Just 5% of £15.5 million annual cuts made in 3 months

By Elgan Hearn, Local Democracy Reporter

Concerns have been expressed that by the end of June, Powys County Council had only delivered £703,000 of this year’s gargantuan financial savings total of £15.428 million.

But there is good news, as finance chiefs predict the council will land the 2026/27 budget at the end of the financial year with a surplus of £2.12 million.

At a meeting of the Economy, Residents and Communities Scrutiny Committee next Wednesday, councillors will receive a report showing how the council’s revenue budget has progressed during the first quarter of the financial year, between April 1 and June 30.

This year, the council’s budget is £390.55 million, and finance chiefs forecast the authority will spend £388.428 million by the end of next March.

The report explained that the predicted position is a combination of forecast overspends, most notably £1.3 million in Social Services and £300,000 in Highways, Transport and Recycling (HTR), which are “counterbalanced” by forecast underspends.

This is related to the predicted use of £3.6 million from the “risk budget”, which is used to offset financial pressures in services when they crop up.

The council has set aside £4 million this year for the risk budget so that it doesn’t eat into its financial reserves, which stood at £80.196 million at the end of March.

The report said: “This is very much in line with expectations as the risk budget is held until it needs to be released to support service pressures that materialise through the year.”

When the budget was set back in February, the cuts and savings target had been £12 million.

The savings target has now leapt up to £15.428 million after £3.4 million in undelivered savings from last year was added to the total.

The report says that so far £703,000 has actually been achieved – although it does add that just over £14 million is “assured” to be made by the end of the year.

Director of Corporate Services and S151 officer, Jane Thomas, said: “The underspend position reported at quarter one is positive; however, the low level of achieved savings is of concern.

“Maintaining financial resilience is predicated on the delivery of a balanced budget. Robust financial management and realignment of service delivery to remain within budget are essential.

“Assurance must be sought from heads of service that appropriate plans are in place to ensure delivery.

“The council’s financial plans will be subject to ongoing review, funding assumptions will be revisited as more information becomes available, revised budget gaps calculated and clear plans of how we can bridge the gaps will be developed.

“We must continue to take every opportunity to reduce costs and ensure the financial sustainability of the council.”

Comments from the committee will be added to the report before it is brought before the cabinet to note at a meeting later this month.