Warning change to councils’ funding could cost Welsh city millions

Nicholas Thomas, Local Democracy Reporter 

Councillors have agreed any changes to the way local government is funded in Wales must not come at their city’s expense.

The new Plaid Cymru Welsh Government has committed to reviewing the funding formula for councils, “to ensure that it reflects the real cost of delivering services in different parts of Wales”.

But Labour Cllr Dimitri Batrouni, who leads Newport City Council, has warned any changes must continue to recognise Newport as the nation’s “fastest-growing city with the fastest-growing young population”.

The vast majority of council funding comes from the Welsh Government, which it in turn receives from the UK Treasury.

In recent years, Newport has benefited from the highest annual increase in funding of any Welsh council – worth an additional £20 million for the current financial year.

Cllr Batrouni told colleagues that extra funding would have instead been worth £13.5 million if Newport had received the Welsh average increase.

His notice of motion – which was backed by nearly every city councillor – declared the “importance of ensuring that any revised formula is fair, transparent, and does not disadvantage Newport”.

“It’s about ensuring the funding Newport receives reflects the realities of the city we serve,” said Cllr Deb Davies, the council’s deputy leader.

She said Newport’s growth “brings pressure” on schools and homes, and “at the same time, our ageing population is placing increasing demands on social care and domiciliary services, which are among the most expensive services a council can provide”.

“Any new formula must properly recognise the cost of growing cities like Newport,” she told colleagues. “It must reflect population growth, rising demand and the investment needed to sustain economic success.

But the deputy leader said the matter was “not urban versus rural Wales”, and “every community deserves fair funding”.

Cllr Miqdad Al-Nuaimi, an independent, asked whether there were “better ways of sitting with the Welsh Government and conveying the same message”.

“We just seem to be picking fights with them,” he said.

Green councillor Lauren James, Labour’s Cllr John Reynolds, and Tory councillor Will Routley all disputed this, insisting their job was to stand up for the city’s residents.

Following Plaid’s Senedd election win in May, a minister confirmed the government would push ahead with reviewing the funding formula for Wales’ councils.

Sian Gwenllian told the Senedd: “We need to reduce bureaucracy and processes, and focus on delivery, making sure that we work together to make the best use of funding, and we need to empower local government to use its core funding better.

“I want to work with local government to support and enable councils to find their own solutions and by working together towards long-term sustainability, and that’s by looking at how things can be done differently, working with them and listening to them to understand what works.”

A new Audit Wales report has also recommended the government should “improve” the funding process for Welsh councils.

Following the debate in Newport, the council will write to the government and “seek assurances” it and the city’s residents “are not financially disadvantaged by any changes”.

It will also request that the council is “fully consulted before any reforms are implemented”.

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