Minister rejects funding formula “bias” as Senedd passes local government settlement

(Title Image: Wales Online)

Immediately following the debate on the national budget for 2019-20, a debate on the local government settlement – which determines how much money councils will have to spend in the coming financial year – took place.

Carefully considered

Local Government & Housing Minister, Julie James (Lab, Swansea West), explained the numbers:

“Next year, local authorities in Wales will receive over £4.2 billion in general revenue allocations from core funding and non-domestic rates. This is an increase of 0.2 per cent compared with 2018-19. The distribution of this funding reflects the most up-to-date assessment of relative need based on information on the demographic, physical, economic and social characteristics of every authority in Wales.”
– Local Government & Housing Minister, Julie James

The Minister said careful consideration had been given to consultation responses and additional money has been provided to mitigate against the budget cuts that had been originally planned; no council faces a cut of more than 0.3% compared to the current budget. An additional £100million in capital spending will also be made available to councils over the next three financial years.

A false economy

Shadow Communities Minister, Mark Isherwood AM (Con, North Wales), said the WLGA considered the budget to be driven by “tired and outdated thinking”.

While the Welsh Government were often making unflattering comparisons to England, he said they were no longer comparable due to major differences in budget allocations – England gives money directly to schools, for example.

“….we heard last week in the debate on social care funding about the challenges that face social care. Funding care comes under the auspices of local government, and expenditure on social care has remained flat since 2009-10, despite the increase in demand for services and the increase in staffing costs as well—increases in pensions, wages and external contracts.”
– Dr Dai Lloyd AM (Plaid, South Wales West)

Caroline Jones AM (Ind, South Wales West) pointed to stalled local government reform:

“Local government officials blame the Welsh Government, and the Welsh Government blames the UK Government, but in truth, they are all to blame. Years of waste and buck-passing have resulted in today’s crisis. Decades of profligate, wasteful spending and an unfair tax system at a UK level have resulted in the need for austerity. Welsh Government’s mismanagement of local government has resulted in duplication and waste; why do we need 22 separate local authorities? We don’t.”
– Caroline Jones AM

“From disastrous to bad”

Continuing his backbench scrutiny from the debate on the final budget, Mike Hedges AM (Lab, Swansea East) said that while the council settlement had improved, it was only “from disastrous to bad”.

He was particularly concerned about school budgets, citing correspondence with headteachers who say support staff positions have been cut and some schools were using non-qualified teachers in nursery classes.

“The National Assembly’s research briefing entitled ‘School Funding in Wales’ highlights the following facts. Between the academic year 2010-11 and the current academic year 2018-19, local authority gross expenditure on schools has decreased in real terms by just under 8 per cent. The average amount local authorities spent per pupil in 2018-19—whilst being £266 higher than that spent in 2010-11—is a real-term decrease of 7.5 per cent.”
– Mike Hedges AM

Jack Sargeant AM (Lab, Alyn & Deeside) said that conversations with local councillors revealed a feeling there was a north-south divide, but he also called for council tax to be reformed to be more progressive.

In reply, the Minister said her door was open to AMs or interested groups who want funding decisions for their local council explained, but the funding formula was agreed each year with input from councils. She rejected any suggestion of favouritism or bias in the formula.

Vote

This vote was a bit closer than the one on the main Welsh budget.

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