CONWY’S esperate financial situation has been likened to ‘a hurricane’ following the council’s decision to raise council tax by 9.9%.
At Thursday’s meeting (March 2) at Bodlondeb, cabinet member for finance, Cllr Mike Priestley, made the analogy as he explained the authority had been forced to raid its reserves for extra cash.
Despite financial warnings from officers against doing this, 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, describing the authority’s dire financial situation as a ‘perfect storm’.
“We have been advised strongly not to use reserves regarding balancing the budget. Reserves are for a rainy day,” said Cllr Priestley. “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, for a band-D home in Conwy, residents will pay £1,580.53 in council tax a year – or £142.38 extra a year.
Conwy blamed rising energy prices, care fees, children’s care, 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 people paying their council tax on a credit card and slammed the proposals of upping council tax.
“It is a regressive tax. It hits the poorest hardest,” he said. “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. To put 9.9% on them…”
He added: “I can’t support it.”
Cllr Harry Saville agreed saying: “I think the thing I find the most disappointing about the proposed 9.9% 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. “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,” he said.
Cllr Austin Roberts added: “We are saying it with a heavy heart, but we are saying it as it is.”
In total 73% of Conwy’s budget comes from the Welsh Government and 27% from council tax. Conwy’s total budget for 2023/24 is £198,413,000.
But Conwy County Council received only a 7.3% increase in its last Local Government Settlement from the Welsh Government, less than the national average of 7.9%.
Speaking after the meeting, Aberconwy MS Janet Finch-Saunders acknowledged the lack of Welsh Government funding but accused the cabinet of a lack of innovation.
“Growth in regular pay among employees in Great Britain was at 6.4% in September to November 2022, so there is no doubt that the 9.9% rise cannot be justified, especially when Torfaen has managed 1.9%,” 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 so 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 10 months ago has betrayed our residents and the very people who put them into power.”