05 October 2012
A new report published by the Welsh Local Government Association today has revealed the bleak financial climate that will be faced by local councils in Wales potentially up until 2021.
Launched at a finance conference hosted by the WLGA in Cardiff, the report presents a range of bleak financial forecasts that show how spending on public services in Wales is set to face a hugely challenging future following the spending cuts and reforms to the UK Welfare system proposed by the UK Government.
Local government finances are already under pressure in Wales, with per person spending having already fallen by 8.4% in real terms since its peak in 2009−10. Further spending cuts are also threatening core services.
Councillor Aaron Shotton (Flintshire), WLGA Deputy Leader and Spokesperson for Finance and Resources said:
“While every local council in Wales is already feeling the squeeze when it comes to protecting vital public services, this report highlights how over three quarters of the cuts to spending on public services are yet to come. The cuts and the pressures on local government finances are only just beginning, and the long-term financial future of local government in Wales is challenging.
“We will need to respond to that challenge in a positive way and redouble our efforts around public service reform. We will not be immune to taking difficult decisions about service priorities and we will have to engage our communities in that debate.”
Based on the report findings, the financial situation for Welsh local authorities will be tough until at least 2020−21, with even the most optimistic set of financial assumptions meaning Wales could see a 1.6 percent reduction in per person spending power in 2021 compared to 2013.
A far more pessimistic financial projection could mean that Welsh council’s spending power will be reduced by as much as 18 percent. This could be a likely scenario due to the continued weakness in the economy and the state of wider UK public finances. Decisions around protecting the NHS and UK Government’s plans for welfare spending will also determine future investment in local services.
Such large reductions to local government spending power represents a huge challenge for local councils that may have to deliver spending cuts of up to 52 percent in those services that are unprotected.
Councillor Aaron Shotton added:
“This timely report acts as a wake up call on the true severity of the current and long-term financial crisis in public spending in Wales. Such large cuts, in addition to those already made will be difficult to achieve without affecting the range and the quality of services currently provided to local residents. Such a bleak financial climate means that councils may be forced to cut, or scale back spending on a vast array of services that they have traditionally delivered. Local government in Wales faces a hugely challenging fiscal situation for many years to come. We will need to innovate, and we will need to mitigate the negative effects of spending cuts and welfare reforms if we are to protect our local communities.”
For more information contact: Stuart Hodges