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Gwynedd North Wales Politics

Council tax rise could be inevitable due to ‘significant financial shortfall’ in funding

COUNCIL tax increases could be inevitable and vital services cut amid the ‘bursting clouds’ of an impending financial storm, a Welsh council has warned.

Cyngor Gwynedd has presented a bleak Christmas message to its residents, over its potential financial situation from April, 2024 and onwards.

It blames a “significant financial shortfall” in Welsh Government funding, which follows an announcement, yesterday, (Wednesday, December 20)  that the council will only receive a settlement increase of £4million.

But the county says it faces expected additional inflation and demand expenditure pressures of around £23million, and fears the situation could- get worse.

Options it can consider to reduce a financial deficit in 2024/25 include a decision to increase Council Tax.

The council says every 0.5%  Council Tax rise  leads to a £450,000 deficit reduction.

It could also consider cutting services, creating additional savings and by increasing charges on residents for specific services.

Potential measures will be considered, leading up to the full council meeting in March, 2024, when the budget for the 2024/25 financial year is set.

Among rising demands, the council claims:

More people are presenting themselves as homeless in Gwynedd, up by 35% since 2018/19.

Referrals to Gwynedd’s mental health services have increased to 5,565 in 2022/23, up 2,000 since 2019/20 – and continues rising.

Gwynedd’s Children and Family Support Department referrals have increased to 7,175 in 2022/23, up by 2,500 since 2019/20 with numbers increasing.

And referrals to Gwynedd’s Adult, Health and Wellbeing Department  increased to 4,558 in 2022/23, up by over 400, between 2020/21 – 2022/23.

The trend could continue as Gwynedd residents aged over 85 are expected to increase by around 23% over the next ten years.

Other pressures include increases in requests to support Additional Learning Needs children and school pupil transport.

The council says its settlement from the Welsh Government is the joint-lowest of the 22 Welsh councils, and says  drop in Gwynedd’s population, more than other authorities  is “largely responsible.”

Councillor Dyfrig Siencyn, Cyngor Gwynedd council leader said  the Government’s financial announcement was “a heavy blow” for local government in Wales, particularly Gwynedd.

“Whist we are grateful to the Welsh Finance Minister for putting in place a 2% funding floor, Gwynedd will receive the lowest contribution of all the Welsh councils towards funding of local services.

“We’ve been warning for some time about the looming financial storm, this announcement confirms the clouds above are about to burst.

“As a council, Gwynedd has suffered financial shortfalls for more than 12 years, we have already had to respond by delivering nearly £70million of savings since 2010, introducing new and more efficient ways of working.

“Throughout this prolonged period of financial pain, we have managed to protect frontline services for the most vulnerable.
“We will continue to explore every possible avenue to avoid painful service cuts.

“With this latest announcement, we have realistically reached the very end of what is possible without cutting services and raising Council Tax.”

Councillor Ioan Thomas, Cyngor Gwynedd’s Cabinet Member for Finance, said the council had “a good reputation for sound financial management and working within our means.”

“This approach has got us through austerity, Brexit, Covid and financial tremors caused by decisions taken during Liz Truss’ premiership.

“Surviving one crisis after another has eroded our ability to provide services at the exact time that inflationary costs and demand for services is shooting up. This latest announcement feels very much like the final straw.

“As we look forward to Christmas, it is extremely unfortunate to have to prepare to ask the people of Gwynedd to contribute more through their Council Tax in the spring ,whilst at the same time having to cut the services they rely on.

“The reality facing Gwynedd, and other councils in the New Year,  due to  central government decisions  are beyond our control.”