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Local Government

Carmarthenshire council consults public on plans to tackle £25m budget gap

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Authority faces difficult decisions ahead of 2026/27 budget

CARMARTHENSHIRE COUNTY COUNCIL has launched a public consultation on its plans to address significant budget pressures, as it works to close a £25 million shortfall in its draft budget for 2026/27.

Like councils across Wales, Carmarthenshire is facing mounting financial challenges driven by inflation, rising demand for services and funding constraints. More than three quarters of the Council’s net revenue budget for day-to-day services such as social care and education comes from grants provided by the Welsh Government, which itself receives a block grant from the UK Government.

Only 17% of the Council’s income is generated through Council Tax.

In November 2025, the Welsh Government announced a provisional funding settlement for Carmarthenshire of 2.3%. To help bridge the gap, the Council has identified more than £9.5 million in operational savings and has also applied a recurrent £5 million saving through a reduction in employer contributions to the Dyfed Pension Fund.

Despite these measures, and a proposed Council Tax increase of 6.5%, the Council still faces a remaining shortfall of £3.5 million in its draft budget.

Since those figures were prepared, the Welsh Labour Government reached a budget agreement with Plaid Cymru on 9 December 2025. This could result in an overall funding increase of 4.1% for Carmarthenshire in 2026/27. The deal will be voted on by the Senedd on 20 January 2026.

However, until the final funding settlement is confirmed, the Council is consulting residents based on the original 2.3% provisional increase.

Savings proposals

The Council has a legal duty to set a balanced budget, ensuring that income from sources such as the Revenue Support Grant, Council Tax, paid-for services and grants meets its expenditure.

Last year, spending reductions of more than £8 million were delivered, including savings in educational transport, public conveniences and some cultural and leisure services. Building on this, the Council is proposing a further £9.5 million in operational savings for 2026/27.

Proposals focus on Integrated Services, Adult Services, Children’s Services and Environmental Infrastructure. Measures include expanding in-house care services, supporting greater independence where possible, extending the Families Together programme to reduce the need for children to enter care, increasing local fostering provision, and identifying efficiencies across highways and transport.

A significant element of the budget strategy is the reduction in employer pension contributions. Strong investment performance has allowed the Dyfed Pension Fund to reduce the Council’s contribution rate from 16.2% to 12.5% between April 2026 and March 2029. This delivers a recurrent £5 million saving with no service reductions, job losses or impact on pension benefits.

Cabinet member’s comments

Cabinet Member for Resources, Alun Lenny said the financial outlook remained extremely challenging.

He said: “Carmarthenshire County Council, like all local authorities across Wales, is facing very difficult budget decisions due to factors largely outside our control, including inflation, nationally agreed pay settlements and the level of funding provided by the Welsh Government.

“Demand for services continues to grow. Social care is under particular pressure due to an ageing population, rising commissioned care costs, Foundation Living Wage increases and capped client contributions.

“Children’s Services are also experiencing significant pressures, with more children requiring specialist residential placements, higher fostering payments and increasing complexity of need.

“Education faces challenges from school overspends, inflation and pay awards, as well as rising levels of additional learning needs, elective home education, attendance issues and behavioural pressures.

“Even after identifying £9.5 million of operational savings, we are still facing a significant budget gap. That is why it is vital that residents, businesses and stakeholders have their say on how we address these challenges.”

Have your say

The Council is inviting residents, businesses and voluntary and community organisations to comment on the proposed savings. Feedback will be considered by councillors as part of the final budget-setting process, ahead of approval by Full Council in March 2026.

Views can be shared online via the Council’s website or in person at customer service Hwb centres in Llanelli, Carmarthen and Ammanford.

The consultation closes on 1 February 2026.

Business

Pembrokeshire Llawhaden care home at holiday lets approved

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A PREVIOUSLY refused call to change holiday accommodation near a Pembrokeshire village which was not meeting the criteria to avoid the second homes council tax premium, to a residential care home, has now been allowed.

In an application to Pembrokeshire County Council, Ian Parker sought permission for a change of use of The Sycamores, Gelli Hill, Llawhaden, on the site of a former farm complex, from an eight-bedroom holiday let capable of supporting 16 guests, to a residential care home of six residents and 10 staff.

A previous application was refused by county planners in 2024 on the basis it had failed “to provide justification in order to support an identified need for a residential care home at this location”.

A supporting statement, through agent H.B. Tribe Chartered Engineer, said its previous use as a holiday let was available for 140 days and actually let for 70 days in any one year, below the-now 182-day level to avoid incurring a second homes council tax premium.

“Recent local press reports indicate that a number of providers of holiday accommodation have left the industry as they cannot meet this target and, if they continue, are therefore liable for a huge increase in taxation, putting up the rate for holiday makers who are unlikely to pay the additional sums. Demand will therefore fall.

“In 2023 The Sycamores did not meet this new threshold and therefore faced the increased cost of having to pay council tax, (with the premium as a second home) so hard business decisions had to be taken. The property cannot continue as a holiday let.”

It said the applicants, together with a third director, own and operate three care homes in Pembrokeshire and Ceredigion specialising in the care of adults with learning disabilities, employing some 95 staff as the clients require 24-hour care and some need one-to-one supervision at all times.

It concluded: “It is known that nationally the care system is struggling to meet the increasing demands that are being asked of it. This is no less true for those with learning disabilities as any other group of the population. Evidence has been submitted to show that there is a demand for further residential and respite care spaces in West Wales.

