A 3.9% council tax rise for residents in Rhondda Cynon Taf next year has been approved by councillors. Full council approved the budget proposals at a meeting on Wednesday, March 8 which will close the budget gap that the council was facing of £38m.
This will mean an increase of 78p per week for a person living in a Band A property and £1.17 per week for a person living in a Band D property with 42% of properties in Rhondda Cynon Taf being Band A. Increasing council tax by 3.9% will reduce the remaining budget gap by £1.815m, the report said.
In January, cabinet agreed draft proposals for the revenue budget strategy for the financial year 2023/24 which have been out to consultation. The final local government settlement from Welsh Government confirmed a 6.6% increase announced for RCT with a 7.9% average increase across Wales.
RCT’s capital grant is set to increase by £2.287m to £13.886m having reduced by £2.165m for this financial year.
Schools
The council’s plans to close its budget gap of £38.326m have seen it advise schools to plan for a 2.75% reduction in funding after being fully funded for pay and non pay pressures and to be prepared to use the flexibility of their own reserves, with the council report saying that the aggregate level of school balances increased from £12m to £20m over the course of the last financial year (2021/22). But the report said schools will be allocated funding in full to cover costs in respect of pay, inflation, energy cost increases, pupil number changes and additional pressures around ALN (Additional Learning Needs).
After adjusting the individual schools budget to reflect lower pension and National Insurance costs, this will provide an extra £18m of funding to schools, it added. The 2.75% funding reduction that the council has advised schools to plan for will result in a budget cut of £5.3m, but the proposal is that an extra £500,000 is set aside as further support with the school-based challenges of ALN plus a further £500,000 of general funding reducing the impact on schools to £4.3m.
In overall terms, the proposal will mean that the aggregate schools budget will increase by £13.7m, an increase of 7.9% with the level of efficiencies required also reduced to 2.2%.
Specific service and spending changes
The council is also introducing specific service and spending changes in areas such as waste services, meals on wheels, council run nurseries, council tax premiums on long term empty properties and second homes, shifting from revenue to capital funding for some things and fees and charges. The waste service changes which have been agreed by cabinet include collecting black bags and bins every three weeks with a maximum of three black bags per household (for those with existing black bag waste collections) and the “no side waste” rule continuing for those households with large 240 litre wheelie bin collections. One bag of side waste, no larger than 70 litres, being allowed for the standard 120 litre bins.
It will also see a trial of the use of reusable recycling sacks for the collection of dry mixed recycling with these waste services changes set to save £800,000 over a full year. Cabinet has also agree changes to the community meals service (meals on wheels) to reorganise it and provide a hot/frozen community meal home delivery service with increased charges for those who use the service which reduces the subsidy per meal and reduces the council’s budget by £427,000.
To increase the availability of a range of childcare options for families in local communities, a market testing exercise confirmed that there are a number of experienced providers who have expressed an interest to
deliver one or more of the council run nurseries. Cabinet have agreed that a procurement process will now be carried out and this will reduce the council’s budget by £322,000 in a full year.
Cabinet and council have already agreed the introduction of a council tax premium on long term empty properties and second homes within RCT as the council continues to try to bring empty properties back into use and these measures will raise extra council tax, estimated to be £1.5m in a full year. Spend has been identified which is currently funded from revenue budgets which could be funded from capital budgets.
These relate to IT software licence costs, vehicle purchases and RCT’s contribution to the Cardiff Capital Region City Deal and would reduce the revenue budget by £4m. There will be a standard 5% increase in fees and charges with the council absorbing the implications of not applying an uplift in line with the CPI (Consumer Price Index) rate of inflation but a number of areas will have different increases or none at all and this will bring in £750,000 of extra income for the council.
Including part year savings such as £600,000 from the waste service changes, £320,000 from the meals on wheels changes and £188,000 from the nursery proposals, these specific service changes reduce the budget gap by £7.358m.
Energy
On energy, the council is using £5m from reserves to smooth the impact for next year. The latest available forecast increases for RCT Council’s energy costs for next year show a 283% increase for gas and a 147% increase for electricity but the report said it is likely costs for the year after (2024/25) will be lower and that there is the opportunity to use one off funding to smooth the one year spike in energy costs.
