BLAENAU GWENT finance chiefs are recommending that the council dip into its piggy bank and use £2.1 million of reserve funds.

This move would allow the council to produce a balanced budget for 2024/2025.

On Monday, February 19, at a meeting of the Corporate and Performance Scrutiny Committee, Blaenau Gwent County Borough Councillors will get their first chance to look at the draft budget proposals for next year.

This follows a public consultation on proposals during January, which finished on February 8.

Councillors will be advised that council tax needs to rise by five per cent and that a minimum of £6.27 million worth of efficiencies and cuts are needed to plug a funding gap.

This gap is between the £188.86 million the council expects to need to run its services such as schools, social services, rubbish collection and street lighting, and the £183.34 million total budget it expects to have.

Chief officer resources Rhian Hayden said that councillors need to “consider

and recommend the 2024/25 revenue budget” which includes proposals for delivering a £6.27 million of financial efficiencies and budget cuts towards the budget gap.

This figure could rise towards £10 million as the council also works on proposals to address funding gaps in future financial years which is predicted to be £34 million over the next five years.

Ms Hayden said: “This will be the second year that the use of reserves has been required to fund the revenue budget, with £4 million agreed for 2023/2024.”

She added that the all of the  £4 million is not expected to be used, which gives the council more “flexibility” to use the reserves next year.

Ms Hayden adds: “The continued use of reserves to balance the budget is not sustainable in the long term, only providing one-off in year funding and increasing the funding gap in the following financial years.”

Just before Christmas it was announced that Blaenau Gwent would receive a funding increase from the Welsh Government of 2.6 per cent for next year – which equates to £3.62 million.

In January, the UK government decided to pump an extra £600 million into local authorities in England and the corresponding funding to Wales known as a “Barnett consequential” equates to £25 million.

The Welsh Government told local authorities explains that, of this £25 million, £10.6 million will go towards a social care workers fund that had been previously cut.

The remaining £14.4 million will be added to this year’s funding allocation from the Welsh Government to local authorities.

After receiving this funding boost, Blaenau Gwent say it now expects to receive £3.95 million from the Welsh Government.

Ms Hayden said: “Whilst this increase is welcomed, given the current economic climate and cost of living crisis, the council is faced with significant financial challenges.”

The reserve at the end of this March is predicted to have £12.77 in the “general reserves” pot and £17.22 million in the “usable earmarked reserves” which gives a total of £29.99 million.

The council predicts that by March 31, 2025, they will still have £12.77 million in their “general reserves” pot and £15.15 million in their “usable earmarked reserves” pot which gives a total of £27.92 million.

Recommendations from the committee are expected to be added to the report which will be debated by Cabinet on Wednesday, February 21, before the budget will be finalised at a special council meeting on Tuesday, February 25.