The leader of a council has penned a letter to all local authority members, emphasising their primary goal should be to prevent financial insolvency.
Denbighshire council is contemplating potential solutions such as raising council tax and reducing services to address budgetary concerns.
In a confidential communication to councillors, leader Jason McLellan cautioned that the local authority is confronting a projected deficit of £20-26 million for the 2024/25 fiscal year. He further mentioned that the option of implementing charges for certain services may be necessary due to elevated inflation rates and heightened service demand.
The council is concerned that job cuts may become a necessity, and the leader urged councillors to maintain the confidentiality of this information to avoid creating uncertainty among council staff.
Council Leader Jason McLellan cautioned: “The main priority for cabinet at this point is to stop the council from going bankrupt, which has happened recently to other local authorities across the UK as they have been unable to balance their books. Latest forecasts predict pressures of £26m in 24/25, and there is no expectation that the 3% indicative settlement from Welsh Government will change. Before any increases in council tax, that would result in a gap of £20m.
“Due to the unprecedented scale of the problems we face, we are unable to follow a similar process to that which has been followed in previous years, when the requirement for savings was much less, even in the period of austerity.”
Opposition Leader Cllr Huw Hilditch-Roberts stated: “The email that all councillors received last week is the first thing we’ve heard about the Labour and Plaid cabinet that their priority is to stop the council going bankrupt,”
“As an independent group, we are calling for an urgent extraordinary meeting of the council so that all councillors can be put into the picture of the situation that is facing Denbighshire County Council and the cabinet’s priority of protecting the council from going bankrupt. When the council tax was set earlier this year six months ago, we asked for reassurance going forward, and now this emerges. We need to have an open and transparent process for all councillors to be told what exactly is going on.”
“When you see an email that mentions bankruptcy, you worry for staff; it is going to be a worry for residents; it is going to be a worry for councillors; it is going to be a worry for everyone. The word bankruptcy is a serious situation, and that is why we need a meeting to discuss the seriousness of the situation.”
