Could 2020/21 budget surplus fund Council Tax cut ahead of election next year

At a meeting of the Finance Panel on Friday, June 25 councillors looked at the final position of the 2020/21 budget.

At the outset, it had been predicted that the the coronavirus pandemic would blow a £12 million hole into the budget.

Final figures show that due to financial support from the Welsh and UK Government, Powys County Council, ended up with a £8.349 million surplus.

Of the extra money, £4.1m will be put away into reserves accounts and earmarked for recovery funds.

Labour group leader Cllr Mathew Dorrance believed that there were still issues around the explanation as to how the council had ended up with a surplus, when the money given to it was supposed to be used to deal with Covid.

Cllr Dorrance said: “How does that generate a surplus if the money was supposed to be spent on those issues?

“We should be breaking even not having a stash of cash for something else, it should not be put in place to deal with bad financial management of this council.

“I am really sceptical of an ulterior motive of putting this additional money away, and I suspect it’s to pull out a pre-election council tax cut with that £8m, and I’d like assurances right now that this is not what you’re going to do.”

Finance portfolio holder, and Conservative group leader, Cllr Aled Davies said: “No, of course not.

“Delivery of services is all important to us as a cabinet, there’s huge demand out there and we have to try and support our communities the best we can.”

Cllr Aled Davies who has presided over cumulative council tax increases of over 22 per-cent while in office, said that “at all times we will try and keep council tax increases to the minimum.”

“We will never agree precisely on the level of council tax and spend on services, but we agree that we need to support our residents in delivering these services,” said Cllr Davies.

Head of Finance, Jane Thomas, added: “I want to be absolutely clear, all of the money we received through the Welsh Government to support our Covid costs and loss of income has been used to fill those gaps.

“It’s not that that has resulted in the surplus position we are reporting at the year end, that has been created by other funding streams coming in that offset expenditure that was already going to be incurred.”

She added that a couple of significant grants relating to coronavirus costs had been received “unhypothecated” which means the council could decide for themselves what to do with the money.

The report of the end of year budget position, approved by the Independent/Conservative cabinet last week shows that over £5m was received in various grants from the Welsh Government in March.