09 January 2004
A bitter political row has broken out this week after the Welsh Assembly government announced that it was going to tackle bed-blocking with money earmarked by Chancellor Gordon Brown for keeping down council tax bills.
There were immediate demands for Brown to intervene following the announcement from Sue Essex, the local government and finance minister, on January 6 that she intended to redirect his extra millions to fund services for people leaving hospital.
The £22.4m, Wales's share of the £406m extra funding for local government unveiled in Brown's November Pre-Budget Report, was supposed to 'address the concerns' of council tax payers. He had also pledged that the money would be 'free of ring-fencing'.
Welsh MPs and council leaders slammed Essex for ignoring Brown's intentions and distributing £19.5m of the money in the form of ring-fenced grants that must be spent on anti bed-blocking measures, irrespective of whether the authority has a problem in that area. The rest will be spent on combating social deprivation.
There have been loud demands that councils be allowed to decide where to spend the money to ensure that council tax increases are kept to a minimum.
Monmouth Labour MP Huw Edwards, who has been leading the protests, spoke to Public Finance immediately after having an emergency meeting with Gordon Brown over the issue on January 7. As PF went to press, he was also seeking an urgent meeting with Welsh First Minister Rhodri Morgan. Meanwhile, several other Welsh Labour MPs met Welsh Secretary Peter Hain on January 6 to express their anger.
'Gordon acknowledges that the aim of the extra money was to cushion council tax increases next year,' Edwards said. 'He stands by what he said in his statement, but he cannot intervene because under devolution the decision is up to the Assembly government.'
Edwards said Monmouthshire County Council estimated that the ring-fencing meant a likely council tax increase of 10.5% next year instead of 8.5%. 'I support devolution but this is a clear distortion of the chancellor's intentions,' he added.
The Welsh Local Government Association was equally critical, accusing Essex of 'breaking the spirit' of Brown's original commitment.
Steve Thomas, its head of strategic policy, told PF that councils would be 'as creative as possible' in how they used the money, but warned their hands had been tied.
'How the money would be distributed was supposed to be the key debate, but the debate never really happened,' he said. 'We need an opportunity to comment and an opportunity to prioritise the use of the money. We are asking for the money to be available to us in the same way as it is for English councils.'
But Essex remained unrepentant, insisting that the money was being used in the best interests of the public.
'The Assembly government is determined to ensure that this additional money is put to the best possible use by tackling key concerns for people living in Wales,' she said.
PFjan2004
