Welsh councils ‘in crisis of sustainability’ after years of under-investment

Martin Shipton

Years of under-investment have left councils in Wales struggling to provide the services people expect of them, according to a group of experts.

The Independent Working Group on Sustainable Local Government for the Future – led by the Wales Centre for Public Policy in collaboration with the Welsh Local Government Association (WLGA) – brings together council leaders, chief executives and independent experts.

Challenges

A position paper from the group published to coincide with the WLGA’s annual conference in Llandudno highlights a series of major challenges facing Welsh councils:

The core purpose and value of local government in Wales is local democracy. Being ‘close’ to their populations, councils can design and deliver services that are responsive to local contexts. However, due to increased pressures on budgets and resources, local government is struggling to respond to local priorities. This constrains councils’ ability to deliver meaningful change for their communities.

Without significant further investment, local government is unsustainable in Wales.
Local government is facing a series of acute pressures. Social services, education and housing dominate local authority spending and cost pressures have risen significantly with inflation and pay increases. The result is that functions that make a real difference to community wellbeing are being squeezed out.

Social care needs to be funded and delivered differently, and integrated better with health, but should remain within the responsibility of local authorities. Without significant investment from central government, any changes to local funding and delivery of social care will have minimal changes to outcomes for residents.

Public health responsibilities, currently held by health boards, need to be integrated with local authority decision making. Simply giving responsibility for running public health services to councils would likely create issues of scale for some smaller councils due to insufficient resources.

Councils are uniquely placed to deliver preventative health policies. Early intervention and prevention are under-resourced as an increasing proportion of the available resource is focused on addressing acute needs.

As there is no appetite to radically change the functions or fundamental structure of local government in Wales, delivery models must change. Some functions need to be delivered differently using new technology and/or through collaborations built on shared priorities.

Survey

The Group has published a survey to gauge the views of local government stakeholders on the positions set out above.

Professor Steve Martin, independent chair of the Working Group said: “It is clear from the initial work the Group has done that local authorities urgently need more funding but also to develop new ways to deliver local services if they are to be sustainable in the years ahead. We are asking for feedback on the group’s initial conclusions to test whether they are shared by the local government family across Wales and so we can start to develop a shared vision for tackling the challenges all councils face.”

Councillor Mary Ann Brocklesby, WLGA spokesperson for social justice and leader of Monmouthshire County Council, said: “We’re grateful for the support we’ve had from both the Welsh and UK governments, but the reality is that councils are under huge pressure. After years of underinvestment, the whole sector is in a tough spot.

“This working group brings together experience, innovation and ambition from across the sector to explore new ways of working that can strengthen public services and help us deliver for our communities now and in the years to come. This is an opportunity to work together, think differently, and shape a sustainable future for local government.”

Rising costs

Asked about the prospects for councils in Wales following last week’s Spending Review, which Cardiff University analysts said would grow the Welsh Government’s budgets at a lower rate than under the previous Conservative UK government, WLGA leader Andrew Morgan, who also leads Rhondda Cynon Taf council, said that in conjunction with the Local Government Association in England, the WLGA would lobby the UK Government for more funding for social care, by far the biggest pressure and one where costs were rising rapidly.

When it was pointed out to Cllr Morgan that some Senedd Members still took the view – despite two previous unsuccessful attempts at reform – that the number of councils in Wales should be significantly reduced through mergers, Cllr Morgan said: “I’ll say it as it is. Some of the people who say about local government reorganisation – perhaps maybe they should try spending some time as a councillor.

“Sometimes they don’t speak from a point of evidence. When a few years ago we looked at whether or not local authorities should be reduced down, people were suggesting that by having fewer councils you could get rid of the vast majority of chief executives, directors of social services, all those senior kinds of statutory posts. But after mergers they would probably need a deputy and several other senior officers below them, in terms of covering geographical areas and the numbers in the population.

“Even if you were to make significant savings of say £200m, which we questioned at the time and said wasn’t achievable, the initial cost of setting the new system up would probably be vastly more than that.

“Just to put it in context, the shortfall in funding predicted over the next three years for local government is well over £1bn. So if you make a £200m saving, even if that was achievable and you make savings over the long term, initially, you wouldn’t because of the upfront costs of doing it. But even if you could make £200m saving over the long term, that doesn’t cover the shortfall in funding for one year.

“We have already made a lot of savings through change and the collaborations between councils that we’ve introduced. I would say to anybody who thinks that local government reorganisation is a silver bullet, that it’s like putting a plaster on somebody who’s just lost their arm. It really isn’t going to save us long term.”

‘Changing structures’

WLGA chief executive Chris Llewellyn said: “You’ve been around for a long time and have heard this debate for as long as you’ve been reporting on politics in Wales. We have a structure. There is an obsession in Wales with changing structures. We see the same thing with regional rugby. There’s always a figure out there – and if we could only just grasp the number and then every ball, our problems would be sorted.

“Most authorities deliver 650 or 700 different services. Each one of those services has probably got an optimal model for delivery and they’re all probably different. The reality is the evidence for reorganisation isn’t there. As an association, we’ve always said that we should put our focus and energies into making the structures we’ve got work rather than grasping at some kind of mythical structure.

“In terms of scale, what we do know is that big health boards don’t always work. And if you look over the border to England, big local authorities don’t work very effectively. If you look at the 22 councils we have over the years, some of the smallest authorities have run some of the best and most efficient services. And if we look at any of the academic work that looks at restructuring public services, it shows that it takes longer than might have been expected. It always costs more and performance takes a dip.”