Could Boost In Funding Lead To Lower Council Tax?

A better-than-expected financial settlement from the Welsh Government could lead to a reduction in the near-10 per cent council tax rise being mooted by Pembrokeshire and Ceredigion.

Both Ceredigion and Pembrokeshire had received a 3.6 per cent funding increase from Welsh Government, which has now been increased to 3.8 per cent in its final budget for 2025-’26 through a guaranteed 3.8 per cent funding floor for all local authorities.

Other Welsh Government budget announcements were a raft of other funding for local government Wales-wide, including £5m to improve playgrounds and play facilities for children and an extra £5m to support leisure centres to be more energy efficient.

This funding floor rate is still below the average increase of 4.3 per cent.

On the eve of yesterday’s February 20 announcement of the final budget, Pembrokeshire County Council was to consider its own budget, with a 9.85 per cent council tax rise currently being proposed.

Members agreed to adjourn that decision until March 6, in part for them to await any movement in the final settlement from Welsh Government; this 0.2 per cent rise being worth some £500,000 in extra money for the authority’s coffers.

Pembrokeshire County Council Cabinet member for finance Cllr Joshua Beynon welcomed the increase, but warned: “The increase to 3.8 per cent is positive for us in Pembrokeshire representing circa £500,000 in additional money. However, we still have a funding gap of around £26 million meaning this gap needs to be filled by a combination of service cuts and a council tax rise.”

Neighbouring Ceredigion is currently on course for a 9.9 per cent council tax rise, with the final decision on March 3.

But reports for councillors have said: “Cabinet have already determined that any benefit from a funding floor in the final settlement would be used to reduce the proposed council tax increase.”

In Ceredigion, Elin Jones MS and Ben Lake MP have said the below 4.3 per cent level for the county will “inevitably mean that Ceredigion County Council will continue to face a challenging financial situation”.

Elin Jones MS said: “This is a miniscule uplift for Ceredigion Council and will give the council very little flexibility to ease its budgetary pressures. By having a lower-than-average uplift from Welsh Government, the effect of this will be felt by the important local services and the council taxpayers in Ceredigion.”

Ben Lake MP added: “There seems to be an inherent bias in the funding formula against rural areas and this needs to be investigated and rectified. Council taxpayers in rural areas are having to pay more than their fair share and this is increasingly unsustainable.”