PEMBROKESHIRE’S projected budget funding gap for 2024-25 has increased by more than £1m, to £28.4m, following a lower-than-expected settlement from Welsh Government.
At the January 8 meeting of Pembrokeshire County Council’s Cabinet, members will receive a report on the Provisional Local Government Settlement for 2024-25.
On December 20, the Welsh Government said that core revenue funding for local government would increase by 3.1 per cent, with no local authority receiving less than a two per cent increase.
Pembrokeshire will receive a 2.5 per cent increase in the Aggregate External Finance (AEF) rate, placing it 16th in terms of the settlement rate out of the 22 Welsh local authorities.
Last year, Pembrokeshire received a higher-than-expected AEF settlement of 7.9 per cent, against an expected 3.5 per cent.
When the Outline Draft County Council Budget 2024-25 was reported to council on December 14, the projected funding gap was £27.1m, based on a 3.1 per cent increase; that has now increased to £28.4m, the report for members says.
Bleak warnings about the need for substantial raises in council tax to balance the council’s budget were made last year when the expected settlement was 3.1 per cent.
Last year, Cabinet Member for Corporate Finance Cllr Alec Cormack painted an even bleaker picture for the medium term, with £80.8m over the four-year period; the council unable to produce a balanced budget within a few years if council tax didn’t rise.
He said historic low levels of council tax, Pembrokeshire being the cheapest of the 22 Welsh local authorities, was to blame.
The report before Cabinet members at the January meeting includes an eye-watering potential increase in council tax.
“The 2024-25 provisional Standard Spending Assessment (SSA) for Pembrokeshire is £307.470m. Pembrokeshire will receive AEF of £217.999m, so would need to generate £89.471m from council tax in order to reach SSA.
“This would require an increase in Band D council tax of 18.9 per cent for 2024-25.”
Welsh Government will debate and announce the final Local Government Settlement for 2024-25 on February 27, with a six-week formal consultation period on the Provisional Local Government Settlement ending on January 31.
It is recommended Cabinet consider the Provisional Local Government Settlement and its effect on the projected funding gap for 2024-25 and determine the consultation response from the council, to be returned to Welsh Government by January 31.
A public consultation on the budget in Pembrokeshire was recently undertaken by the council, closing yesterday, January 3.
It included options of increasing council tax, ranging from 7.5 per cent to 25 per cent.