Carmarthenshire council leaders have warned that non-essential spending by schools must be cut back and budgets brought back in line, as new figures show the authority faces a potential £15.9m shortfall at the end of the financial year if expenditure continues at current levels.
The warning applies to schools which are forecasting deficits. However, £2.6m has been set aside to deal with service pressures, and this, along with some extra capital financing money that has been set aside, brings down the overspend liability to £11.3m as things stand.
School deficits and financial pressures
The latest figures discussed by cabinet this week were for the first quarter of 2026-27, meaning there is still nine months to turn the situation around. A cabinet report said the school deficit forecast of £6.9m is actually better than it was at the same time last year.
Councillor Alun Lenny, cabinet member for finance, stressed that action was needed and that the schools' position was not sustainable because collectively they started the year nearly £9.6m in the red. “I cannot overstate the seriousness of the current position,” he said.
Children's services is another area under pressure, mainly due to more young people requiring residential placements, which Cllr Lenny said could cost up to £20,000 per week. Adult social care is also forecasting an overspend as demand from an ageing population grows.
Mitigation and political context
Of the £2.6m set aside to deal with contingencies, the council has pledged £300,000 to cover increased mileage rates for staff due to high fuel costs, with Cllr Lenny blaming President Donald Trump for “starting a war he can't finish”. The Plaid cabinet member also claimed under-funding by central Government over the past decade had left the council £150m worse off in real terms.
Cllr Glynog Davies, cabinet member for education, said the council was taking steps to help schools reduce spending and called on governors to “look with seriousness at their (school) budgets”. He said: “We as a department will do our very best to help them. But we can't continue on the same path.”
The cabinet report also said “progress in rationalising the schools' footprint”, which in theory could mean further school closures, was part of the solution to balance the books.
Previous year's overspend and investments
Later in the meeting councillors learned the Plaid-Independent-led council finished the 2025-26 financial year with £9.4m of departmental overspends out of a total budget of circa £800m. This £9.4m sum was brought down significantly using money held in reserves.
Cabinet was also briefed on spending on capital projects and celebrated last year's opening of the Towy Valley Path between Carmarthen and Llandeilo and the £200m Pentre Awel health and leisure complex in Llanelli.
On housing expenditure, Cllr Carys Jones said investment by the council was “much more than just the figures you see in the report”. The cabinet member for rural affairs, communities and Welsh language said families who'd moved into council homes had told her how much it had changed their lives.
