Recession having significant impact on council services, reports WLGA
05 March 2009
At least 700 jobs will be lost across Welsh councils this year as a direct result of the recession and budget pressures.
A WLGA survey published today into the effect of the economic slowdown on Welsh councils shows that 11 authorities will make jobs cuts during 2009-10, 300 of these are expected across South East Wales authorities and over 200 across South West Wales. However, more than half of Welsh councils expect the recession to result in greatly reduced employment levels over the next few years, with up to 2000 redundancies likely before 2011.
Almost half of councils have reduced staff numbers by seeking voluntary redundancies or introducing a full or partial recruitment freeze, whilst others have undertaken strict reviews of every vacancy to ensure that filling the post is essential.
Today’s survey highlights an overspend across every local authority budget for 2008-09 due to the economic slowdown, with every council experiencing additional demands for services, most notably around increased numbers of people seeking welfare advice and people making housing benefit applications.
In addition, councils anticipate a loss of nearly £35m of investment income during 2009-10 as a result of loss of interest, interest cuts and impact of economic slowdown.
WLGA Leader, Cllr John Davies (Pembrokeshire) said:
“These are extraordinarily tough times for councils. We are all in the situation where our income is falling, yet our expenditure is increasing. Over the last year we have already seen a significant downsizing of local government services and staff levels as a result of insufficient funding for local government. The recession has exacerbated local government pressures at a time when councils are already struggling through insufficient budget settlements.”
“Councils have become well accustomed to delivering much more for less, indeed, we have more than adequately responded to this challenge, delivering efficiency savings that far exceed our targets for example. However, today’s survey highlights what local government has been saying for many years - there is only so much that been squeezed out of an already pressurised system before something gives.”
“Welsh councils are being forced into taking very difficult and often unpopular decisions as a result of insufficient settlements year on year that do not even cover the cost of service delivery. The recession has only added to existing pressures. For example, local authority incomes are falling significantly with 20 authorities across Wales already having reported a reduction in the number of planning applications being made, asset sales are also falling through a fall in land value and developers’ lack of confidence in the current market and our balances are being adversely affected through interest rate cuts.”
“Protecting front line services remains the main priority for every Welsh council. This is evidenced by this week’s average council tax rise of 3.9% - an example of councils working vigorously to strike the right balance between protecting public services and ensuring that no further financial burden is put onto communities at a time when they are already finding it hard to make ends meet.”
More than half of councils also reported increased demand for the services of voluntary organisations such as CAB in their local area, in providing debt counselling and housing advice services for example.
However, some of these voluntary organisations have themselves been affected by the economic slowdown with six local authorities across Wales having already provided emergency grants to local voluntary organisations in their local area which are experiencing financial difficulties.
All 22 local authorities in Wales responded to the survey.
Ends