DENBIGHSHIRE residents could face a huge council tax hike and service cuts following ‘gloomy’ financial projections being discussed by the cabinet.
Councillors heard how Denbighshire could face a £28m budget shortfall in the next financial year if savings and revenue-generating measures aren’t considered.
This year the council received an 8.2% rise in the local government settlement for 2023/24, compared to the Welsh average of 7.9%, resulting in an additional £14.2m to spend.
But the council still faced pressures of over £25m, leaving a funding gap of around £10.8m.
Consequently, the authority bridged this gap with a 3.8% council tax rise, plus savings of around £8m, meaning the council didn’t raid reserves.
But if next year’s council tax was to rise by only 3.8%, Denbighshire could face a £28m shortfall.
But £28m is the median risk scenario only; the financial forecast also predicted a lower-end figure of £18m and a higher-end risk of £36.8m for 2024/25.
A 10% rise in council tax would only generate an extra £7.7m in 2024/25.
The report also outlined the projections for the next three years, and worst-case financial predictions for 2025/26 and 2026/27 forecasted a budget shortfall of just over £19m for both financial years.
Officers and councillors will now work together to look at where savings can be made and extra revenue generated.
The situation was described by the council’s lead member for finance Cllr Gwyneth Ellis as ‘gloomy’, and officers discussed cutting services’ budgets as a potential solution.
Cllr Ellis warned councillors not to expect a ‘windfall’ in the next local government settlement.
Cllr Ellen Heaton added: “It is deeply concerning and daunting for us all.”
Cllr Barry Mellor said, “The residents are at the bottom of this. There has been a lot of fluctuations in prices and the cost of everything.
We are at a bad place at the moment.”
Deputy leader Gill German said, “I think it is safe to say none of us came into these roles to ask services for cuts or to look at increasing the council tax burden on our residents, yet here we are.”
Although Welsh Government pay the local government settlements to councils, Cllr German blamed the UK Government for the situation as they ‘held the purse strings’.
Cllr Rhys Thomas agreed, adding, “It is a disgrace that a Tory government in London treats local government with such disdain.”
Council leader Cllr Jason McLellan said a communication plan was needed to explain the council’s situation to residents.
“We are never going to please everyone by telling them bad news, but we have to be open and honest with the public about the pressures we are under,” he said.
