Swansea Council‘s leader has warned that a failed budget in the Senedd would hit councils like a “Trump-style shutdown”, as cabinet signed off spending restrictions for the rest of the financial year.
Rob Stewart told Wednesday’s meeting that the Welsh Government “still has a minority administration” and must work with other parties to get its budget through. “If a budget cannot be agreed then we will only receive barely 75% of what we would otherwise receive,” he said. “It would be akin to a Trump-style shutdown for government in Wales, and I think everybody should do whatever they can to avoid that scenario.”
Under Welsh law, if the Senedd does not pass an annual budget, ministers can spend only up to three-quarters of the previous year’s total until it does.
Stewart speaks with some authority on that. He is also deputy leader of the Welsh Local Government Association, which represents all 22 councils in Wales, and its annual conference is in Swansea today, the first time it has come to the city since 2015.
Council leaders, he said, would be lobbying the Senedd “to try and avoid that scenario”.
“More than 10, less than 14”
The immediate problem is closer to home. Ben Smith, the council’s finance director and statutory section 151 officer, told cabinet that when the budget was set in March he certified £14m as the minimum safe level of general reserves. They now stand at £10m.
“It is clear and operative that the difference between having £10m and £14m in general reserves is very important when you see a directorate overspend of over £13m,” he said. “More than 10, less than 14.”
Even using every lever available, he said, “I can’t get it below 12-something million at this point in time.” The gap is being covered from earmarked reserves, as it was at year end, but his review of those reserves goes to full council on 1 October and “you cannot use the reserves twice over”.
His advice, adopted in full, is that the council should “stop, pause or slow spend” wherever possible for “probably the rest of the year”, with wording chosen “to make clear to all internal and external stakeholders” while leaving room for statutory duties. “It is not as simple as just stopping stuff,” he said.
The restrictions will have little effect on the second quarter, which ends in two weeks, and are expected to bite in the third. Recovery plans in social services and the Place directorate should show in the next report.
Austerity comparison
Stewart compared the position to “the austerity budgets of the Tory governments in the early 2010s”, when the council cut more than £70m, and said Pembrokeshire had already brought in similar controls. “In some respects it’s what everybody’s doing, but it is something that is unusual for us to do so early in the year.”
The pressures were not a surprise, he said: demand in adult services, up 15% on average, and the cost of supporting people who are homeless or seeking housing. “They’re not pressures that are just hitting Swansea. They’re hitting all councils across Wales.”
One change was made on the floor. The report proposed that exceptions to the freeze be decided by an officer panel; Stewart asked that cabinet members and the leader be involved. Smith agreed, on condition it was framed as his decision in consultation with the chief executive, the leader and the relevant cabinet member, since “the panel doesn’t constitutionally exist”. He added: “The last thing you want is an accountant in charge of absolutely everything.”
On the same agenda, cabinet approved the extended public spaces protection order covering the top of High Street and the Dyfatty area, after scrutiny warned that anti-social behaviour could be displaced into neighbouring streets and asked for monitoring, and noted a performance report that rates school attendance and disabled facilities grants as red risks.
Cabinet also heard from Cllr Andrea Harrington that the housing capital programme is likely to underspend again because of the nitrates hold on new-build sites, while day-to-day repairs are overspending on materials and demand.
The next full council meeting, on 1 October, will take Smith’s proposals for the earmarked reserves.
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