Cardiff Council has revealed it is facing a predicted budget shortfall in 2025/26 of almost £50 million.
The council is now working on a budget plan for next year to bridge the gap. It says this plan could see some services reduced or stopped completely.
A report to Cardiff Council’s Cabinet, due to meet on Thursday, July 18, details the financial pressures the council is currently experiencing due to rising costs and demands for social care, schools and education, buildings, roads and parks, alongside increasing demand for multiple other services.
In March, the council’s Medium-Term Financial Plan highlighted a potential budget gap in 2025-26 of £44.3 million. For the longer period of 2025-2029, this gap increases to £142.3 million.
But councillors will hear next week that next year’s projected deficit has now risen by over £6 million to £49.726 million and £147.7 million over the medium term.
The budget gap is due to a mixture of additional costs and expected reductions in Government funding for public services. Major impacts on the budget include increased demand for complex services, particularly in relation to children in looked-after placements, adult domiciliary care costs, and a steep rise in the requirement for schools to provide provision for pupils with additional learning needs.
Other inflationary pressures including higher food costs in the form of school meals, construction materials ,and externally commissioned services such as care home placements and home-to-school transport are also putting tremendous strain on the council’s budget, it said.
Workforce costs are also having an impact, including:
- Pay awards for council staff like teachers
- A rise in the Real Living Wage
Councillor Chris Weaver, the Cabinet Member for Finance, Modernisation and Performance, said:
“The council has a responsibility to deliver a balanced budget for 2025-26 and we are committed to achieving that goal in what continues to be an increasingly challenging financial landscape.
“We will now work on putting together a Budget, and an updated Corporate Plan, which will prioritise the resources available on key services.”
Among the measures the council intends to take to address the budget gap are:
- Maximising income streams where possible, including increasing the fees it charges for some services
- Efficiency savings
- Reducing spending
Councillor Weaver added:
“We know we have some difficult decisions and choices to make over the coming months, but we are determined to try to reduce the budget deficit in ways that will have as little impact on the people of Cardiff as possible. This is, however, becoming increasingly difficult.
“This council – like councils across the UK – has seen its budget reduced in real terms requiring hundreds of millions of savings over the past 15 years. So far, we have managed to safeguard most of the services that our residents rely on and care about, but the budget gap we face next year and over the next four years, set against the money we expect to receive, means it’s very likely we will no longer be able to deliver some services. We will of course consult with residents throughout this process to understand what matters the most to them.”
The report will be discussed at the Council’s Policy Review and Performance Scrutiny Committee on Wednesday, July 17 at 5pm.
The report will then go to Cabinet for approval from 2pm on Thursday, July 18.
