IT DOESN’T appear that a Welsh council is doing enough to balance agile working, its assets and its maintenance budget, a councillor has said.
Councillor Andrew Barry of Reform UK was speaking as Merthyr Tydfil full council discussed the current £5.61m hole in its finances for 2026/2027.
The budget update report went to cabinet and full council on Wednesday, November 12 and it includes additional costs of £13.05m such as pay pressures, additional service demands and capital financing costs.
But these are offset by net funding increases of £7.43m from the Welsh Government (assumed to be 2.3%) and council tax, which at the moment is being modelled at 5%.
The £5.61m budget gap is a £3.38m reduction compared with earlier forecasts.
The figures are based on current assumptions that include a revenue settlement of +2.3% for 2026/27 and 1% in following years, a pay award of +2.5% for 2026/27 and 2% in following years, a council tax increase of 5% per year and no use of reserves.
The report says every effort will be made to continue identifying efficiency savings and this will include maximising income generation opportunities and grant maximisation.
But it also states that given the level of savings required is £5.61 million for 2026/27 alone, it will be necessary to go beyond the traditional approach to identifying operational efficiencies.
“Whilst every effort will be made to deliver the majority of savings requirements through operational efficiencies and the council’s transformation programme, the quantum of savings is such that options which impact on services (service change proposals) are still likely to be required.
“Directorates are currently drawing up options for review, and these will be consulted upon during coming months.”
As well as outlining proposals to reduce existing budgets through budget saving proposals, departments will also be considering how to reduce the £5.61m budget gap through cost avoidance measures.
At the moment, schools pressures included within the £5.61m budget gap for 2026/27 total £1.93m which is an increase of 3.6% on current delegated school budgets, so it exceeds the overall 2.3% increase in funding that the council is anticipating it will receive from the Welsh Government.
The report states that the affordability of this will need to be kept under review as part of the wider range of “difficult options” to be considered when balancing the budget for 2026/27.
Cllr Barry pointed out that in 2022 the capital borrowing requirement was £789,000.
With the figures as they are now and how that relates to council tax, the councillor said: “I think there’ll be some raised eyebrows by the residents of Merthyr Tydfil.”
He later added: “I just don’t understand how we’ve allowed our building maintenance costs to get so out of hand.”
He said that sits alongside the fact that since 2020 they’ve had an agile working policy where a huge amount of the workforce work from home on a regular basis.
“You either have an agile working policy and you reduce your asset requirement because people simply aren’t in the buildings or you don’t have an agile working policy and people are in the buildings.
“There seems to be no appetite and I’m not hearing anything about the reduction of assets.”
He said he’d heard there are very few people in the civic centre and there are very few people in the orbit centre.
Cllr Barry said he thinks they have in the region of £213m worth of assets and that “it just doesn’t stack up for the residents of Merthyr Tydfil.”
He said they have all these buildings, an agile working policy, a growing maintenance budget and overspends coming out of left field and he added “you can understand why the residents of Merthyr would feel hard done by because it doesn’t appear that we are doing enough to balance the equation between agile working, our assets and that maintenance budget.
“There’s a correlation there that needs work and it needs work urgently.”
Councillor Geraint Thomas, leader of the opposition Independent group, said: “We’ve got challenges coming to all of us over the next few months and we’ve got some difficult decisions to make.”
Councillor Anna Williams-Price, Labour cabinet member for financial sustainability, assets and commercial, said that “estate rationalisation” is on the radar of the transformation programme currently.
She also said that the report had been clear about the risks associated with the capital finance programme which has been escalated to the corporate risk register by cabinet, and further updates on mitigating actions against the risks had been undertaken such as a capital oversight board with more detail to be reported in December.
On the maintenance backlog, she said there has been an increase in past years so this does need to be considered in line with the capital programme more broadly.
