Council tax in Merthyr Tydfil could be going up by 3.55% next year

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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With £106,000 from measures withdrawn at full council, £1.9m in additional demands and £705,000 going towards a council service capacity exercise, this resulted in the £288,000 surplus.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.



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