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Plaid Cymru are extremely fortunate in having the redoubtable Eurfyl ap Gwilym to do the sums for us. Not for the first time, his analysis of the numbers has come up with an answer which differs from the 'official' one.
Betsan suggests that the Government have deliberately taken a gloomier view, on the basis that it will be easier to put money back into the budget than to take more out. That would certainly be one way of reconciling the two sets of numbers.
I have long suspected that the noises coming from many local authorities in Wales are based on a similar principle - play up the scale of the necessary cuts now and then give people a pleasant surprise, rather than play them down and deliver an unpleasant one. At its simplest, it's a way of managing expectations so that they can eventually be exceeded – and it's something with which an awful lot of managers and salespeople in the commercial world will be very familiar.
It is not, though, a very transparent way of considering the future budget, or of having a rational discussion on the scale of cuts actually needed.
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6 comments:
"I have long suspected that the noises coming from many local authorities in Wales are based on a similar principle - play up the scale of the necessary cuts now and then give people a pleasant surprise, rather than play them down and deliver an unpleasant one."
And I believe this to be the case the ConDems. They went really big on the scale of the cuts needed. What price the 'our plans were so good we didn't need to bring in those necessary cuts as much' message after?
more likely its a case of Labour playing politics with the Cuts to come.
If WAG cuts harder and faster than the UK, Scottish and Northern Ireland Government which it certainly will and helps the Welsh private sector go into melt down, they can decimate already deprived communities, blame on the Tories and Lib Dems and leave Welsh voters the only option of running back to Labour with open arms for another generation at the very least.
While you are right that in the past local authorities might have sometimes exaggerated the budget situation I don't think that this is the case today. Although the argument about figures are interesting the simple fact is that no one will know the reality of the situation until October 20th. It also,of course depends on how the cake is sliced up by WAG. Many in Local government would argue that WAG cannot protect its pet policy intiatives without accepting the consequences of the possible effect on local government services. There is also the interesting issue of WAG benefiting under the Barnett formula from the decision of the UK government to ring fence and not in theory cut health but then it seems that WAG will not then pass all of this money on to health. The other problem is that there are 22 local authorities in Wales and how they weather the storm will depend on their size and what decisions they have taken in the past on expenditure. There is also the issue of council tax to consider. Look at many of the budget reports presented to cabinets before the summer and it is clear that many officers are considering 5% council tax increases in the next few years as part of their budget strategy. It will be interesting to see how the public react to this when council tax is frozen in Scotland and the Uk Coalition has promised to introduce a similar policy in England. What is also being forgotten about in the climate created by the UK government cuts agenda is that local government faces other financial pressures. In Wales,for example, we have an aging population and this will increase the pressure on social service budgets. There is also the unresolved issue in too many authorities of equal pay. Although they will be allowed to cover the back pay by borrowing this has to be paid back and the job evaulation process will increase costs. Only this week Birmingham decided to terminate the contracts of all its staff and reemploy them on new contracts with worse conditions of service in order to save money.Finally, there is the on going issue of pensions with many of the funds being revalued this year and there is bound to be a need for more money to be put into the funds. This will not be recognised in the local government settlement. If this grim scenario was for one year then probably local authorities could survive. But given the scale of the cuts over the next four years and the size of the average authority in Wales compared to the comparative strength of the 8 Counties in the 1980s no can really predict what the eventual effect on public services will be. As for the comments who will be blamed for the cuts again no one knows for certain.In the 1980s when decisions were made by a Tory Secretary of State it was easy to blame the Tories and Labour benefited electorally. Many in Labour will obviously hope for a rerun of the 1980s. But this time the actual cuts decisions will be made by WAG. This makes it much harder to play and win the blame game. It will be interesting to see who wins probably the most intriguing battle of spin since Lock and Laker played the Ramadin and Valantine in the 1950s!
Jeff,
"While you are right that in the past local authorities might have sometimes exaggerated the budget situation I don't think that this is the case today. "
You may be right, but they have cried wolf so often that it's hard to be certain. Complaining every single year about a 'poor settlement' has done nothing to improve credibility when there really is a problem.
"the simple fact is that no one will know the reality of the situation until October 20th.
