Further Challenges Ahead

Now that the dust has settled on this week’s Budget announcement, it is evident that austerity is far from over and that we continue to face an uncertain and challenging financial outlook here in Wales.

The Resolution Foundation has concluded that on average, most people will be £1,000 worse off a year following the decision to downgrade both growth and productivity forecasts, and that we are all enduring the longest period without a growth in living standards for sixty years, when records began. To compound this, the Institute of Fiscal Studies has predicted that earnings will be lower in real terms by 2022 than they were in 2008.

So in addition to the significant personal impacts felt by all, these forecasts and statistics paint a picture of increased pressure and reliance upon public services, which received little, if any boost this week.

There was the announcement of an additional £1.2 Billion for Wales, but compared with the reductions received over the last seven years, this funding will do little to lessen the financial burden on the public sector in Wales. The total figure comprises of £215m for revenue, or day-to-day expenditure; and a further £1bn of capital funding to deliver long term, infrastructure based projects. Unfortunately, over half of the capital funding will need to be repaid to the UK Treasury over the course of the next four years, meaning that the true figure will essentially equate to far less than the £1.2bn headline.

While these small increases, amounting to just 2%, in the resources available to Wales are to be welcomed, this additional funding will do little to ease the pressures on key frontline public services, which have been struggling to cope as a result of the successive cuts to Welsh funding we have experienced since 2010-11.

I think it’s fair to say that there is an element of Wales having a rough deal when it comes to UK Government announcements – many important questions were left unanswered, particularly concerning the future of major projects such as the development of the Tidal Lagoon in Swansea Bay or the electrification of the rail line.

I was also extremely disappointed to see that there was no support to deliver a lift of the 1% pay cap on public sector workers, which is of course, something that we have discussed at length in the Council to support our workforce, and we have championed the case for this to be funded in the Budget. RCT has the highest proportion of public sector workers in Wales (32%), and we are certainly aware of the integral role that our employees play in providing essential services for communities.

The harsh realities of austerity are therefore here to stay and, as a Council, we will continue to plan accordingly to ensure that we can respond to further challenges in the proactive manner we have adopted to date, which has allowed us to minimise the impact on frontline services and create opportunities to invest strategically for the future. As Welsh Local Government Leaders of all political affiliations made clear in advance of the Budget, the opportunities to do things differently to mitigate the impact of the cuts are running out and inevitably, as a result of this Budget, difficult decisions will continue to be necessary going into the future.

Once the Welsh Government have had the opportunity to fully analyse the figures and allocate accordingly to their priority areas, we will no doubt be able to fully appreciate what this Budget means for Local Government in Wales.