04 September 2012
Local council leaders in Wales have united to challenge the UK Government on the financial cost of UK welfare reforms and their operational delivery.
Granted Royal Assent in March 2012, the Welfare Reform Act will lead to wholesale changes to the structure of the UK welfare system.
With hundreds of thousands of people in Wales already suffering the effects of a weak UK economy, job losses and decreased earnings, welfare reform presents one of the most dramatic changes to Wales’ social safety net in decades.
The WLGA Coordinating Committee has written to the UK Government outlining how the current funding allocations for delivering changes to the welfare system in Wales, are based on highly optimistic financial forecasts that could lead to Welsh councils having to foot the bill for these already unpopular reforms.
Councillor Aaron Shotton (Flintshire), WLGA Deputy Leader and Spokesperson for Finance and Resources said:
“Welfare reform in Wales represents a transfer of liability to local councils which has not been seen for generations. This comes at a time when councils are already trying to balance an increasing demand for public services, against a worsening financial climate. What local authorities need, both in Wales and the rest of the UK, is an early, accurate and transparent announcement from the UK Government on both the financial and social cost of their reforms. Only then can local government in Wales budget effectively and begin to mitigate the effects of these reforms.”
The call from the WLGA focuses on the level of central Government funding that will be required to deliver changes to Wales’ council tax benefit system. It is estimated that changes to the system could lead to a shortfall of up to £50million in Welsh local government finances. If the burden of this extra financial demand falls on Welsh local government then it will place added pressure on core services such as housing, social care and education that already find themselves stretched by the current economic climate.
Similar financial confusion arises for all elements of UK welfare reform, and the WLGA has called for an ongoing assessment of the new burdens created by changes to the welfare system to ensure that local councils, and the communities that they serve, are fully compensated for any hidden or unforeseen costs.
Councillor Anthony Hunt (Torfaen), Deputy Spokesperson for Finance and Resources commented:
“Council leaders are deeply concerned over the complexity of the changes being introduced to the UK benefits system. We do not believe that these reforms are transparent, or that the wider social and economic consequences of these changes have been fully evaluated. We estimate that current claimants of Council Tax Benefit may lose up to a fifth of their benefit within a few years and the outlook for the claimants of other benefits is no better. The impact of UK Welfare reform on the most vulnerable people in Wales remains highly uncertain, and there are likely to be longer term impacts in terms of social disadvantage, educational attainment, health and well being. All of these impacts will create higher long term costs for local government.”
Councillor Shotton added:
“If local councils are left to foot the bill then local communities will face a double hit based on the nature of the reforms themselves, and also through the transfer of budgets from existing front-line services to cover additional welfare reform financial burdens. This is simply not acceptable. Any additional costs for local councils created by welfare reform must be funded directly by central government.”
For more information contact: Stuart Hodges