Planning for our 2026/2027 council budget

Wrexham Council needs to save £33.6 million in the next three financial years. This is a serious financial situation and our approach to these challenges affects you as residents. Ideas have been put together on how to improve efficiencies in each department in the council and we want to know if you agree with these approaches.

Council finance

The Council receives its funding from a variety of sources, including a grant from the Welsh Government, Business Rates, Council Tax and Fees & Charges. 

 Our financial year runs from April to March, but planning begins the previous summer when we assess the cost of new commitments and initiatives for the next year.  

Our main source of income is the Revenue Support Grant from Welsh Government (RSG). In late autumn, the Welsh Government publishes its Provisional Settlement, which gives an indication of the size of the grant and level of business rates we might expect for the next financial year. The level of grant is based on the Council’s Standard Spending Assessment (SSA), which outlines what the Welsh Government thinks we should spend. Business rates are collected locally but administered on an all-Wales basis.

The Welsh Government then issues its Final Settlement. The Final Settlement advises us of our final share of the money so that we can set the budget and council tax levels for the next financial year.

 In February the Council agrees the budget, sets the level of Council Tax for the next financial year and outlines where the Council’s funding for the following year comes from and what it will be spent on, including contributions to the police and community councils. 

At the end of the year, we account for our spending during the previous year in the Statement of Accounts which goes on public display and is independently audited by Audit Wales.

Where our money comes from

2025/26 funding

54% of our funding comes from the Welsh Government.

21% comes from Council Tax.

25% comes from the fees we charge for services such as planning permission, waste collection, car parking, licensing and register office fees.

The pressures on our budget

On 19 February 2025 the Council approved a Medium Term Financial Plan (MTFP) which highlighted that for the period 2026/27 to 2028/29 costs will increase by £63.3m, which includes inflation and increased demand, whilst funding is assumed to increase by £29.7m over the same period. This therefore leaves a potential revenue shortfall of approximately £33.6m for the period 2026/27 to 2028/29.

Since 2014/15 the Council’s funding gap (the difference between net locally funded expenditure and funding from Welsh Government) has been bridged by making efficiencies and cuts amounting to around £60m.

Inflationary increases, taken with a significant and continuing increase in demand pressures, continues to threaten financial sustainability.

The Council has managed very challenging budget positions recently. The pressure areas are common to all councils and include:

• Adult Social Care
• Social Care for Children 
• Special Education Provision
• School Transport
• Schools
• Homelessness
• Energy costs
• Increased responses to weather related events, eg. flooding

The MTFP is a dynamic document and is updated regularly as latest information informs changes to assumptions. The volatile economic climate and the impact it has on the cost of service provision, alongside growth in demand for statutory and other demand-led services means that a range of different outcomes are now possible.

The financial year 2024/25 was the last year of the current UK Government spending review period. Financial year 2025/26 is essentially a one year spending review period. Therefore, funding forecasts beyond 2025/26 are based on analysis of existing statistical data and analysis, recognising national government fiscal rules and outline spending policies.

Based on current assessments of national public funding scenarios and forecasts, the outlook for the following two years continues to present a very challenging period for local government. The impact of the growth in demand and related costs of service provision for the most vulnerable continues to outpace any reasonable expectation of funding that can be raised locally, amidst national funding settlements that simply do not acknowledge the scale of the issue. The nature of service needs and scale of growth in service provision relating to children – whether that be schools, special education, social care or transport, presents a clear risk to the financial sustainability of this and other councils. Until there is a national recognition of this position and the wider impact of the demand for social care, local government will continue to be at risk of becoming financially unsustainable. Added to this, the lack of reliable multi-year financial settlements greatly hinders councils’ ability to plan beyond the next financial year.

The Council will continue to mitigate financial risks and endeavour to produce sustainable budgets within this challenging context. The Change Programme will be key to identifying options as a key part of the budget strategy and service delivery strategy over the next 2-3 years.