North Wales councils warn of council tax increases and cuts

Richard Evans Local Democracy Reporter

Cash-strapped North Wales councils slammed the Welsh Government for its announcement on Wednesday that four of the six northern authorities will likely see a rise in annual funds well below the national average.

The Local Government Provisional Settlement is the indicative annual amount councils are likely to receive from Welsh Government and was announced on Wednesday.

But four of the six North Wales councils have been told they will likely receive under the 4.3% national average rise, with Gwynedd (3.2%) once again set for one of the lowest settlements in Wales.

Flintshire is set to see a 3.3% increase, Anglesey 3.6%, Conwy 3.7%, Wrexham 4.4%, and Denbighshire 4.7%.

In contrast several South Wales councils such as Newport (5.6%), Cardiff (5.3%), Merthyr Tydfil (5.1%), and Blaenau Gwent (4.8%) are all looking like they will receive significantly more – although Monmouthshire and Powys fared worst with increases of 2.8% and 3.2% respectively.

Formula

Welsh Government uses a formula to distribute funding to the 22 authorities based on an assessment of the needs of the area, which includes population and demography as well as the physical, economic, and social characteristics.

Councils such as Conwy are claiming the formula is outdated but that there is resistance to change from councils that historically benefit from the current sums.

After being told it will again receive one of the worst settlements in Wales, Gwynedd estimates that an additional £22.4 million will be needed in 2025-26 to maintain services at current levels.

Leader Cllr Nia Jeffreys said: “Cyngor Gwynedd has no control over national and demographic changes which are increasing the costs of our services. Yet, as a council, we must provide for the most vulnerable and balance our budget even when government funding is lacking.

“Over the past year, we have been hoping for the best but preparing for the worst.

“Unfortunately, we are now seeing our fears come true, and as councillors we will be forced to make extremely difficult decisions early in the new year.”

“Disappointing”

Wrexham’s leader Mark Pritchard said: “Whilst we have welcomed engagement with Welsh Government, this is a disappointing settlement which does not address the £560m gap in council funding for 2025-26.

“Local authorities have a statutory duty to present balanced budgets.

“To achieve this, they could now be forced into a ‘Sophie’s choice’ situation to meet the shortfall – either to look again at council tax levels to raise revenue, or to consider cuts to everyday services to lower expenditure.

“This would be in addition to the impossible decisions that councils are already taking due to the scale of the funding challenges and a chronic lack of investment in the public sector.”

He added: “It is clear that the position is unsustainable.

“I urge the Welsh Government to reflect on the settlement and explore all avenues available to them to invest in our essential local services.

“It is only with long-term, sustainable funding that councils can support residents, communities, and businesses and help to deliver national ambitions.”

Conwy’s leader Cllr Charlie McCoubrey said: “The settlement from Welsh Government accounts for about 70% of the money we’ll have available to spend on services next year.

“As it currently stands, Conwy will receive a 3.7% increase in funding from Welsh Government.

“This is below the Wales average of 4.3%.

“And whilst any increase is very welcome, it won’t be sufficient to meet the funding shortfall that the council faces as a result of increased demand for services, national pay awards, price inflation, energy, and fuel increases.”

He added: “We’re currently estimating a resource shortfall in the region of £19 million before any reimbursement of our additional Employers National Insurance contributions, which is not included in the provisional settlement announced.”

Hope

Anglesey Council leader Cllr Gary Pritchard said: “Bearing in mind that we’ve had 14 years of austerity, the draft settlement seems to be a step in the right direction.

“However, with more money coming to Welsh Government from Westminster, we certainly would have hoped for more funding to safeguard the vital services provided by Anglesey Council, and all other local authorities across Wales.

“The increase announced for next year by Welsh Government clearly falls short of meeting the 7% pressure on council budgets across Wales.

“The devil, of course, will be in the detail.

“We will have to look at the draft settlement with our senior officers to see how it affects us.

“We can’t yet rule anything out in terms of making possible service cuts, using our general reserves, or raising council tax.”

He added: “Our overriding aim remains to try to provide Anglesey residents with the best possible services using the resources we have at our disposal.”

Denbighshire leader Cllr Jason McLellan said: “This provisional increase in funding from Welsh Government is higher than we had envisaged for the upcoming financial year.

“This provisional increase is welcomed and is positive. Welsh Government recognises the importance of the services that local councils deliver to local communities.”

But he added: “The increase in funding does not resolve the significant financial challenge that we currently face and we continue to work to set a balance budget in the new year that meets the needs of our residents and the increases in demand and costs for those services.”

Welsh Government response

A Welsh Government spokesperson said: “In 2025-26, local authorities in Wales will receive £6.1 billion from the Welsh Government in core revenue funding and non-domestic rates to spend on delivering key services – an increase of 4.3% or £253 million on a like-for-like basis compared to the current year.

“The formula which distributes this funding between authorities takes into account a range of factors which drive Authorities’ relative need to spend on services as well as their ability to raise local income – the formula is agreed with local government. Each year, some authorities experience smaller increases than others, due to relative changes in for example population and pupil numbers.”

The Local Democracy Reporting Service contacted Flintshire County Council for comment.