A GWENT council finished the past financial year with a surplus of more than £800,000 despite at one point fearing spending was heading out of control.
At the end of September the council was predicting it would be £3.5 million in the red by the end of March though that position improved by January.
The latest financial report for 2024/25, that was presented to the ruling Labour cabinet’s May 27 meeting, confirmed a final surplus of £834,000 at the end of the fiscal year in March.
Head of financial services Robert Green reminded councillors: “It sounds like a big figure but in relative terms it’s not that big at all.”
The finance chief said the £834,000 is a 0.4 per cent variance against the council’s estimated spending at the start of the year while its approved net budget was £322m.
Extra funding from the Welsh Government to relieve pressures on local authorities meant total spending was £227m and the £834,000 surplus, that will now be put into the council’s general fund, is what was left after it transferred £3.8m into reserves. The council had also used around £1m from reserves to meet spending commitments.
It will create three new reserve funds to cover the costs of working closer together with neighbours Blaenau Gwent to achieve savings across both councils, a fund for new school catering equipment and another to provide financial support for planned work in relation to economic development within the borough.
Additional funds were also transferred to eight existing reserves including cover for pay rises for council staff and teachers which are negotiated nationally, IT equipment for schools, social services and the cost of holding the 2027 council elections.
Council leader Anthony Hunt told the cabinet there had previously been a “lot of trepidation” in planning the 2024 budget, 18 months ago, but the financial headroom means it can address the still overspending children’s services budget in a “sustainable and safe way to transform those services as opposed to a panicked, destabilising way.”
The Panteg councillor said investment in new equipment “will benefit those services going forward.”
Delays to various building projects has resulted in around £30m in total in the council’s capital budget being carried forward into the current financial year.
The overall level of school reserves reduced by £1.2m at the end of 2024/25 financial year, to a collective balance of £4.731m which was an improved position compared to budgets school governors had approved, mainly as a result of a additional Welsh Government funding.
Five schools finished the year in deficit though only one has set a deficit budget, in which it plans to spend more than the funding it will receive, for 2025/26 but Mr Green said a number are relying on existing reserves to set a balanced budget for the forthcoming year.
He warned: “It is something we will be keeping an eye on.”
Overall the council’s planned drawdown on reserves was less than expected and its will carry forward a balance of £10.9m which is sufficient cover and above the minimum £7.5m set in its policy.