Council could face three-year £42m black hole

Richard Evans, Local Democracy Reporter

A council could face a funding gap of up to £42m over the next three years, driving up council tax – councillors will be warned.

The financial update will be presented to the Denbighshire County Council cabinet on Tuesday, 26 May, at the authority’s Ruthin County Hall HQ.

The cabinet will consider the “Medium Term Financial Strategy and Plan for 2027/28 – 2029/30”, a review of the council’s financial resilience and sustainability.

The report says the “pressures are difficult to forecast but are ranging from £13m to £25m in 2027/28 with a mid-range of £18m” with “similar ranges” forecast for 2028/29 and 2029/30.

But the report goes on to say the “forecast gap” for 2027/28–2029/30 “ranges from a low of £24m to a high of £42m, with a mid-range projection of £30m”.

Council officers are blaming the financial black hole on statutory services driving up costs well above inflation.

The report states: “Demand for services from communities continues to grow, and the complexity of needs has intensified in areas such as education, social care, and homelessness in recent years.

“Costs of service delivery in these areas have risen significantly, and those increases are well above headline rates of inflation. These cost pressures are dominating council spending and are in areas where there are statutory duties to provide services.”

The report added: “The combined effect of these factors has been to increase the council’s budget requirement to spend on delivering day-to-day services year on year, which is set to continue.”

The paper goes on to warn that the authority’s mid-term financial plan cites potential council tax rises that “range from 4% – 8% for 2027/28 and a 5.23% long-term average thereafter for both years”.

A mid-range rise of 6% is also referenced.

Cabinet members will be asked to consider, approve, and provide feedback at the meeting.