Council tax could go up by 15%, warns leader

A warning of steep rises in council tax, compulsory redundancies and cuts to services because of a lack of funding has been issued by a Welsh council leader.

Wrexham's Mark Pritchard said his authority was discussing a council tax rise of between 9.9% and 15%, and also warned that the threat of a Welsh council going bankrupt had not gone away.

Appearing before a Senedd committee, he asked whether the Welsh government was setting up councils to fail.

Wales' 22 local authorities were given a cash boost of £253m by Welsh ministers in last month's draft budget, but councillors told the committee that it still was not enough.

The Welsh Local Government Association has previously identified a funding gap of £560m.

The Welsh government says it has made substantial investment in local government, with core funding increasing by 4.3% next year, but ministers acknowledge that councils will still have to make difficult decisions.

Pritchard told the Local Government committee: "I will make this fairly simplistic really. There will be cuts to services, redundancies and higher council tax."

He said that discussions were taking place over where Wrexham council would set the tax but that it "could be between 9.9% and 15%."

Newport council, which is receiving the highest increase in Welsh government funding from April, has pencilled in a 6.7% council tax rise, predicting it will be "one of the lowest in Wales", while proposing cuts, including to libraries and community centres.

Pritchard told Wednesday's committee: "Yes it [the settlement from Welsh ministers] is an improvement and I'm really pleased, but it isn't enough money because the demands are outstripping the services.

"Welsh government received [an extra] £1.1bn from Westminster and we were told that we were a priority and that we were going to be given a larger settlement."

He added: "I think I have to say this: is the Welsh government setting us up to fail because they know what the pressures are?"

"All we want, the 22 local authorities across Wales, is to be funded appropriately."

He said that the council would have to make people redundant and revealed that only 15 Wrexham council workers had expressed an interest after a previous trawl for voluntary redundancies.

He warned that up to 15,000 jobs were at risk across Welsh public services.

Pritchard added: "Bankruptcy is still there. It never goes away… demands are outstripping the financial amount of money we have. It isn't one authority saying this, it is the 22 authorities."

The Welsh government has been asked to comment.

Council leaders were appearing in front of Senedd members on a day of detailed scrutiny of the Welsh government's draft budget.

Independent experts appearing at the same time in front of the Senedd's Finance Committee suggested that the threat of bankruptcy had been averted because of the increase in funding from the Welsh government and proposed rises in council tax.

Ed Poole, from the Wales Governance Centre, said that a 3.1% increase in funding over two years was "a significant increase relative to previous years".

"When we look at the picture across Wales this is a settlement that's much better than could have been expected six months ago," he said.

Bridgend council's deputy leader told the Local Government Committee that the authority would not be making redundancies because it simply did not have the staff to deliver important services.

Jane Gebbie said she was "managing a vacancy-management system" with the council having lost 40% of its staff since 2010.

Gebbie said that Welsh councils did not deliver a "gold standard" in public services anymore.

Bridgend along with Anglesey and Monmouthshire councils - who were also in front of the committee - are looking at increases in council tax, use of reserves and cuts to services in order to balance the books.

Senedd members also heard of concern around the impact of the rise in National Insurance contributions announced last autumn by the UK government.

Plaid Cymru committee member Sian Gwenllian suggested that an extra £109m would be made available for councils to deal with the rise, but councillors said there was uncertainty over whether it would cover the full costs.

It also looks unlikely that extra cash will be made available by the UK government to cover the rise in NI for workers not employed directly by the public sector, but nonetheless contracted by councils to provide public services such as social care.

Welsh ministers still need to strike a deal with an opposition party for the budget to pass a vote in the Senedd, because Labour has only half the seats.

The vote is due to take place in March.