The local government settlement announced by Welsh Government shows a slowing down of the budget cuts faced by local councils in Wales.
In the current climate this is an outcome which councils will view in a positive light and welcome the recognition by Welsh Government of the importance of preventative council services.
With the draft settlement outlining a 1.4% budget reduction that is markedly lower than the cuts of up to 4% councils have experienced in recent years, it is also lower than initially feared. Council leaders hope it will signal the beginning of a turnaround in the level of funded allocated to the delivery of vital local public services.
While councils still face an overall budget reduction, the settlement offers a positive Welsh Government response to calls from the WLGA for more of Wales’ financial resources to be invested in preventative local services such as education and social care. Key ministers have reflected upon this in detailed discussions with WLGA spokespersons and have produced a fair and balanced outcome.
Such investment is seen as a way of improving the future wellbeing and health of communities in Wales, of reducing costs for Wales’ cherished but pressured NHS, and as a way of protecting the local public services most highly valued by communities in Wales.
The WLGA has also recently published its 'Localism 2016-21' manifesto calling for local councils to be offered increased financial flexibility and a move away from an overly complex system of grant-funded dependency that hampers local councils’ ability to respond to local needs.
Commenting on the draft settlement, Councillor Bob Wellington CBE (Torfaen), WLGA Leader said:
“Times remain tough, but this settlement at least shows that Welsh Government Ministers are listening to local government leaders and working with us to protect local services from the worst impacts of austerity. Today's settlement offers a welcome slow-down in the daunting level of budget cuts local government has experienced over recent years. This relative protection is appreciated by councils, and we recognise that it has not been easy for the Welsh Government to achieve when their own funding is being stretched by continued austerity from the UK Government.
“We also welcome the Welsh Government’s commitment to protect services like education and social care. This recognises the strong call made by the WLGA for recognition of the important contribution council-run services make to reducing costly pressures in other public services such as the NHS.”
Councillor Aaron Shotton (Flintshire), WLGA Deputy Leader and spokesperson for finance said:
"It is welcome and clear that Welsh Government has accepted the strong case, passionately made by the family of Welsh local government for an increased level of protection of council services from the effects of UK austerity. While councils in England have been subjected to devastating cuts in recent years, we now have the opportunity to create a different reality in Wales and we hope this welcome 'slow down' on local government budget cuts will mark the beginning of this process.
“It is encouraging to see some increased financial flexibility through commitments to further review specific grants and the inclusion of the outcome agreement grant in the settlement. We will continue to work with the Minister for Public Services on increased financial flexibilities through the work of the Independent Commission on local government finance and the Finance Futures Panel.”
Councillor Dyfed Edwards (Gwynedd), WLGA Plaid Cymru Group Leader said:
“While Welsh councils will still face severe financial pressures, with estimated budget pressures of £200 million for the next financial year alone, this settlement is very much less severe than that offered to English local authorities.”
“This will not detract from the need for councils to look at how they can transform their services. We have already seen many good examples in Wales where council members and officers are taking to the road or using technology to have more purposeful conversations with their communities about the future of local public services, and also to explain the financial pressures being placed on local services. This work will now continue into the future.”
Councillor Hugh Evans (Denbighshire), WLGA Independent Group Leader said:
“While the overall settlement shows an average reduction of 1.4% the funding formula delivers a range of reductions across the 22 local authorities. I would urge Ministers to consider what actions can be taken to protect those at the lower end of the scale and implement the floor mechanism that has operated in the past.
“Over recent years, local government has seen significant job losses, a scaling back of local service provision and a loss of many of the local facilities that our communities hold most dear. This settlement does represent a slow-down, but we need to look at moving beyond annual incremental budgeting. Local public services require a much longer-term approach to financial planning and we will work with the Welsh Government to achieve this.”
Councillor Peter Fox (Monmouthshire), WLGA Conservative Group Leader said:
“The announcement of the local government settlement shows that while the Welsh Government have listened on a number of key issues raised by local government, we clearly still need to fundamentally review the funding formula and take into account the needs of rural communities.
“The Office for Budget Responsibility recently said that the cuts made over the remainder of this UK Parliament should be half as much as that made under the previous administration. This flexibility was granted to the Welsh Government in the Chancellor’s Spending Review.”