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Pembrokeshire council overspend cut but bleak warnings ahead

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PEMBROKESHIRE still faces its greatest-ever financial challenge despite the council being in a better economic position than previously projected.

Earlier this year, the council’s third quarter of the financial year projections for the 2023-24 budget, the council was currently on course for an overspend of £6.6m on a previously-agreed budget of £287.6m, up from £3m three months previously.

Members of Pembrokeshire County Council’s Cabinet, meeting on July 11, will now hear that figure – at financial year end – has been reduced to a £3m overspend, for a total of £290.6m.

“This represents an improved position from the £6.6m projected overspend reported at Quarter 3 (Q3) mainly due to continued vacancy savings, the moratorium on non-essential expenditure, additional income and grant income received during the final quarter of the year, further reduction in capital financing costs,” the report says.

The report also says that picture is even more rosy: a Minimum Revenue Provision (MRP) adjustment to offset an overpayment of MRP in 2019-20 has resulted in the council’s net expenditure for 2023-24 reducing to £289m; the overspend reducing to £1.4m.

The final financial quarter, Q4, has seen additional and increased demands in many council services, particularly School ALN provision, Children’s Services, Adult Services and Homelessness, partly offset by an underspend of £5.9m in Capital Financing Costs and Investment Income, together with use of the £1.6m MRP.

Additional council tax income, primarily as a result of the ongoing collection of council tax arrears from previous years during 2023-24, has also resulted in £1.1m more than anticipated being collected during 2023-24, the report says.

A report from the Director of Resources and S151 Officer says: “Whilst the reduction in projected overspend of £6.6m to actual overspend of £3m is welcomed, the fact that we have ended 2023-24 with an overspend is disappointing and something we should seek to avoid in future years.

“The MRP adjustment and additional council tax income will mean that the utilisation of reserves to fund the adjusted overspend for 2023-24 will be minimal at £0.253m.”

However, he warned: “The financial challenge for 2024-25 and throughout the Medium Term Financial Plan (MTFP) will be the greatest challenge ever faced by the council.

“There are going to be some extremely difficult decisions to be made and it is virtually inevitable that in order to balance the budget and ensure financial sustainability for 2025-26 and beyond, the council will have to make significant budget savings across virtually all council services, continue to utilise a significant element of the council tax premiums to fund elements of the budget relating to affordable housing and enhancing the sustainability of local communities, and move its Band D council tax level to at least the average level in Wales.”

The report highlights a continued bleak MTFP, with a ‘most likely’ projected funding gap of £84.6m over the period 2024-25 to 2027-28; with £32.3m in respect of 2024-25.

Cabinet members are recommended to approve the Budget Outturn Report, and to approve the appropriation of £0.253m from the Initiative Fund reserve to fund the deficit reported for 2023-24.

Business

Welsh Government rejects Council’s tourism tax plea

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THE WELSH GOVERNMENT has rejected a request from Pembrokeshire County Council to reconsider its 182-night rule on holiday letting.

In a letter to the local authority from Wales’s Finance Secretary, Mark Drakeford, the Welsh Government said it would not reconsider its approach until it had two years’ data on its effects.

The Labour government introduced the 182-night rule to target property owners who casually rent properties and pay neither the increased Council Tax premium on second homes nor Small Business Rates. By encouraging owners to release properties onto the for-sale market, the government wants to increase the availability of homes in Wales’s holiday hotspots. It’s a blunt tool, and there have been predictable but unforeseen consequences (at least by the Welsh Government). The rule’s introduction has reduced the number of properties upon which owners pay either the enhanced rate of Council Tax for second homes or pay business rates.

A LETTER TO MARK

On October 17, Pembrokeshire’s county councillors instructed the Council leader to write to the Welsh Government asking for a reduction in the 182-night rule.

Although councillors agreed an increase in the previous threshold was welcome, many felt the letting target was too high for many viable businesses.

The letter to the Welsh Government said: “Whilst 182 days is certainly achievable in some of our main tourist towns such as Tenby, Saundersfoot, and Newport, it was very difficult to achieve this in other parts of the county, particularly away from the sea.”

The letter said the rule is having a detrimental effect on Pembrokeshire’s vital tourism industry.

Council Leader Jon Harvey’s letter also said: “We do not wish to implement any local policy decisions that would conflict with Welsh Government, and, as such, I am formally writing to you to ask the Welsh Government to consider reducing the 182 days let threshold for self-catering properties to qualify for Non-Domestic Rates.”

DRAKEFORD SAYS “NO”

In a reply from Mark Drakeford, which was circulated to all Council members, the Welsh Government refused to reconsider its position ahead of the next tourism season.

Mr Drakeford said: “The primary aims of our changes to local taxes are to ensure property owners are making a fair contribution and to maximise the use of property to the benefit of local communities. This could include benefits arising from increased occupancy for short-term letting or the release of some properties for sale or rent as permanent homes for local people.

