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‘Huge uncertainty’ on how pandemic will hit Vale council finances

 

“Huge uncertainty” remains on how the coronavirus pandemic will hit the Vale of Glamorgan council finances next year.

Council leader Neil Moore said there was “no guarantee” that the Welsh Government would continue helping the council fund the cost of dealing with Covid-19.

The Vale council is preparing to set its budget for the next financial year, beginning in April, when a council tax increase of 3.9 per cent is expected. The cabinet met on Monday, February 8 to agree the budget proposals, which will likely be signed off on March 10.

The Welsh Government has so far funded much of the extra cost and lost income faced by councils because of the pandemic. But during the cabinet meeting, Cllr Moore warned it was unclear whether that financial support would continue.

He said: “We still don’t know whether or not the pandemic will continue after the new financial year. I think it will. And we are still unclear as to whether or not we will get the support that we’re currently having from Welsh Government.

“Thus far, funding has been received from Welsh Government for this year to help support this financial impact.

“However, there is huge uncertainty as to how the picture will develop over the coming months, and therefore it’s very difficult to provide predictions for the coming year and beyond.

“The assumptions are that any ongoing financial impact on council services from Covid in the coming year will be supported by Welsh Government. But there is no guarantee.

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“We still have a long way to go. There are still many, many pressures upon us.”

In December, the Welsh Government announced the financial settlement given to each council across Wales for the next financial year. The Vale of Glamorgan received an increase in its settlement of 4.9 per cent — much higher than expected.

But as many of the day-to-day costs the council has to pay are also increasing, the Vale council is still facing a budget shortfall. This means to balance the books, council tax will go up, and a target of £500,000 savings from the budget will be made next year.

Cllr Moore said: “We have taken into account the fact that we have a better settlement than previously thought. But we still have those massive cost pressures and we still have to make those savings, so we’re proposing a 3.9 per cent council tax increase.”

Council finances are split between two budgets: revenue and capital. Revenue means spending on day-to-day public services, while capital means investing in longer term upgrades, like building new schools.

The Vale council plans to invest £249 million in its five-year capital budget. This includes £480,000 on road resurfacing, £136 million on new school buildings, as well as money on flood prevention, decarbonising housing, and the economic recovery after the pandemic.

The council tax increase and budget proposals have not yet been confirmed. Councillors will debate and likely approve the budget during a full council meeting on March 10.

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