Thursday, November 08, 2007
The real story
The new scrutiny arrangements for the budget really kicked-in today with Assembly Members on the Finance Committee making the most of their opportunity to get beneath the skin of the Government's financial plans for the next three years.
The BBC report that having established that the increases announced by the Finance Minister were in 'cash' terms before the 2.7% inflation rate was taken into account, the Committee have unravelled the Labour-Plaid spin. They have demonstrated to the public that far from the budget being good news as the Government would have us believe, there are in fact real term cuts in key services.
Core funding for local government and social justice will be cut by 0.6% in real terms in 2008/9 - and stay broadly flat in the two years after that, vindication for the WLGA and a bit of a body blow to Andrew Davies, who claimed on Tuesday that the central funding for Councils "will grow by more than 3.2 per cent in 2008-09, not 2.2 per cent as quoted by the Welsh Local Government Association. That figure is very close to our overall growth in spending of 3.4 per cent."
It seems that is only true if you lump in hypothocated grants that cannot be used as general revenue to offset the Council Tax. And when inflation is taken into account that 3.4% increase in the budget in 2008/9 is just 0.7%.
The Committee established that the increase in health and social services next year is in fact just 1.5%, whilst economy and transport budget will receive a modest cash boost of 1.3% in the first year, 2008/9 but in 2009/10 it will be cut by 1.8% and by 1.7% the year after. The education budget faces a real term cut.
The BBC report that having established that the increases announced by the Finance Minister were in 'cash' terms before the 2.7% inflation rate was taken into account, the Committee have unravelled the Labour-Plaid spin. They have demonstrated to the public that far from the budget being good news as the Government would have us believe, there are in fact real term cuts in key services.
Core funding for local government and social justice will be cut by 0.6% in real terms in 2008/9 - and stay broadly flat in the two years after that, vindication for the WLGA and a bit of a body blow to Andrew Davies, who claimed on Tuesday that the central funding for Councils "will grow by more than 3.2 per cent in 2008-09, not 2.2 per cent as quoted by the Welsh Local Government Association. That figure is very close to our overall growth in spending of 3.4 per cent."
It seems that is only true if you lump in hypothocated grants that cannot be used as general revenue to offset the Council Tax. And when inflation is taken into account that 3.4% increase in the budget in 2008/9 is just 0.7%.
The Committee established that the increase in health and social services next year is in fact just 1.5%, whilst economy and transport budget will receive a modest cash boost of 1.3% in the first year, 2008/9 but in 2009/10 it will be cut by 1.8% and by 1.7% the year after. The education budget faces a real term cut.
Comments:
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It worse than you think Peter because local government inflation is much greater than the retail price index. It wouldn't even cover the recent pay agreement with the local government unions. Then you have the issue of the continued overspend in social services, the need to do something very quickly in waste management to avoid the 2013 fines, the growing gap between money spent per pupil in England compared to Wales, the crumbling leisure facilities in most authorities, the state of our school buildings and not forgetting of course the issue of the money for equal pay. As my local AMs told the local rag this week 'It's a good deal for Wales and local government' You have to wonder what planet some of these characters are living on.
# posted by 
: 9:16 AM
: 9:16 AM
Anonymous said...
"It worse than you think Peter because local government inflation is much greater than the retail price index."
What? What utter total bollocks! Earth to planet WLGA, you have entered now entered the twilighht zone!
"It worse than you think Peter because local government inflation is much greater than the retail price index."
What? What utter total bollocks! Earth to planet WLGA, you have entered now entered the twilighht zone!
# posted by : 11:06 PM
: 11:06 PM
It seems that my comment really hit the jackpot.'Abusive' should realise that inflation is calculated on the price increase of a basket of goods. Unfortunately for local government cornflakes is not part of the local government basket. Local government inflation used to be running at about 7%. It is probably more now given the increase in interest rates and the recent local government pay settlement. The settlement is awful and will cause real problems for local authorities. The fact that my previous comment caused such abuse seems to suggest that I hit a raw nerve.It also probably is another example of the poor advice given by the little boys and girls who now advise at great public expense WAG. Listen sonny or girlie or whoever you are if Harry Jones, Noel Crowley, Russell Goodway or Jeff Jones were still involved in local government this budget would be toast. Even with Steve Thomas the WLGA won last week's arguments hands down. Grow up and realise that that there are hard times ahead.When the going gets tough the task of an adviser is to keep your cool not reach for the valium!
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# posted by : 5:06 PM
: 5:06 PM<< Home
