Finance announcement a heavy blow for Cyngor Gwynedd

Cyngor Gwynedd is warning that essential local services are under threat and that Council Tax increases are inevitable from April 2024 onwards due to a significant financial shortfall in the funding it receives from Welsh Government.

This follows the Welsh Government's announcement today (20/12/2023) confirming that Cyngor Gwynedd will receive a settlement increase of £4million in comparison with expected additional inflation and demand expenditure pressures of around £23million. There are also warnings that the situation will deteriorate further over the following two years.

For the financial year from April 2024 onwards, Cyngor Gwynedd’s settlement from the Welsh Government will be the joint-lowest of the 22 Welsh councils. The fact that Gwynedd’s population has dropped by more than any other authority is largely responsible for this.

Councillor Dyfrig Siencyn, Leader of Cyngor Gwynedd said:

"This announcement is a heavy blow for local government in Wales, and for Gwynedd in particular. Whilst 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 the funding of our local services. We have been warning for some time about the looming financial storm, and this announcement confirms that the clouds above us are about to burst.

"As a council, Gwynedd has suffered financial shortfalls for more than 12 years and we have already had to respond by delivering nearly £70million of savings since 2010 by 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 people in Gwynedd.

"It goes without saying that we will continue to explore every possible avenue to avoid painful service cuts. But, with this latest announcement, we have realistically reached the very end of what is possible without cutting services and raising Council Tax."

Despite years of poor financial settlements, Cyngor Gwynedd has successfully protected those services which the county's most vulnerable people and children depend upon. This has been done through a combination of careful financial planning and a continuous effort to deliver efficiency savings.

At the same time, alongside the effect of inflation, demand for essential and statutory services in Gwynedd has increased significantly. For example:

• the number of people presenting themselves as homeless in Gwynedd has risen by 35% since 2018/19;
• referrals to Gwynedd’s mental health services have increased to 5,565 in 2022/23 – an increase of over 2,000 since 2019/20 and the numbers are continuing to increase;
• referrals to Gwynedd’s Children and Family Support Department have increased to 7,175 in 2022/23 – an increase of over 2,500 since 2019/20 and the numbers are continuing to increase;
• referrals to Gwynedd’s Adult, Health and Wellbeing Department have increased to 4,558 in 2022/23 – an increase of over 400 between 2020/21 and 2022/23. It is expected that this trend will continue as it is forecast that the number of Gwynedd residents over 85 years of age will increase by around 23% over the next ten years;
• a significant increase in requests for support for children with Additional Learning Needs;
• a significant increase in the cost of providing school transport for pupils.

Councillor Ioan Thomas, Cyngor Gwynedd’s Cabinet Member for Finance, added:

"Cyngor Gwynedd has a good reputation for sound financial management and working within our means. This approach has got us through austerity, Brexit, Covid and the financial tremors caused by the 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 day-in, day-out. But, like councils throughout Wales and the UK more widely, this is the reality facing Gwynedd in the New Year due to decisions taken by central government that are beyond our control."

Notes:

Cyngor Gwynedd will have three options for reducing the financial deficit it will face in 2024/25:

• increasing Council Tax – every 0.5% increase in Council Tax will lead to a £450,000 reduction in the deficit;
• delivering additional savings beyond the £39.1 million delivered since 2015 and cutting services;
• increasing the charges the Council levies on residents for specific services.

All these options will be carefully considered over the months leading up to the Full Council Meeting in March 2024 when Cyngor Gwynedd will set its budget for the 2024/25 financial year.