Blaenau Gwent Council Expects £200,000 Surplus in Budget by March 2024

BLAENAU GWENT finance chiefs are predicting a surplus of £200,000 by the end of March 2024 for this year’s budget.
At a Blaenau Gwent County Borough Council Cabinet meeting on Wednesday, October 4 senior councillors will receive a financial update on how the budget progressed during the first quarter of 2023/2024.
This covers April to the end of June.
When funding that had been earmarked for use from the reserves is added to Blaenau Gwent’s £184.3 budget for the year, the surplus rises to £970,000.
The report explains that the use of £4.2 million from the council’s Specific Reserves that had been agreed when the budget was set last February, is now expected to dip to £3.23 million.
The council’s resources chief officer, Rhian Hayden said: “The overall forecast favourable variance is mainly due to the forecast underspend against a number of budget areas within Corporate Services:”
Despite the positive outlook – there are still some areas of concern.
This year’s pay award for council staff is expected see and average salary rise of 6.4 per cent – while the council has only budgeted for a five per cent rise.
This means that the council will need to find an extra £600,000 to cover this shortfall.
While energy costs are starting to drop the report explains that the council doesn’t expect to see this filter through until the next financial year.
Based on the energy costs used by the council from April to June the forecast cost is an increase of around £2 million compared to 2022/2023.
This is due to the council buying its energy in advance.
This is also having a knock on effect on street lighting in the county borough which has seen a rise in costs.
As part of the item, senior councillors are asked to agree to a £620,000 virement.
Virement is a term used to explain an internal money transfer between council budgets.
The £620,000 for street lighting which is the responsibility of the Environment Service – is set to come from the Corporate Services “contingency fund for in year inflationary pressures.”
Ms Hayden explains that council departments who predict losses of over £50,000 are developing action plans.
These plans are supposed to explain why they are forecasting an “adverse” variance against their allotted budget and how they are trying to overcome this.
Ms Hayden said: “Action plans will be monitored as part of the budget monitoring and reporting framework and the impact reported to Cabinet.
“Continuing, new and emerging cost pressures will be considered as part of the Medium Term Financial Strategy (MTFS) and the budget setting process.
“There is a risk that continued high inflation, the pay award and energy costs will be higher than the current forecast, increasing the cost pressures facing the council.”
Councillors are expected to agree the virements and discuss the report. ‌​‌​‌​​​‍‌​‌​​‌‌‌‍‌​‌‌​​‌​‍‌​‌‌‌​‌‌‍‌​‌‌‌‌​​