Councillor says 5-year financial plan should be in place after recurring multi-million pound shortfall

Richard Evans, Local Democracy Reporter

Councillor says county council should have a financial strategy in place to deal with recurring multi-million-pound budget shortfalls.

Conservative councillor Gareth Jones made the comment on Monday as Conwy County Council’s finance and resources overview and scrutiny committee discussed plans for balancing its 2027/28 budget at the authority’s Coed Pella HQ in Colwyn Bay.

The council is facing a potential resource shortfall of £25.741m for 2027/28, with councillors being asked to consider options including budget reductions, the use of reserves, and council tax increases.

Cllr Jones said he was disappointed the authority appeared to be facing the same situation every year, despite being in the fourth year of the current administration.

“It’s mainly an observation in that we are where we are, as far as the process is concerned,” he said.

“My disappointment is that we seem to be in the same place every year, where we are looking at massive shortfalls and looking at raising council taxes or cutting services significantly, and we are into the fourth year of the administration.

“With hindsight, it would have been nice to have actually had that five-year strategy, and this should be that final year when everything falls into place, where we’ve actually transformed and changed things significantly because we knew at the beginning we were likely to be facing shortfalls every year, yet every year we just deal with things on a twelve-monthly basis.”

He said a longer-term strategy could make annual budget planning easier and give residents a clearer idea of what to expect.

Cllr Jones added: “And maybe it’s a lesson for the next administration after the next lot of elections to actually lay out that five-year plan as to where they think they are going to be in five years and how they are actually going to get there. I would guess that would make the planning easier every year, in that there shouldn’t be any massive surprises on business cases and things like that, because it is a continuation.”

He also said such a plan would help residents understand what changes they could face.

“But also it lets the residents know as to what they can expect as far as increases in services are concerned. Personally, it would have been nice to have had those policies in place from the beginning, so that we knew where we were going to,” he said.

Added pressure 

Cllr Jones added there was added pressure on councillors not to increase council tax due to the upcoming elections. But Conwy’s head of finance Amanda Hughes said the difficulty with longer-term planning was not necessarily projecting the size of a future funding gap but predicting how the council would close it.

She said: “I absolutely understand and get the need for us to consider longer-term planning. And I guess in the medium-term financial plan, the outlook there is a three-year window, and so I’m happy obviously to potentially seek to project those figures further on, and to make that a longer timescale. That is something I can certainly consider and do for the future.”

But Ms Hughes said the council was ultimately dependent on annual funding decisions by the Welsh Government in terms of the amounts paid annually in the local government settlement.

She added: “I think the difficulty more widely, though, is that in reality it’s one thing to project a gap. The issue is not the projection of the gap. The issue is the projection of the solutions, I guess.

“And the difficulty, I think, with that is – and whilst I’m not suggesting for one moment we shouldn’t try – you’ll be aware of the reality of what we face; we are working with an annual funding picture from Welsh Government, and there are occasional talks by Welsh Government of them moving to a three-year planning window, but it doesn’t ever actually happen. They continue to actually happen on a one-year cycle, at the moment at least.”

Ms Hughes then referred to significant changes in funding during the course of recent annual budget cycles, citing last year’s draft settlement announcement initially indicating a 2% uplift for the council, which later increased to 4.1%.

Resource shortfall

Finance and Strategic Planning portfolio holder Cllr Chris Cater said the authority was facing another “substantial resource shortfall”, with significant demand-led pressures continuing to affect services.

Cllr Cater said councillors needed to recognise the financial challenges facing the authority while waiting for the Welsh Government’s 2027/28 budget and local government settlement.

He said: “Key factors have yet to be clarified, but all of us elected members have to know the extremely challenging financial outlook as Conwy faces another substantial resource shortfall, unfortunately. Once again Conwy has to deal with significant demand-led pressures.

“We know these are social care, education, homelessness, home-to-school transport, etc. These are all still in front of us to grapple with, and members will know there is suddenly high inflation and capital financing costs, which have not reduced as we had hoped and pay awards which are not set by us.”

Financial options

Cllr Cater explained the council’s financial options. He said: “So while we await the 2027-28 Welsh Government budget and local government settlement, the tools we have in the overall budgetary equation are keeping business cases to a minimum, identifying budget reductions, the use of reserves, and the level of council tax.

“I fully realise our duty as elected members is to defend our residents against hikes in council tax, but the demographic character of Conwy is always challenging, as we know, and at the end of the day our remit is the financial sustainability of the council.”

The committee’s discussion comes ahead of Conwy County Council’s Cabinet meeting tomorrow (Tuesday, 8 September), when members are due to consider the Business Planning Framework.

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