Council warns tax rise could be as high as 12%

Richard Evans, local democracy reporter

A local authority could increase council tax by a staggering 12% next year to try and balance the books.

In the last financial year, despite receiving the highest percentage increase in north Wales in its local government settlement from Welsh Government, Denbighshire increased council tax by 9.34%.

But according to a report discussed on Thursday at a performance scrutiny committee, the council is expecting council tax to rise by around 9% in 2025/25 but has estimated a figure between 6% and 12%.

The report states that “pressures” range from a £15m shortfall in funding to £27m – with a mid-range estimate of £21m.

But even a 9% council tax rise will see the council £15m in the red.

‘Assumptions’

The report states: “Assumptions made about council tax increases in the MTFP (medium-term financial plan) range from 6% – 12% for 2025/26 and a 5.5% long term average thereafter for both years though it is important to note that no decisions have been made yet.

“A midrange assumption of a council tax increase of 9% for 2025/26 yields an additional £6.8m but only addresses a third of the funding gap – the remaining gap is substantial at £15m.”

The report concluded: “The council should be planning to take action to reduce the projected net expenditure by c£21m in 2025/26 to set a balanced budget.

“That reduces to c£15m were a council tax increase in the region of 9% to be supported.”

The scrutiny committee will now provide feedback to cabinet.

Reduce costs

Summing up Denbighshire’s position, cabinet member for finance Cllr Gwyneth Ellis said the council had to change how it does things to bring costs down.

“If you look at the medium-term financial plan, you’ll see for the next three years things look bad,” she said.

“So the process here we are going through at the moment of making savings and at the same time cutting services can’t really continue.

“If we carry on like that, it will get to a point where that either we are not able to deliver statutory services or we are getting to the point members are going to say this is not acceptable, and they are not going to be able to vote on a budget.

“What we’ve realised is something has to change, and that’s what the transformation agenda is all about, and I’d say that is the main mitigating step to carry on in years to come to set a balanced budget.

“We have to do things differently, and we don’t know what that is yet. Ideas are being developed.”