The leader of Rhondda Cynon Taf Council has welcomed the increase in funding from Welsh Government but said they’ll face pressures like never before.
Speaking at full council on Wednesday, January 19, Councillor Andrew Morgan welcomed the provisional funding settlement which included an 8.4% increase in the council’s funding from Welsh Government.
But he warned of pressures the likes of which they haven’t seen before and raised the issue of the Welsh Government hardship fund coming to an end.
Read more: You can find more stories from across RCT here.
The report to full council said RCT’s provisional figure would mean its 2022/23 Revenue Support Grant and Non Domestic Rates funding from Welsh Government would total £441.43m.
This includes funding for the Food and Residual Waste Management Gate Fee Support (worth £2.43m for RCT) and the Social Care Workforce Grant (worth £408,000 for RCT) but the council’s general capital funding allocation has reduced by £2.16m to £11.59m.
Cllr Morgan said that while it’s a positive settlement they have to consider the pressures and that going forward there won’t be a hardship fund from Welsh Government which they’re currently receiving.
He highlighted the investment in social care and schools to deal with pressures and said they need to be mindful of cost pressures on residents.
Cllr Morgan said cabinet would soon consider bringing forward the implementation of the real living wage so it comes in early.
He said there are “pressures like never before” and it's not known what’s going to happen with Covid, adding that this is why priority has been given to schools and social care.
Cabinet member for finance Councillor Mark Norris also welcomed the 8.4% increase but urged caution with finances going forward.
Councillor Pauline Jarman, leader of the Plaid Cymru group asked if the free school meals policy agreed by Labour and Plaid Cymru in the Senedd would be a priority in the budget and if they were able to consider reducing the rise in council tax if they could eliminate the budget deficit through efficiencies and other measures.
Cllr Morgan said they’d look at additional pressures and said he’d like to see the lowest increase possible.
He added that free school meals are funded by a separate grant not by the Revenue Support Grant.
He said it’s likely to be phased in over three years as an audit needs to be done and schools will be assessed to see how quickly it could be implemented and costs.
The latest assessment of the council’s budget position was considered by council in September which, based on a range of modelled settlement levels, projected a funding gap of around £9.3m with a 4% increase in the settlement.
The 8.4% increase will lead to an extra £20.47m being available which, added to £316,000 from the impact of the updated tax base, adds up to £20.79m in additional resources available.
Updates to the council’s base budget requirements include the financial implications of increases to National Insurance contributions payable by employers linked to the UK Government’s Health and Social Care Levy and the costs of funding the payment of the real living wage to social care providers within Rhondda Cynon Taf.
Further funding has also been identified and included in the schools
budget to recognise the implications of the Additional Learning
Needs and Education Tribunal (Wales) Act and funding for inflation and pupil number changes.
There is a total of £11.76m worth of updates to the total base budget requirement made up of £4.7m for Health and Social Care Levy and pay costs, £2.43m for Food and Residual Waste Management Gate Fee Support, £3m for real living wage and independent sector costs, £2.01m for schools (including ALN and pupil numbers), £1.16m for other items including inflation, specialist accommodation and waste and £1.54m for the removal of risk items.
When taking into account the additional resources from the provisional settlement of £20.792m as well as the £11.766m worth of budget requirements and the £9.255m budget gap which would have resulted from a 4% increase, the remaining budget gap reduces to £229,000.
Each year the council looks to meet an efficiency target which for the current year (2021/22) added up to £4.6m.
The ‘modelled’ increase in council tax at the moment is in line with the current
year’s increase of 2.65% and cabinet will soon consider and recommend the level of council tax for next year.
The report said that a 1% increase in council tax will generate an additional income for the council of £1.19m (at the 2022/23 tax base level), but will also cost £253,000 in additional council tax reduction scheme requirements.
This means a 1% increase generates a net additional income of £942,000 with 21% of any council tax increase being lost to support the increased costs associated with the Welsh Government’s council tax reduction scheme.
The final local government settlement for 2022/2023 will be announced in early March.
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