City council faces biggest budget gap in Wales

Kieran Molloy – Local democracy reporter

Cardiff council is projected to face a £43.8m budget gap for the 2027/28 financial year – the largest of any local authority in the country.

Analysis conducted by the BBC Shared Data Unit, as part of the BBC local news partnership, has projected that Cardiff Council will have a budget gap of £43.8m for the next financial year.

A budget gap is the difference between what a council expects to spend and the funding it expects to receive.

This shortfall is usually closed through a combination of savings, higher income, government funding or in some cases the use of a council’s reserve funds.

Before the 2026/27 financial year, Cardiff Council faced a £22.7m budget gap but this was closed through a combination of savings and a 3.9% rise in council tax.

The year before that, the council faced a gap of £27.7m, which was closed through similar methods.

The council with the second highest projected budget gap for 2027/28 is Carmarthenshire Council with £34m and then Flintshire Council £26.6m.

Of all Welsh councils, Cardiff is planning the largest total savings in the 2026/27 financial year, with an expectation of £14.78m.

Despite having the largest total, Cardiff has the lowest savings per person of any council in Wales at only £38.50 per person.

Powys Council has the highest savings per person at £88.82 per person, although it has a much lower population than Cardiff, which has the highest population in Wales.

A Cardiff Council spokesperson said: “It is important to note that Cardiff Council is not in a budget gap and that it has set a balanced budget for 2026/27. While the Council faced a significant budget gap as a result of rising demand and increasing costs, particularly in social care, education and Additional Learning Needs provision, that gap was closed through a combination of efficiency savings, additional income, a Council Tax increase and the planned use of reserves.

“The council approved a balanced budget for 2026/27 following a citywide consultation process.

“As Wales’ largest local authority, Cardiff Council faces substantial financial pressures  driven by increasing demand for services and the rising cost of delivering them. In  2026/27 alone, the cost of providing services increased by £56.2 million, while Cardiff  received a 4.2% increase in Welsh Government funding.

“The £14.78 million savings requirement for 2026/27 reflects the scale of the challenge  facing a council of Cardiff’s size.”

The council continued that the savings program was focused on efficiency measures, change programme savings and additional income generation with no cuts to frontline services.”

The 2026/27 budget includes significant additional investment in schools, services for  vulnerable children and adults, neighbourhood improvements and cleaner streets..

“Looking ahead, councils across Wales continue to face significant financial pressures from inflation, rising demand and increasing service complexity

“Cardiff Council will continue to try and address these challenges through transformation programmes, efficiency measures, prudent financial planning and ongoing engagement with Welsh Government on sustainable local government funding.

“The intention is to avoid making reductions on core services but the size of the gap means that this cannot be counted out at this time.”

The council also said that it will continue to invest in the city through its £1.47bn capital programme which supports housing, education, infrastructure and regeneration.

“It is therefore important that figures relating to budget gaps are understood in their proper context. They represent the financial challenge that must be addressed during  budget setting, not a budget gap position.

“Cardiff Council has set a balanced budget for  2026/27, and work will continue over the remainder of the current financial year to ensure that a package of proposals is put forward that will achieve a balanced budget for  2027/28, addressing the budget gap currently projected as £43.8 million.”

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