Welsh council facing £19.7m budget shortfall

Richard Evans, Local Democracy Reporter

A Welsh council is facing a £19.714m shortfall in 2026/27 – with the authority citing a national crisis in which some councils have faced bankruptcy.

A report, set to be considered by Conwy County council’s finance committee next week, says the authority is likely to see a 4.1% increase in its annual local government settlement from Welsh Government – the joint lowest percentage rise in Wales.

The overall amount the council is to receive is likely to increase from £203.526m to £210.992m, with an announcement expected from Welsh Government later this month.

The average local government settlement increase in Wales is expected to be 4.5%, according to a draft Welsh Government report, ranging from 4.1% to 6.1%.

'Further adjustments'

In December councillors considered the outline budgetary position for 2026/27 ahead of the draft local government settlement.

Then the estimated resource shortfall stood at £20.598 million, but “further adjustments” have since been made.

Despite this, in the last three years, Conwy residents have suffered successive 10% council tax rises and service cuts, and more rises and cuts are expected.

The report states: “We continue to be affected by high service demand and economic conditions, which have brought about a range of budgetary pressures and much uncertainty that is still prevalent.

“It is evident that local government across the UK is subject to significant pressure, and there have been a number of councils who have issued a Local Government and Finance Act 1988 section 114 notice, which essentially declares the council ‘bankrupt’.

“Whilst a number of the high-profile cases have had poor financial management at their heart, it is increasingly evident that other well-run councils are now facing significant issues as a result of the lack of funding being directed to local government. This is a risk that Conwy also faces.”

The Local Government Budget 2026/2027 is set to be discussed by the finance and resources overview and scrutiny committee at the council’s Coed Pella HQ on Monday, 19 January.