This consultation ended 9 February 2024
Like all other businesses and residents of Anglesey, the cost of living crisis has created a significant financial challenge for the council.
The council’s main contractors (refuse collection, school meals, highway maintenance, residential and nursing homes, homecare providers) are facing rising costs and these are passed on to the council.
Other costs have risen significantly over the past two years in particular energy costs. The council has to fund national pay awards and changes to pension contribution rates. During this period the council has experienced an increase in demand for services, particularly in adult and children social care and homelessness prevention which creates an additional financial pressure.
Similar position for all councils
The council’s position is not unique, with all 22 Welsh councils facing a similar challenges.
However, the council's position is somewhat better than the situation in England, where a number of councils have already declared themselves effectively bankrupt, with a significant number warning that they will be in that position within the next two years.
Welsh Government grant
The council is legally obliged to set a budget which is fully funded from the Welsh Government Grant, Council Tax and the council’s own cash balances. In 2023 to 2024, the Welsh Government grant funded 71% of the council’s net revenue budget.
In order to provide the same level of services at the estimated cost for 2024 to 2025 and to take account of the increased demand for services, it is estimated that the council’s net revenue budget for 2024 to 2025 would have to rise by £14.4m, which is 8.25% higher than 2023 to 2024.
At the same time, the grant the council receives from Welsh Government for 2024 to 2025 is only rising by 2.5%. Funding the budget in full simply by raising Council Tax would require a 30% increase in Council Tax.
Council looking to limit Council Tax increase
The council’s proposed budget has set out to limit the increase in Council Tax, whilst trying to protect front line services from major reductions, and also ensuring the financial viability of the council.
The proposal therefore reduces the net revenue budget by £4.8m, uses £4.4m of the council’s reserves and balances and increases the Council Tax by 9.78%.
Increasing the Council Tax by 9.78% (plus 1.12% to cover fire levy) will generate an additional £5.2m in income for the council. This will also increase the Band D charge by £156.51 or £3.01 per week.
This will still leave Anglesey with one of the lowest band D charges in Wales.
The proposal will leave the council with around £9.5m of general balances, which equates to 5% of the net revenue budget for 2024 to 2025.
Although the level of general balances can be lower than this figure, lowering the level of reserves below this figure does increase the risk that the council could become insolvent.
Have your say
The council would like to know your views on how to address the budget situation.
A final decision will be taken in March 2024 on the council’s budget and the level of Council Tax for 2024 to 2025.
You can read a detailed report on the council’s budget proposals before you answer our survey. This report will open a new tab in your browser.
The survey is anonymous and you will not be asked to say who you are or where you live.
The closing date for the survey is Friday 9 February 2024.