“As a consequence of the changes, self-catering properties are classed as non-domestic only if they are being used for business purposes for the majority of the year. This provides a clearer demonstration that the properties concerned are being let regularly and are making a substantial contribution to the local economy.”

Mr Drakeford claimed that information from businesses engaged in holiday letting showed the Welsh Government’s approach was having the effects Cardiff Bay desired. That seems contrary to data provided by the Wales Tourism Alliance and the figures produced for Pembrokeshire County Council’s budget.

Confirming the Welsh Government has no plans to reconsider its position, Mark Drakeford said: “We understand that there may be a period of adjustment, as some property owners consider their options and determine how to respond. It will be important to allow time for the changes to embed before drawing any firm conclusions.

“The initial impact on the number of self-catering properties classified as non-domestic will be known after April 2025, when two years will have elapsed since the changes took effect. This is when the Valuation Office Agency is expected to have completed a full round of routine compliance checks.”

Claiming that reconsidering the position would cause “uncertainty” in the private letting sector, Mr Drakeford wrote: “There are no plans to undertake a formal review in the short-term, nor in isolation from the broader package of measures within our three-pronged approach to tackling the impact that large numbers of second homes and holiday lets can have on communities and the Welsh language.”

That’s not only a “no”, it’s a “no” with knobs on.

YOU ALREADY HAVE ALL THE TOOLS YOU NEED

Mark Drakeford doubled down on his “no” by claiming Pembrokeshire County Council already had all the tools it needed to address the problems caused by the tourism tax.

He said: “We have extended the exceptions to council tax premiums to include properties with a planning condition which specifies that the property may only be used as a holiday let or prevents its permanent occupation as a person’s sole or main residence. We have also provided

guidance for local authorities on the use of discretion to tailor their arrangements to reflect local circumstances.”

Quite how designating a property for a holiday let allows its release onto the local housing market where homes for local families are in short supply is unaddressed.

The Finance Secretary continues: “Where a self-catering property does not meet the letting criteria and is not subject to a planning condition, the Welsh Government has provided local authorities with as much discretion as possible to consider the approach to take for the benefit of your communities.

“We consider our local taxation regime will help local authorities to incentivise the right balance between capacity within the self-catering tourism sector, and [its[ economic benefits and supporting viable communities of local residents to live and work in these areas.”

If, as Mark Drakeford claims, Pembrokeshire County Council has all the powers and options it needs to address the issue, there will, no doubt, be a flood of information coming from the Council’s Cabinet Member for Finance, Joshua Beynon, to show members precisely where the rabbit that should be in the hat is hidden.

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News

Pembrokeshire County Council prepares for severe weather impact

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THE COUNCIL says it has initiated emergency preparedness plans as the county braces for severe weather conditions this weekend. Additional staff are on standby to tackle potential issues across the highways network and in local communities.

Key measures announced include:

  • Facility closures: All council-operated facilities, including leisure centres, libraries, parkland, and Waste and Recycling Centres, will remain closed on Saturday, December 7.
  • Public transport suspension: Bus services will be halted, and Transport for Wales has been informed of the disruption.
  • Cleddau Bridge restrictions: High-sided vehicles are advised to avoid the Cleddau Bridge, which may face a full closure overnight and throughout Saturday due to high winds.
  • Emergency shelter: An emergency night shelter has been opened and will remain operational until Monday, December 9, to support those in need.
  • Community support: Care providers and care homes have implemented contingency plans to safeguard Pembrokeshire’s most vulnerable residents.

The council urges residents to remain vigilant and stay updated via Pembrokeshire County Council’s social media channels over the weekend.

For more information and updates, monitor local news outlets.

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News

Welsh Conservatives elect new leader

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CLWYD WEST Member of the Senedd (MS) Darren Millar has been elected unopposed as the new leader of the Welsh Conservative Group in the Senedd.

Millar’s appointment follows unanimous public endorsements from all 15 of his colleagues in the Welsh Parliament. The nomination period for the leadership role closed at 5:00pm today.

Commenting on the election, Bernard Gentry, Chairman of the Welsh Conservative Party, said:
“I am pleased to announce that Darren Millar MS has been elected unopposed as the new Leader of the Welsh Conservative Group in the Welsh Parliament.

“In recent months, we’ve been winning numerous local government by-elections across Wales, and our action days have recruited hundreds of new volunteers and activists. Working together as one united party under Darren, Mims, and myself, I am confident we can achieve further success at the Senedd elections in 2026 and bring to an end the quarter of a century of Labour rule.

“I wish Darren every success as he takes the helm.”

The newly elected leader, Darren Millar MS, expressed gratitude for the support he has received:
“I am humbled by the incredible support of my colleagues in the Senedd and the kind messages I have received from Conservative Party members and members of the public across the country.

“Andrew RT Davies will be a difficult act to follow, but I am determined to build on his legacy as we take the fight to our political opponents in the run-up to the Senedd elections in 2026.

“After 25 years of Labour failure, Wales is crying out for hope and change. I look forward to setting out our plans to deliver just that in the weeks and months to come.”

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