A projected £91m hole in Cardiff Council's budget leaves the authority facing an ‘uncertain and challenging' future.
The £91m budget gap – created by a combination of government funding reductions, increased demand for services and rising costs – will impact on the authority's finances over three years from 2019.
Cabinet member for Finance, Modernisation and Performance, Cllr Chris Weaver, said:
“Every year balancing the books becomes harder because so much of the budget has already been reduced. This council has found £145m in savings over the past five years and we are looking at making £14m in savings in the current year (2018/19). There's little doubt these new projections on top of what we've already achieved leave this council facing an uncertain and challenging future.
“We are going to have to look hard at all the services we deliver. Some may disappear. I'm aware there's an element of sounding like a broken record repeating itself – but the relentless nature of the squeeze on our budgets is pushing us ever closer to the cliff edge.”
The Council's Cabinet will consider recommendations in the Budget Strategy Report 2019/20 at a meeting on Thursday, July 12.
Included in the recommendations are:
- Allow directorates to develop plans to address a budget gap of £34m in 2019/20 and £91m over the next three years;
- Allow the council to seek expressions of interest in voluntary severance from its workers;
- Begin consultation process with residents.
Cllr Weaver added:
“Anyone who has been following the news will know that councils across the UK are struggling to make ends meet and Council Tax rates are rising to compensate. Cardiff is no different, but, we are ambitious for our capital city. We want Cardiff to be a great place to live and a great place to do business and our Capital Ambition agenda sets out a programme which we believe will deliver on the things that really matter to our residents.
“We are still going to improve the city's schools, the city's roads and transport infrastructure, the city's leisure and housing offerings and we are going to help create jobs so that everyone can share in the benefits we want to bring to our city. But these cuts mean the Council will have to prioritise. There will be services which we quite simply will be unable to offer to residents in the future. The money is no longer there and any increases to Council Tax will only just help us pay for statutory services which we are legally bound to deliver. Balancing our ambitions for the city and the need to continue to cut budgets is a delicate act and we need residents to understand that.”
The Budget Strategy report sets out a £66m savings target over the next three years. The rest of the £91m budget gap – £25m – will have to be bridged by the following means:
- Increase in Council Tax;
- Use reserves;
- Cap schools budget growth (this is not a cut to school budgets. The strategy provides schools with a cash increase over the next three years in contrast with other areas of the Council where budgets are being cut.)
Cllr Weaver said:
“We will continue to modernise the way we work to ensure we deliver the best possible service we can for taxpayers, but we also need to be upfront with residents. Austerity has not ended. If we are to continue to deliver the services the city's residents want and continue to make Cardiff an even better place to live then we have to find ways to raise the funds to make that happen in the face of shrinking budgets and increasing demands as our population grows.”
The Council's total current budget stands at £609m, but 65% of this (£397m) is currently spent on schools and social services. Both areas are facing rising demand pressures as the city's population grows.
Cllr Weaver added:
“Each 1% increase in Council Tax raises about £1.4 million, and we are facing a £34m shortfall in 2019/20 alone. A four or five per cent increase in Council Tax would only bring in around £6m which comes nowhere near to bridging the gap. We will have to find huge savings and generate income in a range of different ways to set this budget.
“We will enter a period of consultation with residents now and I urge people to get involved. We need to hear their views on the services that matter the most to them. Over the summer residents will be able to take part in the Ask Cardiff survey and there will be more detailed consultation in the autumn.”