Making savings without effecting services, extremely tough for councils warns WLGA
11 June 2009
Welsh councils could face cuts of tens of millions of pounds over the next few years as a result of the expected substantial reduction in government funding, warns the WLGA today.
Responding to a savings strategy that is being considered by Gwynedd Council to deliver an additional £16million of savings over the next three years, the WLGA has said that all councils are carefully considering their spending plans in view of a bleak funding outlook, whilst emphasising the difficulty for councils in making savings without effecting services.
Steve Thomas, WLGA Chief Executive said:
“The collapse of the international banking sector and the global recession has had a profound effect on UK public finances. In Wales, the headlines for all tiers of elected government are stark. For example, the Institute of Fiscal Studies (IFS) has forecast that; overall public spending will fall by 0.1% annually in real terms from 2011 to 2014 and if the budget squeeze continues to fall on public spending up to 2017-18, total public spending would fall back to the level of 2002. How will this affect the average Welsh family? The IFS predicts that bringing public finances back into balance will cost every UK family £2,840 per year by 2017-18 through higher taxes or public spending cuts.”
“We saw from the Chancellor’s Budget Report earlier this year that the Welsh Assembly Government will see a significant budget contraction over the next few years, a reduction of £216m in revenue and £200m in capital in 2010-11 alone. The Assembly has already signalled the difficulties this new public finance context will present for Wales, both for the Assembly itself and other public bodies. ”
“Every public body will need to plan and work together, however greater efficiency alone will not be enough to deliver the levels of savings that are needed, other radical choices will be required. The next five years will be the true test of devolution in Wales as we work together to maintain public services within one of the most difficult and demanding of contexts since the second world war.”
“700 local government jobs have already been lost in Wales during 2009 and up to 2,000 are predicted by 2011 due to the recession. With the outlook for councils looking so bleak over the next three years, every council is already planning ahead and reviewing their medium term financial plans. Making savings without affecting services is going to be extremely difficult for councils and tough choices over potential service cuts are inevitable. A local government pay offer 0.5% has been put forward for this year and it might be that in the future we have to look at a pay freeze.”
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