Wednesday, November 02, 2005
The curious case of the Assembly's Tax storm
The publication of the local Council funding settlement yesterday was bang on schedule and that is the problem. The Local Government Minister has told authorities how much they will be getting from the Assembly budget in 2006-07 and yet that budget has not yet been approved. Indeed, when it came to Plenary the opposition forced through an amendment that effectively rejected it. As a result party leaders have started negotiations to find an acceptable financial settlement, the latest session of which occurs tonight.
Now, I understand the necessity of giving Councils as great a notice as possible of how much they will have to spend and so I suppose it was reasonable that the Minister should outline her proposals. However, the announcement did cause a few raised eyebrows here, not least because it takes no account whatsoever of the Assembly resolution that there should be a further scheme to help victims of the Welsh Council tax-rebanding exercise.
There is also the fact that the settlement has, once more, left many Councils in financial difficulty. A big chunk of the 5.1% increase is, in fact, earmarked grants, leaving precious little extra to cope with inflationary pressures. If Council tax bills are to be kept in single figures then there will need to be large scale cuts in services across Wales.
This has been exacerbated by the decision to hold back £33 million, the effective 1% efficiency savings that the Assembly expects Councils to make. Because the Assembly is not giving local authorities the opportunity to re-invest these savings in frontline services as is happening in England, this is effectively a centrally-imposed 1% cut in schools, social services, highway maintenance, cleansing etc etc. We are still trying to get Ministers to admit this publicly but so far they are the only ones who are in denial, and that includes local government itself and a number of key officials.
Now, I understand the necessity of giving Councils as great a notice as possible of how much they will have to spend and so I suppose it was reasonable that the Minister should outline her proposals. However, the announcement did cause a few raised eyebrows here, not least because it takes no account whatsoever of the Assembly resolution that there should be a further scheme to help victims of the Welsh Council tax-rebanding exercise.
There is also the fact that the settlement has, once more, left many Councils in financial difficulty. A big chunk of the 5.1% increase is, in fact, earmarked grants, leaving precious little extra to cope with inflationary pressures. If Council tax bills are to be kept in single figures then there will need to be large scale cuts in services across Wales.
This has been exacerbated by the decision to hold back £33 million, the effective 1% efficiency savings that the Assembly expects Councils to make. Because the Assembly is not giving local authorities the opportunity to re-invest these savings in frontline services as is happening in England, this is effectively a centrally-imposed 1% cut in schools, social services, highway maintenance, cleansing etc etc. We are still trying to get Ministers to admit this publicly but so far they are the only ones who are in denial, and that includes local government itself and a number of key officials.
