Council tax in the Vale of Glamorgan could rise next April by up to 3.9 per cent.
The extra money is needed by the Vale of Glamorgan council which faces a budget shortfall of almost £27 million.
Council bosses have now begun the long process of setting next year’s budget, which will take until March next year ahead of the financial year starting the following month.
They are modelling council tax increases of 3.3 per cent and 3.9 per cent, although a final decision won’t be taken until March.
Council leader Neil Moore said: “This is the toughest financial position we have ever experienced. I want to be completely clear on that point and the fact we are facing unpalatable choices as we bid to maintain the vital services on which people rely.”
The budget shortfall of £26,946,000 comes from various factors including the pandemic increasing demand for council services, an ageing population in the Vale, more pupils with special educational needs, and sky high inflation.
Westminster’s recent decision to increase national insurance, as part of a new health and social care tax, is expected to cost the Vale council £1,033,000 next year. The increase takes effect from April and means both workers and employers will see their national insurance bills rise.
Much of the council’s budget comes from the Welsh Government. But in recent years a provisional local government settlement has been announced in December, rather than October, with a final figure only arriving at the start of March. This means a range of options have to be considered on how much money the council can spend without knowing how much income it will receive.
Cllr Moore added: “Although the amount of funding received from the Welsh Government last year was higher than anticipated, it did not address the legacy of the previous 10 years during which local authority funding was consistently cut.
“That coupled with the financial burden of the coronavirus has left the council in an extremely challenging predicament. I want to be open and honest with residents over the reality of the situation and stress that their views will play a vital part in deciding the best way forward.”
Since the start of the pandemic, the Welsh Government has covered the huge extra costs faced by councils from Covid-19, as well as the massive amounts of lost income from things like car parking. But these local authority emergency hardship grants are expected to end in the next financial year, starting in April.
A six-week public consultation on the budget proposals is expected to run from the end of November until the beginning of January.