End of austerity has put council finances in a better shape, despite coronavirus
CARDIFF Council needs to make less savings this financial year than it has for eleven of the last twelve, despite the massive spending demands of coronavirus.
In its Budget proposal, the council has identified a funding shortfall of £15.6m for the 2021/22 financial year. It is dealing with this through £10.2m of cuts and by a 3.5% increase in council tax – worth around £44 a year on an average Band D property.
However, all of the £10.2m of cuts will be ‘efficiency savings’ which means they should not affect council services. They involve cutting jobs at the council through voluntary redundancy and leaving vacant posts unfilled.
The £10.2m figure is less spending cuts than the council had to make every year between 2010/11 and 2019/20.
In 2014/15 alone, the council had to make savings of £48.6 million and between 2010/11 and 2020/21 the council made £236m of spending cuts in total.
This is because the massive costs of Covid-19 are being claimed back by the council with money from the Welsh Government Covid Hardship Fund.
As of the end of December 2020, Cardiff Council had claimed over £67m from the fund, and it expects to be able to claim more through 2021.
Coronavirus has therefore not hit council finances to the same extent as the years of austerity did, when government funding was cut.
Money coming in from the Local Government Settlement, the annual sum that is given from the Welsh Government to councils, is also said to be “higher than anticipated” for 2021/22.
The council says this allows “targeted investment and an opportunity to address base budget structural issues”. However it is unknown if the amount of grant will continue to rise in future years.
The council’s budget report expresses worry about a return to austerity in the wake of the pandemic, saying it is not assumed funding will continue at these levels due to the risk that public finances could be tightened in order to pay for the support during the pandemic.
