14% council tax rise warning from council leader

Bruce Sinclair Local Democracy Reporter

A council leader has outlined the bleak financial situation faced by the county in the run-up to a budget that could see council tax bills increase by more than £200 for the average household.

In an open letter to Ceredigion residents and ratepayers, Ceredigion Leader Bryan Davies explained “the extraordinarily difficult financial situation faced by your council”.

The final setting of Ceredigion’s budget for 2024-25 is due to take place on February 29, with fears council tax could increase by as much as 13.9 per cent, meaning the average Band D council tax-payer could see their bills increase by as much as £216 a year, in order for the council to balance its books.

Pressures

“Over the next few weeks all councillors will be faced with decisions on setting next year’s budget and I wanted you to be aware of the financial pressures we’re under,” Cllr Davies said.

“I have been a councillor for over 10 years and the council leader for less than two years, I have never known such a challenging financial situation.

“Every year the Welsh Government allocates a budget for each local authority. In our budget allocation for 2024-25 Ceredigion Council only received a 2.6 per cent increase and this is in comparison to four per cent given to Newport and Cardiff.

“The allocations are linked to the county’s population, and we’re penalised for having low population numbers.”

That 2.6 per cent increase saw Ceredigion 14th out of the 22 Welsh local authorities, the lowest increase per head of population across all of Wales.

Cllr Davies added: “A 2.6 per cent increase must be compared Ceredigion-specific inflation running at 10.1 per cent. We have very challenging social care budgets, with an ever-increasing elderly population, with escalating numbers of young people needing complex costly out-of-county care and, of course, our decision to take control of Hafan y Waun.

“Taking over Hafan y Waun care home has added over £1m to our expenditure, but it is a decision that secures our main dementia care facility in Ceredigion, and which I’m sure, will benefit Ceredigion residents and their families hugely.

“We are required, by law, to balance our books and failure to do so would mean Welsh Government having to take over the running of our services.

“This year, to balance our books, it may be that a council tax increase of 13.9 per cent in necessary.

“If we were only to raise council tax by five per cent, for instance, we would have a shortfall of £4.1million, even with cuts to various budgets.

“Hard pressed”

“No councillor ever wants to raise the council tax levy and I, like my co-councillors, certainly don’t want to see such an increase on the already hard-pressed Ceredigion residents.

“A 13.9 per cent council tax rise is an extra £12 per month in Band A dwellings, £18 per month for Band D dwellings and £22 per month in Band E dwellings.

“Around 5,300 households in Ceredigion already access the council tax reduction scheme and I’ll want to see if more residents can be helped to access this support. Please contact Ceredigion County Council if you think you could be eligible.”

He said there may be a, small, glimmer of hope, but a large council tax increase was still likely.

“It may be the Westminster allocation of extra funding for councils last week is passed to us by Welsh Government, but this will be very small. The increase may therefore be just less than 13.9 per cent. I will want to make the final figure as small as possible.

“Even with this level of council tax increase, we will also need to make cuts to our expenditure and services in order to balance the books. This coming year will be really tough.

“I know that people see us as a council reducing services and increasing taxes. In the last decade and more our services and our staffing have had to reduce because the funding to us has reduced dramatically.

“Excellent reports”

“Ten years ago, our budget was made up of 80 per cent central government funding and 20 per cent council tax, now it is roughly 68 per cent central government, 32 per cent council tax. Every time Jeremy Hunt in Westminster, or Rebecca Evans in Cardiff Bay get up to say that they are not increasing national levels of taxation they are referring to income tax. This strategy only shifts the burden to taxation on a local level and is inherently unfair.

“Ceredigion Council continues to have excellent reports on the services we deliver – the schools and care homes we run, and on our efficiency as a council. Our staff do a tremendous job in running our leisure centres, collecting the bins, in teaching and in caring. As a council I’d love for us to be able to do more, but for now in these difficult times, we can’t.

“As residents in Ceredigion, you will have a variety of views on how we run this council and the decisions we are elected to take. I’m talking to your community councils this week to hear their views and I’m sure they’ll be keen to discuss local priorities. I am here to listen.

“I hope that we can all work together for the greater good of Ceredigion. As councillors that’s what we all want to do.”

Annual council tax increases, on the 13.9 per cent figure, for Bands A-E would be: £144, £168, £192, £216 and £264 respectively.