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‘Disappointing’ local government settlement is one of lowest rises in Wales

Caerphilly County Borough Council (Pic: LDRS)

CAERPHILLY will receive one of the lowest increases in council funding from the Welsh Government next year.

The proposed 2.3% rise in the local government settlement will mean an extra £7.6 million for services, compared with this year, but 18 of Wales’ 22 councils will receive a bigger increase in funding.

Settlements are the sums of money the Welsh Government gives councils each year to provide services.

The Welsh Government’s finance minister said on Wednesday (December 20) the provisional settlements were against the backdrop of an “incredibly tough financial situation”, in which ministers had “re-shaped our spending plans so we can protect the core, frontline public services”.

A spokesman for Caerphilly’s Labour group, which controls the council, said the 2.3% rise in the settlement was “disappointing”, but added the local authority would “work hard to keep services running as best as possible for our residents”.

The leader of the council’s Plaid Cymru group, meanwhile, said the settlement for Caerphilly was “not realistic and won’t even cover inflation”.

Welsh councils will receive, on average, a 3.1% increase in their settlements next April, but this is still below the UK inflation level, which currently stands at 3.9% – though this fell steeply last month from 4.6% in October.

But while inflation rates remain higher than the proposed settlement increases, the reality for councils is they will be looking at budgets shrinking, rather than growing.

A spokesman for Caerphilly’s Labour group told the Local Democracy Reporting Service (LDRS): “It is disappointing to receive one of the lower settlements from the Welsh Government.

“We do however understand the financial pressures on the Welsh Government brought about by real-terms cuts from Westminster. 

“This council works hard to act as a preventative service for our residents, who have been impacted by the rising cost of living pressures, so we will work through the settlement in fine detail. 

“There will unfortunately be added pressures to the deficit in next year’s budget, but we will ensure we work hard to keep services running as best as possible for our residents.”

Plaid group leader Lindsay Whittle told the LDRS he feared the provisional settlements could lead to a council tax hike.

“The Labour council will, no doubt, continue to complain but they really need to take a close look at their financial handling of the authority, in particular the huge reserves they have built up,” he said.

“There has also been talk already of rises in council tax of up to 10% in Wales, and I would be very worried at any increase proposed in Caerphilly that is anywhere near that figure.

“Working in a food bank, I’m aware of how many people are really struggling to make ends meet and can’t afford even more financial pressure piled on them.”

The current financial year’s settlement increases in Wales were much more generous than those for next year, at an average of 7.9%.

Finance minister Ms Evans said the new settlements for 2024/25 reflected the drop in funding the Welsh Government was itself receiving from Westminster.

“Our overall funding settlement is not sufficient to meet all pressures,” she said. “This has meant taking difficult decisions elsewhere in the budget to honour our commitment to councils last year of a 3.1% rise in their funding for next year.

“I appreciate the pressures local government is facing, and recognise that demand for services – along with the recent very high rates of inflation – mean local government will still need to make difficult decisions on services, efficiencies, and council tax in setting their budgets.

“We will continue to work closely together to face these shared challenges and strive to make the best use of the resources we have in order to make the most difference to the communities we serve.”

A spokesperson for Caerphilly County Borough Council added: “We will consider the implications of today’s settlement announcement and work through the details as we prepare the council’s draft budget proposals for 2024/25.

“Whilst any increase in funding is welcomed, all local authorities continue to face significant financial pressures and it is inevitable that difficult choices will need to be made.

“The 2024/25 draft budget proposals will be considered by cabinet on 17 January, 2024 and this will be followed by a period of public consultation prior to the final budget being approved in late February.”