Tory asks Labour finance chief if Powys residents can afford another increase in Council Tax

At a meeting of Powys council’s Economy, Residents and Communities scrutiny committee on Tuesday, January 27, councillors probed the 2026/2027 budget proposals.

Councillor Pete Lewington (Conservative – Newtown West) said: “I have questions about affordability; in previous years we have seen Council Tax increases far in excess of five per cent”

This year the Council Tax went up by 8.9 per cent and the council always calculate for a five per cent annual increase as a starting point every year.

Cllr Lewington said: “Obviously this has a cumulative affect and disproportionately impacts the most vulnerable.”

He pointed out that the “continuing cost of living challenge” for Powys residents is highlighted in the budget report.

Cllr Lewington asked: “What evidence was used to assess the affordability of a 4.9 per cent Council Tax for our residents, have we tested if people can afford it?

“Has the cumulative increase of Council Tax been factored into our financial planning?”

Finance portfolio holder Councillor David Thomas (Labour – Tawe Uchaf) said:  “No administration wants to increase Council Tax but unfortunately we do need to look at the challenge we are faced with.”

He explained that after receiving the details of the budget settlement from the Welsh Government settlement there was still a gap of £19 million to fill.

The papers show that the council predicts its budget need next year will be £402.5million.

The Welsh Government is set to give Powys £267.5 million next year and the council currently receives just over £115 million in Council Tax.

He explained that this means that there is still a gap of £19 million to fill.

Cllr Thomas said: “We have to cover that and there are a number of ways we could have done that; one would have been to leave everything as it is and simply increase Council Tax by roughly 19 per cent.

“But that’s totally unacceptable.

“We managed to discover £12 million worth of savings through service re-design, increases in fees and charges and that bring us to a position where we had a gap of £7 milliion.”

He explained that £2 million of this would be covered by an increase in the Council Tax base, reflecting that more properties have been built or are now classed as residential and can be charged Council Tax.

Cllr Thomas continued: “Then we had to find another £5 million which is the 4.9 per cent Council Tax.

“Had we not done that, we would have had to find £5 million more in savings or reduce our spending.”

He explained that this could have meant less funding going into Schools or Social Services which would have created “enormous problems for vulnerable residents.”

Cllr Thomas added “So it’s a balancing act.”

He added that 53 per cent of households will be eligible to some form of Council Tax reduction due to the “generous package” of discounts and exemptions provided by council

“Only 47 per cent residents will pay full Council Tax,” said Cllr Thomas.

Cllr Lewington said that he had heard no evidence only: “reliance on the Council Tax reduction scheme.”

The budget and Council Tax will be finalised at a council meeting on February 26.