Cardiff council is projected to have the largest budget gap of any local authority in Wales for the 2027-28 financial year, with a shortfall of £43.8m, and has warned that reductions to core services cannot be ruled out.
Largest budget gap in Wales
Analysis by the BBC Shared Data Unit, as part of the BBC local news partnership, has projected the Welsh capital’s local authority will have a budget gap of £43.8m for the next financial year – the largest for any county in Wales. A budget gap is the difference between what a council expects to spend and the funding it expects to receive. This shortfall is usually closed through a combination of savings, higher income, government funding, or in some cases the use of a council’s reserve funds.
Before the 2026-27 financial year, Cardiff council faced a £22.7m budget gap, but this was closed through a combination of savings and a 3.9% rise in council tax. The year before that, the council faced a gap of £27.7m, which was closed through similar methods.
Comparison with other Welsh councils
The council with the second-highest projected budget gap for 2027-28 is Carmarthenshire Council with £34m, followed by Flintshire Council at £26.6m. Of all Welsh councils, Cardiff is planning the largest total savings in the 2026-27 financial year, with an expectation of £14.78m.
Despite having the largest total gap, Cardiff has the lowest savings per person of any council in Wales at only £38.50 per person. Powys Council has the highest savings per person at £88.82 per person, although it has a much lower population than Cardiff, which has the highest population in Wales.
Council response and outlook
A Cardiff council spokesman said: “It is important to note that Cardiff council is not in a budget gap and that it has set a balanced budget for 2026-27. While the council faced a significant budget gap as a result of rising demand and increasing costs, particularly in social care, education, and additional learning needs provision, that gap was closed through a combination of efficiency savings, additional income, a council tax increase, and the planned use of reserves.
“The council approved a balanced budget for 2026-27 following a citywide consultation process.
“As Wales’ largest local authority Cardiff council faces substantial financial pressures driven by increasing demand for services and the rising cost of delivering them. In 2026-27 alone the cost of providing services increased by £56.2m while Cardiff received a 4.2% increase in Welsh Government funding.
“The £14.78m savings requirement for 2026-27 reflects the scale of the challenge facing a council of Cardiff’s size.”
They added the savings programme was focused on efficiency measures, change programme savings, and additional income generation with no cuts to frontline services. The 2026-27 budget included significant additional investment in schools, services for vulnerable children and adults, neighbourhood improvements, and cleaner streets.
“Looking ahead, councils across Wales continue to face significant financial pressures from inflation, rising demand, and increasing service complexity,
