Laura Sharman 19 April 2021

Welsh councils face £178m funding gap next year

Welsh councils face £178m funding gap next year image

Welsh local authorities will face a funding gap of £178m next year due to post-pandemic pressures, a new report has found.

Analysis by Cardiff University’s Wales Governance Centre warns this could rise to £607m next year if the Welsh Government decides to redirect budget resources to fund the projected legacy costs of COVID-19 on the NHS.

The report finds social services will account for 55% of all local authority spending pressures by 2025/26.

Cian Siôn, a researcher on the Wales Fiscal Analysis project, said: 'Even though the block grant is set to grow in real terms over the next five years, growing demand for services, including social care, and significant post-pandemic pressures combine to create a challenging outlook for the Welsh and local authority budgets.

'This challenge kicks in immediately with a substantial funding gap next year, based on current UK Government spending plans.'

The report also reveals that council tax now accounts for 5.4% of the total tax take in Wales, compared to 4.3% in England.

Mr Siôn added: ‘Our analysis suggests that above-inflation increases to council tax here to stay. In our model, we assume a 4.5% annual increase to council tax bills from 2022−23 to 2025−26, and even this is not sufficient to meet funding pressures in full.

’This strengthens the case for revisiting the way the local taxation system operates in Wales. A policy which pivots around inflation-busting council tax increases every year is an unsustainable way of funding local authorities in the long-term.’

SIGN UP
For your free daily news bulletin
Highways jobs

Transport and Major Work Manager

Slough Borough Council
£54,556 to £60,085 per year Inclusive of Local Weighting Allowance of £1096
Drive the future of transport and infrastructure in Slough Slough, Berkshire
Recuriter: Slough Borough Council

Policy & Executive Office Lead

Sandwell Metropolitan Borough Council
Band I SCP 44-47 (£55,609 - £59,027 per annum)
Are you a strategic thinker with the ability to turn insight into action? Sandwell, West Midlands
Recuriter: Sandwell Metropolitan Borough Council

Contract & Project Supervisor

Sandwell Metropolitan Borough Council
Band G SCP 32-37 (£42,839- £48,226 per annum)
Help shape the future of Sandwell's homes and communities. Sandwell, West Midlands
Recuriter: Sandwell Metropolitan Borough Council

Planning & Admin Officer

Sandwell Metropolitan Borough Council
Band D, SCP 9 -17 (£27,254 - £31,022 per annum)
Be at the heart of a service that makes a difference. Sandwell, West Midlands
Recuriter: Sandwell Metropolitan Borough Council

Local Plan Project Manager

Sandwell Metropolitan Borough Council
Band H, SCP 38-43 (£49,282 – £54,495 per annum) Pro Rata
This is a Fixed Term Contract Until April 2029 Sandwell, West Midlands
Recuriter: Sandwell Metropolitan Borough Council
Linkedin Banner