Merthyr Tydfil Council is currently considering a 5% increase in council tax for residents in the upcoming year. The council’s budget proposals for 2025/2026 indicate that although no final decision has been made yet, a 5% increase in council tax is being budgeted. Each 1% increase in the tax is expected to provide the council with an additional £300,000 in revenue. The council had initially faced an £8.77m budget gap, which has now been reduced to £5.27m after accounting for various factors such as the impact of the revenue settlement, pay pressures, adjustments to the council tax base, additional service demands, and other financial adjustments.
The provisional Welsh Government settlement for the next year includes a funding increase of 5.1% for Merthyr Tydfil. Councillor Gareth Lewis, Labour, cabinet member for education, highlighted the council’s commitment to improving education standards and outcomes for young people in Merthyr Tydfil, noting that no additional savings would be required from schools in the coming year. The council is facing unavoidable additional demands of £3.31m due to financial pressures on services like demographic growth, legislative changes, new initiatives, and loss of income.
Managers have identified service efficiencies amounting to £3.27m for the next financial year by realigning budgets, operational savings, grant income, income generation, and efficiency initiatives. A proposal to close household waste recycling centres for an additional day per week was developed but was not recommended for council approval. The council plans to maintain a corporate vacancy factor budget of £1m for the upcoming year. The projected net spend for the council in 2025/26 is £172.48m, allocated across various sectors including education, social services, public protection, and governance.
The budget proposals aim to utilise £1.5m of earmarked reserves from an underspend in the 2023/24 revenue budget. While considered necessary for the current economic circumstances, this contribution is seen as unsustainable over the medium term. The final local government settlement is expected to be announced soon, with ongoing discussions regarding council tax levels, use of reserves, and the overall budget balancing for the upcoming financial year. The council intends to continue identifying savings and transformation opportunities to ensure long-term financial sustainability.
A special combined governance, audit, and joint scrutiny committee meeting is scheduled for February 19 to discuss the budget proposals for 2025/26. The council is focused on prudent financial management and addressing the fiscal challenges to provide essential services and support the community effectively. Stay updated on the developments in Merthyr Tydfil by signing up for the newsletter to receive the latest news straight to your inbox.