“The application property exists and will remain as it is. There is no new visual impact on the countryside.”

An officer report recommending approval for the latest application said: “The applicant in addressing the previous refusal of planning permission has provided information to demonstrate that there is substantial demand for the provision of new residential care beds from within Pembrokeshire, Carmarthenshire and Ceredigion.

“It is considered that the building is appropriate for the proposed use, given its current use as holiday accommodation.”

It also said concerns about potential increases in foul water drainage were already met by the potential capacity of the existing tourist accommodation.

The application was conditionally approved.

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Business

Vandalised former Chinese restaurant bedsits scheme approval expected

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PLANS to convert a vandalised former Pembrokeshire town centre Chinese restaurant to a flat and bedsits are expected to be approved next week.

In an application recommended for approval the January 13 meeting of Pembrokeshire County Council’s planning committee, Mr S Sahin and Miss S Ahmed, through agent Hayston Developments & Planning Ltd, seek permission for a change of use of Grade-II-listed 20 Hamilton Terrace, Milford Haven from the former Mandarin Restaurant to one flat and eight bedsits, an amendment of an original scheme which included one extra bedsit.

The scheme is before committee rather than delegated to officers as it is recommended for approval despite being contrary to a policy of the development plan.

The application for the Mandarin follows a withdrawn scheme for three flats deemed invalid by council planners.

A supporting statement says: “The property has historically been in use as a Chinese restaurant on the ground floor with two flats on the upper floors of the building. The ground floor use of the building ceased some 10 years ago and currently lies vacant. Due to the lack of use of the building, it is in a very poor condition and has been the subject of unfortunate vandalism particularly to the interior of the building.”

It says that, after the previous scheme was withdrawn, the applicants have “since reviewed their position and now present revised applications to be considered by the council”.

It adds: “The clients have re-thought on what type of accommodation is needed and required in this part of Milford Haven.  It has been identified that the cheaper type of affordable housing for either workers or a single person is the most needed. Indeed, PCC Housing Need Register reflects this need, and this has also been confirmed by the local estate agents.”

It concludes: “The proposal is considered to put an important Grade-II-Listed Building back into beneficial use and would help to secure its long-term future. The proposal would represent a high-quality and sympathetic conversion and extension of the building, and which would make a positive contribution to the locality and conservation area status.”

An officer report recommending approval says one letter of objection was received raising concerns including potential impact on a neighbouring property and boundaries, and the discharge of the sewer under number 20.

It concludes: “The proposal is for the change of use of use with alterations and extensions to the building to create one self-contained flat and eight bedsits.  This would not accord [with policy] as it would involve the change of use of the ground floor to residential (C3) use in a Secondary Frontage.

“However, material planning considerations have been identified which are considered to be sufficient to justify a departure from the policy.”

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Business

Major Pembrokeshire farm development back before planners after ‘cooling off’ period

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A PREVIOUSLY backed call against officer recommendations for the relocation of a Pembrokeshire farm diversification scheme which packages and distributes specialist medical equipment across Europe will again be considered by councillors.

At the December meeting of Pembrokeshire County council’s planning committee, members backed a call by Mr Van Der Spoel for the relocation and expansion of an existing farm diversification business into an existing agricultural building at Castle Villa, Hayscastle despite an officer recommendation for refusal.

Back in July a similar application by Mr Van Der Spoel, through agent Harries Planning Design Management, was refused by planning officers.

A supporting statement for that application said the Dutch-born applicant, together with his wife and adult daughter ran the farm diversification business packing specialist medical supplies at their 135-acre sheep farm.

It added: “The business run from this site is FRIO ASTRID EURO Ltd, which has a franchise agreement with FRIO UK. This business has been run from Castle Villa since its incorporation in 1998. The business was initially run from the stable building on the farmyard at Castle Villa.

“The business set-up involves receiving stock from FRIO UK in Wolfscastle, packaging orders and distributing the stock to seven Western Europe countries.”

Wolfscastle-based FRIO produces the world’s first patented insulin cooling wallet which keeps insulin and other temperature-sensitive medicines cool and safe.

The scheme for the business, said to have outgrown its current site, was previously refused by county planners on grounds including a lack of “robust evidence” to prove it couldn’t be sited within a nearby settlement or an allocated employment site, such as Haverfordwest.

Since then, an application seeking to address the reasons for refusal was submitted, and, at the request of local member Cllr Mark Carter, a call for the scheme to be decided by full planning committee rather than delegated to officers was backed at the October meeting of Pembrokeshire County Council’s planning delegation panel.

The latest application is again, after its ‘minded to’ backing at the December meeting, recommended for refusal on similar grounds to previously at the January 13 planning meeting.

It has returned to the January committee for ratification after a ‘cooling off’ period, and, if backed then, will ultimately be decided by full council.

A report for members following the ‘minded to’ approval, warns: “Members should be aware that if they are ‘minded to’ approve the application on the basis of economic benefits and farm diversification, this is a consideration which can be applied to many other existing sites. This would have further consequences for the implementation of policies within the LDP and its delivery.”

It adds that, if it is backed again, it includes a condition, suggested by the agent, that: “Should the farm and business ever be operating by different individuals/companies, the use of this building by FRIO ASTRID must cease and be relocated should further planning permission not be obtained.

“This will be regulated by the submission of documents annually to demonstrate the farm and business remain under ownership by the same individual/company.”

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