The leader of Swansea Council has welcomed the extra money coming to local authorities next year but warned it still left them "significantly short" due to the energy, wage and other financial pressures they were facing.
Addressing a cabinet meeting Cllr Rob Stewart said Wales's 22 councils faced £200 million extra energy costs in 2023-24, while the NHS Wales needed to find an extra £260 million to power hospitals and other buildings.
Councils get most of their core funding from the Welsh Government, with a smaller proportion coming from council tax and a share of business rates. Swansea Council is in line to receive £417.7 million from the Welsh Government in 2023-24 - that's £29.3 million more than this financial year. While not insignificant, Cllr Stewart has previously said that the council's energy bills alone would be around £15 million more than they are now.
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He told cabinet members that "difficult decisions" will have to be made as councils draw up their spending and savings plans. On the plus side Swansea Council has around £160 million in reserve and is likely to use £30 million of it to help balance the books this year. Cllr Stewart said the Labour-run council had made "prudent" decisions in recent years to bolster the reserves, which now gave it extra flexibility.
Finance director Ben Smith said this use of reserves was not something he would normally countenance but that there were real pressures bearing down. A smaller draw from the council's contingency fund is also set to be deployed.
Mr Smith's report to cabinet said there was a forecast budget shortfall this year of £15.2 million, with all departments except for finance currently overspending. But it added that measures taken and planned should reduce that to £2.8 million. The report also said that extra costs arising from a long-running IT project are having to be funded this year and next year, while schools would need to fund teachers' pay awards from their own budgets this year.
Mr Smith said council tax losses - money which the council expected to receive but didn't - were "stubborn", and that council rent arrears had risen in the most recent quarter. Cllr Stewart said: "Given the pressure which we are facing it is important that all departments continue their efforts to bring spending under control."
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