Reforming local government has been a rather fruitless endeavour since devolution – to the extent that a few years ago I added the absence of reform to a list of failures of devolution.
Despite dissatisfaction with the current unitary authority system – and the role of town & community councils – the system inherited from the UK Government in the 1990s remains stubbornly in place.
The issue go much deeper than the map, of course – all of which will be looked at in more detail here.
I’ll try and keep this short as this piece has gone on long enough. There’s more information on how councils are funded in Part II and I’ll be coming back to the possible options later on in Part VII.
According to Cardiff University’s Wales Fiscal Analysis17, between 2019-10 and 2019-20, the value of government grants to local government fell by 16.8% and “real terms” (before inflation) spending by councils has fallen by 6% over the decade.
In June 2019, citing Wales Fiscal Analysis research the WLGA estimated around 37,000 jobs have been lost from local government in Wales between 2009-2018 (just under 20% of the workforce) – and that’s without factoring in the estimated 15,000 job losses that could/would have resulted from reorganisation, though it’s unclear whether most of those jobs would’ve been lost anyway.
Council tax increases in Wales have long been above inflation and this was expected to continue – though the Welsh Government recently announced a revaluation of properties as part of a Labour-Plaid Cymru agreement in the Senedd.
The biggest spending pressures on local government are schools and social services – though the Covid-19 pandemic presented a short to medium-term challenge as well. Welsh unitary authorities are expected to have a £132million budget gap by 2025-26 (though rising inflation and the impact of Brexit could result in a higher estimate as of 2022).
Despite all of this, in October 2018 research by Cambridge University18 suggested cuts to local government spending in England were twice as severe as in Wales and Scotland. A “benefit” of devolution, possibly?
In terms of the direct impacts of the UK Government’s austerity drive, the Welsh Centre for Public Policy19 noted a struggle to protect major statutory council services (such as education) from cuts. In the end, most of the axe fell on discretionary services.
Paradoxically, their report cited a Council Leader who said that the public was far more likely to react negatively to a smaller cut to a hyperlocal service (an example’s given of a £20,000 cut to a community centre grant) than a larger cut to a big ticket service (i.e a £500,000 cut to education).
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Audit Wales20 noted that while communities were willing to involve themselves in taking on community assets to prevent them from being lost to cuts, the help wasn’t there and communities were rarely consulted properly. Just 10% of people questioned said they felt involved in designing services despite 90% saying they were willing to see discretionary services delivered differently to protect them.
Some of the responses to austerity have included:
- Capital Receipts – In English: selling off unused or under-used council-owned land and buildings to raise funds.
- Council Tax & Service Fee Increases – Self-explanatory. Council tax only generates around a third of council income but it’s often the only tool the unitary authorities have to boost their budgets or maintain spending. Charging for services that were previously free or a lower price is also a reaction.
- Community Asset Transfer – Unitary authorities transfer leases for certain community assets to town & community councils, sports clubs and other organisations.
- Outsourcing – Transfering day-to-day control over certain services to not-for-profits, commercial providers or arms-length companies.
- Innovation – Changing how services are used such as moving services online, preventing hospital admissions by providing more social care at home, “hot-desking” at council offices etc.
- City & Growth Deals – Programmes to encourage job creation and job retention to boost public finances through extra tax income, economic development and regeneration.
17: Ifan, G; Sion, C; Cardiff University, Wales Fiscal Analysis (April 2021). “Local Government & The Welsh Budget: Outlook and challenges to the next Welsh Government”. Available at: https://www.cardiff.ac.uk/__data/assets/pdf_file/0009/2513619/lgf_outlook_2021_7.pdf
18: Cambridge University Research (18th October 2018). “Austerity cuts twice as deep in England as the rest of Britain”. Available at: https://www.cam.ac.uk/research/news/austerity-cuts-twice-as-deep-in-england-as-rest-of-britain
19: Downe, J; Taylor-Collins E; Welsh Centre for Public Policy (June 2019). “At the tipping point? Welsh local government and austerity” (p31-38). Available at: https://www.wcpp.org.uk/wp-content/uploads/2019/06/190418-Austerity-Report-FINAL-1.pdf
20: Audit Wales (April 2021). “At Your Discretion: Local Government Discretionary Services” (p7-8). Available at: https://www.audit.wales/publication/your-discretion-local-government-discretionary-services
