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Cardiff Council facing 'significant' cuts

Thursday, 28 November 2024 02:16

By Ted Peskett - Local Democracy Reporter X @TedPeskettNews

A Cardiff Council official said 'significant' service changes and service cuts will be required to help save tens of millions of pounds.

Speaking at a meeting on Tuesday, the council’s corporate director of resources, Chris Lee, said they currently expect to face a budget gap of more than £60 million for 2025-26.

Previously, the local authority said it expected to face a budget gap of £49 million – more than twice the size of the gap in 2023/24 (£24m). This year, the budget gap was £30 million.

Members of the city council’s governance and audit committee meeting were told a number of other factors that could affect the budget next year are yet to be determined.

Cardiff Council will find out how much funding it will receive from the Welsh Government for its budget by December 11th.

Mr Lee said: “That gap has grown. There is some potential light in terms of a settlement figure for us, but nowhere near what we would require in terms of closing that gap."

“I do think there are still some significant service changes, service cuts required as part of the process.”

Other factors that the council continues to review include pay awards, capital financing and any other cost pressures that emerge as part of the monitoring of services for the rest of 2024/25.

Following the UK Government’s budget announcement in October, it was revealed the Welsh Government would receive an additional £1.7 billion.

However, this amount includes both 2024-25 and 2025-26, with the money covering already-agreed annual pay increases and a significant share likely going to the health service.

National Insurance changes announced in the October budget will also affect councils.

Mr Lee told committee members on Tuesday that the increase in National Insurance and the reduction in the threshold by which employers have to pay it will impact councils not only in terms of direct staffing costs, but also the cost of commissioned services.

The council official said it is difficult to quantify this currently.

A review of council services was carried out over the summer in which all services were asked to identify options for savings they could make or any areas of significant change that could be developed on.

Mr Lee said services were asked to consider savings for future years as well as the 2025/26 financial year. He added: “What has come out of that exercise is a range of options…that haven’t been made public yet but are being considered by cabinet."

“Cabinet will consider a short list then [of] whatever saving options they wish to put out. That will be done over the coming weeks, so that is imminent.”

Mr Lee went on to say that going forward the council will look to mitigate pressures on services and slow demand, adding: "There is a huge programme of work that we are trying to pull together.”

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