Monday, March 11, 2013


Last week, local authorities across Wales announced that jobs and services would have to be cut in order to make up a £145m funding shortfall in their budgets.

This follows a recent National Audit Office report which highlighted the increasing difficulty faced by local authorities in absorbing the reductions in their central government funding without reducing services and meeting obligations.

Indeed, councils have seen their funding fall by over nine per cent during the last three years with more reductions in expenditure forecasted up to the end of the decade.

The situation is expected to get worse as demand for expensive services, such as adult and children’s social care, is going up whilst the latitude for cost savings through reducing other non-essential services is narrowing.

In North Wales, councils are dealing with this situation in different ways. In Anglesey, a decision has been made to raise council tax by 5 per cent whilst Conwy could be looking at cutting staffing costs to save £5.1m. Contrast this with Denbighshire and Flintshire, where both councils have focused on saving money internally so as not to affect frontline services.

So how can this situation be sorted out?

Well, one consequence of this financial crisis is the re-emergence of rumblings that this is largely a result of having too many local authorities. The suggestion is that there could be considerable financial savings if we had fewer councils.

In fact, some have recently suggested that there is a strong case for only two councils in North Wales, as was the case under Gwynedd and Clwyd prior to 1996, as this would ensure efficiencies and economies of scale that would save money and could, in the long run, cut council taxes. Similar mergers of existing councils could also take place across other parts of Wales.

There is also confusion over who should be responsible for services, as the recent debate over who manages education in Wales has recently demonstrated. This is not surprising, as the existing structure established back in 1994 was constructed to deliver services in partnership with a Welsh Office that was part of the UK Government and not a new devolved body in the form of the National Assembly for Wales.

As a recent briefing paper for Assembly Members noted, critics have observed that the current arrangement is unsustainable with twenty two local authorities delivering and duplicating the same services. In addition, many are too small to achieve any significant efficiencies and economies of scale that are urgently required over the next few years.

And whilst the Welsh Government has been advocating greater sharing of resources, some have noted that such collaboration is merely delaying the inevitable and that efforts to share services have been largely unsuccessful.

Such comments have not swayed the opinion of Carl Sargeant, the Local Government Minister, who has been known to argue that he is not supportive of change because of the "high one-off costs of a full-blown reorganisation".

And that is the challenge for those advocating a reduction in the number of local authorities in Wales, namely demonstrating that the long term cost benefits to the public purse of reorganisation are both cost effective and provide a solution to the governance of Wales in a post-devolution era that will last a generation.

Therefore, given the Welsh Government’s reluctance to engage in any review over the current status of local authorities, despite the clear exasperation of some Ministers with the current accountability of councils, could the reorganisation of public services in Wales become a key issue at the next Assembly elections?

Certainly, it will be interesting to see when any of three opposition parties, and perhaps even members of the Labour Party, will break ranks and formally call for a reorganisation of local authorities in Wales.