COUNCIL tax in Cardiff is likely to increase by four per cent next April as the council faces a £21.3 million budget gap.

The four per cent increase would raise an extra £6.3 million income for Cardiff council.

Just over £15 million efficiency savings would also likely need to be made in the next financial year.

Council bosses said increasing demand for services and lost income due to the pandemic are both creating extra strain on the budget.

Councillor Chris Weaver, cabinet member for finance, said: “As we come out of lockdown and begin to deal with the fallout from the pandemic we are starting to see an increase in demand for many of our key services. There are residents who have lost their jobs and their homes, vulnerable people who need more help to get by, and an ever-rising caseload in social services.

MORE NEWS:

“It all points towards people needing more and more help and the forecasts we are seeing on unemployment potentially rising once furlough ends to around 6.5 per cent, means we are having to prepare for a huge increase in demand for our services just as we face financial uncertainty too.

“Covid had a massive impact on this council’s ability to generate income. Since lockdown began we have lost £38.2 million in income and we can’t be sure how much of that money will return once things get back to normal.”

Last year, the council initially planned to increase council tax by four per cent, before revising this down to 3.5 per cent. The increase took effect last April. Also last year, the council’s reserves shot up by £32 million, as many departments spent less than initially budgeted.

The council’s cabinet will consider the budget strategy report for the next financial year, at a meeting on Thursday, July 15. This is an early-stage look at how much the council will spend between April 2022 and March 2023, and how much income it will take in.

Cllr Weaver said: “Right now around two thirds of our budget is spent on schools and social services and these costs are increasing every year. All the other services our residents need have to be met with the remainder.

“Services which are becoming even more important as we come out of lockdown and face the bill for Covid, set against the realities of our struggling retail and hospitality sectors and higher unemployment, with all the additional stresses that brings into people’s lives.

“This council has ambitious plans to help kick-start Cardiff’s recovery from the pandemic. We will be bringing jobs to the city through our major council-homes building scheme, the largest in Wales, and through our big developments like the Indoor Arena and Cardiff Bay Masterplan, as well as our exciting plans for the International Sports Village.

“Big projects like these, alongside our multi-million spend on our 21st Century Schools programme, and the work we are doing with Welsh Government on the metro, improving public transport and active travel options like cycling across the city, will all help to make a difference, bringing jobs and creating a cleaner and a greener city.

“But we can’t get away from the fact the council will have to make big savings within our budget at a time when it needs to spend to aid the recovery.”

Final decisions on the budget and increasing council tax won’t be made until spring next year, likely in March.

Most of the council’s money comes from Welsh Government grants, while about 28 per cent comes from council tax. Schools and social services make up 70 per cent of where the council’s budget is spent.

Cllr Weaver added: “Without council tax, many of the other important services we deliver could be lost or face severe cuts. Last year, we modelled a four per cent increase in the summer, but we were able to bring that down to 3.5 per cent.

“We will strive to do everything we can to keep any increase low, while knowing we do need to maintain and invest in the services our citizens rely on as we plan for a better future.”