Up to 14,000 council redundancies predicted across Wales due to reduced budgets

A senior councillor has warned that trade unions predict between 12,000 and 14,000 redundancies across all Welsh local authorities in response to the ongoing squeeze on public spending.

Torfaen council leader Anthony Hunt has claimed that the potential shortfall in funding for Welsh councils is three times higher than would normally be expected.

Torfaen council itself faces a potential £4.2 million shortfall required to maintain services next year. The council’s figures are based on increasing revenue, with a potential 4.95 per cent council tax rise, to “narrow” that gap.

Long term consequences

Councillor Hunt, the Welsh Local Government Association’s finance spokesman, told Torfaen’s cabinet: “People will have read about situations, especially over the border in England, of a number of councils facing a lack of financial viability. It’s a real challenge.”

He continued: “In Wales, the estimated (funding) gap is already £821 million this year, that’s three times more than usual and is largely due to inflation and rising costs of children’s care placements and schools and 14 years of austerity that’s put the fabric of public services at risk across the whole UK.”

At the weekend Councillor Hunt was part of a discussion on funding for councils on BBC Radio Wales, during which independent leader of Wrexham council, Mark Pritchard, claimed: “It’s only a matter of time before an authority across Wales will go bankrupt.”

Mr Hunt told the programme that councils are seeing budgets reduce, saying: “Sooner or later, if you stretch the elastic out every year, something goes ping – and I think we’re reaching that point. If you look across the border, the areas they’ve cut, libraries, youth services and social care there are long term consequences to that.”

Inheritance tax cut amid funding crisis

Councillor Hunt criticised reports that the chancellor’s autumn statement, due tomorrow, Wednesday 22 November, could see a cut in inheritance tax.

He said: “That is a tax cut for the most wealthy, one per cent, at the same time as we are talking about a funding crisis in public services and a cost-of-living crisis.”

Torfaen’s cabinet noted that the current year’s financial position is set for a £977,000 underspend and noted the predicted £4.2 million shortfall for next year, although councils aren’t expected to learn how much they will receive from the Welsh Government until December 20.

One expected increase in costs for Torfaen is a £2.96 million potential pay rise for teachers, which it intends to meet rather than passing on to schools, however schools will still have to find £1.4 million in savings from their own budgets.