SERVICE closures and job losses could happen if extra money doesn’t come from central government, the leader of a Welsh council has said.
Councillor Andrew Morgan, the leader of Rhondda Cynon Taf Council, said that without additional financial support from Westminster, there won’t just be trimming or cutting services but the removal of some services.
He was speaking during an update on the council’s medium-term financial plan which was discussed by full council on Wednesday, September 28.
The report showed that without extra funding, the budget gap for the next three years up to 2025-26 is predicted to be £77m and over £36m for next year alone based on a modelled council tax increase of 2%.
The council’s director of finance Barrie Davies said the council’s projections show a coming period of “significant financial challenge”.
He said: “In the absence of additional funding, it is inevitable that there will be a need to reduce our services to close the budget gap that we face.”
He said they’re already reviewing all options to reduce spend and generate income.
On schools, he said they fully funded their pressures for many years but they’re not going to be insulated from these pressures and they also need to be prepared.
The Welsh Government settlement for councils is not expected until December.
Cllr Morgan said the report should be “quite stark reading for councillors”.
“In my time being a councillor since 2004 we’ve not faced a budget gap of this scale.
“This won’t be simply trimming or cutting services. If there isn’t government intervention, this will be wholesale closing down of some services.”
He said they could be looking at one and a half or two times the amount of the worst budget gap during austerity.
Cllr Morgan said if they were to close their entire leisure services, close down the refuse service and not collect bins any more, stop all highway repairs, stopped all litter picking and closed every library, it would still leave the council millions of pounds short next year.
He said the mini budget from the Chancellor did nothing at all for public services.
Cllr Morgan said they need to be “absolutely clear” with the public when they set the budget what support is available from April onwards because at present there is no additional support from the treasury for utility costs from then.
He said utility costs alone next year are going to be huge and there are pay pressures which are currently unfunded with no additional funding from UK Government.
Cllr Morgan said: “We are at present clinging to the cliff edge by our finger nails” and added that he would like to convene a meeting of group leaders to discuss the challenges they face.
Cllr Morgan reiterated that they probably won’t be able to protect schools fully as they have done through austerity.
“We could see substantial job losses in the local authority without additional funding. That would be inevitable.
“You can’t cut services unfortunately without cutting staff because 80% of our budget goes on staff.
“These are the real choices that we will be forced to make unless there is additional government support.”
He said Welsh Government can’t give any additional funding because they’ve drawn down all their reserves possible.
Cllr Morgan said most schools have good balances but that he will be writing to them to urge caution in using them at the moment because they may be needed to help “cushion the blow.”
He said that in 18 years he’s never had discussions with officers, Welsh Government and other council leaders like he’s having now.
He said: “It is frightening stuff because we know that, if the local authority has to lay off substantial numbers of staff or are expected to put substantial hikes in council tax, it will massively affect our communities.”
He said if they were to try to close the overall gap with council tax, because only 20% of their funding comes from council tax, that would mean it would have to increase by probably more than 40%, which he said is “totally off the wall and not acceptable” adding that he’s said previously that he doesn’t believe a 5% increase is acceptable.
He said: “This will actually impact on residents as much as it will impact on ourselves as a council” especially on mortgage costs which could lead to debts, homes being repossessed and more pressure on services.
He said it’s incumbent on all political parties to shout from the roofs right now adding “we’ve got to see the government get a grip of this situation”.
The deputy leader of the council Councillor Maureen Webber said the officer painted a “stark” and “honest” picture.
She said: “I think we are obligated as councillors to have a collective responsibility through what’s facing us over the coming months.”
She said any alternative that anyone looks to present couldn’t be considered unless they’re feasible, viable or financially deliverable.
Cllr Webber stressed the need for cross-party support and said it might get them through the coming months because they’re going to be presented with some very unpalatable decisions that they’re going to have to make.
Leader of the Plaid Cymru group Councillor Karen Morgan said in many respects this report was to be expected as it was always known after last year’s quite generous settlement that subsequent years would need to take up the slack and that 2023-24 was going to be a challenging year even without the current economic crisis.
She said: “But this really is dire” and that the reference to potential job losses is “very worrying given that the council is a major employer and that public sector workers are highly valued”.
She said that isn’t it the case that they should be making early representation to Welsh Government and that they need some joined up thinking in terms of priorities.
Cllr Morgan emphasized that “So many families in RCT are already at a social and economic disadvantage.”
Cllr Karen Morgan said she’s encouraged by the leader’s call for a meeting with group leaders and asked if he would pledge to work with opposition groups and publish an emergency cost of living action plan to try to avoid making people destitute.
Leader Cllr Morgan reaffirmed his commitment to work with other group leaders and keep them informed but on the action plan he said one of the problems they have is that the position is changing so rapidly and used the examples of the number of private sector evictions and pressure on food banks.
He said they need to be flexible and they can highlight the support that’s available.
Councillor Sam Trask, the Conservative group leader, acknowledged that the council, like many throughout the UK, finds itself in a “very difficult and challenging financial position”.
He said there are a lot of “what ifs?” and that they can only hope they’ll be answered in the autumn budget.
He said he’s not going to rise to any of the political rhetoric and that he doesn’t think there’s any need for it when also asking to work with other group leaders.
“But I will reaffirm my commitment to work with any group leader. I’m happy to meet with the council leader to work constructively and try to find a way forward.”