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19.10.16

Welsh local government receives first funding increase since 2013

Funding for Welsh councils will increase for the first time since 2013-14, with a £3.8m increase in the 2017-18 funding settlement compared to last year.

The cash increase is due to the introduction of a -0.5% funding floor, which means that many councils will receive a funding increase and no council will have to manage on less than 99.5% of the cash provided to them last year.

The total capital funding for 2017-18 will be £442m, while general capital funding will stay unchanged at £143m.

Mark Drakeford AM, the Welsh local government secretary, said: “This is a stable settlement in challenging times and will allow local government to set sustainable budgets despite constraints on public finances.”

Following concerns about an acute social care funding shortfall for Wales, the government said the funding would also include £25m for social care.

The settlement also takes account of the Welsh government’s agreement with Plaid Cymru to provide local government with an additional £25m to support the delivery of vital services, as well as £1m for school transport and £3m for a pilot scheme to support town centre car parking.

Drakeford also published more information about other Welsh government grant schemes planned for 2017-18, providing access to a further £650m of funding.

Funding for council tax reduction schemes will stay at £244m, allowing 300,000 impoverished families to receive support.

Welsh councils have managed to improve their performance in recent years, despite suffering funding cuts and proposals to cut the number of councils from 22 to eight or nine.

Cllr Bob Wellington, leader of the Welsh Local Government Association (WLGA), said: “I am pleased that during difficult times Welsh government ministers are listening to local government working with us to mitigate the worst excesses of austerity. Today's settlement offers a welcome easing to the reductions of recent years.  We recognise that it has not been easy for the Welsh Government to achieve this when there are competing demands on their own funding that is further stretched by continued austerity.

“We also welcome the Welsh government’s announcement which recognises the strong call made by the WLGA for recognition of the important contribution that council-run services make to reducing costly pressures in other public services such as the NHS.”

However, Cllr Dyfed Edwards, WLGA Plaid Cymru group leader, said Welsh councils will still face “severe financial pressures estimated to be around £200m for the next financial year alone” and this “settlement is very much less severe than past announcements”.

“As leaders we will need to look at how we can transform our services and fully grasp the digitalisation agenda. I would urge my colleagues, elected members and officers to fully engage with their communities about the future of local public services and be clear about the financial pressures being placed upon them,” he added.

A report from the Wales Audit Office earlier this year warned that Welsh councils have scope for improvement in their governance and financial planning arrangements.

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