Welsh local authorities facing 0.5% cut in core funding

11 Oct 17

Welsh local authorities will see their core funding cut by 0.5% next year, following the announcement of a settlement local government secretary Mark Drakeford described as “challenging but manageable”.

Drakeford yesterday announced a funding settlement totalling £4.2bn, including a £1.8bn funding floor to ensure no authority has to manage cuts of more than 1% in 2018-19.

The settlement also includes an additional £62m for schools and £42m for social services.

Speaking to Public Finance ahead of the settlement announcement, Drakeford said he had told local authorities last year to prepare for a tough settlement for 2018-19.

“I haven’t been able to step back from that rather stark warning,” he said.

“My aim… is to provide a settlement for local government which I know will be challenging, I can’t avoid it.

“I can’t wipe away the impact of austerity, but I have done my very best with colleagues around the Cabinet table to provide a settlement that is in the challenging but manageable.”

The settlement also includes an additional £6m for homelessness prevention on top of £6m provided last year, and £600,000 will be provided alongside the settlement to bring an end to charging for child burials. General capital funding remains at £143m.

“My priority, using a formula we have agreed with local government, is to try and protect councils from the worst of the cuts passed on to us by the UK government. I think this is reflected in the settlement for 2018-19,” Drakeford said.

“We have acted to protect funding for key public services such as schools and social care while also recognising the pressures that exist in areas such as homelessness prevention.”

Looking forward to the 2019-20 settlement, he warned that it “might be difficult” and urged councils to use the time available to them to plan.

An indicative settlement for 2019-20 shows a 1.5% reduction in the funds available to the Welsh Government. Ministers say they will continue to protect core services, particularly schools and social services.

The Welsh Local Government Association said councils would view the settlement as “very difficult and challenging”.

It said the headline cut of 0.5% disguised a much worse picture and, because of service pressures, the sector would have to look for savings of nearly 4.5% of net budgets in the next financial year.

WLGA leader Debbie Wilcox said she recognised Drakeford’s efforts to try and protect local services.

“The problem for local government is that we are now in a ‘war of attrition’. Services are wearing down to the point of collapse and the public are rightly growing frustrated in terms of paying council tax and yet seeing key community functions cut or closed.”

  • Vivienne Russell

    Vivienne Russell is managing editor of Public Finance magazine and publicfinance.co.uk

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