Anglesey Council was accused of “overcharging” residents after reporting an underspend for the third year running.

The council’s executive heard on Wednesday that the overall financial position for 2022/23 – including corporate finance and the Council Tax fund – showed a projected underspend of £1.2m.

A report monitoring the financial situation for 2022/23 said this represented 0.76% of the council’s net budget.

The Plaid Cymru-led council was criticised by an opposition politician, with the claim that island residents were being “overcharged”.

Liberal Democrat councillor Aled Morris Jones said: “In 21/22, the council reported an underspend of £4.8m and in 20/21 it was £4.2m.

“Added to the £1.2m over the past three years, that totals £10.2m.

“It shows, what we as the opposition group have been saying for a long time, they have been over charging the people of Ynys Mon. They should refund the money.”

However, during the meeting, finance portfolio holder Cllr Robin Wyn Williams said the underspend “did not reflect the true position”.

In a quarterly report, monitoring the revenue budget and the outturn for 22/23, he described how in March 2022, the council had set a budget for 22/23 of £158,365m.

“That was funded through the Council Tax, non-domestic rates and general grants received from Cardiff,” he said.

It included the total of £3.16m for general items and other things planned for, and a budget of £1.950m, for the council tax premium, as in the previous year, there was no requirement services to make savings in 22/23.

“There was an increase in our budget from the Welsh Government of 9.2 percent, that was welcomed.”

But a number of areas, including social care and homelessness had seen “a lot of pressure” during the year, the meeting heard.

“This report sets out the financial performance at the end of quarter four… there is a projected underspend of £1.21m.

“But there is more to this than what is on the surface.

“When people hear an underspend again, of £1.2m they will say what are they doing?

“It’s important to recognise that the financial situation is different when you lift the bonnet up and look into the financial situation more carefully.

“If we pull the one-offs out of the budget, for 22/23, the financial situation is very different.

“When you consider things like vacancies throughout the year, grants from Cardiff coming late in the day, and consider how much in reserves we used, if they weren’t part of this budget, we would have overspent during the year – 22/23 – an overspend of expenditure of £2.8m, that would have created a higher gap in the budget moving forward into 23/24.

“I have always said it is important for use to be prudent, to take a step back and think about the situation in the long term, rather than just rushing into decisions.

“There were noises in the scrutiny committee over why are we increasing council tax, we have to.

“We also have to remember, we are amongst the five or six cheapest council taxes in Wales [and] the cheapest in North Wales.”