Conwy council may be £25.7m short in 2027/28, on an estimate written before the Welsh Government says what it will pay

Conwy County Borough Council expects to be £25.7m short in the year from April 2027. Conwy is a county borough on the north Wales coast, and the council runs schools, social care, homelessness services and home to school transport there. By law it cannot run a deficit, so the money has to come from some mix of a council tax rise, more from the Welsh Government, and cuts to services. A report that went to the Finance and Resources Overview and Scrutiny Committee at 10am on Monday 7 September, and reaches Cabinet at 2pm on Tuesday 8 September, sets total projected 2027/28 expenditure at £366.806m against a 2026/27 base budget of £341.065m, the money the council has to spend this year. The difference is a potential resource shortfall of £25.741m before any increase in overall funding. Neither meeting decides the budget. On Monday the committee could only recommend; on Tuesday Cabinet is asked to approve the timetable and process for the Business Planning Framework and to note the scale of the gap. The budget itself is set in the new year. The Welsh Government has indicated it plans to publish its Draft Budget for 2027/28 on 17 November 2026, with the Final Budget planned for 16 February 2027. Appendix 1 gives no date for the provisional Local Government Settlement that sets most of what Conwy gets; the covering report expects it in November 2026 and the timetable in Appendix 2 gives November or December, subject to change.

What kind of number this is

The report says plainly what weight the figure bears. Paragraph 6.1 states that "the projected shortfall should not be regarded as a precise or final position" and calls it "an indicative planning estimate based on the information currently available and a range of assumptions that will need to be revisited as the budget process develops". Paragraph 4.12 puts it another way: the modelling assumptions "are not a forecast of what will happen, but a reasonable basis for planning at this stage". The covering report is blunter still, calling the £25.741m a figure that "at this stage is not a 'correct' position, given various unknowns particularly around pay, but is sufficient for planning purposes". Paragraph 1.3 lists what is still open, and section 4 sets out eleven uncertainties behind it: the 2027/28 Welsh Government funding position, the 2027 pay awards, inflation, demand pressures and the availability of any additional specific funding.

Twenty-eight per cent

Council tax cannot carry a gap this size on its own. Each further 1 per cent on Conwy's council tax raises £923,000, Table 1 states, so closing the whole £25.741m that way would take a rise of nearly 28 per cent, a figure Cover has worked out by dividing the shortfall by the council's own £923,000 and one no councillor has proposed. The report carries no Band D figure, so this piece states no cost to a household. The other levers are smaller still, and the panel sets out what each is worth.

What the model already assumes away

Table 1 does not leave the full £25.741m standing. It models an assumed 2 per cent rise in Aggregate External Finance, the yearly grant from the Welsh Government that pays for most of what the council does, and an assumed 5 per cent council tax rise. Both are assumptions inside the model, not decisions taken. The two together are worth £9.176m, and the table puts what is left at £16.566m, a thousand pounds above the straight subtraction because every line in it is rounded to the nearest thousand.

Who can change it

The Welsh Government moves first, and nothing about the size of this gap is settled until it does. Last year Conwy's grant went up 4.1 per cent in the final 2026/27 settlement published in January 2026, while the average Welsh council got 4.5 per cent on a like for like basis. Paragraph 2.5 tells members not to read the average across: "Conwy has often received a lower-than-average increase through the Welsh Government funding formula and therefore any all-Wales percentage increase cannot be assumed to apply equally to this Council." Paragraph 6.2 puts it to members this way: "in the absence of sufficient additional funding, the Council is likely to face a significant budget shortfall in 2027/28. This will require difficult choices in relation to service pressures, budget reductions, Council Tax, reserves and the prioritisation of available resources." Reserves are the council's savings, and a reserve can be spent only once. Paragraph 2.2 names the demand: "social care, education, homelessness, home to school transport and other statutory services". Councillor Chris Cater, the Cabinet Member for Finance and Strategic Planning, whose observations are printed at section 5.1 of the covering report, says the council is "committed to provisionally identify the range of budget reductions, Council Tax increase, use of reserves or other mitigating actions which would bring us to a legal, balanced budget", and calls the timetable "certainly challenging". On the council's reading of the Welsh Government's plans, the next date that changes the arithmetic is 17 November.

Correction, 7 September 2026: an earlier version misnamed the council's report as the Budget Planning Framework. It is the Business Planning Framework.