'Services are being challenged': Council predicting overspend position of £510,000 on this year's budget

At a meeting of the council’s Finance Panel on Friday, councillors will be told that this figure will drop to a £55,000 overspend on the £341.6 million budget once money from reserves is moved to cover the gap.

The report explains that the overspend on the total budget as it stood at the end of June is due to a £199,000 overspend on the schools delegated budget and £51,000 on the Housing Revenue Account (HRA) which funds the maintenance and building of council houses.

A further overspend of £195,000 is predicted in the non-ring-fenced departmental budgets.

The report said: “This is as would be expected at this relatively early stage in the financial year.”

The report explains that of the £12.9 million in cuts and savings that need to be made this year and that £2.5million has been “delivered” by the end of June.

Council chiefs give assurances that a further £8.7 million will be delivered by the end of March 2025.

This leaves £1.7 million which are at risk of not being found.

The report said: “Services are being challenged as to the reasons for the changes in positions for some savings proposals and will be required to consider mitigating action to ensure that they can deliver within the budget allocated.”

Out of a total £73.160 million that the council holds in various reserve accounts, the report predicts that it will use £25.777 million during the course of the year.

The report said: “The budgeted use of specific reserves in the main relates to the use of grants that were rolled forward from 2023-24 for use in this financial year and these total £11.6 million of the £13.7 million.

“Other specific reserve use includes £1.3 million for levelling up match funding.”

At the end of the last financial year, it was noted that the council had achieved a surplus of just over £2.3 million on its budget of £326.6 million.

Director of corporate services and s151 officer Jane Thomas said: “The out-turn for 2023-24 was welcome and has allowed us the opportunity to bolster specific reserves and mitigate the ongoing budget pressures through this financial year, in readiness for the challenges to come.

“However, the council faces significant challenge as we develop our plans for future years.”

The council funding gap over the next four years is predicted to be anything from £46 million to £64 million and assumes that funding from the Welsh Government will be stagnant.

Ms Thomas said: “The financial pressure we continue to face is likely to outweigh the funding available.

“The financial plans will be subject to ongoing review, funding assumptions will

be revisited as more information becomes available, revised budget gaps calculated and clear plans of how we can bridge the gaps will be developed.”

Ms Thomas believes that the already heavily criticised “Sustainable Powys” programme which will centralise services on four towns in the county, is “fundamental” to the council’s financial stability.

Ms Thomas said: “This is critical to ensure that the council can remain financially stable and provide sustainable services for the residents of Powys in the long-term.”

Comments from the panel will be added to the report which is expected to be presented to senior councillors at a Cabinet meeting next Tuesday, July 30.