Shropshire Star

Powys: Action to slash deficit yet to kick in

Action taken to slash Powys County Council’s deficit has not kicked in yet, the finance boss has said.

Published
Powys County Council HQ

Councillor Aled Davies, portfolio holder for finance set out the council's financial position, which he said is ‘challenging’ during a Cabinet meeting.

The budget monitoring report stated that the council is predicted to be overspent by £7.917 million, but the figure does not include predicted 'efficiency savings', after which the deficit comes down to £5.804m.

"Based on the projections included in this report the overspend position would be financed from the General Fund Reserve. With the assurance around the delivery of savings the impact on the general fund would be £5.804m, reducing the balance to £3.886m," said Cllr Davies.

He said action, such as reviewing all budget headings to identify areas of underspending or higher than expected levels of income, a review of staff vacancies and the identification of alternative reserve funding, is already underway to reduce the projected deficit, but the impact of this action has not yet kicked in, but it will be reflected in November’s report.

The leader of the council’s opposition group warned the budget overspend is in 'grave danger of running out of control'.

Risk

Welsh Liberal Democrat Councillor James Gibson-Watt warned that the council needs to take 'immediate corrective action' to resolve the issue.

"This position is placing the council and all its services at risk. Nobody doubts that Powys, like all local authorities in Wales, is feeling the effects of sharp reductions in funding by the UK’s Conservative Government, which has had a devastating effect on local authorities in England and has fed through in to reduced funding available for local authorities in Wales," said Cllr Gibson-Watt, member for Glasbury.

"But it is still very unclear how, for example, Powys’s Children’s Services budget, which was increased from about £12m to about £18.5m between 2017/18 and 2018/19, is still projected to be overspent by a further £5.5m this year. It is absolutely essential that the council establishes a safe and effective service to protect and support vulnerable children and young people in Powys. But the service’s budget must be more carefully managed as spending at current levels is completely unsustainable without further severe cutbacks to other vital services, which of course will also harm those vulnerable children.”

"The Highways, Waste & Recycling budget is also projected to overspend this year, by over £2m, due to increased fuel and transport costs. This is surely in part due to the devaluation of sterling following the Brexit referendum and just shows how Brexit is already damaging the council and its services.”

"The Cabinet must regain control of the council’s budget. Relying on fast-dwindling reserves to bail it out simply will not do," he added.