Merthyr Tydfil Council is facing an unexpected increase in school transport costs of over £100,000 due to the A465 Heads of the Valleys road dualling project. The additional costs are projected to be £186,000 for the financial year 2023/2024 and an estimated £106,000 for 2024/2025, with an extra budget allocation of £97,000. Councillor Anna Williams-Price, the cabinet member for governance and resources, revealed that income of £51,000 from Future Valleys Construction is anticipated to help offset some of the costs.
In a recent cabinet meeting, it was reported that Merthyr Tydfil Council had a budget surplus of over £3 million for the last financial year, subject to audit. The council is considering transferring this surplus to the budget reserve, with general reserves standing at £5.723 million, which is 3.75% of the council’s net revenue spend for 2023-24. Additionally, budget savings from the corporate vacancy factor exceeded the budgeted amount by £145,000.
For the current financial year, a net revenue budget deficit of £647,000 is forecasted as of the end of the second quarter, covering the period from April 1 to September 30. This includes projected deficits in various areas such as education, economy and public protection, and neighbourhood services. However, there are projected budget surpluses in social services and corporate sectors, as well as a surplus in the council tax collection fund of £465,000.
The council’s budget monitoring report highlighted the need for managers to urgently address projected budget deficits and identify measures to mitigate them. The final audited revenue outturn position will be reported to the council once the external audit of the accounts is completed by Audit Wales.
Merthyr Tydfil Council’s financial challenges stem from the unforeseen school transport costs incurred by the A465 Heads of the Valleys road works. Despite reporting a substantial budget surplus for the previous financial year, the council is now facing a predicted budget deficit for the current year. Efforts are being made to manage these financial pressures and ensure the council’s financial sustainability in the future.