Welsh Government announces council funding cuts

The Conservatives are accusing the Welsh Government of actively encouraging big council tax rises next year. The tax has been frozen by the Scottish and Westminster governments but annual increases are allowed in Wales, where tax levels have historically been lower. The UK minister for English local government, Eric Pickles, claims that what's happening in Wales is a warning to voters in England.

Welsh councils face an average cut of 3.4% in cash terms in their main source of income -the support grant from the Welsh Government. When he announced the cut, Public Services Minister Leighton Andrews refused to say by how much he expected the tax to rise. However, he told councils that the Welsh Government remains "flexible" about increases.

Ultimately, Welsh council tax rises are nothing to do with the Westminster Government but it's inevitable that Conservative Ministers preparing to fight a General Election will make much of this issue as they have of comparisons between the Welsh and English health services.

The Welsh Conservatives claim that there are signs of "dodgy budget manipulation" in the funding cuts faced by local councils. The Tories point out that eight of the ten councils with the smallest cuts in their money from the Welsh Government are Labour controlled.

Welsh Government sources point to the local government funding formula, which they see as being far from cynical or crude, although it's undeniably complicated. They draw attention to the so-called "damping" mechanism, which has protected from even deeper cuts three of the worst-hit councils -Ceredigion, Powys and Monmouthshire. They're led by Plaid Cymru, the independents and the Conservatives respectively.

They still face cuts of between 4.5 per cent and 4.3 per cent, while the three with the smallest cuts -Labour controlled Neath Port Talbot, Newport and Merthyr Tydfil- lose between 2.4 per cent and 2.6 per cent. The largest single factor is that above-average increases in pupil numbers have had an even bigger impact than usual on this year's funding formula. That's because the money for schools is being increased despite cutbacks in overall council funding.

The Welsh Local Government Association says key local services could start to disappear as as result of councils being placed "bottom of the funding pile" by the Welsh Government.

The WLGA also insists that the £10 million increase for social services is just a tenth of what's needed to cope with the effects of an ageing population and with cutbacks elsewhere. It says merging councils will do little to help as halving the number of councillors, chief executives and senior managers would save no more than £18 million, when councils face a shortfall of £900 million over the next three years.

How much funding the Welsh Government intend to allocate each local authority for 2015-16 is to be announced later by Public Services Minister Leighton Andrews.

It's expected that morecCouncils will face further cuts, continuing from last years' drop in funding.

Last year all of Wales' 22 councils had their budgets cut for the 2014-15 financial year.

Some councils fared worse than others, with Ceredigion, Denbighshire and Powys seeing the biggest reduction - 4.6% - to their annual budget.