Another council tax rise expected in Conwy as councillors slam funding settlement

Conwy Council is facing a budget shortfall of up to £30m next year with fresh council tax rises now looking inevitable.

But even a 10% rise would only generate an additional £6.8m, with councillors and officers blaming the financial issues on the formula used by the Welsh Government to calculate how much local authorities receive in funding.

Whilst ministers are yet to confirm the final settlement, they have indicated an increase of just over 3% is likely across Wales – an additional sum of around £6m for Conwy.

Despite an overall average funding increase of around 7.9% in Wales last year, Conwy received only 7.3%, significantly less of a percentage rise than neighbours Denbighshire and Gwynedd.

This led to a 9.9% rise in council tax and 10% budget cuts across services to cover a £19m shortfall – with even schools being asked to make 5% cuts.

Councillors met at Bodlondeb for a special finance and resources overview and scrutiny committee meeting to discuss a timetable for setting the next budget.

It was warned that Conwy is facing a budget shortfall of between £20m and £30m, subject to “variables”, and councillors are now tasked with bridging the gap.

Councillors and lead officers have again questioned the formula used to calculate the final settlement, citing Conwy’s elderly population and huge social services bill as just one area not fully considered.

Conwy’s director of finance Amanda Hughes said: “The reality of it is if we have that kind of gap remaining that very much is a reflection of insufficient funding coming through from government as opposed to it being an issue with what we are spending.

“The pressures that we are being faced with are inflationary, both pay and general inflation and service-demand led pressures, and therefore, in effect, the funding coming from government is insufficient to meet those pressures we are facing and out of our control.”

Cllr Harry Saville asked if meetings taking place between the Welsh Local Government Association (WLGA) and Welsh Government could lead to a review of the funding formula.

Leader Cllr Charlie McCoubrey said it was “a work in progress” but added meetings between the two organisations were taking place in September.

However, Cllr Nigel Smith issued a stinging criticism, calling the WLGA “Welsh Government puppets”.

He said: “Interesting talk about the WLGA; they seem to be puppets of Welsh Government, and I won’t be holding my breath for any change because where we lose out others (counties) gain, and they will be predominantly in South Wales.”

He added: “We never fare well with Welsh Government settlements historically.”

Councillors backed the report as well as a proposal by Cllr Anne McCaffrey for a public consultation, but the matter must first be considered by cabinet members.

Cllr McCaffrey called the shortfall “a catastrophe” for Conwy and said she didn’t hold out much hope of the formula being changed.

She said: “We all know in our heart of hearts that there is going to be no significant changes in the funding formula in the next five if not 10 years.”

Full council will meet on 29 February, 2024 to finalise and agree both the budget and council tax rates for 2024/25.

By Richard Evans – Local Democracy Reporter