Fears that Welsh council is ‘over-reliant’ on Welsh Government grants

Elgan Hearn, Local democracy reporter

Fears have been raised that a Welsh County Council is over-reliant on specific Welsh Government grants which help fund vital services.

At a meeting of Powys council’s Economy, Residents and Communities scrutiny committee on Tuesday, January 27, councillors probed the 2026/2027 budget proposals in several areas including Highways, Transport and Recycling (HTR)

This year the department received £36.83 million from the council’s main budget. This figure is expected to rise to £39.63 million in 2026/2027 from an overall council budget of £390.5 million.

The department has put forward a range of savings and cuts that will be put towards an overall total of £12.3 million that the council needs to make next year in order to balance the books.

Amongst these is a line on a proposed saving of £695,000 from the: “Use of a WG (Welsh Government) Regional Transport Grant.”

This grant would be used by the department instead of council revenue.

Cllr Adrian Jones (Conservative – Berriew and Castle Caereinion) asked: “Is there a risk that if these grants are not forthcoming that the HTR budget will be reduced?

“There’s quite a level of grant funding each year.”

Cllr Gary Mitchell (Plaid Cymru – Llanbrynmair) pointed out that the £695,000 had been flagged up as an “amber” risk.

Cllr Mitchell said: “That gives me the impression that there’s risk around that, it’s not a definite. If we were comfortable and we knew it was coming in it would be green.”

He asked when the department expect to know the details of that grant confirmation.

Head of Highways John Forsey said: “Until we get the grant letter there’s never any certainty that we’re going to get a grant, but this income is factored in.”

“Hopefully we’ll have more clarity before the end of February.”

He explained that next year the department expects to receive “off the top of my head” £11 million in grant funding.

Mr Forsey said: “There is a high reliance on grant income, it’s always a risk.

“We know there are changes in how grants are being administered in Welsh Government and how that will flow to local authorities on a more regional basis.

“We’re fairly confident that we’ll get the allocations we have suggested in the budget.”

He explained that “positive news” for the council is that are expecting a “fairly significant transport grant increase” from the Welsh Government.

Mr Forsey said that this would be worth £12.8 million next year.

But this funding will be for the whole of Mid Wales and will be administered by the Corporate Joint Committee (CJC) with Ceredigion council.

Towards the end of the meeting, Chairwoman, Cllr Angela Davies (Liberal Democrat – Rhayader) asked her colleagues to bring together comments to be added to the budget papers as they go forward to the full council meeting at the end of February when the budget will be voted upon.

Cllr Jones said: “I am concerned about the level of grant funding for highways and if that is lost can it be reinstated through the normal (budget) process?”

He stressed that the grant funding for highways “benefits” all of the council and if if’s lost, HTR should not “take all of the sting” and it should be shared across the council.

Cllr Pete Lewington, (Conservative – Newtown West) believed the committee should highlight which proposals are at most risk of “non-delivery” and ask whether any alternatives “already exist.”