Local authority to hike council tax by 16%

Dale Spridgeon – Local Democracy Reporter

People living in one Welsh local authority could face a council tax rise of up to 16% as the local council tries to balance its books.

The Gwynedd Council’s chief executive Dafydd Gibbard has warned of “difficult decisions” ahead over the potential council tax rises and service cuts.

It comes as the council forecasts an overspend of £7.6million by its council departments by the end of the financial year, and an estimated £14-18m budget gap for the next financial year.

Overspends

“There are no easy answers, unless you stop providing services, the only other option is to raise council tax, you could be looking at as much as 16 percent,” he said during a meeting last week.

A spending freeze was already being discussed in his departments.

During last week’s meeting, it was reported that six Cyngor Gwynedd departments had overspends, including four described as “significant”.

The worst affected were Adults, Health and Well-Being, Children and Families, Highways, Engineering, YGC and the Environment.

Councillor Paul Rawlinson described the financial picture as one of “great concern”.

He said: “The problem is not one of over-spending, but one of underfunding. We’re just not getting enough Government resources.”

In the Adults, Health and Well-being department the latest projections suggested an overspend of £2.7 million.

Sickness

This was due to a “combination of factors” including increasing pressure on domiciliary care provision, higher staffing costs, sickness levels and high rates of non-contact hours with the internal provision.

The Children and Families department’s position had “worsened substantially” since 2023/24.

A reported overspend of £2.6 million was now up to £3.2 million as a result of ” an increase in out-of-county placement costs.”

An increase was also seen in the “complexities of packages and increased use of unregistered placements”.

An “exceptional” overspending by the Children and Families department had led the Chief Executive to commission work to “better understand” the “looked after children’s” care situation.

The Highways, Engineering and YGC department was also expected to have an overspend of £649,000.

In municipal, there were additional pressure on the budgets of street cleaning and cleaning public toilets.

Environment saw an overspend of £1.083m forecast, with the annual trend of overspend in the waste collection and recycling fields continuing – responsible for £334,000 of the overspend.

Employment costs and sickness and overtime levels were “problematic”.

Pressures

Additional fleet costs, in terms of vehicle hire, reduced parking income, and number of “slipping savings schemes” were also “part of the bigger picture”.

Education saw a £1.5m overspend in the 2023/24 financial year on school transport.

The department got an extra budget allocation of around £900,000 on a permanent basis, and £900,000 for a year only to “address pressures” in school bus and taxi provision following the re-tendering of contracts, however there was now “a balanced financial position”.

Housing and Property showed a “trend of significant pressure on the emergency accommodation services”.

Projections showed spending at £6.4 million this year, compared with £6.8 million last year.

The overspend of £227,000 came after considering the additional budget of £3m allocated from the council tax premium as well as a one-off additional budget of £1.2 million.

At the meeting, cabinet members also approved the transfer of almost £1.9m of underspend on corporate budgets to the council’s Financial Strategy Reserve.

A report submitted to the cabinet on May 14, 2024, outlined new savings and cuts needed.

“Appropriate measures” would include a freeze on spending and use of the council’s reserves to fund the financial deficit projected for 2024/25.

A follow-up report would be presented to the cabinet on January 25, 2025, following an end of November review.

Funding

The chief executive said: “‘Overspend’ is a technical term, what it really is, is a lack of funding.

“On the one hand we have increasing demand for our services, on the other side a lack of increase in our budget creating a bigger and bigger gap.”

Demands in the areas of adult and children’s care, homelessness and school transport increase each year, he said.

He added: “The number of people coming through the door is higher – we are paying for that.

“The children’s department is a simple example, the overspend is likely to be £3m, but £2m will come straight from the needs of a small number of children with very profound needs.

“We are not going to say ‘sorry we can’t look after those children we haven’t got the money’ but it leads to an overspend immediately.

“There are no easy answers, we anticipate we won’t receive any additional funding at all, not a single penny next year.

“We face a deficit range of between £14m and £18m.

“Unless you stop providing services the only other option is to increase tax, you are looking at a 16% increase of council tax next year.

“None of these are easy options. There are difficult times ahead.”