26 September 2022
Surging inflation and rocketing energy costs will have a significant impact on Powys County Council’s financial planning for this and future financial years, the Cabinet has been warned.
The County Council approved a Medium-Term Financial Strategy in March setting out its spending plans until 2027 but recent world events have meant that plans will have to be re-assessed and revised plans put in place for the next five years.
Cabinet Member for Finance, Cllr David Thomas said; “The world has changed since our last medium-term financial plan was adopted with a significant impact on the economic climate both home and abroad.
“Russia’s invasion of Ukraine had major repercussions for the global economy, almost immediately gas and oil prices peaked over 200 and 50 per cent above their end-2021 levels respectively. Prices have since fallen back but remain well above historical averages.
“Pressure on energy prices has had immediate impact on the UK’s economy with inflation rising to above 10 per cent and predicted to stay at higher levels into next year. Interest rates have increased as the Bank of England looks to address rising inflation and significant uncertainty remains.
“Taken together the impact on the County Council’s budget and its ability to deliver local services cannot be overstated. We must review our medium-term financial plans and take account of increasing costs in this financial year and for the coming years.
“We will have to implement changes to manage these cost pressures, as soon as possible and the cabinet in the coming months will be setting the direction and developing objectives that will shape the council over the next five years.
“When finalised those plans will result in an updated Medium-Term Financial Strategy which will set out how the council will deliver services to our residents within available resources.