficiency savings for 2024/25 to more than £13m.

Councillor Andrew Morgan OBE, Leader of Rhondda Cynon Taf Council, said: “Cabinet took the opportunity on Wednesday to discuss and consider the feedback from phase two of this year’s budget consultation process, which focused on a draft strategy that responded to one of the biggest budget gaps we’ve ever faced as a Local Authority. The position takes into account the uplift in funding received from Welsh Government and despite this, like all councils in Wales, we’ve had to make a number of very difficult decisions to protect key services.

“However, due to the continued financial management by officers, along with our established processes to identify savings early and on an ongoing basis, we have been able to effectively protect as many of our frontline services as possible with relatively minimal levels of service reductions. The delivery of more than £13m of efficiency savings for next year follows on from the £16m identified as part of the current year’s budget. The proposed council tax rise at 4.99% is again very likely to be one of the lowest across Wales.

“Our strategy also protects vital services such as schools and social services – for example, we’ve proposed to increase the Schools budget by £12.4m or 6.64%, which includes the additional funding agreed today of a further £500,000. This compares to the 2.8% increase we received from Welsh Government. The consultation respondents were in general agreement with many key elements of the draft strategy – acknowledging the unprecedented challenges being faced across Local Government, and the need for us to make difficult decisions in some areas to protect others.

“Cabinet has concluded that officers have taken a responsible approach to their financial planning and the process of preparing the Council’s budget – and that our strategy sets out a robust and proportionate response for 2024/25 when considering the circumstances. Cabinet will now recommend the strategy to elected members at their meeting on March 6 for final approval.”

Other components of the strategy include energy efficiency proposals and a standard 5% increase in Fees and Charges for Council services, the latter generating £425,000 of extra income. The remaining Budget gap for 2024/25 then stands at £7.0m, which is proposed to be met in full by the release of reserves funding that has been set aside for this purpose.

In total, 686 people were engaged with the phase two budget consultation exercise. Survey respondents generally agreed with the strategy prioritising an increase to the Schools budget (62.8%), maximising efficiency savings (72.9%), the approach to the fees and charges levels (67.5%), and the proposed approach to using Council reserves (75.6%). A full summary of consultation responses is available as an Appendix to Wednesday’s Cabinet report.

Posted on 23/02/2024