Following the publication of a report highlighting that some County Councils are better placed than others to deal with the financial impact of the Covid-19 pandemic, Shadow Local Government Minister Mark Isherwood has today questioned the Local Government Minister over what action she will be taking to address the inequalities.
The Wales Audit Office Report on the ‘Financial Sustainability of Local Government as a Result of the COVID-19 Pandemic’ found that in the first six months of this year, County Councils in Wales recorded financial costs of £325 million due to the pandemic.
Whilst this has been largely offset by the Welsh Government’s Local Government Hardship Fund, the report cites figures from the Welsh Local Government Association (WLGA) which estimate that, by 2022-23, Councils will be facing budget pressures of approximately £600 million (pre-COVID figures).
Mr Isherwood is concerned by the Auditor General’s suggestion that some Councils were better placed than others to deal with the financial impacts of the crisis, and therefore asked the Minister how she will address this.
Speaking in today’s Plenary meeting of the Welsh Parliament, he said:
“Overall, Councils held useable reserves of over £1.1 billion as of March 2020, although reserves held by individual councils vary widely – for example, Rhondda Cynon Taff held useable reserves of over £119 million as of March 2020, compared to Blaenau Gwent with around £14 million and Conwy with around £11 million. (Gwynedd had around £71 million, Denbighshire £36 million, Wrexham £26 million, Flintshire £24 million and Anglesey £16 million).
“How therefore do you respond to the Report’s statement that whilst the financial support provided by the Welsh Government has largely offset the immediate financial concerns, it may be the case that councils have to increasingly use their reserves should the financial impact continue to be felt over future years – and how will you address the inequality in the ability across Councils to do this?”
The Minister said “we are working with each individual local authority to enable us to understand their very specific circumstances” and that she is “confident that we are not in a position where any local authority in Wales faces any particular financial crisis”.
Mr Isherwood also questioned the Minister over the findings of a second report by the Wales Audit Office on ‘Commercialisation in Local Government’ which argues that: ‘’With future funding at best unpredictable, new thinking is needed to transform the way councils operate to protect and improve services for their communities.”
He said:
“The report finds that the skills of elected members themselves is a barrier to Councils taking advantage of commercial opportunities and greater entrepreneurship.
“How, therefore, do you respond to the Report’s argument that ‘’the best approaches involve elected members early and have specific, well defined, and regularly updated policies that are appropriate to local circumstances and support councillors to discharge their governance, decision making and oversight responsibilities’’?”
The Minister said: “We largely agree with that, which is why we're putting the provisions into the Act that allow us to put the regulations in place to do exactly that.”