UNCERTAINTY surrounds a council’s budget for the upcoming with it predicting a possible funding shortfall of anywhere between £3-£6.5 million next year.

Monmouthshire County Council also anticipates that over the coming four years covered by its medium term financial plan its funding gap could be between £19.3m to £31.4m.

The council has changed how it calculates its funding requirements with its service departments now expected to provide evidence, data and figures to support the predicted financial pressures on their budgets.

“We’ve removed that assumed demand in favour of asking services for forecast demand and robust evidence of what those pressures are rather than just having generic assumptions around them and will need actual data on cost and how they are planning to manage them,” said the council’s head of finance Jonathan Davies.

Service pressures, such as increased demand, can have the biggest impact on the council’s budget planning while it also makes assumptions on the funding it will receive, pay awards it has to honour and inflation.

He presented the update on the medium term financial plan to the council’s performance and scrutiny committee with the document intended to be a “framework” for financial planning.

Councillor Ben Callard, the Labour cabinet member responsible for finance, said the figures aren’t “final budget requirements” but scenarios based on assumptions he said would change as the UK Government announces its budget later this month and the Welsh Government later in the autumn.

The council expects to learn what funding it will receive from the Welsh Government for 2027/28 in December, while the meeting took place shortly before a funding agreement between the Plaid Cymru government and Welsh Labour opposition for extra funding to support pupils with additional learning needs this year was announced.

Cllr Callard said he is aware no party has overall control in the council chamber and where Labour has previously passed its budget with support from its Green Party cabinet colleague and one independent councillor it has seen two members defect to the Independent Group this year.

The budget, which will have to be passed no later than March, will be the last before council elections in May.

“I’m very cognisant no party has a majority and I’m really keen to talk to other groups to see what ideas they might have for the budget and for the council to pass a budget this year,” said Cllr Callard.

Conservative Rachel Buckler said the plan illustrated a “conundrum of real financial concern for the council”.

Cllr Callard said in previous years the current Labour administration had had to address funding shortfalls of around £10m a year and said: “The adverse figure this year is £6.5m. It is better this time than in previous years. I’m not saying it’s not a challenge but it is not as great as it has been.”

The committee was told planning for the upcoming year is based on a “favourable” position of a £3m shortfall in what the council will be funded for and its expected costs, a £4.5m mid-case scenario and £6.5m adverse position.

Deputy chief executive, and senior finance officer, Peter Davies said a draft budget, for next year, is likely to be published in January and put out to public consultation with the cabinet and senior management already working up proposals.