Absolutely agree. And it's part of my reason for suspecting a degree of exaggeration now. It's at least in part about positioning, and attempting to negotiate by megaphone. If it's as bad as they say, they'll claim they were right all along; and if it isn't, then it will no doubt be a victory for their debating and lobbying skills.
Moving on to the other points in your comment, I entirely agree that we need to look again at the number and function of local authorities in Wales, and the way that they are financed. My biggest concern would be about rushing into a reorganisation on largely financial grounds rather than taking a more measured view of what changes are needed to what is done where and by who in the context of the devolution settlement. I actually think that we should at least consider some further centralisation as well as some further devolution of powers so that we have meaningful local government, with authorities that really can take decisions to do those things for which they are responsible differently in different parts of Wales if that's what people vote for.
And part of that has to be reform of local government finance, including a shift from national funding to local funding to reduce the extent of central government control of local decision-taking. That doesn't mean more tax, but it does mean a shift in the balance of taxation. There is nothing sacrosanct about the idea of taxation being so centralised - it isn't in so many other countries. There is a role for the centre in addressing any unfairness which results from the differences in the local tax base, but the central contribution has become far too large in comparison with the local tax take. So, local income tax, perhaps even local sales tax - the sort of things which are normal elsewhere.
As for the politics of the reaction to the cuts, I share your uncertainty as to how that will play electorally. I have concerns that merely arguing 'against cuts' will not work politically, since the coalition seem to have won the argument about the necessity for cutting (even if I still believe they're wrong). I think we need to do more to shift the debate to a) rebut the underlying arguments for cuts on the scale being proposed, and b) start putting forward some alternative views about how services should be run and funded. And I see a shift from national to local taxation as being part of the response to b).
John.My views on the present local government structure are well known. It simply is not fit for purpose. But having said that now is not the time for reform. Local government faces some really difficult decisions over the next 5 years and needs to keep its eye on the ball and not be distracted. The point that I was trying to make was that the size and financial strength of the former counties made it easier for them to handle the 1980s cuts agenda. Mid Glamorgan ,for example, had a large amount of reserves for reasons which I wouldn't bore you with. These reserves were used to protect services. The present 22 local authorities don't have this luxury and will have to take the cuts on the chin.
What I would like to see happen is a consensus develop between all the political parties to set up an independent commission after the next Assembly election to produce a blue print for a 21st century local government system in Wales. A commission that will ignore vested interest but instead concentrate on effective service delivery and accountability. The Commission would rule nothing in or nothing out. It would take into account the existence of the Assembly and the need for a far more effective community council tier to rival what is common place in Europe. as a result soem services could go to the Assembly. In my opinion ,for example,there should be one police and fire service for Wales under the control of an Assembly minister as is often the case in regional government in Europe. The Commission would also look at finance. Returning not only the business rate to local government but also looking at new ways of raising revenue besides the discredited council tax. I've only recently returned from France. At the end of my holiday I paid 7 euros in tourist tax. Yet Cardiff Council and other councils make not one penny from visitors despite the need to provide extra services to cater for tourists. It was interesting watching in a town the size of Maesteg the work of the municipal police and to see workmen employed by the local council look after a built environment which any citizen would be proud to contribute taxes to maintain. In sharp contrast to the sad often rundown environment in so many of our communities. Local government is the key to any thriving democracy. In the UK it doesn't exist. Instead we have local administration. With a little bit of imagination and a more mature attitude from all politicians we might be able to develop a new system which could be in place by the end of this decade.
Jeff,
"What I would like to see happen is a consensus develop between all the political parties to set up an independent commission after the next Assembly election to produce a blue print for a 21st century local government system in Wales."
That's certainly something which I'd be only too happy to support. The whole issue needs a thorough review from first principles, and it needs to be done in a less partisan way than that which gave us either of the last two local government reorganisations.
I suspect that we're not a million miles apart on the sort of outcome we'd like to see either. I want effective local government where people are free to choose (through the ballot box) different local priorities in those functions which remain with local government, with central government keeping its fingers out of those areas. And I want to see it financed as far as possible from locally raised taxation (albeit with some sort of balancing mechanism so that poorer areas are not disadvantaged).
Other countries can achieve that balance; there's no reason why we can't too.
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