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TORFAEN: Funding squeeze warning

A POTENTIAL shortfall in funding for Welsh councils is three times higher than what is normally expected, a senior councillor has said.

Torfaen council leader Anthony Hunt has also warned trade unions have estimated the 22 local authorities across Wales could be looking at making between 12,000 and 14,000 redundancies in response to the ongoing squeeze on public spending.

Torfaen council has said it is facing a £4.2 million shortfall in the amount of money it needs to maintain services next year and its financial planning is based on increasing revenue, including through a potential 4.95 per cent council tax rise, to “narrow” that gap.

Cllr Hunt, who is the Welsh Local Government Association’s finance spokesman, told Torfaen’s cabinet: “People will have read about situations many other councils, especially over the border in England, of a number of councils facing a lack of financial viability. It’s a real challenge.

“In Wales the estimated (funding) gap is already £821 million this year, that’s three times more than usual and is largely due to inflation and rising costs of children’s care placements and schools and 14 years of austerity that’s put the fabric of public services at risk across the whole UK.”

The Labour leader said councils are “working closely” with trade unions but warned: “Trade unions estimate between 12,000 to 14,000 jobs could go from local government.”

At the weekend Cllr Hunt was part of a discussion on funding for councils on BBC Radio Wales, during which independent leader of Wrexham council, Mark Pritchard, claimed: “It’s only a matter of time before an authority across Wales will go bankrupt.”

Mr Hunt told the programme councils are seeing budgets reduce and said: “Sooner or later, if you stretch the elastic out every year, something goes ping – and I think we’re reaching that point.”

At the Torfaen cabinet meeting Cllr Hunt said the borough is “in a better position than most councils” and said it has benefited from an approach of early intervention and supporting preventative services.

He said: “If you look across the border the areas they’ve cut, libraries, youth services and social care there are long term consequences to that.”

Cllr Hunt said he recognised spending pressures on the Welsh Government but said he would continue to lobby for any additional money for local government and investment in social care.

He also criticised reports that the chancellor’s autumn statement, due tomorrow, Wednesday, November 22 could, see a cut in inheritance tax.

Cllr Hunt said: “That is a tax cut for the most wealthy, one per cent, at the same time as we are talking about a funding crisis in public services and a cost-of-living crisis.”

Torfaen’s cabinet noted that it’s in year financial position is set for a £977,000 underspend and noted the predicted £4.2 million shortfall for next year – with officers continue to work on the budget, though councils aren’t due to learn how much they will receive from the Welsh Government until December 20.

Among the increased costs Torfaen is planning for is £2.96 million for a potential pay rise for teachers, which it will meet rather than passing on to schools, however schools will still have to find £1.4 million in savings from their own budgets.