WLGA welcomes proposed reforms of local government finance in Wales

Thursday, 24 March 2016

Local government leaders have welcomed a report calling for a series of ambitious but pragmatic reforms of how local councils in Wales are funded.

Published by an Independent Commission on Local Government Finance in Wales (ICLGF Wales), the report offers a series of reforms to improve the complex workings of local government finance. It would update a finance system creaking under the demands of increasingly devolved public services and the challenges of continued UK austerity.

Offering local councils the financial autonomy and flexibility required to respond to local community needs and shape public service delivery in Wales, key recommendations of the ‘Ambition for Change: Aiming Higher’ report include measures to increase the share of Council income raised locally, reduce hypothecation and improve multi-year financial planning.

The report also directly supports the WLGA’s ‘Localism 2016-21’ manifesto proposal and the Welsh Government’s ‘Power to Local People’ white paper, which spelt out the need to make fundamental changes to the local government finance system and to offer local councils a greater role in raising their own finances.

Steve Thomas, Chief Executive of the WLGA said:

“Times are tough for local councils in Wales and this will be unrelenting for the next four years. Successfully transformed public services are likely to be more responsive to residents needs and delivered by councils or their partners at a local level and this requires a financial framework for a system that is flexible, sustainable and fit for the future.

“The health of local government finance directly influences the health of local public services in Wales, and it is crucial that we get the finance system right. This report offers an ambitious but deliverable blueprint that now be considered by the WLGA in detail. A refreshed approach will allow local councils and Welsh Government to build a finance system that is fit for purpose and capable of supporting the local public services upon which so many of our local communities rely.”

Jon Rae, WLGA Director of Resources said:

“Professor Travers and his fellow Commissioners have done an excellent job in producing a report that chimes with the Welsh Government’s and Local Government’s objectives. The current system of local government finance remains largely unchanged from the 1980s and change is overdue. Services that are fit for the future will be localised and citizen-centred and will require a finance system that has greater local accountability and flexibility.

“The ‘Ambition for Change: Aiming Higher’ report offers a series of reforms that are ambitious, but also highly practical and deliverable. If actioned these reforms have the potential to massively reduce the cost of national bureaucracy, fully involve local tax payers in decisions on how their money is spent, allow for much greater investment into vitally important preventative services that reduce pressures in other areas such as the NHS, and will place local councils at the very heart of local economic growth and community well-being. 

“The current system of funding local councils in Wales is now a broken relic that predates a devolution journey that started in Wales over a 17 years ago. Local councils, and local communities in Wales urgently need to see it reformed if we are to deliver and sustain our local public services into the future.”

The ICLGF Wales was Chaired by Professor Tony Travers and brought together independent experts offering a wealth of public sector finance experience to examine how local government funding in Wales could be made more sustainable.

ENDS

Notes to Editor:

  1. The Independent Commission on Local Government Finance Wales is made up of independent experts with a wealth of public sector finance experience in Wales and England.
  2. Established to examine how local government funding in Wales can be made more sustainable, the Commission was founded and supported by the Chartered Institute of Public Finance and Accountancy Wales and the Welsh Local Government Association in acknowledgement of an urgent need to shape a sustainable finance system for local government in Wales.
  3. A full list and biographical details for each Commissioner are available here
  4. Click for a full version of the ‘Ambition for Change: Aiming higher’ report
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