Local government leaders, from all political parties, have reacted strongly to a draft budget settlement that will see reductions in core funding of £175m in 2014/15, with a further £65m in 2015/16, and leave local councils facing a £460 million budget shortfall by the end of that period.
The draft budget announced by the Welsh Government risks casting local public services as the ‘poor relations’ of the Welsh public sector, with a drastic 4% average cut to core council funding next year and further reductions in 2015-16. This comes on top of the 8% inflation-adjusted reduction that local government has already experienced.
With the prospect of more cuts to come, spending plans in Wales are expected to make this the tightest 7 years for public service spending in the post War period. Wales’ 22 council leaders recently wrote to the First Minister to set out what this means for communities in Wales, and to outline what the Welsh Government needs to do to help protect local services.
While the depth and scale of the cuts stem from the continued austerity programme of the UK Government, they also reflect the decision taken by the Welsh Government to deal with the crisis of the NHS in Wales by significantly increasing its budget. This protection will effectively ‘squeeze-out’ all other departmental budgets, including the preventative services run by local councils such as social care, housing and leisure that actively reduce the longer-term pressures expected to be placed on Wales’ health services.
With the draft budget effectively running the risk of storing up significant long-term problems by prioritising the hunt for short term savings, local government is repeating its call for greater flexibility in how budgets are allocated to public services in Wales.
Councillor Aaron Shotton (Flintshire), WLGA Finance spokesperson said:
“Local councils recognise that the Welsh Government faces some difficult and unenviable decisions on how to allocate its dwindling financial resources, due to the swingeing cuts that are being made to the ‘block grant’ funding that is allocated to Wales by the UK Government.
“By the end of 2015-16, local government will have borne the brunt of austerity in Wales, when funding from central sources will have shrunk by 15% after adjusting for inflation. This will see councils potentially having to close libraries and sports centres, slash pothole and other day-to-day maintenance budgets, cut bus subsidies and switch off streetlights between midnight and dawn.
“While local councils will do everything they can to protect frontline services like education and social care, they will simply not be able to protect everything. This budget settlement means communities throughout Wales will have to significantly revise their expectations in terms of what services they can realistically expect their local councils to deliver, and some difficult discussions lie ahead between councils and their communities on what should be prioritised.”
Councillor Bob Wellington (Torfaen), WLGA Leader stated:
“Local government has been left facing the worst financial settlement since devolution. This is a situation that will not be solved by simple calls for local government reorganisation, as even if we embarked on such a programme today it will take many years and a significant amount of money to successfully implement.
“Councils have already put in place medium term financial strategies to squeeze out efficiencies and increase innovation. In recent years our workforce has been subject to a prolonged pay freeze and every one in local government is playing a part in terms of squeezing budgets to protect frontline services. Unfortunately, this is not enough and we have already seen huge cuts to non statutory service provision and a decline of over 11,000 jobs in the sector. In many parts of Wales, local government is not just one of the largest employers, it is often the only large employer. Sadly, on the basis of this draft settlement we can expect the size of the workforce to shrink even further and more services to close.
“While council leaders acknowledge the need to make savings, and the difficult decisions facing Welsh Ministers, we will only be able to transform and find better ways of delivering public services in Wales when we have a flexible and consistent financial framework that will allow us to do so.”
Councillor Dyfed Edwards (Gwynedd), Leader of the WLGA Plaid Cymru group said:
“The settlement by the Welsh Government heralds a new era for councils in Wales. The austerity policies of the UK government have created a perfect storm of reducing budgets and increased pressures on front line services. We face huge challenges in such circumstances and will need to work in partnership with the Welsh Government and the people of Wales in order to alleviate the effects on our communities. The future will be uncertain, but whatever it brings, things will not stay the same.
“Rural areas in Wales have suffered decreasing budgets for a number of years and have the added pressure of sustaining front line services in areas which are sparsely populated, and where the local authority is often the largest major employer by some distance. Reducing budgets for rural councils will therefore undoubtedly threaten the sustainability of rural communities in terms of employment and service provision.
“The financial crisis is here for the long term. We now need a new understanding for the Welsh public sector that will steer us through the years of austerity and offer leadership and hope for our communities.”
Councillor Hugh Evans (Denbighshire), Leader of the WLGA Independent group said:
“This is clearly the worst settlement for local government since devolution. Denbighshire is a high performing council that embraces change and is constantly seeking to innovate and improve the services it delivers. To continue doing so, we need much greater flexibility and consistency in how local government is funded.
“The Welsh Government is choosing to target cuts at local councils. It can also choose to reduce the bureaucracy and constraints that weigh councils down, and by doing so help enable local government to meet the significant challenges it faces during what is now the most difficult economic period in local government history. The stark alternative is sustained and major cuts to those public services that are so vital to local communities in Wales.”
Councillor Peter Fox (Monmouthshire), Leader of the WLGA Conservative group said:
"The challenges that face local government in Wales following Welsh Government cuts are unprecedented and of a magnitude that have not been experienced before. Over recent years local government has managed significant real term cuts, but the scale of the problems facing local authorities over the next few years will require radical approaches. Councils will have to question hard what services they can continue to deliver, especially with regard to discretionary services as they strive to maintain their statutory responsibilities."