Council faces ‘sobering’ 16.7% starting point for council tax rise, financial expert warns

A council could be starting at a 16.7% council tax increase when it attempts to set a balanced budget for 2026/27, a backbench councillor has warned.

At a finance and resources and overview scrutiny committee at Conwy County Council’s Coed Pella HQ this week, financial expert Cllr Gareth Jones warned the chamber of his estimate, which included costs yet to be factored in.

This prompted the authority’s head of finance Amanda Hughes to tell the chamber she wasn’t “doubting it would be in that kind of region”.

Chairing the meeting, Cllr Cheryl Carlisle, together with Cllr Kay Redhead, reassured residents that the 16.7% represented the likely gap the council needed to cover and not an actual proposal to increase council tax by that amount.

The debate followed a budget report being presented for 2026/27 ahead of the council setting a budget in the new year.

Ms Hughes told councillors that the authority was expecting a 2.3% uplift in its Provisional Local Government Settlement, following a Welsh Government announcement last week.

This would mean an additional £6m for the budget, but the council is facing a £20.6m funding gap – down from an earlier estimate of £22m.

This means Conwy County Council is facing an expected £14m shortfall – after three years of service cuts and council tax rises of nearly 10%.

Whilst the authority could receive more funds from Welsh Government – as hundreds of millions is yet to be allocated – councillors heard the council was among nine of 22 authorities set to receive the “floor” amount.

Much of the pressures come from teacher and council staff pay rises, which are set externally.

But backbench Rhos on Sea councillor Gareth Jones spoke about costs that are yet to be included in estimations. These included residents running out of savings and requests coming in for care home funding.

He said Conwy County Council was picking up the social care burden from Betsi Cadwaladr University Health Board once people left hospitals whilst trying to recover funds from the NHS.

He said people were “struggling to pay council tax” and that was “a good indicator that people are under financial pressure”.

He said these factors caused “a knock-on effect of causing increased strain on children’s services, social services and housing”.

Context

“But also, to put it into context, it is what’s not in the report,” said Cllr Jones.

“Just to check my maths, it looks like our starting point is a council tax increase of 16.74% or roughly £316 per increase, per household so that’s a sobering place to start.

“And I know we are likely to get some extra money, and we are going to have to save some costs, but that is a huge gap and a really difficult place to start from.”

Head of finance Amanda Hughes replied: “I haven’t done the maths, but I’m not doubting it would be in that kind of region.”

Cllr Chris Cater is the authority’s cabinet member for finance and strategic planning. “There is no doubt that we have serious financial pressures and difficult choices ahead of us,” he said.

“Our options in tackling Conwy’s resource shortfall remain what we discussed at the budget working groups, looking at budget reductions, looking after the efficiency savings, or curtailing certain services.

“So that is one option we’ve got. The second is increasing council tax, of course, and our third is applying non-recurring funding from reserves and balances, which our section 151 (finance) officer Amanda Hughes has strongly advised us to resist.”

He added that there were “inherent risks with each of those” but said there was “much more work to be done”.

‘Substantial gap’

Head of finance Amanda Hughes said a council tax rise of 5% would raise council tax by “roughly £5m”.

“I think in broad terms, just simplistically, if we were to, for arguments sake, raise council tax at 5%, that would raise a bit less than but roughly £5m,” she said.

“You can see, therefore, in terms of the equation, if we’ve had a £20m gap, if we’ve had £6m from Welsh Government, if we simplistically, pending a decision, get £5m from council tax, you can still see we’ve got a substantial gap that will need to be made up by other things or more council tax.”

Chief executive Rhun ap Gareth said that “about nine local authorities out of 22 were on the floor”. He added: “That doesn’t feel comfortable, does it? Of those nine, four of them are in North Wales.”

Leader Cllr Julie Fallon said she would continue to put pressure on Welsh Government and that it was “not appropriate” that the more rural communities are impacted by funding disparity.

She added: “It is very clear that we cannot have a situation where rural authorities find themselves in this more dire financial position. It is just completely unacceptable.”

‘Immoral’

Cllr Cheryl Carlisle said working families were on their knees, adding it was “completely immoral” that residents were suffering. Cllr Paul Luckock said that “in whole areas of the council” he was “not sure we can cut anything out”.

He added: “And that’s why I don’t like it. I know about tax arrears. I know people in my constituency who pay their monthly council tax bill if they can pay with their credit card. I know that reality, but if that’s the only tool we’ve got, we need to take that tool.”

Chief executive Rhun ap Gareth said the council had lost £92m of its previous budget over 10 years. The finance and resources overview and scrutiny committee voted unanimously in favour of backing the report after making the recommendations.