Work on addressing a predicted £38 million in cuts and savings for Powys County Council by 2026 needs to start – despite a surplus from the last year.

At the council’s cabinet meeting on Tuesday, July 27, the financial forecast for the first quarter of 2021/22 was reported.

Cllr Aled Davies said: “We keep a really close eye on the finances of the council as we progress through the year, this is for April, May and June.

“Our overall position is okay. There’s a slight surplus of £730,000 on a base budget of just under £280m.

“It’s good news on the face of it but it does involve significant cost pressures of almost £5.3m which is balanced by underspends in other areas.”

Cllr Davies pointed out the cuts and savings of nearly £13.4m that need to be made this financial year to balance the budget.

The report indicates that so far, just under £4m of these has been made, with assurance given to cabinet that a further £6.820m have been found. This leaves £2.6m to be identified.

Cllr Davies said: “I know it’s relatively early in the year but there’s still concern,  and it needs focussing on to make sure we deliver those savings.”

Cllr Davies said that it was “good to know” that the Welsh Government Hardship Fund to provide support during the pandemic has been extended to March 31, 2022.

This fund provides funding for Welsh local authorities to deal with the costs of the pandemic.

He said: “Even though we have had the support from the Welsh and UK Government we’re still facing and almost £40m deficit over the next five years which we do need to address. It’s what Jane Thomas (head of finance) and I will be focussed on over the next months and years.”

Ms Thomas stressed that the £8million surplus on last year’s council budget should be seen as a one off

She said: “It was very welcome at the time and will benefit us to get through the situation, but it does not help us address our long-term funding issues.

“We have to focus on the longer term.”

Ms Thomas explained that part of this work will include council services understanding what the ongoing longer-term impact of coronavirus will be on Powys residents and how it will impact  on demand for services.

She believed that the council would in future need to “embed” this understanding into how it manages its finances.

The report was noted by the cabinet.