Shadow Welsh Minister for Communities and Local Government, Mark Isherwood AM, has called for a Welsh Government Statement on Local Authority Reserves after it was revealed that Councils facing the largest cuts in the Welsh Government’s Local Government Settlement 2019-20, including three North Wales Councils, have amongst the smallest Reserves.
Nine out of 22 Welsh Local Authorities receive an increase under the Welsh Government’s settlement. However, with the exception of Denbighshire, which now receives a flat settlement, all North Wales Councils are to receive a cut, with the largest cuts in Flintshire, Conwy, and Anglesey, alongside Monmouthshire and Powys.
In this week’s Business Statement Mr Isherwood, who two weeks ago met with the cross-party group of Flintshire County Councillors who travelled to the Assembly to lobby for fairer funding, called for a Statement on Local Authority Reserves, highlighting the plight of Anglesey County Council whose Finance Chief warned this week that if the Council didn't put more cash into its reserves, the authority could go the same way as Northamptonshire, which was unable to balance its books and became effectively insolvent last year.
He said:
“The Councillors Workbook on Local Government Finance states that earmarked reserves 'are restricted by local agreement to fund certain types of expenditure but can be reconsidered or released if the council's future plans and priorities change.'
“In the Welsh Government's Local Government settlement, Cardiff, with total usable reserves of £109.6 million, is having a 0.9 per cent rise; Rhondda Cynon Taf, with reserves of £152.1 million, is having a 0.8 per cent rise; Newport, with reserves of £102.3 million, is having a 0.6 per cent rise; Swansea, with reserves of £95.1 million, is having a 0.5 per cent rise. But Councils with the largest cuts of -0.3 per cent include Flintshire, with reserves of £49.4 million, Conwy with just £22.7 million, and Anglesey with £24.1 million.
“Now, as you're aware, in Anglesey, economic output per person, prosperity, is just under half of that in Cardiff, at just £13,935 per person - the lowest in Wales. Anglesey and Conwy are amongst five Welsh Local Authorities where 30 per cent or more of workers are paid less than the voluntary Living Wage.
“Yesterday, the Finance Chief on Anglesey Council was reported in the Daily Post as warning that if the Council didn't put more cash into its reserves, the Authority could go the same way as Northamptonshire, which was unable to balance its books and became effectively insolvent last year.
“Given these points, I hope we can have a Welsh Government Statement with minimum blame laying and maximum focus on how we've got to this position within the available cake in Wales, and how on earth we're going to get out of it so that councils like Anglesey don't have to consider going the same way as Northamptonshire.”
The Welsh Government Minister for Finance and Trefnydd, Rebecca Evans, stated that the “Welsh Government has strived to give local authorities the best possible settlement that we could, but we are under no illusion that it is a very difficult period for local authorities”, and said that while the previous Minister made a written statement on Local Government reserves, she will explore with the current Minister whether there is more to add on the issue.
