Responding to the publication of the Welsh Assembly Government’s draft budget today, the WLGA says it signals the start of a long period of significant cutbacks and contraction within local government in Wales.
Today’s figures show that the Assembly Government has sought to prioritise front line services, in what the WLGA recognises has been a hugely challenging set of budget negotiations for Assembly Ministers. We are grateful for the extensive dialogue we have had with Finance Minister, Andrew Davies and Local Government Minister, Dr Brian Gibbons. Such dialogue will be vital as we tackle difficult decisions over the forthcoming years.
Whilst not unexpected, the 2.1% uplift for local government remains by far the worst financial settlement since devolution with the Assemblies own budget facing significant pressures. This matches the average uplift across Assembly Government departments but falls below health which sees a 2.6% increase.
The future for individual councils on both current spending and key capital projects is bleak. This will be especially pronounced in those areas already hardest hit by the recession. As a result of this year’s budget, some authorities are likely to see increases of below 1%. The WLGA is calling therefore for urgent discussions with the Assembly Government to put a “floor” funding arrangement in place to protect these authorities and to ensure that all councils receive a minimum uplift.
Cllr John Davies (Pembrokeshire), WLGA Leader said: “All parts of the public sector will need to work together over the next period to try to mitigate the impact of cuts. We fully support the Assembly Government’s proposal for a Public Services Summit in Wales in order to ensure a ‘Team Wales’ response to what will be the most severe set of budget cutbacks for many decades. This year already, the local government workforce has accepted a 1% pay rise – the lowest pay rise compared to any other part of the UK public sector, as well as agreeing to a pay freeze for senior officers. Over the next few years further tough decisions will be needed by councils and the key question they will need to ask themselves will be what they need to stop doing in order to protect frontline services. The reality is that the years of austerity within the public sector have begun and we are in this for the long haul. The challenge for all parts of the public sector will be to prioritise front line services and to remove unnecessary and costly overheads in areas such as regulation and inspection.”
Cllr Rodney Berman (Cardiff), WLGA Finance spokesperson added: “This year’s budget comes on top of already difficult settlements over recent years where local government has played second fiddle to other Assembly Government priorities including health. The impending crisis must be recognised by everyone as must the need for all parts of the public sector to make equally radical decisions over resource priorities. There is need for an open and transparent public sector debate to determine priorities for the coming period and also to reinforce the message that services will be cutback and that difficult choices will need to be made. Within my own local authority for example, we have already undertaken a voluntary severance exercise and anticipate that over the next five years our workforce will need to be downsized.”
Today’s budget the WLGA says is the precursor of much worse to come. Indeed, for the first time since the establishment of the National Assembly in 1999 there will be ‘real and potentially deep cuts in public expenditure in Wales between 2010 and 2014’.
Maintaining current levels of service delivery and the existing local government workforce will be the greatest challenge to face councils. In some service areas real cuts will occur and many councils are already seeking voluntary redundancies and early severance across their workforce. As vacancy freezes become the norm across Welsh local authorities, the WLGA also says today that one of the key challenges for councils will be minimising the impact of the recession on the 16-25 year olds who are being hardest hit and is today warning that to under-invest in this generation over the next few years could have devastating consequences for the future.
