The Welsh Local Government Association has called for all constraints to be lifted on its funding settlement, as the Welsh public sector braces itself for at least four more years of cuts to public spending.
The call follows the publication of two reports by Wales Public Services 2025. The first report from the Institute of Fiscal Studies looks at the long term prospects for public expenditure in Wales, while the second report factors in demand pressures and concludes that Wales could face an acute funding gap of between £2.5 and £4.6 billion by 2025 if the whole Welsh public sector does not start to do things differently.
While this increasingly bleak long term financial forecast does remain uncertain, and will be shaped by decisions taken by the UK and Welsh governments, both reports provide ample evidence that the Welsh public sector needs to work together to plan for the demands of the future.
The reports also make it clear that cuts to spending on public services form only one part of the story. While public spending is set to reduce, significant demographic changes such as population growth and an ageing population mean that demand for public services is predicted to rise, creating a ‘double bind’ that will continue to impact in Wales even when the current period of acute austerity measures comes to an end.
Commenting on the report, Councillor Aaron Shotton (Flintshire), WLGA Deputy Leader and Spokesperson for Finance said:
“These reports confirm that with over two thirds of public spending cuts yet to be felt in Wales, the Welsh Government will have to perform an unenviable juggling act when it comes to allocating its dwindling financial resources. Our local public services are vital to communities in Wales and must not become the ‘ball that is dropped’ when Welsh Ministers decide how their reduced budgets should be spent in the future.
“While council leaders acknowledge the need to make savings, local services such as libraries, schools, leisure centres and community facilities all play a vital role in promoting economic and community well being in Wales, and actively reduce service pressures in other areas of the Welsh public sector such as the NHS. Any hunt for short term savings runs the risk of storing up significant difficulties for Wales in the future.
“Never before has Wales had to manage such a prolonged period of public sector austerity, and while it is easy to see this as a binary choice of protecting one area as opposed to another, there are far too many linkages between public services to take such a simplistic view. While cuts to the local government budget in England have already decimated the range and quality of services traditionally offered by local councils across the border, we must avoid this situation repeating itself in Wales and divest from and shape services in a way that does least harm to the people of Wales.
“Welsh Ministers have already called for a ‘Welsh way’ when it comes to responding to the current financial crisis. Local government remains committed to leading on this and creating a more positive outcome for residents in Wales, but will need much greater stability and flexibility in its funding if local councils are to meet the challenges of the future.”
