Residents in Caerphilly could see a council tax increase of 3.9 per cent in 2021/22 – but there would be no new cuts to services in the financial year.

A report on Caerphilly County Borough Council’s proposed budget says the council tax increase will contribute £3 million to a £14.1 million shortfall.

Approved cuts already made ahead of the new tax year in April will make up £2 million, while the Welsh local government settlement (money from the Welsh Government) will contribute the remaining £9 million.

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The need for such funding is predominantly down to proposed new investments and general fund pressures, which contribute £8 million to budget pressures. School costs and inflationary costs make up the remaining £6.1 million.

The main contributors to the general fund pressures are social services, accounting for £2.5 million, and education and life long learning, accounting for £1.4 million.

However, the budget acknowledges that the council could be required to find cuts of up to £20.7 million for the four-year period from 2022/23 to 2025/26.

Although the report says “future financial forecasting is very sensitive to even minor changes in assumptions”.

For example, a two per cent increase in Welsh Government funding per year would reduce the savings from £20.7 million to £8.8 million.

The budget does not include income losses or additional costs due to coronavirus, because it is assumed that this will continue to be funded by the Welsh Government.

Caerphilly’s cabinet will decide on Wednesday (January 13) whether to endorse the draft budget and start the consultation period.

The final budget will be presented to cabinet and full council in February.