Cabinet agrees to 8.9% council tax hike
By Elgan Hearn, Local Democracy reporting Service
Powys councillors could be voting on 2025/2026 budget proposals in March, a couple of weeks later than usual.
This would allow the Welsh Government the possibility of pulling a rabbit out of a hat and give Powys County Council more money.
On Tuesday, members of the Liberal Democrat/Labour Cabinet met to agree the draft budget proposal. The proposal will be subject to several weeks of scrutiny before all councillors give their say at a meeting on February 20.
The Welsh Government’s budget will be finalised after this date with a vote expected to take place in the Senedd in March.
Last month the council found out that it is set to receive a 3.2% rise in funding for 2025/2026 from the Labour Welsh Government.
This equates to £7.7million and is less than the average funding rise of 4.3%.
It puts Powys at the bottom of the funding pile and sits at 21 out of 22 local authorities in Wales.
This raised fears that Council Tax would have to go up by 13.5% to make up the difference in the funding needed by the council to run its services.
However, the increase in Council Tax is now set to be 8.9%.
Some opposition councillors have told the Local Democracy Reporting Service that “it must be embarrassing” for Powys council’s Labour cabinet members that the Labour Government in the Senedd have given the authority such a “poor” settlement.
Finance portfolio holder, Labour’s Cllr David Thomas, said: “The proposal today is based on the provisional settlement by the Welsh Government.
“The Welsh Government draft budget is currently being scrutinised, and the final budget and local government settlement will be published on February 25.
“If there are any late changes these will need to be made and presented to council at the meeting on March 6 for approval or if required a further council meeting.”
Cllr Thomas explained that Welsh local authority leaders are currently lobbying the Welsh Government for a “funding floor” to be implemented.
This is because financial pressures facing local authorities across Wales in 2025/2026 are calculated to be 7% of council spending which is above the 4.3% average increase.
Cllr Thomas said: “This falls well short of what is needed to maintain statutory services at their current level and meet the needs of resident and communities.
“Should a floor mechanism be implemented Cabinet will consider amendments to the proposal following the increase in funding.”
The council has calculated that to run its services next year it needs £378 million which is a £36.4 million increase from the £341.6 million this year.
The extra funding is needed to deal with pressures which include pay inflation of social care and more money to be given to schools.
The extra money raised by Council Tax will bring in £9.8 million which means that £12.3 million in cuts, savings and efficiencies will need to be found during the year to balance the books.
Cabinet went ahead and voted unanimously to approve the draft budget.
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