COUNCIL tax in Pembrokeshire would need to rise by double figures – along with severe cuts – to “balance the books,” or even more than 20 per cent if second homes and other premiums are not used, senior councillors were warned.
The bleak picture presented to members of the county council’s Cabinet at their December 4 meeting was made during a report on the Outline Draft Pembrokeshire County Council Budget for 2024-25 and the Outline Draft Medium Term Financial Plan (MTFP) 2024-25 to 2027-28 by Cabinet Member for Corporate Finance Cllr Alec Cormack.
Cllr Cormack said the final picture depended on the Welsh Government Aggregate External Finance (AEF) settlement, the details of which are expected on December 20.
Last year, Pembrokeshire received a higher-than-expected AEF settlement of 7.9 per cent, against an expected 3.5 per cent, with 3.1 per cent expected for this year, against a backdrop of reduced central government funding and Welsh Government financial pressures.
“I’m sure all 60 councillors are hoping Welsh government will give us an early Christmas present this year, I think it is highly unlikely that will happen,” said Cllr Cormack, adding: “Given the uncertainty I’m not recommending a specific outline budget to Cabinet today.”
He said Pembrokeshire was facing a £27.1m funding gap with the expected 3.1 per cent AEF settlement.
“Based on the latest forecast a 22.65 per cent council tax increase is needed to balance the budget, even with budget savings,” said Cllr Cormack, adding that council tax premiums, such as second homes and empty properties, could be used to lower this, but was still likely to be in double figures.
He painted an even bleaker picture for the MTFP, 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.
“Because we have the lowest council tax in Wales, we are facing the biggest problem; for years we’ve had less money to spend than others so have been cutting back on expenditure more than others, we have less fat to trim than others.
“We have to get the level up to the Wales average, the alternative is we make bigger and bigger cuts each year.”
He added: “Our council tax is 13 per cent below the average and that is as a result of many years’ making that low level of council tax; each year we’re getting less money, making cuts others have not had to make.
He said every local authority in Wales was facing its own challenges, but Pembrokeshire’s was “exacerbated by the under-financing from council tax”.
“I really feel now we are at a tipping point; I really feel we can’t continue as we are, the cost savings we may have to decide in March will fundamentally affect the services of residents.”
The setting of the council budget would be decided by full council, Cllr Cormack saying: “This will be a very, very difficult budget round, all 60 councillors will have to search their souls about what is the right trade-off.”
Council Leader Cllr David Simpson said: “Because we’ve got such a low council tax our way out of it seems deeper. People [local authorities] on the top of the scale are on about a 10 per cent increase, that’s equivalent of our 15 per cent, that’s the sort of figures we must look at.
“Every department has got to have cuts, everybody is worried about the future, it’s not just this year it’s the next year and years after that. We are making decisions today that will affect the council for years to come.
“There will be nothing left to it without taking away from statutory services, is that what you want? We have to go with our conscience; I hope the ‘opposition’ has an open mind to how they vote, for the last 18 months they’ve done blanket votes if they oppose it.”
A public consultation on the budget has been launched by the council, with a closing date of January 3.
It includes options of increasing council tax, ranging from 7.5 per cent to 25 per cent.
“It’s very important that we hear from as many people in Pembrokeshire as possible,” said Cllr Cormack.
“Like other councils, we are once again facing significant budget pressures and understanding community and household priorities is vital in helping us to make the difficult choices necessary in setting the 2024-25 budget.”
