Merthyr Tydfil Council is proposing to increase council tax by 3.55% next year.
Budget proposals set to go before cabinet and then go to full council for approval on Wednesday, March 3, would see a Band D council tax of of £1,728.98 for 2021/22 which is an increase of £59.27 for the year or £1.14 per week.
The cabinet report said that as 84% of the properties within the county borough are valued at Bands A to C, a significant proportion of council tax payers will be liable to payments less than £1,728.98.
It adds that the Council Tax Reduction Scheme for 2021/22 adopted by council in January provides support with council tax payments for those residents eligible to apply.
The council reduced its opening budget gap for next of £3.58m to a £288,000 budget surplus through:
- £2.78m from the Welsh Government settlement
- £216,000 through the social services grant
- £1.27m in Covid demands being funded by Welsh Government
- £764,000 in money for further commitments
- £150,000 through the corporate vacancy factor which reflects the salary savings resulting from the natural delay between a post becoming vacant and being filled
- £350,000 in employee severance costs
- £1.04m in service cuts
With £106,000 from measures withdrawn at full council, £1.9m in additional demands and £705,000 going towards a council service capacity exercise, this resulted in the £288,000 surplus.
But with the council tax increase proposal of 3.55%, this results in a net loss of income of £343,000 compared to what it would have been with a 4.99% increase as originally modelled.
This means the council has a £55,000 budget deficit which it plans to address through a reduction in the pay award provision.
This leaves the council with a revenue budget for the next financial year of £133.34m.
The council is expecting the Welsh Government’s Covid-19 Hardship Fund to continue into 2021/22 with estimated additional costs of £1.27m requiring extra financial support.
These costs include £871,000 around homelessness provision, £31,000 related to school transport, £275,000 in lost car parking income and £100,000 in lost conference income.
The council received a 4.64% increase in its funding from the provisional Welsh Government settlement back in December.
Cabinet meets at 4pm on Wednesday, March 3 before full council meets to vote on the budget at 5pm.
