Powys slice of council tax set to rise by a whopping 8.9%

By Elgan Hearn, Local Democracy Reporting Service

Residents in the Welshpool area will be facing an 8.9% rise to the Powys County Council share of their council tax from April.

The Liberal Democrat/Labour Cabinet of Powys County Council is expected to approve a draft budget that includes an increase in Council Tax on Tuesday.

The Council Tax increase next year for a Band D dwelling would be £145.86, which means the annual bill would rise to £2,199.86, before Dyfed-Powys Police or community/town council precepts for 2025/2026 are added to it.

This proposed rise is less than the 13.5% Council Tax rise that was floated by the Council Leader, Liberal Democrat Cllr James Gibson-Watt just before Christmas.

This followed what was seen in Powys as a poor financial settlement from the Welsh Government for next year.

Since then, council number crunchers have been busy updating the budget proposal for next year.

The report said: “The impact of the Provisional Settlement together with wider updates to budget modelling resulted in an updated budget gap of £13.5 million.

“The position has continued to be updated, and the development of new proposals enables Cabinet to propose a balanced budget for 2025-26 with the inclusion of an 8.9% increase in Council Tax.

“The setting of our budget, and in turn Council Tax, takes account of the full range of funding sources available to us, as well as the pressures we face.

“The funding position both next year and beyond is set in the context of ongoing uncertainty.”

The council has calculated that to run its services next year it needs £378 million which is a £36.4 million increase from the £341.626 million this year.

The extra funding is needed to deal with pressures which include pay inflation of £7.356 million and “demographic growth" of the ageing Powys population of £8.437 million as well as £3.743 million more to be given to schools.

The council calculates that it has £355.944 million to spend next year which leaves a budget gap of £22.120 million.

The extra money raised by Council Tax will bring that gap down by £9.833 million which means that £12.287 million in cuts, savings and efficiencies will need to be found during the year.

Director of corporate services and s151 officer, Jane Thomas said: “The significant impact of continued inflation, rising costs and additional service
pressures have all added substantial financial pressure to the council’s budget.

“The funding settlement the council has received this year is improved from that which was estimated; however, the cumulative effect of increasing costs far outweighs the additional funding provided creating an even greater challenge in maintaining financial stability.

“In order to meet the statutory responsibility to set a balanced budget the proposal again includes a further significant level of cost reduction for
2025-26.

“Against that background, the draft budget continues to include a risk management allocation and the removal of prior years’ unachievable savings adds resilience and robustness to our budget plan.”

She concludes that the “estimates” used as the basis of next year’s budget proposal are “adequately robust” but a “heightened level” of risk remains.

Once Cabinet approves the draft budget it will be subject to several weeks of scrutiny before the final version of the budget will go to a full council meeting on February 20.