Could USA tariffs affect the county council's budget?

The effects of the USA tariffs on the county council have raised concerns among Powys bosses.

Finance chiefs at Powys County Council are pleased with the 2024/2025 budget position as it stood at the end of February.

With a month left to report in the 2024/2025 financial year, Powys County Council were heading towards surplus of £824,000 on their revenue budget.

Senior councillors were told at a meeting of the Labour/Liberal Democrat cabinet on Tuesday, April 8,  that following movements from specific reserves the underspend will rise to £924,000 on their £341.6 million budget for last year.

This is a slight improvement on the £894,000 surplus which had been predicted at the end of December – and a massive improvement on the £3.938 million defect the council was forecasting to post on its budget at the end of September.

Cabinet member for connected Powys, Liberal Democrat Cllr Jake Berriman asked what effect USA President, Donald Trump’s global  tariffs would have on Powys?

Cllr Berriman said: “As we move into a new financial year, I am concerned at the trade war that is breaking out and the implications that might have on us.

“I want to be assured that we are actively running those (scenarios) in our overall risk register on the effect it could have on our finances and hone any responses accordingly.”

Cabinet member for finance, Labour’s Cllr DavidThomas: “With regard to President Trump’s trade war, in many ways it might have an adverse effect on some of our finances as it could create a slowdown in growth forecast of the economy.

“But that in turn could tempt the Bank of England to reduce interest rates that could be helpful particularly in regard to the capital budget.

Cllr Thomas had “no doubts” there would be a “significant increase” to inflation in the country as a consequence of the decisions made in the White House, and that the council needed to be aware of the problem.

On the budget position Cllr David Thomas said: “There have been additional grants received in January and February totalling £1.3 million, these have been reflected in service budgets and are reported here to comply with financial regulations.”

Director of corporate services and s151 officer Jane Thomas said: “All in all, it’s a pleasing position to see.

“The outturn projected in this report it shows we are managing our resources well within the budget that was set.

“We have received additional (grant) funding in the very last week of the financial year so we are likely to see an even better improvement in the outturn which will be reported back to you in a couple of months time.”

The cabinet went ahead, noted the report, and approved the financial virements.

By Elgan Hearn, Local Democracy Reporting Service