Cyngor Gwynedd Cabinet approves Medium Term Financial Plan

Cyngor Gwynedd's Cabinet has warned that the financial shortfall facing the authority will increase significantly over the next three years.

 

In response, the Council’s Cabinet has today adopted a Medium Term Financial Plan as a means of investigating every possible way of reducing spending. The aim is to implement the plan before discussions regarding the Council Tax level for 2025/26 begin.

 

Over recent years, due to central government austerity policies, the money local councils such as Gwynedd receive from the Welsh Government has been far from sufficient. But at the same time, the cost of providing local services has increased dramatically as more vulnerable families need support. 

 

For example, there are over 2,500 more referrals to Gwynedd's children's social services now than in the pre-Covid-19 era; there are more than 2,000 more referrals to the Council's mental health services over the same period while spending on services for homeless people has doubled since 2021/22.

 

This follows years of financial austerity, in response to which Cyngor Gwynedd has implemented £90 million-worth of efficiency savings, has re-prioritised services and continued to deliver services on reduced funds since 2006. By the end of next three years – with the completion of the new savings – Cyngor Gwynedd will have implemented a total of £107 million-worth of savings.

 

The report presented to the Cabinet at its meeting yesterday (14 May) states that introducing piecemeal savings has run its course and that a new plan needs to be introduced to meet the level of cuts facing the Council for the foreseeable future.

 

The three main pillars of the Medium-Term Financial Plan, approved by the Cabinet, are:

• establishing an 'early warning' system which will enable the Council to freeze spending in some areas at short notice if budgets are stretched;
• identifying the most essential services for the people of Gwynedd, allowing the Council to put together the required structures to meet their needs;
• undertaking a series of detailed spending reviews.

The Medium Term Financial Plan is based on the latest available forecasts, which suggest that there will be insufficient funding for local services. Simultaneously, additional spending requirements facing the authority over the next three years are set to increase further due to the spiralling costs of energy, insurance, raw materials and wages.

 

Councillor Dyfrig Siencyn, Leader of Cyngor Gwynedd, said: "Based on the information currently available to us, this report has highlighted that we are looking at a cumulative deficit of £17.4 million in the Council’s budgets over the next three years.

 

"This figure is based on the assumption that the Council will decide to increase Council Tax by 5% annually over the next three years. Unless the Council does this, it is anticipated that the gap will increase to more than £36 million and deeper and further savings would have to be made which would have a devastating and tangible effect on nearly everything the Council does.

 

"In preparing for the long term, I welcome this opportunity to introduce a new more resilient and sustainable financial model by looking closely at our priorities for the medium term."

 

Councillor Paul Rowlinson, Cyngor Gwynedd's Cabinet Member for Finance, added:

 

"Cyngor Gwynedd has a reputation for careful financial planning, and by looking beyond the figures for the current year, we can make informed decisions and plan for the future.

 

"We are not likely to find out exactly how much funding Gwynedd will receive from Welsh Government for 2025/26 until December 2024 at the earliest, but the outlook leads us to believe that the financial settlement will not increase.

 

"To avoid the significant risk of serious financial instability, I welcome this opportunity to take early and decisive steps to prepare for the future.

 

"Years of implementing efficiency savings have resulted in services and staff coming under increasing pressure, with budget shortfalls leading to unavoidable over-spending in a number of areas. I stress that "over-spend" in this context means a budget that is not sufficient to maintain services.

 

"Alongside the adoption of this plan, we continue to call on the Westminster Government to recognise the crisis facing public services and to fund local councils fairly."

 

ENDS

 

Notes – The full report can be read here: Medium Term Financial Plan Report.pdf (llyw.cymru)