23/09/22 

Cardiff Council's monthly review of its financial performance has highlighted the need for savings as the cost of living crisis, inflation and rising energy prices continue to put pressure on budgets. 

In a report set to be discussed by the Council's Cabinet next Wednesday, September 28, officers outline in detail the current state of the authority's finances. 

The report predicts that by the end of the current financial year, without remedial action, the budget could be overspent by as much as £7.3m but work to reduce this is already under way. 

It points to Children's Services as facing the most significant pressures. "In the main," it states, "these relate to high numbers and costs of residential placements." 

In addition, like other organisations, the Council is feeling the impact of unprecedented inflation levels and "across broader services, post-pandemic recovery has been overshadowed by an energy cost and cost of living crisis that has resulted in significant expenditure pressures in areas such as food costs, fuel and utilities. 

"Plus, it has dampened down income recovery given the squeeze on household budgets currently." 

Pressures are hitting some services harder than others. Two areas noted in the report for their potential overspends include: 

Economic development (£2.68m)- largely linked to income shortfalls within culture, venues and events as the cost of living crisis affects ticket sales for venues and events 

Education - (£5.424m)- reflecting rising school transport costs due to pressure on fuel prices, driver supply and increased numbers of pupils with additional learning needs (ALN) requiring transport. In addition, the schools catering position has been affected by rising food price rises and reduced income from paid-for school meals. 

To help offset these financial pressures, the Council is able to draw on its £10m Covid recovery budget established for 2022/23 but the report warns that at month 4 just over £3.5m remains for cover any future costs and risks that may emerge. A further report on the 2022/23 position will be presented to Cabinet in coming months. 

Cllr Chris Weaver, the Council's Cabinet Member for Finance, Modernisation and Performance, said the authority would make every effort this year to reduce the overspend to a balanced position. "In the event that the overspend has not been fully addressed by year end, the Council is able to call on reserves to support the position. This would be a last resort and all directorates are focused on managing the financial challenge," he added. 

"It's important that all departments stay focused on their financial positions and tight controls will remain in place for the rest of this financial year."