Welsh councils are facing a staggering budget pressure of £559m next year, which equates to a potential council tax hike of 26% or the loss of almost 14,000 jobs. This daunting prospect was laid bare before a committee by Mark Pritchard, the leader of Wrexham council.
He acknowledged the provisional improvement in the settlement from the Welsh Government that registered a 3.8% increase in December, but he cautioned that even the increased funding falls short of what is necessary, with service cuts, redundancies, and a higher council tax looming ominously. “We’ve got no other option here,” he said.
In his testimony to the Senedd’s local government committee on January 8, Cllr Pritchard admitted that while there was a sense of relief at the revised financial position, it remained inadequate. He expressed a stark concern: “Is it a relief? Yes, it’s better, it’s an improvement but it’s not enough.” For the latest Welsh news delivered to your inbox sign up to our newsletter
He also questioned the intentions of the Welsh Government, noting: “I think I have to say this: is the Welsh Government setting us up to fail because they know what the pressures are… all we want… is to be funded appropriately.”
Cllr Pritchard did not hold back on challenging areas such as adult social care and children’s services in Wrexham, where despite an additional £25m put forward by the independent-led council, they continue to struggle. He flagged the dire risk of compulsory redundancies and contended that job losses could spiral into the thousands across Wales, while the risk of bankruptcy still looms.
He noted: “The way we’re going … we’re on the edge and unless the money comes there will be serious consequences.” Further complicating matters for Welsh councils is the looming £109m cost attributed to rising employer national insurance contributions, on which Cllr Pritchard is demanding clarity before the proposed June implementation date.
Speaking to the committee, he said: “If the money’s going to come, they should give it us. We’re setting out budgets before it – it’s a nonsense.” Addressing the ongoing financial trials facing councils after 14 years of austerity, Labour leader of Monmouthshire council, Mary Ann Brocklesby, highlighted the severe structural difficulties encountered. She drew attention to the critical areas of social care and education, stating: “The resources we have available to deal with the increasing pressures are not there.”
Councillor Brocklesby noted that funding for additional learning needs support and school attendance is already “‘Cut to the bone’ Mary Ann Brocklesby, the Labour leader of Monmouthshire council, said councils have faced deep structural challenges after 14 years of austerity. She added: “Nevertheless, I breathed a huge sigh of relief when the settlement came. ”
Without the proposed 3.8% average increase in funding, she explained to the committee the dire outcomes that could arise, such as widespread job cuts and dramatic reductions in services.
Gary Pritchard, leader of the Plaid Cymru-run Isle of Anglesey council, also conveyed a stark picture. He said: “After 14 years of austerity, there is nothing left to cut – we have tightened the belt as much as we can.”
Inquiring about the consequences of the UK Government’s decision to lift NI contributions, he estimated an internal cost to the council of approximately £4m-£4.5m. Additionally, he expressed worries over the ambiguity of reimbursements for councils after budgets are decided, particularly for outsourced services. He said: “There’s no clarity in terms of whether every element of the council’s work will be paid or just the statutory elements.”
Jane Gebbie, Bridgend council’s deputy leader, has highlighted the financial strain on councils, with an additional £44m cost for commissioned care not being covered by the UK Treasury. The Labour councillor told the committee councils were fortunate not to receive a cash-flat settlement for the 12 months from April.
Speaking to a committee, the Labour councillor expressed relief that councils did not receive a cash-flat settlement for the upcoming 12 months from April.
She said: “We’re all very grateful for that … I would have imagined that there would have been various councils across Wales issuing section 114 [bankruptcy] notices because they would have no longer been in a position to deliver services.”
Cllr Gebbie noted the significant reduction in local government staff, by 40% since 2010 and mentioned that Bridgend council is not considering redundancies due to recruitment challenges.
She contrasted a 4.3% increase with a 5.7% pay offer to workers, saying: “Already that indicates that we won’t have the resource to pay our staff appropriately.”
Cllr Gebbie stressed: “We need to be realistic about what we are able to provide. We don’t deliver gold-standard services in local government any more.”