Cold water has been poured over the suggestion that a predicted £2.2 million budget surplus for this year could see next year’s Council Tax bills drop for Powys residents.

At a meeting of Powys County Council’s Liberal Democrat/Labour Cabinet on Tuesday, September 23, senior councillors received a report on the 2025/2026 budget performance as it stood at the end of June.

Following the first quarter of the financial year, the council was predicting a surplus of £2.194 million on its £367.055 million budget by the end of next March.

Earlier this month, councillors and independent lay members at a meeting of the Finance Panel had gone through the paper with a fine-tooth comb and mention of lowering Council Tax bills for cash-strapped residents had been made due to the predicted surplus.

The comments from that meeting were brought up at cabinet by education portfolio holder, Cllr Pete Roberts (Liberal Democrat – Llandrindod South).

Cllr Roberts said: “We’ve seen speculation that this says we have money to spare at the end of the year, and it was facetiously suggested at Finance Panel that we should give a Council Tax cut as a result of this.”

He suggested that if the council used all of the £3 million set aside for contingencies within the budget for emerging financial risks, and if Adult Social Services pressures emerged this winter, the council would “barely break even and will actually come in with a small deficit.”

Finance portfolio holder Cllr David Thomas (Labour – Tawe Uchaf) said: “I think we need to bear in mind that this is a forecast after the first quarter.

“It looks highly probable that we will have to utilise that risk budget by quarter three.

“It’s a bit premature to be talking about Council Tax reductions for next year.”

The report also explains that cuts, savings and efficiencies totalling £16 million need to be delivered by the council this year,

Cllr Thomas said that by the end of June that £3.4 million of these “cost reductions” had been made.

He then added that a further £10.2 million are “assured of delivery” – but that £2.3 million was already described as at risk of not being made by the end of next March.

Cllr Thomas said: “That’s a concern in itself and underlines how difficult it is to find savings at the moment.”

He told councillors that the total predicted funding gap of £39.1 million was being currently predicted as a “best case scenario” by the end of March 2030.

“That could potentially increase to £68.2 million,” stressed Cllr Thomas.

Council leader, Cllr Jake Berriman (Liberal Democrat – Llandrindod North) said: “Obviously the emphasis that is based here is on getting to grips with the budget as it emerges and portfolio holders to have regular and detailed discussions with budget holders as we progress.”

The cabinet noted the report and agreed the inter-council budget transfers, which are known as virements.