Powys needs to cut another £7.7m this year

By Elgan Hearn, Local Democracy Reporter

To balance the books, it looks likely that Powys County Council (PCC) will be forced to dip into its piggy bank.

Savings of over £7.7million have to be found for the rest of the financial year, and a report for PCC’s Cabinet meeting is expected to explain that money from reserves will be used as a measure to plug the financial black hole.

Finance Cabinet member, Cllr Aled Davies, said: “The revenue expenditure out turn against budget is projected to be £4.9million over budget, this is based on savings achieved to date but also reflects assurance that further savings will be achieved.”

Savings of £4.588 million have been found so far which is 37% of the total £12.296 million required.

Cllr Davies, added: “It is important to note that efficiency savings will be accounted for when they have been delivered and we maintain this approach to ensure a prudent position.

“The revenue reserves held at the beginning of the year totalled £40.3million with £9.7million held in the General Reserve and Specific and ring fenced reserves of £27.4million.

“The planned use of reserves to support the overall revenue budget during the year excluding School and Housing Revenue Account (HRA) is £9.9million.”

Cllr Davies, added: “Based on the projections the overspend position would be financed from the general fund reserve, with the assurance around the delivery of savings the impact of the general fund would be £4.860million.”

A number of services have been flagged up as red, meaning that they are at a critical risk of not balancing their books.

One of the services that is having an impact of the budget is Children’s Services, with its budget now expected to go over £5.276 million by a further £1.375 million.

The report says that many posts in the department are still being covered by agency staff at a higher cost, if this continues it would add nearly an extra £1 million to its budget.

A projected overspend of over £2 million is also expected in the Highways, Transport and Recycling Departments. This is being partly blamed on the continual rise of fuel costs.

Changes to the way Council Tax has been collected where a premium of 50% has been charged on properties that are periodically occupied, i.e. holiday homes/second homes and long term empty properties is supposed to have collected an extra £700,000 for Central Activities.

It had been thought that the changes would make £1 million for the department, which is now projected to end the financial year £1.3 million over budget.

Head of Financial Services, Jane Thomas said: “The position projected at the end of July reports a higher level of projected expenditure than that reported for June and although some assurance has been provided that savings for some directorates will be delivered the overall positions remains in an overspend position.”