The local government settlement announced by Welsh Government continues an eight-year run of real terms reductions to local government funding.
In the context of ongoing and prolonged austerity, councils will view this as a very difficult and challenging settlement for supporting vital services that contribute to the education, health and well- being of our communities. Leaders across Wales have pushed for parity of funding and particularly sought new investment in a range of services, such as economic development, environmental health and transport, which have been pummeled by cuts.
The headline reduction of 0.5% fails to recognise the full story; with service pressures that amount to £212m in 2018-19 alone, the sector will have to look for savings of nearly 4.5% of net budgets in the next financial year. This comes on top of cuts of over £1bn that have been made to date and 25,000 job losses across the sector. While the reduction is within the range predicted by the WLGA, local government is still bearing the heaviest burden of austerity.
Commenting on the draft settlement, Councillor Debbie Wilcox (Newport), WLGA Leader said:
“I have gone on record on a number of occasions to express my frustrations with the UK Government’s austerity agenda; it clearly isn’t working. The competing demands on the Welsh Government’s own funding presents the Cabinet Secretary with difficult choices and we recognize his efforts to try to protect local services. The problem for local government is that we are now in a ‘war of attrition’. Services are wearing down to the point of collapse and the public are rightly growing frustrated in terms of paying council tax and yet seeing key community functions cut or closed.”
“The whole position is unsustainable. Local authorities cannot go on to be expected to make the harshest of cuts whilst continuing to provide the same breadth and level of service; in short, something has got to give. “
Councillor Anthony Hunt (Torfaen), WLGA Spokesperson for Finance & Resources said:
“We have worked well with the Cabinet Secretary and I would like to thank him for the approach that he has taken to the settlement this year. However, local government as a whole will need to find cuts and efficiency savings of around 4.5% of net budgets.”
“We also need more transparency around some of the figures in this announcement, those delivering and receiving education and social services will expect additional allocations of £62m and £42m respectively. However, this is still a very difficult settlement - there is no additional resource to protect them or explanation of how these figures have been calculated. The funding envelope has quite simply reduced by 0.5% or £20m on top of the savings and cuts made in previous years.”
Councillor Emlyn Dole (Carmarthenshire), WLGA Plaid Cymru Group Leader said:
“Welsh councils will still face severe financial pressures estimated to be over £200 million for the next financial year alone due to demographic factors and workforce related pressures.”
“I would urge the UK Government to use its Budget announcement in November to fully fund any relaxation of the pay cap. Every 1% increase in pay costs the public sector around £100m, and £35m of that is attributable to councils. Our workforce deserves a pay rise. In this context, local government funding must be more flexible and the transfer of nearly £100m of grants into the settlement is a positive step. I would urge Ministers to think about the other funding flexibilities for the other £700m in grants which put an additional administrative burden on the public services.”
Councillor Hugh Evans OBE (Denbighshire), WLGA Independent Group Leader said:
“The funding formula delivers a range of increases and decreases across the 22 local authorities; it is right that the Welsh Government has provided a floor mechanism safety net and I hope that continues in future years. We still need to make sure that the system takes account of the additional needs of providing services in communities with diverse needs and especially the additional costs of providing services in rural communities which are dramatically underfunded.”
“The funding reductions that local government has seen in recent years have been unprecedented and I am sad to note that this settlement continues that recent trend. While I welcome the fact that an indicative figure has been given for 2019-20 and that we have three years of capital allocations it cannot hide the fact that austerity continues over this period. Local services require a much longer-term approach to financial planning and we will work with the Welsh Government to achieve this after the UK Government’s Autumn Budget.”
Councillor Peter Fox OBE (Monmouthshire), WLGA Conservative Group Leader said:
“Social services and education should be funded on equal terms with the health which means providing the £160m that both services need to stand still next year. There are also a range of preventative services within councils that will not survive unless the Welsh Government has a long hard look at the way it allocates money across the totality of public services. Ring-fencing small sums in the settlement for those services is like robbing Peter to pay Paul, as other services suffer.”
“When the Chancellor announces his Autumn Budget, we will get a clearer picture of the Welsh Government’s budget allocations for future years. Independent experts at Wales Public Services 2025 have already estimated there could be an additional £300m up to 2021-22 and that should be the basis of continued investment in local public services.”
For further information, contact:
Jon Rae: 029 20468620