3.9% Council Tax rise slammed

The 3.9 per cent Powys Council Tax hike has been slammed as “unacceptable” by a member of Powys County Council’s Finance Panel.

It was revealed at a meeting of the panel on Friday that Powys County Council had been preparing a budget in the belief they would receive just a two per cent rise in funding from the Welsh Government.

Cllr David Thomas believed that the draft budget approved by the Cabinet was “uncannily” similar to the one seen by councillors on 1 December.

He believed there had been little change in he proposals to reflect the four per cent increase in funding that PCC is set to receive.

Head of Finance, Jane Thomas, said that there have been changes to the original plan including a proposed cut to school budgets.

Cllr David Thomas questioned the affordability of the Council Tax hike and believed that changes could be made which would mean no need for the 3.9 per cent increase.

Cllr Thomas said:  “Residents of the county have come through 12 months of enormous pressures, and we are in the middle of a pandemic.

“We say this is not a Covid budget as it’s based on business as usual, but it should be.

“What I see is an unacceptable council tax increase”

In previous panel meetings Cllr Thomas has suggested that part of the general reserve fund should be used to plug gaps in funding made by the pandemic.

He now believed that the some of the reserve, which is expected to sit at just over £24.8 million on March 31, could be used to reduce the Council Tax.

Cllr Thomas said: “We keep being told that this is being held for a rainy day, there must be some flexibility in that general fund to be brought into the budget to ease some of these unpalatable cuts and the impact on our residents.”

He wanted reassurance that the cabinet would look again at costs of the building programme and also the use of reserve funds before the budget is approved.

Ms Thomas added: “Reserves has been a big topic of discussion with cabinet and they have taken advice from me around the use of them.

“You can use reserves to meet one off exceptional costs.

“When we started the financial year, and the pandemic took hold we were forecasting a potential overspend on our budget of £12 million pounds,

“If we had not had the funding from the Welsh Government, we would have to  use reserves or face a significant stop to the delivery of services during this financial year.”

Ms Thomas explained that if the pandemic continues they could  still need the reserves to fund the council’s response to coronavirus, if extra funding for 2021/22 from the Welsh Government does not materialise.

“We need to make sure we are not eroding them so we can cover that risk,” said Ms Thomas.

Finance portfolio holder, Cllr Aled Davies believed that using reserves for 2021/22 would be: “a really dangerous approach”.

Just before Christmas 2020 the Welsh Government announced a four per cent rise of just over £7.3 million in funding for Powys.

This takes the draft revenue settlement for Powys, from the Welsh Government up to £191.897 million.

Council tax collection and grant funding provides around £88 million of the total PCC budget.

With the Council Tax and grant funding added to the budget, the total figure for the 2021/22 will be £280.664 million .

Within the budget are £11.828 million in cuts or savings, that need to be made during 2021/22.

The 3.9 per cent council tax rise equates to an extra  £53 a year on the council tax bill for a Band D property in Powys.

A Full Council meeting is set to discuss the draft budget on February 25 and a further meeting will take place on March 4 to legally set the Council Tax.

The Welsh Government is due to publish its final budget for 2021-22 on 2 March.

 

 

By Elgan Hearn, Local Democracy Reporting Service