Pressures including rising inflation, increased demand for services and anticipated pay awards for its staff have led Cardiff Council to predict a £36.8m gap in its budget for 2024-25, a new report has revealed.

The Council’s latest Medium Term Financial Plan (MTFP), which will be reviewed by the Cabinet at its meeting on July 13, outlines in detail the predicted cost of delivering its services next year, including running schools, caring for vulnerable people and operating libraries and venues.

It also estimates how much Welsh Government funding it will receive.

For 2024-25, the council estimates additional costs of £53.6m. Set against additional funding of £16.8m, the budget gap is now £36.8m

The report explains how the additional costs have arisen:

Estimated price inflation (£9.7m)

This includes increases in the price the Council pays for securing care for vulnerable children and adults as well as levies it pays to organisations like the fire service;

Demand increases (£7.6m)

This reflects an increase in people needing the Council’s support, particularly for care, as well as education costs including home-to-school transport;

Estimated pay awards (£21.5m)

Inflation is also affecting workforce costs through pay awards for teachers and other council staff. Pay awards for the current financial year are not yet finalised and are adding uncertainty to the planning process;

Other pressures (£14.8m)

This includes sums that reflect emerging pressures in areas such as social care, homelessness, school catering and waste collection. It also includes costs associated with financing the Council’s capital programme (building new schools etc.), and maintaining current assets.

The Council has a statutory obligation to deliver a balanced budget and the report says it will achieve this primarily through a programme of:

Reducing spending
Increasing income
Using all available sources of funding, including careful consideration of future levels of Council Tax

Where possible, the council intends to limit the impact on residents and customers but it will consult fully with affected groups and the public if any changes proposed affect service delivery and standards.

Cllr Chris Weaver, the Cabinet member responsible for finance, said the budget gap would be kept under close review. “We’ll continue to work on making savings and generating income over the summer,” he added. “In the case of efficiency savings, we’ll implement these as early as possible and we will be embarking on a programme of consulting with unions, employees, third sector groups and the public to assess what the priorities are for their communities.”

The Medium Term Financial Plan will be discussed at the Council’s Policy Review & Performance Scrutiny Committee next Wednesday at 4.30pm.