‘Our £53m budget this authority has warns changes are
THE leader of Cardiff council has warned it is “fairly inevitable” that the authority will have to change the way that some services are operated due to financial strain.
It was recently revealed that the council faces a £53m deficit in its budget.
Like all local authorities across the UK Cardiff council is facing huge financial pressure due to spiralling inflation.
In his office at County Hall council leader Huw Thomas talked about what the budget pressures will mean for ordinary people, Cardiff’s housing crisis, and the protection of Cardiff’s green spaces as he outlined the major issues currently facing the authority.
When asked what he thinks the three biggest challenges have been for him as council leader over recent months, Cllr Thomas said: “What has built up a head of steam and is number one, two, and three is the funding challenges that we face. I think it is important to stress that they are not unique to Cardiff but each council has to approach them in their own way.
“There are the in-year pressures and you would have seen from month six in-year budget pressures of around £7m. That is a combination in the main of the pay award for our staff.
“That reflects the higher level of inflation than what we were budgeting for in February. It reflects a really tough level of demand, particularly within children services, and then there is still a Covid hangover, particularly in some of our income generating areas – the castle, City Hall – where we have not returned to the level of income that we were seeing pre-Covid and we make contingencies for that but nevertheless it is a challenging picture in year.”
At the time the interview was carried out, Cardiff council was yet to receive its financial settlement from the Welsh Government for the forthcoming year.
This is the amount of money that the Welsh Government gives to local authorities in Wales to spend on their budgets.
Cllr Thomas said the current hole in the council’s budget could well increase though when the settlement was handed out Cardiff saw its allocation rise 9% for 2023-24 to a total of £592m.
Speaking prior to the announcement, Cllr Thomas added: “The budget gap that we are now facing, £53m, is the biggest this authority has ever faced. That is predicated on a funding settlement, with an increase of 3.5%, and that was forecast by the Welsh Government when they set their budget in March. If there are departmental cuts at a UK Government level that forecast may not be viable so we may be looking at even more than £53m.
“We have been through 12 years of this already. It is pushing a third of a billion pounds in purchasing power we have lost over that time per year. That’s cumulative. It is not like there is fat to trim in our organisation. In a hypothetical scenario we could close every library, we could close every park, we could stop collecting bins in the city full stop, and we would still have a budget gap.
“Or to put it another way: if we put council tax up 5%, and that is probably the highest I can remember us ever putting it up in one go, that only covers half of our increased energy bill.”
When asked how worried people should be about the budget hole, the leader said: “First and foremost we are going to try and protect frontline service delivery and we will do that through backoffice efficiency savings, carefully calibrated increases in council tax, use of reserves, but I guess what it is increasingly looking like [is] if we just did those measures it is not going to be enough.
“So I think it is fairly inevitable... that we will have to change the way some services are currently operated. We will still look to protect those services in some way, so they may be delivered differently, but that said there are lots of services that we have already transformed. “Take the New Theatre – that has been outsourced. A lot of our sport development work – that is now delivered in partnership with Cardiff Met. “So there are fewer and fewer big-ticket items that can deliver a big contribution to the overall savings that we in Cardiff and other councils now have to look at.”
In October, Cardiff council revealed that there were more than 8,200 people on the housing waiting list. The authority also revealed that it receives 400 new applications a month but only 1,600 properties each year become available to let.
A second housing partnership programme was recently approved by the authority which could pave the way for the construction of 1,700 new homes. However, existing homes in the city which are lying empty are also part of the problem.
In 2021, it was reported that there were more than 1,300 empty properties in Cardiff. The council has helped to bring 121 properties back into use since April 2021 but there are still more than 1,200.
Cllr Thomas said: “There are additional powers in terms of additional