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Community groups in Caerphilly will be given two months to bid for money given to them by a council Community Empowerment Fund, or any unspent sums will be taken away.

Caerphilly County Borough Council launched the scheme because of a “desire to have a fund… supporting local communities”, Cllr Eluned Stenner, the cabinet member for finance, told a meeting on Wednesday July 24.

Each ward councillor has access to a pot of funding – currently £3,630 each – and must sponsor eligible organisations to apply for access to the money.

The council describes the scheme, now in its third year, as “broadly successful”, but a new report also shows some ward areas are reporting sizeable underspends.

Given the council’s wider budget pressures and the looming threat of millions of pounds of further savings required next year, the local authority is unhappy the Community Empowerment Fund money is going unspent – and argues it makes more sense to recoup any leftover cash.

“Underspends benefit no local communities,” Cllr Stenner told Wednesday’s meeting.

Cabinet members went on to agree that any money unspent by September 30 this year would be returned to the council’s central General Fund.

Cllr Jamie Pritchard, the deputy leader, noted “significant underspends in certain wards” but asked for clarity on the September 30 deadline.

Policy officer Vicky Doyle confirmed that any application that “comes in by September 30 in wards where there are underspends would be funded from those underspends”.

Applications usually take six to eight weeks, but any eligible bids received before the deadline will be processed, Ms Doyle added.

“This money can be used by councillors to help people and groups within their communities,” said Cllr Sean Morgan, who leads Caerphilly Council. “If that money is going unspent, then us councillors have to tighten the purse strings, in the same way we are asking the organisation to tighten the purse strings.”

There is also a desire in the council for ward members to encourage bids from new groups, “to build capacity locally and empower communities to do more for themselves”.

But this hasn’t been the case in practice.

According to the council report, the “vast majority of cases funding applications have come from often long-standing, existing groups”.

The scheme has also seen some groups access funds every year, “which reduces the opportunity for other groups or new groups to apply for funding”