Welsh Government faces criticism over council funding formula

Senedd members clashed over plans to review Wales’ funding formula after the Welsh Government’s proposal was rejected. Constitution Minister Dafydd Trystan Davies defended the government’s stance, while Reform party leaders claimed the decision could save £1.5 billion annually and warned that Plaid Cymru might emulate England’s funding cuts. Concerns were raised that a new formula could shift resources from poorer urban areas to wealthier rural ones.

The Auditor General for Wales, Adrian Crompton, warned that the Welsh Government has not fully reviewed how it allocates funding to councils, leaving them with significant financial challenges. In 2024‑25 the government funded about 69 % of councils’ gross revenue spending through general and restricted grants and redistributed business rates, but many councils find the formula opaque and difficult to plan budgets around.