Posted: Sun 5th Mar 2023

Updated: Wed 8th Mar

Conwy Council’s financial crisis likened to ‘a hurricane’ following 9.9% tax rise

North Wales news and information
This article is old - Published: Sunday, Mar 5th, 2023

Conwy Council’s desperate financial situation has been likened to “a hurricane” following its decision to increase council tax by 9.9 per cent.

At a meeting on Thursday at the local authority’s Bodlondeb HQ, cabinet member for finance Mike Priestley used the analogy as he explained it had been forced to raid its reserves for extra cash.

Despite warnings from officers against doing so, the council took £720,000 from its savings to fund a late additional local government pay offer for staff, adding to the authority’s financial problems. Conwy has in the region of £25m in its reserves.

Cllr Priestley referred to a comment made by cabinet member for housing Cllr Emily Owen, who described the authority’s dire financial situation as a “perfect storm”.

He said: “We have been advised strongly not to use reserves regarding balancing the budget. Reserves are for a rainy day.

“You can only use reserves once. Once you have used a reserve, it’s gone. We should be adding and building up our reserves.

“Our budget is likened to a perfect storm, but I’m afraid I’m upgrading that storm to a hurricane. That’s how volatile and fast-moving this budget has been.”

The council tax increase means residents living in a typical band-D home in Conwy will pay £1,580 during the next financial year – a rise of £142 compared to the average bill for the previous year.

The council blamed rising energy prices, care fees, increased children’s care costs, funding for housing and homelessness, and national pay awards, as well as North Wales Fire service’s precept, for their £21.7m resource shortfall.

Speaking at the same meeting, Cllr David Carr referred to the possibility of people paying their council tax on a credit card and slammed the proposals to increase it.

He said: “It is a regressive tax. It hits the poorest hardest. This is really going to hit people on minimum wage in my ward and other wards who don’t get any help with their council tax. They are really struggling.”

Cllr Harry Saville said: “I think the thing I find the most disappointing about the proposed 9.9 per cent increase is at the moment we charge slightly below the Wales average for council tax. This budget will see us in the top third and most expensive councils.”

But Cllr Nigel Smith said it was a “miracle” that the books had been balanced.

He said: “We never foresaw what would hit us with Ukraine and the Russian problems, and that evolved into the biggest financial crisis that this county has seen.”

Cllr Austin Roberts added: “We are saying it with a heavy heart, but we are saying it as it is.”

In total, 73 per cent of Conwy’s budget comes from Welsh Government and 27 per cent from council tax. Conwy’s total budget for 2023/24 is £198.4m.

The authority received a 7.3 per cent increase in its latest local government settlement from the devolved government, less than the national average of 7.9 per cent.

Speaking after the meeting, Aberconwy MS Janet Finch-Saunders acknowledged funding situation but accused the cabinet of a lack of innovation.

She said: “Residents are being targeted for more money from all directions, which is making many poorer and causing serious financial hardship.

“Alongside changing the funding formula used by the Welsh Government to calculate how much money is allocated to local authorities, what is clear to me is that the Conwy cabinet lacks innovation, which has led to an extortionate increase.

“Ideas include looking at asset management, reducing the number of empty properties, cutting down on wasteful spend, and reviewing the management structure.

“I am appalled that this new cabinet elected only ten months ago has betrayed our residents and the very people who put them into power.”

By Richard Evans – Local Democracy Reporter

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