North Wales MS criticises ‘outdated’ funding formula impacting Flintshire Council

Long-standing concerns over unfair funding for local authorities in North Wales were reignited this week, as Flintshire’s financial challenges took centre stage in a Welsh Parliament debate.

A new report by the Auditor General has highlighted significant financial sustainability risks across local government in Wales, with Flintshire County Council emerging as one of the most at-risk councils.

The report warns of an urgent need for action to address growing funding gaps and spiralling costs.

Flintshire County Council’s financial position is particularly precarious, with the report citing low reserves, escalating service costs, and a lack of long-term strategic transformation plans.

North Wales MS Mark Isherwood confronted the Welsh Government over what he described as an “outdated” local government funding formula, which has left Flintshire County Council, among others, struggling for resources.

The Audit Wales report has added weight to years of criticism from local representatives about the funding formula’s fairness.

Speaking in the chamber this week, Mr Isherwood said:

“For more than two decades, I’ve been highlighting the unfair financial impact of the Labour Welsh Government’s Local Government Funding Formula on local authorities always left near the bottom, including Flintshire. In March, I raised concern that four North Wales councils were again among the six receiving the lowest settlements in Wales.”

Flintshire’s Cabinet Member for Transformation and Assets recently criticised the Welsh Government for failing to provide multi-year funding estimates, calling it “a very odd situation.”

Meanwhile, the council’s Chief Executive highlighted the cumulative effect of consistent underfunding, saying: “In Flintshire, a consistently low-funded council is a contributory factor in relation to where we are today.”

Responding, the Cabinet Secretary for Housing and Local Government, Jayne Bryant MS—the Assembly Member for Newport West—defended the funding system.

She argued that three-quarters of the formula is updated annually, with allocations based on relative changes in population and pupil numbers across Wales.

While acknowledging that some councils receive smaller increases, she reiterated that the formula reflects comparisons between authorities.

“This is something we do with local government, rather than to local government,” she added, pledging to engage with council leaders on potential changes.

Mr Isherwood remained unconvinced, describing the funding system as out of step with Flintshire’s needs: “Data is updated on measures within this outdated funding formula which omit key population characteristics and needs,” he said.

Following the publication of the Audit Wales report earlier this week, Adrian Crompton, the Auditor General, stressed the importance of long-term solutions: “Councils have taken difficult decisions to manage their finances through a long period of financial constraint. But as the cumulative impact of that restraint builds, we cannot assume that local government will remain financially sustainable.”

The report calls for a transformative shift in how Welsh councils approach financial sustainability.

Moving beyond balancing annual budgets, councils must adopt innovative, long-term strategies to ensure value for money and sustainable services.

Mr Crompton concluded: “Local government is financially unsustainable over the medium term unless action is taken, by those who support and interact with the sector as well as councils themselves. Though a difficult message, I hope that this report helps councils, the Welsh Government, and all of those committed to the sector to chart a path to a sustainable future.”

These concerns are reflected in Flintshire County Council’s current battle against an unprecedented financial shortfall.

For Flintshire, mr Isherwood’s criticism hits home, with the council facing a £38.4 million shortfall for 2025/26.

This shortfall is driven by rising costs, increased demand for services, and limited funding.

The council has already cut more than £125 million from its budget over the past decade but warns that all remaining cost-saving options will significantly impact essential services like education, social care, and waste management.

Leaders are urging the Welsh Government to address inequities in the funding formula, noting that Flintshire ranks 20th out of 22 Welsh councils in terms of funding per capita.

The council has launched a public consultation to gather input from residents, businesses, and visitors to help shape tough decisions and avoid issuing a Section 114 notice, which would declare it effectively bankrupt.

While some councils in England have already reached this critical point, no Welsh authority has yet taken this step, and Flintshire is determined not to be the first.

However, without additional support from the Welsh Government, council leaders warn that drastic cuts may be unavoidable.

Feedback from the consultation will inform the council’s final budget decisions, expected later this year, as it seeks to close the financial gap and safeguard vital community services.