For the second year running, Chancellor Jeremy Hunt is talking about “difficult decisions”. At the moment these appear to involve choosing between squeezing those unable to work due to ill health or disability even more tightly, or giving already-wealthy people a break on inheritance tax worth billions. Clearly such decisions don’t result in difficulty for everyone. But nearly 14 years of austerity under a revolving-door Conservative UK government, inflation, runaway energy prices, and culture wars have had huge and broad impacts, especially on local authorities and the public services they deliver, including those in Wales.
For example, Carmarthenshire Council says the Home Office owes it £230,000 for time and costs wasted on an imposed scheme to house asylum seekers that inflamed community tensions, acted as a meeting/spark point for far right groups, cost hotel workers their jobs, funded someone with a problematic history, then came to nothing. Council leader Darren Price noted that officers were diverted from usual tasks during a time of “significant budget strain” to handle the “fiasco”.
The following excerpts from three stories by Local Democracy Reporters in Wales were published in the last week or so alone. They exemplify how councils are increasingly forced to make ‘difficult decisions’ on the delivery of public services due to decisions made in London.
Vale of Glamorgan: council leader shares thoughts on latest financial situation
Vale of Glamorgan Council continues to face a “very challenging” financial situation according to its leader as its projected budget gap grows. The leader of the council, Councillor Lis Burnett, addressed cabinet members at a meeting on Thursday 16 November about the council’s revised projected budget gap of £10.5mn for 2024/25. Inflation and “exceptional increases in demand” for council services are some of the contributors to the continued financial pressure.
An initial forecast indicated that Vale of Glamorgan Council’s costs will rise by 38.525mn for the next financial year. That figure has since reduced to £20.767mn. “It remains very challenging. We have seen information in the last 24 hours that inflation has gone down, but that doesn’t mean that prices are cut, it means that they increase at a slower rate.”
Some of the biggest pressures on the council’s public services include an increase in children looked after by the local authority, a growth in the number of adults needing social care, and an increase in the complexity of the provision required. Following a better-than-expected settlement from the Welsh Government last year, Vale of Glamorgan Council faced a budget gap of £9mn.
However, the leader said she was not as confident that the local authority would receive as good a settlement this time around. She said: “The prospects … this year are very low with the current performance of the economy.”
Ted Peskett, Local Democracy Reporter
Monmouthshire: £14mn funding shortfall for public services
Jobs are likely to be slashed at a Gwent council that has warned it is facing a £14.4mn shortfall in the amount of money it needs to operate. A report for Monmouthshire County Council, which has around 4,500 staff, warns: “Given the size of the budget gap, it’s likely that there’ll be redundancies within the council’s workforce in the lead up to, and during the financial year commencing 1 April 2024, notwithstanding every effort being made to avoid them.”
The Welsh Government indicated in March this year the funding it awards local government would increase by 3.1% for the 2024/25 financial year, which would see Monmouthshire receive an extra £3.8mn above the £122.675mn basic funding settlement it was provided with for the current financial year. But there’s no guarantee the council will receive an increase of that amount, with the Welsh Government having already warned inflation is eating into its overall budget, and Labour-led Monmouthshire said a 3.1% increase wouldn’t be enough to meet its needs anyway.
It is facing an increasing demand for its public services which funding isn’t meeting the cost of providing, and inflation and energy prices that are “still far higher than two years ago”. It is also feared the Welsh Government won’t fully fund pay rises for teachers, with the council also facing higher pay demands for other staff and having to meet a likely increase in the Real Living Wage for the lowest paid.
The Labour member for Llanfoist and Govilon said the council wants the UK government and Welsh Government, which is largely dependent on Westminster for the bulk of its funding, to “provide the funding which at least covers the cost of inflation and the increased demand on services.”
Twm Owen, Local Democracy Reporter
Blaenau Gwent: trust that runs leisure centres sees £1.1mn rise in energy costs
Astronomical increases to energy costs could see the organisation responsible for delivering leisure, learning, and cultural services in Blaenau Gwent spend all the money it holds in reserve by the end of this financial year. The dire financial warning was issued at a meeting of Blaenau Gwent County Borough Council’s Partnerships scrutiny committee on Thursday 16 November, as councillors discussed a performance report for Aneurin Leisure Trust (ALT) for the 2022/2023 financial year.
In that year, Blaenau Gwent paid a management fee of just under £3.2mn to the not-for-profit organisation, which runs the sports centres at Abertillery, Ebbw Vale, and Tredegar. The report explained that the trust had financial reserves of £1.260mn at the end of March 2022 – but had to use just over £450,000 of this to balance the books. This leaves ALT with a reserve of £810,000.
The report said: “As things stand the forecast deficit will virtually wipe out the Trust’s reserves in this financial year (2023-24). This means that ALT will be in an extremely vulnerable position for 2024/25 onwards and will need to achieve significant cost reductions which is likely to lead to reduced service delivery.” The report also explained that energy costs had jumped by 207% from what they had been in 2019/2020.
Elgan Hearn, Local Democracy Reporter