Cabinet approves 2025-26 budget proposals

Carmarthenshire County Council’s Cabinet has approved its 2025-26 Budget Strategy following its second highest number of responses to an extensive public consultation.

Following the public consultation, the proposal to close or asset transfer public conveniences has been removed from the 2025/26 Budget Proposal. In addition, the Cabinet has recommended that proposed parking charges increases are curtailed and that savings to highways and flood defence budgets is removed.

However, in order to set a balanced budget for 2025/26, the Cabinet has approved a Council Tax increase of 9.75% and some £8.6m of budget reductions. 

In preparing yet another very challenging budget, Carmarthenshire County Council invited the public and other interested parties to express their views on, for example, council tax increase, educational transport, public conveniences, and some cultural and leisure services. These were considered alongside 90 detailed operational proposals, such as building costs, efficient use of vehicles, digital efficiencies, staffing structures and internal and back-office functions. 

Over 2,900 people responded to the online consultation, and 61 young people from the county’s secondary schools attended a face-to-face event at County Hall to discuss with Cabinet Members and express their priorities.  

In response to the public consultation, Cabinet have approved the following changes to the Council’s Budget proposals: 

·       Remove proposal to close or asset transfer our public conveniences, worth £75,000 in 2025/26 and £50,000 in 2026/27, recognising the negative response expressed by the public in the budget consultation.

·       Not to increase car parking charges increases above inflation, recognising public comments regarding the important contribution its facilities provide in supporting town centre businesses and tourism, as well as the daily impact on residents' lives.

·       Remove £200,000 of savings to highways and flood defence budgets, recognising concern from councillors expressed in the seminar and scrutiny meeting.

Carmarthenshire County Council, like all local authorities, is having to make very difficult budgetary decisions, due mainly to factors which are beyond its control, such as the rate of inflation, substantial increase in national insurance and nationally agreed pay settlements.

Despite a provisional funding increase of 4.1% from the Welsh Government for 2025/26, announced on December 10, 2024, there has been a substantial increase in demand for council services, in addition to the inflation and pay pressures. As a result, efficiency savings together with a Council Tax rise must be made to set a legally balanced budget.  

The County Council gets the majority of its income to fund essential day-to-day services such as social care and education in grants from the Welsh Government, which in turn gets an annual block grant from the UK Government. Only 16% of the Council’s overall funding comes from the Council Tax.  

The Council has a legal responsibility to set a balanced annual budget, by ensuring that income from sources such as the RSG, the Council Tax, paid-for services and grants is enough to cover its expenditure.

Cabinet Member for Resources, Cllr. Alun Lenny said:

Local authorities across Wales are into the 15th year of austerity in all but name. Funding for public services remains inadequate, indeed this is the worst year that I can remember. Even at this late stage we are continuing to lobby the Welsh Government, through the WLGA, for a better settlement.

On an all-Wales basis, the provisional funding for local government increased by 4.3%. As is known, Carmarthenshire County Council received an RSG uplift of 4.1% which, when added to grant transfers in, is worth some £25m. However, this is less than half the £55m that the County Council need, due to the combination of service pressures and cost increases, and the multi-million-pound hole blown in our budget by the Chancellor's national insurance increase.

We have reviewed the key components of our budget assumptions and allocations. Inflation remains above the Bank of England’s 2% target – and may go up further, so we have had to amend the uplift applied to our net expenditure by half a percent, to 2.5%. Next year's budget retains our medium-term financial plan assumption of a 1% increase above inflation for nationally agreed pay awards, so these are also uplifted. 

Put together, these add more than £2m to the sums provided for in our draft budget. Against this, we have been able to reduce our allowance for the National Insurance increase by half a million pounds, but even allowing for this change, pay costs add £23m to our budget next year. The inflation increase is also offset by a final £2.2m reduction in next year's energy costs, now that almost all our volumes have been secured. 

For almost six weeks between December and January, we consulted widely on our budget policy proposals. More than 2,900 people shared their views and I'm thankful to all who took part in the consultation or responded to the surveys. From the responses gathered, it's fair to say that people generally appreciate that difficult choices need to be made.”

 Carmarthenshire County Council’s 2025/26 Budget Proposal will be presented to Full Council on Wednesday, 5 March 2025.