Council tax hike for Denbighshire amid £25m ‘black hole’

People living in Denbighshire face a 9.53% council tax rise in April amid a financial situation described as “financial incompetence” by a councillor.

Denbighshire Council’s cabinet are set to meet on Wednesday at the council’s Ruthin County Hall HQ to discuss the council budget for 2024/25.

Despite Denbighshire receiving the highest local government settlement in North Wales of 3.7%, the cabinet is proposing a council tax increase of 9.53% – although the final figure is yet to be agreed.

“Black hole”

The proposed rise includes the 8.23% council-set rise and an additional 1.3% increase in the levy for the North Wales Fire and Rescue Authority, which Denbighshire has no control over.

Denbighshire’s 3.7% local government settlement increase compares to neighbouring Conwy and Gwynedd receiving the lowest increase in Wales of 2%.

Earlier financial reports suggest Denbighshire is facing a black hole of around £25m, and already the cabinet is trying to reduce Denbighshire’s library hours by 40%.

“Financial incompetence”

Conservative councillor Brian Jones, who represents Rhyl, called the situation “financial incompetence” while Denbighshire’s Labour leader Cllr Jason McLellan blamed the UK’s Tory Government.

“Local government in Wales faces these extreme challenges, and Denbighshire is no different because of the financial incompetence of the UK Government,” said Cllr McLellan.

“We saw Liz Truss car crash the economy. In the autumn statement, the UK Government had an opportunity to properly fund Wales and address the funding gap Wales faces. It failed to do that.

“Wales’ overall budget is £1.3 billion less in real terms than it was in 2021, so I’ll take no lessons from the Conservative group about financial mismanagement.

“It is their mismanagement who have put Wales in this predicament.”

Protecting services

Cllr McLellan also pointed to 1.3% of the rise being set by the North Wales Fire Service but conceded the council tax hike was high.

“The proposed increase that we are considering is 8.23%. The additional 1.3% is the North Wales Fire and Service levy. We have no say over that. So to be clear, the council-tax rise is 8.23%,” said Cllr McLellan.

“Residents need to be aware the council-tax rise is high. There is no getting away from that.

“It is a decision that has been reached so we can balance the books, to deliver education and social services so they can be protected as much as possible.

“Last year we had the lowest (rise) in north Wales. Other authorities will be under similar pressures.

“We’ve got to raise council tax to bridge this funding gap we’ve got because of the cuts we are facing from the UK Government.”

Questions

Backbench Rhyl councillor Brian Jones said questions needed to be answered about the proposals.

“This (the proposed council tax rise) will have a detrimental effect on residents,” he said.

“A council-tax rise of this amount will have a detrimental effect on people’s day-to-day cost of living, and inevitably it will affect the least off in society. The question I would ask is will this increase solve all the financial pressures of Denbighshire County Council?

“Because we haven’t all been given the detail of what the balanced budget will look like right down to the last pound, shilling, and pence, you can’t make an educated judgement.

Where has the money gone?

“Residents want to know. You (the council) had £240m in this financial year. Where has all the money gone?

“The honest truth is that the Welsh Government funding formula is flawed the way they dish the money out.

“Because a county councillor like me has only got high-level finance data – it is not broken down – you could say has there been financial incompetence in Denbighshire over the last 12 months.

“They (Denbighshire) knew 12 months ago about the cost-of-living crisis; they knew about the pressures on services, and they still haven’t come to the table with a detailed balanced budget where the costs are broken down so you can see where all the money is going.

“They knew the pressures were coming, and they still haven’t got a balanced budget, so it does suggest there is a little bit of financial incompetence coming into play here.

“They (Denbighshire) are getting more money than what Conwy are receiving.”

Frontline services

Fellow backbencher Cllr Huw Hilditch-Roberts also worried about how the proposed rise could affect the most vulnerable.

“The council are facing real difficult times, and obviously the option is the council are looking to increase council tax, which is all well and good, but if they are doing that, they better make sure the public are getting frontline services, and that is the most important thing, ” he said.

“During the cost-of-living crisis it (the proposed rise) is going to have a huge impact, especially on the vulnerable. It is more money residents are going to have to find every month.

“It is going to be really difficult.”

He added: “It is a situation that is (happening) across Wales.

“The funding formula has not been kind to Denbighshire, and that is a challenge.

“So we need to ask the UK and Welsh Governments to re-look at the funding formula because it is impacting on every service.”

The cabinet will debate the issue on Wednesday, January 23. The final decision will be made at a full council meeting at the end of the month before a balanced budget must be finalised in March.