Carmarthenshire Council is forecasting a £68m underspend on projects like new schools and regeneration schemes, cabinet was told. Councillors had agreed to spend £139m on a range of capital projects in 2023-24 when they set the budget last March. This sum factors in income like grants and revenue from new buildings as well as design and construction costs. Delayed projects will be included in the capital budget for coming financial years.
The latest forecast presented to cabinet is that the council will spend just under £71m rather than £139m. This figure is a snapshot from the end of December so it could change by the end of this month when the financial year ends. Cabinet members expressed satisfaction with what was being achieved such as the recent completion of a new Pembrey primary school. "We are working and developing in so many areas," said cabinet member for education and Welsh language Cllr Glynog Davies. "New schools are needed in this county and we want to continue to do that."
The biggest chunk of this year's capital budget was a planned £63m expenditure on regeneration projects but the latest forecast is much lower and stands at £21m. The report said this decrease was due to delays to Swansea Bay City Region projects and the revamp of the former Debenhams store in Carmarthen into a new community hub among other things.
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The housing department is expecting to spend £6m less than the £34m it planned partly due to delays in a new homes project in Tyisha, Llanelli. Meanwhile £5m less is being allocated to the long-awaited Towy Valley cycle path than planned in 2023-24 due to delays and a £3m underspend is forecast on new fleet vehicles because of long lead-in times to acquire them. The education and children's department expects to spend £4m less on new projects than anticipated for reasons including that Welsh Government approval for them is still pending.
Cllr Alun Lenny, cabinet member for resources, said the housing department was still due to spend a notable sum of more than £28m in 2023-24, including £8m bringing empty properties back into use and more than £4m on new council homes. A total of 20 new flats have recently been created at former council offices in Spilman Street, Carmarthen, and the old YMCA building in Stepney Street, Carmarthen. Cllr Linda Evans, cabinet member for homes, welcomed these new flats while acknowledging that demand for affordable and social housing was "extremely high". She said: "It's very hard for people out there at the moment."
The council's largest capital project – the £200m Pentre Awel health and wellbeing complex in Llanelli – is making progress and the first of four phases is due to open this autumn. The first phase will include a new Llanelli leisure centre.
Councils everywhere experience delays in their capital programme and Carmarthenshire underspent the previous year – 2022-23 – by £46m, according to that year's statement of accounts. One side effect of a slippage in capital expenditure is that councils can earn interest on the money they've borrowed for the projects but not actually spent. They can also hold off borrowing therefore incurring fewer repayment costs. In Carmarthenshire's case this has resulted in a £3m boost to the council's revenue, or day-to-day, budget for 2023-24.
The £3m is badly needed for revenue budget reasons because council departments are forecast to overspend by more than £10m – driven largely by high demand for specialist children's services and agency staff costs and increased adult social care expenditure. In addition to this schools are expected to spend £8.6m more than planned, partly due to wage rises, which would take schools' overall level of reserves down to just £2.5m. Finance chiefs are using the £3m sum, plus £1.5m from the council's contingency fund, to reduce revenue overspending.
Cllr Lenny said he believed that the financial outlook would worsen for all councils next year. He added: "I can assure all members of the continued prudent financial management of the authority."
