£1.2m council surplus will be saved for a rainy day

By Elgan Hearn, Local Democracy Reporter

Powys County Council’s surplus from last year’s budget will be squirrelled away into its reserves, only to be used in an emergency.

In 2025/2026, the council’s budget was £367.055 million, and the authority spent £365.833 million, meaning the budget ended with a £1.222 million surplus.

The final position of the budget was reported to Powys County Council’s Liberal Democrat/Labour cabinet at a meeting on Tuesday.

Finance Portfolio Holder, Cllr David Thomas (Labour – Tawe Uchaf), said: “The year-end underspend allows the council to strengthen its reserve position.

“This will allow us to set aside funding for things such as school improvements, cyber resilience, digital transformation and dealing with storm impacts.

“The general reserve fund increase to £12.3 million represents 4% of the council’s revenue budget.”

He added that the “majority” of council departments had “performed well” from a financial perspective last year.

The “general fund reserve” is the account that is supposed to be used first to plug budget gaps.

The report also shows that the council’s total usable reserves have gone up from £61.894 million on April 1, 2025, to £72.009 million as of March 31.

Cllr Thomas said: “The bottom line really is that the council delivered a positive underspend, achieved most of its savings programme, strengthened reserves for future risks and maintained financial stability despite significant economic pressures.

“However, long-term financial challenges and undelivered savings remain significant concerns.”

To balance the books, £16 million worth of cuts and efficiencies were needed, and this included £3.7 million from past budgets.

Around £12.358 million of these cuts and efficiencies had been actually achieved, which was £2.697 million short of the target.

Of this total, £979,000 worth of savings had been found by departments to replace proposals that had fallen through during the year.

Cllr Thomas said the undelivered savings had been rolled over into this year’s budget.

Council leader Cllr Jake Berriman thanked Cllr Thomas and the financial team for “once again” delivering a budget within 0.3% of target with a surplus, or underspend, “whichever way you wish to look at that”.

“It’s a positive outcome,” said Cllr Berriman. “As we close off these accounts and go forward, we need to continue to work together strongly as cabinet leads in the areas of responsibility we have with our heads of service and directors to ensure we continue to make this council as efficient as we can.”

He added that work on next year’s budget had already started, with the budget advisory group, which has members from across the Powys political spectrum, having held its first meeting yesterday on Monday.

Cabinet agreed the report.