Conwy County Borough Council is anticipating an “eye watering” budget shortfall of between £20.6m and £30m for the 2024/25 financial year.
The local authority said it would be left with “no choice but to reduce its expenditure in a number of areas which is likely to impact on the level of services”.
Any additional expenditure is also likely to be contained to “unavoidable pressures only”.
The financial outlook for the forthcoming year as well as the plan and timetable for setting the 2024/25 budget will be discussed by councillors in a Special Finance and Resources Overview and Scrutiny Committee meeting today (30 August).
Mike Priestley, Conwy’s cabinet member for finance, said an updated Business Planning Framework for 2024/25 “sets out the process that we can take to assist in addressing the relentless financial pressures that we face in Conwy”.
Priestley stated: “At this stage, there are some financial uncertainties, so we have had to make assumptions about the main aspects of the budget, such as price inflation, demand for services, pay awards, and grant funding from the Welsh government.
“Based on these assumptions, the current outlook for 2024/25 points towards a potential resource shortfall of between £20 and £30m subject to the variables.
“Councillors will need to consider how to bridge the gap in the council’s funding shortfall. Essentially the Council will have no choice but to reduce its expenditure in a number of areas which is likely to impact on the level of services and raise additional income.”
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Councillors will receive regular updates and opportunities to debate the budget over the coming months, Priestley said. Full council will then meet on 29 February 2024 to finalise and agree the budget and council tax for 2024/25.
Conwy County Borough Council said that the announcement of the provisional local government settlement in December would be critical to the budget setting process.
The government has so far indicated a 3.06% increase across Wales, but the local authority noted that the Welsh first minister “recently announced that the Welsh government is facing its toughest financial situation since devolution, therefore it’s unclear whether the allocations to local government will be revisited by the UK or Welsh governments”.
The 2023/24 final settlement for Conwy was £198,598m. An uplift of 3.06% will result in additional income of £6.077m, but the authority noted that it had “historically received a below average increase as a result of a range of factors that influence individual authority settlements”.
The final local government settlement is expected to be confirmed by the Welsh government in early March.
A series of budget working groups have and will be held to consider the challenges facing services and to discuss options in terms of service delivery. Heads of service and/or strategic directors will then prepare business cases and budget reduction proposals based on the principles contained within the Business Planning Framework, and in light of discussions at the budget working groups. These will be reviewed and approved in a number of stages, culminating in full council sign-off.
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