Efficiencies
In terms of efficiencies, the council is planning just over £16m (16.164m) of them next year from measures which the council said would not significantly impact on service levels or service delivery but would include operational service changes which might be apparent to residents. These measures will reduce the budget gap to £4.105m and the council plans to use some of its transitional funding reserve to cover this.
The proposals will mean the council has a revenue spending budget for next year of more than £609m.
The views of the leader and deputy leader
Councillor Andrew Morgan, Labour leader of the council, said the £38m budget gap is by far the worst they’ve seen since austerity started. Cllr Morgan said they’ve tried to take a pragmatic approach and be sensible with fees and charges.
He said: “Overall it’s the best position we could have hoped for.” He added: “Although we are making some service changes which in some cases I think are regrettable but we have to make sure we balance the books.” He said overall they’ve done a pretty good job working with officers to keep the council tax down to a minimum, adding that 3.9% will be the fourth lowest increase and that it is to make sure they have sufficient funding especially for social services.
“The pressures will continue no doubt for the coming year and we will continue to have to look at how we can tighten our belt, how we can get as much money through to front line services.” He said he thinks the budget is as good as any if not better than others across Wales.
Responding to a comment from the Conservative group leader, he said he won’t let austerity go because services were cut, people were laid off and RCT communities were impacted. Councillor Maureen Webber said there was no level of criticism from the schools budget forum and in fact they were “extremely supportive” about how the council manages the schools.
She said they need to continuing to engage with communities and they will continue to be engaged in the democratic process of setting a balanced budget. She said she thinks they’ve demonstrated sound financial stewardship which does not take unnecessary risks previously and that’s what they continue to do but said they face severe financial pressures.
The view from other groups
Councillor Karen Morgan, leader of the Plaid Cymru group, raised questions over the energy bill discount scheme, the funding of the initial teacher’s pay award, the latest improved offer and free school meals. She also said scrutiny had raised concern about privatising the meals on wheels service by outsourcing the meal provision, and asked if the council could provide reassurance the school meal service won’t outsourced. Finance director Barrie Davies said it’s not something he has been asked to look at.
Cllr Karen Morgan also said the Plaid Cymru group were concerned that some of the proposed service cuts or “changes” might be a “false economy” where savings might be wiped by extra costs in other departments as a result of the changes. She also questioned whether the increase in fees and charges might result in the loss of revenue and that only time would tell.
Cllr Karen Morgan said co-operation that was offered over budget planning didn’t really happen beyond the initial meeting. She said there was “no doubt that the individual schools budgets would’ve been less generous if Plaid hadn’t made it clear at every opportunity that this is what we were looking for to have our co-operation” and that there’s no detrimental effect to social care.
She said for this reason Plaid would support the budget but with “the very real reservations and concerns about the impact on our residents.” Councillor Mike Powell, the leader of the RCT independents group, said he can’t support the budget because of the school funding.
He said he appreciates the problems but as a school governor he hasn’t had a budget yet and he’s being asked to vote upon something that could impact on not just his school but all schools in RCT. He said it was a tricky one and school funding has always been a bone of contention.
On long term empty properties, he said it was great to see the council was dealing with it in some respect but said they still have over 3,000 long term empty properties in RCT when several years back they only had 2,800. He highlighted that the council is putting meals on wheels prices up, home day care hourly charge up and bulky waste collections raising concern over the potential for more fly tipping and more cost.
Councillor Sam Trask, leader of the Conservative group, said the Conservative group thinks that overall it’s a “very fair budget” but they don’t feel they can support it because in their election pledge they pledged to fight against council tax increases. He said they very much support the use of the reserves and asked that, with the council tax increase only reducing the budget gap by £1.8m, if reserves could’ve played a bigger role at this time with inflation believed to be peaking and predicted to be going down to keep the load off the people with the reserves being replenished.
He said: “The budget gap is not due to austerity. Austerity ended in 2018 it’s about time they (Labour) let it go.” But the director of finance Barrie Davies said that each 1% increase in council tax raises an extra £955,000, so the £1.8m related to the 3.9% is compared to the 2% increase modelled in the medium term financial plan
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