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new cardiff > ENG > Your Council > Council Finance > Council Budget > 2019-20 > Press release - 09/11/18

Cardiff’s budget consultation opens as council looks to close £35.2m financial blackhole

Friday 9​th November 2018

Cardiff’s residents are being urged to take part in a consultation on how the council can bridge a budget gap of £35.2m next year (2019/20).

Residents will be asked to consider a raft of savings suggestions and income generating ideas including:

  • Securing a theatre tenant for the New Theatre;
  • Increasing charges for burials and cremations;
  • Transferring parks assets, like changing rooms, to sports groups;
  • Increasing fines for littering in the city; and
  • Looking at ways of reducing subsidies to major events in Cardiff.

The Council’s total current budget stands at £609m, but 65% of this (£397m) is currently spent on schools and social services. Both areas are facing rising demand pressures as the city’s population grows contributing to a budget gap of £35.2m next year and £93m over the next three years.

Cabinet Member for Finance, Modernisation and Performance, Cllr Chris Weaver, said: “Recent talk of austerity being over and of more money being made available for the public sector is not a reality anyone in local government will recognize.  It’s absolute nonsense.  Sadly, our budget is being cut in real terms yet again. Councils across the UK are under increasing pressure and its the services our citizens rely on that will bear the brunt of this dangerous and seemingly never-ending austerity.

“This Council received a 0.4% increase in funding for next year – that’s just £1.6m – but we need to find £36.8m to maintain frontline services at current levels. That leaves us with a budget gap of £35.2m to bridge once we take the extra £1.6m in funding into account.

“This consultation will lay out how we plan to bridge that gap. We want our residents’ views on these ideas and their help in prioritising the services which matter to them.”

The Budget consultation sets out a £19.4m savings target for 2019/20. The rest of the budget gap ¬- £15.8m - could be bridged by the following means:

  • Increasing Council Tax.  The budget strategy contains a working assumption of 4.3% but this could change following the final budget settlement in December;
  • Use of reserves £2.5m;Release of £4m financial resilience mechanism;
  • Cap schools budget growth (this is not a cut to school budgets. The proposal provides schools with a cash increase of £10.2m additional funding next year, which is in stark contrast with most other areas of the Council where budgets are being cut.)

Cllr Weaver added: “Each 1% in Council Tax brings in about £1.35m, so a rise of 4.3% would bring in £5.8 million.  This doesn’t come close to funding the rising demand for and costs of our services next year. I understand why people ask why we need to raise Council Tax, but without a rise we would have no choice but to cut services like parks, libraries or waste collections even further.

“Some £231m – 38% of our total budget – is delegated to schools to manage. We try to protect the funding we provide to schools from the level of savings other Council departments have been forced to make, but as austerity continues, this is becoming harder and harder to do.  In our budget we are proposing to give schools an additional £10.2m next year which will be an annual increase of 4.4%. However, rising pupil numbers and pay and other inflationary pressures means that even though we are increasing cash funding for schools it  is still a difficult settlement for schools. This is the real face and impact of austerity on our public services.”

The £19.4m in savings will be realized in five ways. The council plans to generate almost £2m in income generation; £2.5m collaborating with other public sector bodies to save money; almost £8m revisiting business processes; £3.4m reviewing external spend and another £3.5m delivering more effective prevention and early intervention measures.

Key among the intervention and preventative measures are working with families providing the right support at the right time before a point of crisis is reached reducing the need for children to be taken into care and developing a new fostering service significantly increasing the number of foster carers in Cardiff.

The following ideas are also among the savings and revenue proposals:

  • Switching the running of the New Theatre to a private theatre tenant saving £404,000;
  • Increasing cremation and burial costs from £560 - £640 and £660 - £760 respectively;
  • Increasing littering fines from £80 to £100
  • Increasing automation of customer enquiries saving £300,000
  • Seeking to reduce events’ subsidies 

Cllr Weaver added: “We are ambitious for our capital city. We want Cardiff to be a great place to live and a great place to do business and our Capital Ambition agenda sets out a programme which we believe will deliver on the things that really matter to our residents.

“We are still going to improve the city’s schools, the city’s roads and transport infrastructure, the city’s leisure and housing offerings and we are going to help create jobs so that everyone can share in the benefits we want to bring to our city. But these cuts mean the Council will have to prioritise. Any increases to Council Tax will only just help us pay for statutory services which we are legally bound to deliver. Balancing our ambitions for the city and the need to continue to cut budgets is a difficult act. Our period of consultation with residents has opened now and I urge people to get involved. We need to hear their views on the services that matter the most to them.”

The consultation will run for six weeks from Friday, November 16 until January 2. Residents can take part online and hard copies of the consultation document will be available at hubs, libraries and council buildings.