Council tax rises not ruled out after Plaid-Labour budget deal

The amount that people in Wales pay in council tax could still rise, according to a senior councillor, despite a budget deal that will see the sector receive more cash.

But Andrew Morgan, Welsh Local Government Association leader, said any increases would be lower than "what it would have been" - and hoped that 10% was "off the table right across the board".

He said demand for services was still "outstripping" the funds available.

Plaid Cymru's deal to pass the Welsh government's spending plans in the Senedd promises an extra £113m for councils to spend on education, recycling and other services.

Plaid's agreement means that Labour will avoid a defeat when its spending plans for the NHS, schools and other services come to a vote in January.

The party said Tuesday's deal with Labour ministers, which includes more money for the NHS, would "protect services".

Labour has a minority of the Senedd's 60 seats - a situation made worse by October's Caerphilly by-election in which Labour lost to Plaid, leaving ministers with two seats short of control of the parliament.

The deal means councils will get an average 4.5% boost to the grant they receive from the Welsh government - an improvement on the 2.7% originally planned in the draft £27bn budget announced in October.

There had been concern when the draft was announced that it did not go far enough in meeting the needs of councils, which are facing increasing demand in services such as social care.

Experts at Cardiff University's Wales Governance Centre said the additional £113m was "roughly equivalent to what a 5% increase in council tax bills would raise for local authority budgets".

"That provides greater certainty and a more realistic prospect of meeting uncertain spending pressures next year without excessive council tax increases," they said.

Councils are funded mostly by the money they receive from the Welsh government, topped up by taxes raised locally.

Each council has to decide its own budget before the start of the next financial year.

Speaking on BBC Radio Wales Breakfast, Morgan said it was a "significant step in the right direction" with no local authority getting less than a 4.1% increase, with one council - Newport - getting a 6.1% increase.

Welsh government figures show rural councils Gwynedd, Conwy, Ceredigion and Carmarthenshire will receive the lowest settlement of 4.1%.

Morgan said challenges in social care and demand on additional learning needs provision and schools was "outstripping the amount of funding we have available".

Asked what it means for council tax, Morgan, who is also Labour leader of Rhondda Cynon Taf council, said it was up to each of the 22 local authorities in Wales.

He said he could not give a "commitment" that it means bills will not go up.

"But what I can say is that any increase now will be far lower than what it would have been."

He said he hoped 10% council tax rises were "off the table right across the board now".

The Welsh government minister in charge, Finance Secretary Mark Drakeford, had put aside hundreds of millions of pounds when he first announced the draft budget in October, money that was expected to be earmarked for an agreement with an opposition party.

He had said he was willing to put money into local government and the NHS.

The deal with Plaid included an extra £180m for the NHS, but the Wales Governance Centre said could require "further top-ups".

It meant core NHS spending, the analysts said, looked set to increase by between 1.7% and 1.8% in real terms, which takes into account rising costs.

While better than the 0.3% implied by the draft budget, it was "still somewhat lower than recent trends" of 3.3% per year since 2018-19.

First Minister Eluned Morgan said Tuesday's deal will provide assurances on jobs and services.

Speaking on a visit to Conwy, where she hosted the Japanese ambassador on a tour of the town and its medieval castle, Eluned Morgan said the politicians now needed to follow through on their agreement to public services

She declined to comment on a suggestion that she and her Labour colleagues had "played games" with the Conservative group in the Senedd, who had also expressed a willingness to negotiate a deal on the budget.

Eluned Morgan said: "The key thing is that we've got a budget deal and that means that public services in Wales remain safe for next year.

"That's what people in our communities care about - they want to make sure that the jobs will be there in future and the services they rely on will be there - without a budget we couldn't give that assurance."

The Welsh Conservatives said the Labour-Plaid deal was a "stitch-up".

Senedd leader Darren Millar said his own plans for the budget would have kept council tax down, with a cap on increases "to protect taxpayers against excessive hikes".