“Small step in the right direction” as package of additional funding for local authorities unveiled

In a written statement Mark Drakeford AM, Cabinet Secretary for Finance, has unveiled proposals for additional funding for local authorities but it has had a lukewarm response in the Guildhall.

In the preamble he stated: “In preparing the draft Budget 2019-20, the Cabinet recognised the real pressures local authorities are facing and were resolute in our commitment to do all we could to protect them from the worst effects of the UK Government’s damaging policy of austerity as we entered this ninth year of austerity. When the National Assembly passed the final Budget 2018-19, in January 2018, local authorities were facing a 1% reduction in the revenue support grant (RSG) for 2019-20 – this was equivalent to a cash reduction of £43m.

“We worked hard during the preparation of the draft Budget 2019-20 to reduce that cut in funding in the RSG to less than £15m (equivalent to a reduction of 0.3% in the RSG). We also put in place a floor to ensure no authority would face a reduction in funding of more than 1%. The draft Budget also provided £84m of additional revenue in special grants and other funding streams for local government outside the RSG.

“This was still a challenging settlement overall for local authorities and we committed to local government being a key priority for any additional funding following the UK Autumn Budget last month. Local government has been at the heart of our considerations as we have worked through the detail of the UK Autumn Budget on our spending proposals over the last few weeks.”

A list of additional funding proposals for local government which will be included in the final Budget have been released and are copied below.

Reacting to the statement Cllr Mark Pritchard, Council Leader told us: “These have been very difficult times for local government and since 2008 we have had to find savings of over £56m . We are on a cliff edge and this is a small step in the right direction and we will consider the detail of the announcement when we receive it.

“We would be keen to see more significant increases when we receive the final local government settlement on 19th December”

The Welsh Local Government Association (WLGA) has said the announcement of additional resources for local services across Wales follows ‘productive discussions over the past month between Welsh Government and the WLGA’.

The WLGA said: “The Welsh Government committed to put councils at the “front of the queue” for distributing the money arising from the Chancellor’s budget. The Welsh Government has worked closely with council leaders to address the most significant service pressures. The funding floor has been raised from -1% to -0.5% and on top of this an additional £13m has been provided to take the Welsh average to a flat cash settlement, meaning more money for core services like education and social care.”

Councillor Debbie Wilcox, WLGA Leader stated: “The financial package announced is supported by WLGA and will be fully discussed at our Council on 30th November 2018. It signals significant progress in our ongoing deliberations prior to the finalisation of the Welsh Government Budget prior to Christmas. It demonstrates a concerted effort to offset the impact of austerity in Wales. Unfortunately, despite Westminster rhetoric, this failed philosophy is far from approaching its end game. Therefore, this does not mean the avoidance of cuts or rises to council tax since funding increases do not meet the pressures and costs of key services in relation to pay, inflation or demographics.”

“Despite this welcome announcement, there is no doubt that this remains a particularly challenging financial settlement after 8 years of austerity. In particular, schools and teachers’ pay pressures remain and a huge pension cost remains unresolved. Welsh Government and WLGA are writing jointly to Westminster to press for this to be fully funded by the Treasury.”

“We look forward to continuing constructive dialogue with the Welsh Government to address these issues and start identifying and agreeing major service pressures ahead and in next year’s budget setting process. The key point however is to stress that in Wales, our councils working with Welsh Government have sought wherever possible to cushion the blow of cuts and protect precious frontline services”.

Welsh Government have just announced package of additional funding proposals for local authorities – totalling £141.5m in rev / capital over 3 years. Will be interesting to see how it is received locally once all digested! pic.twitter.com/pRTk1VJ5wL

— Wrexham.com (@wrexham) November 20, 2018

The details of the package so far released are set out for the following financial years:

In 2018-19:

• A one-off package of revenue and capital of up to £6m to help to meet the repair and clean-up costs associated with Storm Callum
• An extra £4m revenue to meet social care pressures in 2018-19. This brings the extra funding for social care pressures to £14m this autumn – the full consequential from the “emergency” social care funding announced for England in the UK Autumn Budget
• £7.5m revenue to help local authorities meet the cost pressures associated with implementing the teachers’ pay award
• An extra £50m capital for local authorities’ general capital fund – this is the first instalment of a £100m increase over three years to the general capital fund.

In 2019-20:

• An additional £13m in the revenue support grant to provide local government with a cash flat settlement
• £1.2m to raise the funding floor so no local authority faces a reduction of more than 0.5%
• A further £7.5m to help local authorities meet the cost pressures associated with implementing the teachers’ pay award
• Allocating the full £2.3m consequential from the UK Autumn Budget for children’s social services – to help prevent children from being taken into care
• An extra £30m capital for the local authorities’ general capital fund – this is the second instalment of a £100m increase over three years to the general capital fund.

In 2020-21:

An extra £20m capital for the local authorities’ general capital fund – this is the third instalment of a £100m increase over three years to the general capital fund.