Minister challenged over worrying financial situation of North Wales Councils

Shadow Minister for Communities and Local Government, Mark Isherwood AM, has called for a Welsh Government Statement on Local Authority Reserves.

It comes after it was revealed Councils facing the largest cuts, including three North Wales Councils, have the smallest Reserves.

Nine out of 22 Welsh Local Authorities receive an increase under the Welsh Government’s Local Government Settlement 2019-20.

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.

Mr Isherwood highlighted 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.

Mr Isherwood continued:

“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 warned 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 Minister for Finance and Trefnydd, Rebecca Evans, stated that “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.”

Rebecca Evans also 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.

Flintshire residents will have to pay an extra £103 a year after politicians voted to increase their council tax by almost nine per cent.

It came despite warnings that people in the county are already facing financial difficulties with some relying on foodbanks to feed their families.

However, councillors said they were left with little option but to put rates up by 8.75 per cent in light of the £3.1m budget gap facing them in 2019/20.

Many blamed both the UK and Welsh governments for the decision as the local authority is the 19th lowest funded out of the 22 in Wales.