Message from the Leader and Chief Executive

10 November 2023

Dear colleagues,

We wanted to bring you up to date on the Council’s current financial situation.

As we’re sure you know, in real terms Local Authority budgets have been shrinking for more than a decade due to austerity measures and decreased funding in the face of rising costs.

Recently, the situation has become even more severe leading to the present budget position, which is the most challenging we have ever faced.

Cost pressures are forecast to rise by more than £38.525 million for the next financial year. In short, this is how much more expensive it will be to continue operating services at current levels.

After taking action to manage those pressures, the figure has initially been reduced to £20.767 million.  This does not mean that those pressures no longer exist - they do.  It means that we will need to manage them within available budgets, a task that will be challenging in itself.

However, that still leaves a budget shortfall of more than £10.5 million after factoring in the anticipated increase in funding the Council will receive from Welsh Government and other sources.

The simple fact is that costs are increasing at a much higher rate than funding streams.

Energy prices remain extremely high, as do inflation and interest rates.

On top of this, the Council is spending more on provision for an ageing population and growing number of school pupils with Additional Learning Needs.

Demand for social care among both adults and children is increasing, with greater need for homelessness accommodation also pushing up costs.

Against this backdrop of rising expenditure, the money the Council gets from Welsh Government is estimated to climb by only three per cent next year and one per cent after that.

Money gained from Council Tax is also likely to increase relatively modestly as it would be unfair to ask residents to pay significantly more at a time when many are already suffering financially.

Since the summer, each Directorate has been exploring cost saving possibilities, while the use of Council reserves will also be necessary to address these issues.

Even then, some difficult and unpalatable decisions lie ahead as we aim to best allocate monies available and balance the books.

What remains an absolute priority is maintaining the services relied upon by our most vulnerable residents.

We will always make sure our children, older people, those with additional needs and people without a home are properly looked after.

We are proud that the Council’s Strategic Leadership Team and colleagues from across the entire organisation have a track record of overcoming financial obstacles after a pattern of declining budgets in recent years.

It is very clear that we will have to work collaboratively across the organisation and with partners to balance the budget and will need to embrace innovative new approaches to achieve this in line with our reshaping agenda.

Since it was established in 2014, that Reshaping programme of work has helped the Council respond to a range of difficult circumstances, including the Covid-19 pandemic, the cost-of-living crisis and other challenges.

Alongside this strategic work, we need every member of staff to be extremely careful with spending at a time when conserving resources is more important than ever.

Small savings all add up and we all have the chance to put us in a stronger position by making prudent decisions.

While this is a grave situation, it is one we will emerge from. At a meeting of all Chief Officers this week, it was encouraging that the focus was on how we can deliver essential services in new ways that will have an even greater positive impact on our communities.

When we have faced tough challenges in the past, we have come through these difficulties by working together, being open to new ways of working and by being creative, innovative and transforming services.  This is an approach we must again embrace.

A number of Question Time sessions are being organised with colleagues, which will offer the opportunity to further discuss any of the matters raised in this message.

In the meantime, we’d like to thank all staff for their continued effort and commitment – it is very much appreciated.

Diolch yn fawr iawn,

Lis and Rob