Council tax rises looking inevitable for local authority

Richard Evans – Local Democracy Reporter

Fresh council tax rises are looking inevitable for a local authority facing a budget shortfall of up to £30m next year.

But even a 10% rise would only generate an additional £6.8m for Conwy Council  – and now the Welsh Government and its “puppets” have been blasted over a formula which dictates council budgets for the next financial year.

At a Conwy Council finance meeting, councillors and officers blamed the huge budget shortfall on the formula used by the Welsh Government to calculate how much Conwy receives in the annual Local Government Settlement.

Whilst Cardiff is yet to confirm its final settlement, it has indicated a 3.06% increase across Wales – or an additional sum of around £6m for Conwy.

Despite a Welsh average increase of around 7.9% last year, Conwy received only 7.3%, significantly less of a percentage rise than neighbours Denbighshire and Gwynedd.

This led to a 9.9% rise in council tax and 10% budget cuts across services to cover a £19m shortfall – with even schools being asked to make 5% cuts.

Councillors met at Bodlondeb for a special finance and resources overview and scrutiny committee meeting to discuss a timetable for setting the next budget.

It was warned that Conwy is facing a budget shortfall of between £20m and £30m, subject to “variables”, and councillors are now tasked with bridging the gap.

But after a poor Local Government Settlement from Welsh Government in 2023/24, councillors and lead officers are again questioning the formula used to calculate the final sum, citing Conwy’s elderly population and huge social services bill as just one area not fully considered.

Funding

Conwy’s director of finance Amanda Hughes warned: “Say members ultimately supported a 5% council tax rise, then with a £20m shortfall, a £3m rise in council tax, it would still leave £17m short in terms of identifying other cutbacks in the budget to fund that or to effectively balance our expenditure with our funding sources.

“The reality of it is if we have that kind of gap remaining that very much is a reflection of insufficient funding coming through from government as opposed to it being an issue with what we are spending.

“The pressures that we are being faced with are inflationary, both pay and general inflation and service-demand led pressures, and therefore, in effect, the funding coming from government is insufficient to meet those pressures we are facing and out of our control.”

Cllr Harry Saville then asked if meetings taking place between the Welsh Local Government Association (WLGA) and Welsh Government would likely lead to a review of the funding formula used to calculate the annual Local Government Settlement.

Criticism

Leader Cllr Charlie McCoubrey said it was “a work in progress” but added meetings between the two organisations were taking place in September, adding councillors needed to keep banging the drum.

But it was Cllr Nigel Smith who perhaps went the furthest in his criticism calling the WLGA “Welsh Government puppets”.

He said: “Interesting talk about the WLGA; they seem to be puppets of Welsh Government, and I won’t be holding my breath for any change because where we lose out others (counties) gain, and they will be predominantly in South Wales.”

He added: “We never fare well with Welsh Government settlements historically.”

Councillors backed the reports as well as a proposal by Cllr Anne McCaffrey for a public consultation, but the matter must first be considered by cabinet.

Cllr McCaffrey called the shortfall “a catastrophe” for Conwy and didn’t hold out much hope of the formula being changed.

She said: “We all know in our heart of hearts that there is going to be no significant changes in the funding formula in the next five if not 10 years.”