A VALLEYS council is currently forecasting a budget gap of more than £9m next year.
Merthyr Tydfil’s medium term financial plan covering the next three years (2025/2026 to 2027/2028) shows a projected budget deficit of £9.005m for 2026/2027 and £11.033m in 2027/2028.
Current figures for 2026/2027 would see a net spend of £184.81m and a net income of £175.81m and for 2027/2028 it would see a net spend of £190.25m and a net income of £179.22m.
This would mean a cumulative budget deficit of £20.038m over the course of the medium term financial plan.
A report going before cabinet and full council on Wednesday, April 2, said the council faced significant financial challenges over the course of the medium-term and an ongoing programme of transformation would be required to achieve the levels of savings required.
These figures assume a revenue settlement of +1%, a pay award of +2.5% for 2026/27 and 2% for 2027/28, a council tax increase of 5% per year and no use of reserves from 2025/26 onwards.
The report said the plan did not include fixed funding, expenditure or activity projections, but set out a three-year budget forecast for the resources that were likely to be available.
The MTFP is reviewed regularly and will be amended as additional information becomes available with the detail for future years being developed over the period of the strategy, the report said.
For 2025/2026, the council approved a balanced budget of £172.51m which included a 5.5% increase in council tax.
The Welsh Government settlement for the next financial year (2025/2026) resulted in a funding increase of 4.9% for Merthyr Tydfil next year.
