William Eichler 03 October 2022

Welsh councils warn of 'serious harm' to budgets

Welsh councils warn of serious harm to budgets  image
Image: Parliamentlive.tv.

Welsh local authority leaders have warned the Government that market turmoil is causing ‘serious harm’ to council budgets.

On Friday the Welsh Local Government Association (WLGA) said that the turmoil in the currency and debt markets created by Chancellor Kwasi Kwarteng’s mini-budget was adding to the inflationary risk faced by already overstretched council budgets.

At a meeting of the WLGA Executive Board, council leaders made clear their concerns at this impact on council services’ budgets.

WLGA leader Cllr Andrew Morgan (Rhondda Cynon Taf) said: ‘We have long been clear of the financial storm facing local government. Energy bills, inflation, service demands, and pay costs are all already hitting essential local services hard. That storm could very well become a tsunami without action by UK Government to reinstate confidence in the financial markets and to prevent inflation from soaring ever higher.

‘The Chancellor’s mini budget was not some distant, far-away event, but a statement of intent with potent real-life consequences for public services and, in turn, communities.’

Cllr Morgan continued: ‘Local services are at serious risk as a direct result of these choices. Inflationary pressures, energy costs and impact on borrowing is creating a significant hole in this year’s budgets and worse to come next year. Unless support is forthcoming, councils will have to consider service reductions and loss of jobs as a result.’

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