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Taxpayers in Wales are paying more money for fewer services, according to report

7 February 2019

Council Tax

Taxpayers in Wales are paying more money for fewer services as local authorities attempt to plug a funding gap of nearly £1bn, research reveals.

The latest report from Cardiff University’s Wales Governance Centre shows that Welsh local authorities received £918.5m less from Welsh Government grants in 2017-18, compared to 2009-10.

Researchers say the cuts are a knock-on effect of a reduction in UK Government spending and that local authorities have steadily increased Council Tax rates in response. But this has only partially filled the shortfall, leaving councils with £577m less in 2017-8, compared to 2009-10.

As a result, spending on public services fell by 10.4% over that period - the equivalent of £232 less being spent on each person in Wales.

Issued by the Wales Fiscal Analysis project, researchers examined local government revenue and expenditure data since 2009. Their findings come as local authorities in Wales publish their budgets and set council tax levels for the year ahead.

Guto Ifan, Research Assistant at the Wales Governance Centre, said: “This report outlines how nearly a decade of austerity has significantly changed the financing and spending patterns of local authorities in Wales. It’s clear from our findings that taxpayers are effectively paying more money for fewer services...”

“We predict that Council Tax rates will continue to rise and could account for a quarter of all local authority revenue by 2023/24, as county halls try to balance the books and deal with increasing demands for services.”

Guto Ifan Lecturer in Politics and International Relations - Welsh medium

Other significant headlines in the report include:

  • In 2017-8, Council Tax accounted for 19% of local authority gross income, up from 13.8% in 2009-10.
  • School spending per pupil is £324 (5.5%) lower in real terms than in 2009-10*;
  • Despite increasing last year, per person spending on older adults’ (over 65s) social care has still fallen by £157 (14.8%) since 2009-10;
  • Spending on children in care has risen by £95.9 million (33.2%) in real terms since 2009-10, while at the same time, the number of children in care has increased by 1,710 (36.4%);
  • Spending on social services**, a ‘protected’ area of provision, has increased by £106.4m (6.5%) in real-terms. Social services and education now account for 73% of council spending, compared to 68% a decade ago;
  • During the same period, ‘unprotected’ services such as planning and economic development have been cut by 55.4%, libraries, culture, sport and recreation by 36.3%, and transport by 28.5%;
  • 37,000 local government jobs have been lost in Wales in this period, equivalent to 19.9% of the total workforce. It should be noted that Welsh authorities have cut fewer jobs than England (32.4%) or Scotland (20.6%).

Welsh Government has reduced funding to local authorities in response to cuts to the budget allocated by the UK Government. While their budget is set to grow over the next five years, researchers say any increases are likely to be allocated to high-priority areas such as NHS and social services.

Guto Ifan added: “The results show that ‘unprotected’ areas of local spending have been most severely affected by these cuts. Avoiding further deep cuts to these areas will require yet more rapid increases in Council Tax, limiting growth in other areas of spending, or increasing the size of the Welsh budget through Wales’ new tax powers. None of these options are politically easy.

“A serious debate is needed about the future of local government finance and Welsh public finances more generally. Policymakers must now consider what services local councils should provide in the future, and perhaps even more crucially, how they will be paid for.”

*Schools funding has increased but a growth in the number of primary school pupils means the per pupil figure has decreased.

**Excluding Flying Start spending.

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