Local Government and Government Business Minister, Lesley Griffiths, today announced the provisional Local Government settlement for 2014-15.
The settlement of £4.26 billion, delivered against an unprecedented, challenging financial context, represents a reduction of 3.5% compared to the previous year, when adjusted for transfers.
Announcing details of the funding, the Minister acknowledged this is an extremely challenging settlement for Local Government in Wales but said it reflects a balanced outcome given cuts to the Welsh Government budget which mean that by 2015/16, the Welsh budget will be nearly £1.7 billion lower than it was in 2010-11.
The Minister outlined a number of steps she has taken to ease the burden on Local Government in managing difficult financial decisions, as well as help to sustain crucial local services and continue to ensure the best outcomes for the people of Wales.
These include a damping mechanism ensuring no single Local Authority faces an unmanageable reduction in their allocation compared to the previous year and the transfer of over £30 million of specific grants, from the Local Government portfolio into the Revenue Support Grant (RSG) to give Local Authorities greater flexibility in managing their resources. The settlement also, maintains funding of £244 million for the Council Tax Reduction Scheme (CTRS) following the abolition of Council Tax Benefit by the UK Coalition Government.
In line with the Welsh Government’s commitment to ensure the delivery of the best outcomes for Welsh children, the settlement includes the resources necessary to implement a 1% protection for school funding.
As a result of the reductions in the capital budget delegated to the Welsh Government by the UK Government, capital allocations for Local Government continue to present challenges. However, it is likely capital funding for 2014-15 will represent a better settlement for Local Authorities than was indicated last year.
Lesley Griffiths said:
“I acknowledge this is an extremely challenging settlement for Local Government in Wales, which reflects the unprecedented, challenging financial context we are operating within. The persistent pressure on our budget from the UK Coalition Government has forced us to make some difficult choices. Despite this, the Welsh Government has consistently achieved a better outcome for Welsh Local Authorities compared to England, and we continue to do so with today’s settlement.
“I could not have been clearer about the future financial reality facing Local Government in Wales and I have provided warning of the likely shape of budget reductions. For the last three years, the Welsh Government has shielded Local Government from the full force of the cuts to allow them to prepare for the transformational change necessary to maintain vital local services, whilst limiting any additional financial pressure on hard-pressed households.”
The Minister added:
“I have worked hard to ensure the best possible outcome for Local Government given the funding constraints we face and to increase flexibility, achieve fairness and provide additional support. The decisions I have taken reflect the value the Welsh Government places on the wide variety of services provided by Local Government in Wales.”
“The focus must be on intensifying efforts to maintain quality services which deliver strong outcomes through more efficient, innovative and collaborative ways of working. Today’s settlement emphasises the Welsh Government is committed to working in partnership with Local Government to manage the challenges ahead and to continue to deliver for the people of Wales.”
The Minister’s announcement on the settlement marks the commencement of a consultation period which will end on 20 November 2013.