As Councils throughout Wales enter the final stages of setting 2013-14 budgets, the WLGA has warned that balancing the demand for public services against ever dwindling council budgets is becoming increasingly difficult to achieve.
Councillor Aaron Shotton, WLGA Deputy Leader and Spokesperson for Finance and Resources said:
“Local government finances in Wales are under severe pressure because of the cumulative effect of a poor economic climate, UK Government public spending cuts and widespread reform of the UK Welfare system. Budgets are already tight and councils in Wales can expect to face a truly bleak financial forecast for a number of years to come.
“With Councils across Wales entering the final stages of setting their budgets for the coming year, tough decisions have to be made on how to make ever shrinking budgets meet an increasing demand for public services. The financial pressure that has been talked about for so long is very much a matter of the ‘here and now’. Councils have experienced an 8.4% real terms reduction in their spending power since the onset of the recession and the days of small scale savings are over. While there is a great deal of discussion still to be had, local Council budgets for the coming year must be agreed by 11 March 2013, with many Councils now having to decide what services can be protected, and what services may have to be cut in the future.
“Work commissioned by the WLGA from the Institute of Fiscal Studies in 2012 has shown how Councils may face tough financial settlements up to 2020-21, with savings of up to 52 percent needed in certain service areas. What we can expect to see from 2013 onwards is increasing pressure on local Councils to cut discretionary funding in service areas that are not protected, in order to cover the mounting costs of statutory services such as education and social care. Unfortunately, 2013 looks like the year that something will ‘have to give’ when it comes to financing local public services.
“With Councils also being particularly aware of the impact that Welfare reform changes such as the council tax benefit scheme and the ‘bedroom tax’ might have on their local communities, local government in Wales now faces the huge challenge of mitigating the worst effects of spending cuts and welfare reforms on their local communities.”
