NEWPORT council remains on track to have an underspend of just over £2million for the end of the year.
A report to the authority’s cabinet says the council will need to use the spare cash to fund a new pay and grading scheme and changes to help the authority save money.
The report, which goes to a meeting of Newport council’s cabinet on Monday, says the authority is forecasting an underspend of £2.175 million.
If money set aside as a contingency is not needed then the forecast becomes an underspend of £3.6 million.
“Clearly the current forecast underspend is a very welcome position,” the report reads.
“However there remain a number of short to medium term challenges the council will need to fund from one-off resources.”
It says these are the implementation of a new pay and grading scheme, and funds required to implement the change and efficiency programme.
This is estimated to cost around £10 million – but the Invest to Save reserve available to fund these forecasted to be around £9 million on March 31.
Some council areas are predicted to overspend, however. The Street Scene department, which covers waste, is expected to overspend by £325,000.
Pressures on the budget at the department include the likelihood that Newport Transport will not pay a dividend, the cost of the underground fire at Duffryn and an increase in leachate disposal costs at the council’s landfill site.
Chief executive of Newport council Will Godfrey has previously pointed out that £2 million underspend is less than one per cent of the overall spend of the council.
Like all councils in Wales, Newport is facing a decline in the amount of money it receives from the Welsh Government, due to cuts that have been made by the Tory/Lib Dem coalition in Westminster.
Most of the council’s budget – around £250 million a year – is raised from Welsh Government grant cash, with council tax only making up around 12 per cent of the overall budget.
The authority agreed to rise council tax by 4.5 per cent at its full council meeting at the end of February.