Council tax hikes should not follow lower funding settlements, opposition leader warns

Nicholas Thomas Local Democracy Reporter

Council tax bills should not be hiked in response to lower funding settlements for local government, a council’s opposition leader has warned.

Newport has been awarded a provisional 4.7% increase in its settlement from the Welsh Government for the next financial year.

‘Half of what it was’

But despite that rise – the highest in Wales – the increased sums given to councils next spring will be less generous than those offered last year, as the Welsh Government deals with its own shrinking budgets.

Councils in Wales saw their settlements rise by an average of 7.9% for the current financial year, but in 2024/25 the average rise will be 3.1%.

Matthew Evans, who leads the Conservative opposition group in the city council chamber, said “on the face of it” Newport’s provisional settlement increase appeared “generous”, but was “about half of what it was last year”.

“The Welsh Government seems to find money for pet projects”, he said, citing Cardiff Airport, the switch to 20mph, and plans to increase the number of Senedd members.

“The key thing is going to be how Labour reacts [in Newport],” Cllr Evans said. “The last thing people want is a big council tax increase.”

He added the council “should be looking after residents, and should be looking at a low council tax increase next year.”

Population growth

Following news of the provisional 4.7% increase in Newport City Council’s settlement, Jane Mudd, who leads the council, said: “Although Newport has received the greatest percentage increase, in real terms we are still well behind where we need to be”.

She noted the city’s population had grown “rapidly”, causing “additional pressure” on services which “significantly outweighs the funding available to us”.

“We are also facing sizeable cuts to many of the grants we receive and are yet to fully understand the impact of these reductions, but it is certain to be substantial,” Cllr Mudd said.

She blamed UK-wide austerity measures for councils’ “extreme” budget pressures, and said Newport City Council’s “positive” relationship with the Welsh Government would “play a key part in determining how key services are delivered in the future”.

“Our main aim, as always, is to ensure the most fundamental of services are maintained for residents and that we can support those that need an extra helping hand,” Cllr Mudd added.

The Welsh Government’s finance minister, Rebecca Evans, said on Wednesday (December 20) the provisional settlements were against the backdrop of an “incredibly tough financial situation”, in which ministers had “re-shaped our spending plans so we can protect the core, frontline public services”.

Ms Evans added: “I appreciate the pressures local government is facing, and recognise that demand for services – along with the recent very high rates of inflation – mean local government will still need to make difficult decisions on services, efficiencies, and council tax in setting their budgets.

“We will continue to work closely together to face these shared challenges and strive to make the best use of the resources we have in order to make the most difference to the communities we serve.”