Council Tax payers may have to pick up budget shortfall

By Elgan Hearn, Local Democracy Reporter

Powys County Council faces “some difficult decisions” ahead of setting next year’s budget, a finance chief has said.

The council found out that it received one of the worst local authority funding settlements through the whole of Wales this week, with just a 3.2% rise in funding for 2025/2026 from the Labour Welsh Government, which equates to £7.7million.

This is less than the average funding rise of 4.3% and puts Powys 21 out of 22 local authorities in Wales.

Only neighbouring Monmouthshire council is set to receive a worse settlement, with 2.8% more for next year.

Cabinet member for finance, Labour’s Cllr David Thomas, said: “Although we have seen an increase in our local government provisional settlement from the Welsh Government, the reality is that there is still a funding shortfall that we will need to address to ensure we deliver a balanced budget.

“It is clear that the money available to spend on public services really is becoming ever-more restricted and this will dominate the way we deliver services for many years to come.

“The council is facing some difficult decisions as we look to deliver a balanced budget which could see changes to the way we deliver council services as well as an increase in council tax.”

The council say that the increase will not be sufficient in meeting the “severe” financial pressure it is currently facing due to increased demand for services, price inflation, provider costs and national pay awards.

The funding increase means that the Welsh Government grant to Powys will rise next to £250.184 million, up from £242.414 million.

This year, the council has a total budget of just over £341 million which means that it receives around £100 million from Council Tax, grants, and income from fees.

It is already expected that cuts, savings and efficiencies of over £10 million are needed in next year’s budget and this figure rises to anywhere between £48 million to £64 million by the end of the decade.

The cabinet are expected to reveal their budget proposals next month and following a period of intense scrutiny, the draft budget will go in front of all councillors for a vote at a meeting towards the end of February.