Council urges government action to support local services

Welsh and UK governments are being urged to take steps to protect vital council services in the wake of the cost of living crisis, soaring inflation and energy bills.

The Welsh Government has still to set out what financial support councils will get next year, but it is being warned that pressures on council services are worse than they were even at the height of austerity.

Rob Stewart, Leader of Swansea Council, told a meeting last night that demand for services is rising rapidly due to the cost of living crisis while other costs are soaring due to inflation and energy prices.

He said: “Schools, care homes and communities in councils across Wales are facing eye-watering rises in energy costs having been excluded from the energy cap help in the budget, while at the same time facing soaring inflation and extra demand as they try to help and support the most vulnerable in our communities.

“These are financial challenges not of our making, and only the Treasury has the financial firepower to fix. So we are urging UK and Welsh Governments to step up and help us support our communities as we have done throughout the pandemic.

“Swansea Council and our key workers stood shoulder to shoulder with our residents during that crisis. We transformed our services, helping to protect and save lives. We will do the same now as communities across the country face a very difficult winter with a real threat of further austerity.”

He said all councils in Wales were facing a financial firestorm and, along with Swansea Council, they have been lobbying the UK and Welsh Governments for extra help for schools, care services and communities.

In a briefing to councillors, the council’s finance director Ben Smith set out how the council is planning to deal with some of the challenges by cutting more of its costs and dipping into reserves and the council’s Economic Recovery Fund.

But thanks to energy prices, pay costs and other inflationary pressures caused by UK economic conditions, the council is facing a £44m financial black hole in 2023 alone, with a further £59m the following year and an additional £64m in 2025.

Mr Smith said: “Thankfully, we’ve been largely shielded from the rise in energy costs up to now due to the decision to purchase energy in advance when prices were lower.

“But that cushion ends in April and neither we nor likely any other council in Wales will benefit from price caps introduced by the UK government that are softening the blow for domestic users.

“It means that our future energy costs are not certain but along with schools, care homes and community buildings, our bill next year could rise from £5m to £20m.

“This will have a significant impact on our ability to spend on critical council services like social care, education and community services.”

Welsh Government is not due to announce its provisional financial settlement for councils before December 14, with the final announcement due in March next year.

But its existing forecast was for an average funding increase of 3.5% next year, 2.4% the year after and it has been assumed just 2% the year after that.

Cllr Stewart said: “With inflation running at 11% now, the Welsh Government should have received £1.5bn from the UK Government for next year just to stand still, but it got just £600m. Therefore there is now a huge gap.

“The £44m gap, the unfunded energy and inflationary pressures created in Swansea’s finances this year is bigger than at any time during the austerity years, where the funding gap peaked at £27m.

“If Welsh Government is unable to increase funding, then there would be huge impacts and inevitable cuts in jobs and services across Wales.

“Critical services that proved their value to government and our communities during the pandemic and are, if anything, in greater demand now than ever before.

“That’s why we and other councils in Wales are joining together to lobby Welsh and UK governments to find the funding and support our services in the years ahead.” 

(Lead image: Swansea Council)