Dear colleagues,

SLT and Cabinet met earlier today to discuss the Council’s financial strategy. As you will all be aware we have for some time been working in a very challenging economic climate. Ahead of the Westminster Government’s Autumn Statement in November and Welsh Government Budget in December, the Council’s own formal budget setting meetings for 2024/25 are due to begin next week. It is in this context that we wanted to offer an update on our current financial position and plans for the coming months.

The budget for this financial year was agreed in March, with the Council required to bridge a £9.7 million funding shortfall before next April. This shortfall was largely brought about by rising energy prices, inflation and interest rates, while providing vital but expensive services for an ageing population and growing number of school pupils with additional learning needs is also increasing costs.

Savings already identified of £7.4 million and the careful use of our reserves will help address the funding gap in 2023/24 and we are grateful to the work of all colleagues for helping deliver these savings. However, the factors behind our cost increasing continue to affect us and in some areas these are becoming more acute.

In a report presented to Cabinet in July we estimated that a similar funding gap would exist for 2024/25. Our services are relied upon by a great number of people and so we cannot simply stand still. We are constantly responding to new challenges. It will be clear to all of you who work on the frontline of service delivery that there is ever increasing demand for much of what we do, and the needs of those who we support are becoming increasingly complex. In line with this, in recent months it has also become apparent that there are additional significant costs in delivering some of our most essential services.

This means that it is very likely we will have to amend our financial plans for this year as well as preparing for a very tough budget for 2024/25. The discussions that took place today was one of several to enable us as an organisation to prepare for this.

Savings proposals across all areas of Council responsibility will be considered in October and November, for both this year and next. We do not, however, intend to deal with the financial challenges we face simply by cutting provision. This would be the wrong approach, it would not provide the support Vale residents need and it would be a disservice to all of those colleagues who we know are working harder than ever to support our communities.

There are a range of measures that we can consider but if they are to be successful we will need the support of all colleagues across the Council.

In the Spring we, as an organisation, adopted a position of no non-essential spending. No matter how small the decision or sum of money, this principle must run through everything we do. More than ever we need all staff to think carefully about every decision and wherever possible find ways to reduce spending.

We must also be more enterprising in how we use the money that is available to us. One of the areas in which we have had real success in recent years is in using grant funding to support core business. We must continue to bid for available funding, but only where  that assists us in supporting our most essential services and when it does not result in ongoing and unfunded costs.

Our priorities for this year remain unchanged. All of our work should be contributing to supporting residents and colleagues during the cost-of-living crisis, building a more resilient Council for the future, and Project Zero. In many instances being creative in how we work and finding new ways to limit spending will directly contribute to these and help us keep any additional costs low for service users while ensuring we continue to respond to wider issues such as the climate and nature emergencies.

This period of the year is always one of uncertainty. Exactly how challenging next year’s financial gap will be won’t be clear until the end of the year. In the next few weeks all directorate management teams will be considering how to limit expenditure and identify new savings. They will welcome all suggestions from colleagues on how to do so. We will then move into the formal budget setting processes for 2024/25 with initial reports to Cabinet, our scrutiny committees, and Full Council next month.

Despite these exceptionally challenging circumstances, we have not lost our ambition and will continue to explore new and innovative ways to invest in our communities. We will make sure that those who need us are properly looked after and our communities grow stronger. We will do this by continuing to reshape the way in which we work and in which our services are delivered, ensuring they operate as efficiently as possible, while also investigating creative ways to best serve our residents and support our employees. Your support and your ideas will be fundamental to this approach.

We thank you all in advance for you continued hard work and support. Diolch yn fawr i gyd.

Rob Thomas, Chief Executive

Cllr Lis Burnett, Leader of the Council