Statement to the National Assembly Finance Committee
Steve Thomas, Chief Executive WLGA - 13th November
"Thank you to Derek and thank you Chairperson and members of the Finance Committee. Can I apologise to this committee in advance since it is source of real regret to the WLGA that our first presentation to this new body is one characterized by severe disappointment on the one hand and growing consternation on the other. But let me proceed by saying that this budget is wrong on so many levels it’s difficult to know where to begin.
Initially to echo Derek’s point on specific grants, the debate about taking the settlement to 3.2% is a smokescreen. Core funding through RSG is and will remain the heart of the matter. Indeed I have to say that Leaders across the WLGA view this debate as disingenuous. This is particularly because we have been informed by a range of Assembly Members that the first draft of the local government budget that went to Cabinet contained an even lower projected figure than the derisory 2.2% outcome. What was actually proposed was a 1.7% “uplift” (I hope the irony of the use of that word is not lost on the committee)! What does this mean?
The answer is that local government services were in the firing line from the outset and firmly in the sights of the Finance Minister’s Department. What concerns us and should really concern this Finance Committee is to understand the strategic intention behind this budget proposal to diminish local government and local services. There are several possible explanations:
- It may be the view of the Government that in terms of affordability and the need to implement the One Wales Agreement, which has tied the coalition together, that the way to achieve this is for mainstream local services to take the strain.
- It may be the view of the Government that council taxes in Wales are too low in comparison with elsewhere in the UK and the best way of gaining a new resource into Welsh public finances is to squeeze the RSG to local authorities and shift the burden onto the council tax?
- It may simply be a view that local government is just not flavour of the month. But in this regard can we thank the finance minister since he has achieved the impossible, in one fell swoop he has united local government and he is in danger of making us popular!
WLGA group leaders met the First Minister yesterday who honestly pointed out that it would be difficult to unpick this draft budget at this 11th hour. But in candour we honestly do not know what is in the mind of the Government and if the work of this Committee can assist our understanding we would be grateful.
In these tight financial times why can’t we have an honest debate about why school funding is deemed to be less important than higher education funding, as it is in this budget?
I’m not a politician but you are. Answer me then: why is it in this budget that central administration, rural affairs, environment and heritage budgets all within the gift of the Assembly are deemed more important than getting more resources to our kids?
Can we deepen this? On the schools budget, an increase of 4% for Education has been quoted several times over the last week. But look at the budget lines and that is not the case. Along with the core funding for all other local services, the core schools budget (funded through RSG) has increased by only 2.2%. The 4% increase refers to all Assembly Government funded education and training services, including student payments, further education, higher education and various other initiatives such as Flying Start. In contrast Education in England will see an increase of 5.6%, further widening the gap between per pupil funding in the two countries; already £663 per pupil greater in England than in Wales. I point his out as both the chief executive of the WLGA and also a rather concerned parent!
As for the extra £15m Foundation Phase funding shown in the Early Years Revenue budget line, the additional funding equates to around half of the estimated costs of the initiative – based on the Assembly Government’s own calculations we required £30m.
Health is the other great area of public policy and their uplift is 4.2%. The Finance Directors of NHS Trusts in the next evidence session readily admit that for 2008/09 the levels of resources they receive are (and I quote) “better than anticipated”. They don’t say it’s brilliant, they’re not throwing a street party, but I repeat “better than anticipated”. WLGA does not complain about this: indeed we congratulate them. Health like education needs all the resources it can get. But clearly if the NHS resources are more than expected somebody has had to pay for this! Meaning in turn that there must have been a conscious Government decision that social services don’t merit as much resource as their partners in the NHS? Can we debate why that is please?
One final plea. Local government detects in some quarters the dangers of a real caricature emerging in the devolution debate in Wales. The supposition behind it seems to be on the one hand there is an unblemished and overwhelming constitutional political project that absolutely dominates our thinking but behind it is a range of rather dull and boring services such as environmental health, street lighting, community safety and home care which are falling off the radar. But they do so at our peril.
These same services are the foundation stones of devolution and every survey shows that the public care deeply about them. Tomorrow you will publish a local government budget where individual council settlements particularly in north Wales, rural Wales and parts of the valleys will fall below 2% for the first time in 10 years. Not a great start for a government that talked about uniting Wales. And can I suggest that you as a committee may want to reflect that it is obscene that with all these pressures between 3 or 4 councils may be at or around 1%. To stop this happening all that is required is a further £1.8m from Assembly funding. If you forgive us for descending into a sound bite our purpose today is to warn that you could end up with a “bonfire of frontline services” unless you urgently address this and the other issues we have highlighted."
Steve Thomas, Chief Executive, WLGA