19.02.19
Anglesey council faces ‘biggest financial challenge to date’ in setting balanced budget amidst bankruptcy warnings
Anglesey County Council faces bankruptcy if it doesn’t put more money aside, its financial chief has warned as the authority announces multi-million-pound savings and a 9.5% council tax increase.
The county council said it faces “its biggest financial challenge to date” after another cut in funding from central government. On top of the tax increases, it needs to plug a £7m funding gap.
Finance officer Marc Jones warned that if the council did not put more money in its reserves that the authority could follow Northamptonshire CC, which was unable to balance its books last year and was issued with two section 114 spending notices as a result.
Cllr Robin Williams, the finance portfolio holder, said: “This year’s Welsh Government settlement has reduced our funding, whilst costs continue to rise significantly.
“Increasing demand has led to over spending in some services, which in turn has eaten into our financial reserves, leaving us now unable to use them to balance this year’s budget.”
He added, “We therefore have no option but to raise council tax to meet the funding gap and protect vital council services.”
Executive members of Anglesey council backed proposals to hike up council tax by 9.5%, and to raise second home council tax premium to 35% and the empty property council tax premium to 100.
Following another 0.3% reduction in the Welsh Government funding settlement, the council has identified cuts to make up the £7m budget shortfall, which includes a substantial cut to the region’s education budget.
Marc Jones said that with reserves already a level below what he was comfortable with, to reduce it further would raise the risk to the authority even further.
The finance officer said: “If we persist to overspend and the reserves aren't there, the authority technically becomes insolvent, which has already happened in Northamptonshire of course.”
Anglesey council’s leader Llinos Medi said: “Given the intense financial pressures faced, we have found it increasingly difficult to protect school budgets over the past two years.
“A reduction in teaching staff has seen class numbers increase and this in turn could impact standards and have dire consequences on the future education of our children.
“We understand that any increase in council tax won’t be popular, but it’s vital that services like education and social services are protected as much as possible for the future of our children and young people.”
The recommended proposals will now go before the full council on 27 February with a final vote on the council’s 2019-20 budget.
Image credit - JohnDavies49