A Powys finance chief has warned that it is becoming increasingly difficult to find budget savings each year - despite the council posting a surprise surplus for 2024/25.

At a meeting of Powys County Council’s Liberal Democrat/Labour Cabinet on Tuesday, July 29, senior councillors were presented with the final outturn for the 2024/25 budget. The report showed the council ended the financial year with a £5.3 million surplus on its £341.6 million budget.

This marked a major turnaround from the £3.938 million deficit that had been forecast last September - and a sharp improvement on the more modest £894,000 surplus predicted at the end of December.

However, the report also revealed the council had failed to meet its cost reduction target for the year.

A total of £8.9 million in savings and cuts were delivered, against an original target of £10.7 million. That target later rose to £12.9 million after adding undelivered savings from previous years. An additional £1.2 million was achieved through “temporary mitigation” measures, leaving £2.7 million in savings still unmet last year.

Those undelivered savings, along with £3.7 million in rolled-over cuts, will now be added to the £12.3 million in cost reductions expected for 2025/26.

Finance portfolio holder Cllr David Thomas (Labour) said: “If I can make one point on the savings, it’s certainly seen a downward turn from previous years when we improved our savings delivery quite substantially.

“I think it’s worth noting that this reflects how difficult it is to achieved savings, because we have already lost £85 million from our budget over the last five years and £120 million over the last 10 years.

“It really underlines the fact that Sustainable Powys is absolutely essential to this authority moving forward.”

Council leader, Cllr Jake Berriman (Liberal Democrat) said: “We did find in-year savings to counterbalance some of that, which was useful.

“It’s a timely reminder that we need to manage our portfolios diligently as we go through the year.

“Congratulations to everyone for getting to the point that we got so close to what we anticipated.”

Cabinet noted the report and approved a series of departmental budget transfers, known as virements.

"Sustainable Powys" is the council’s umbrella term for a range of potential cost-cutting projects aimed at reducing and reshaping services around five hub towns: Brecon, Llandrindod Wells, Newtown, Welshpool, and Ystradgynlais.

It is seen as a concept rather than a clearly defined plan, with few details released so far beyond the focus on the five core towns.

According to the report, the turnaround in the council’s finances was largely due to a £2 million award from the Welsh Government in March, which helped ease spending pressures in key areas such as Additional Learning Needs (ALN), homelessness, social services, and highways.

The surplus was also boosted by an increase in council tax collection, with the report noting that the council received £118.1 million from residents - £11.4 million more than in 2023/24.