2 February 2008

Gwynedd Council Leader makes funding case for rural communities

Gwynedd Council Leader Councillor Richard Parry Hughes, Chief Executive Harry Thomas and Strategic Director – Resources Dilwyn O Williams recently met with the Welsh Assembly Government’s Finance Minister Dr Brian Gibbons to discuss the increase in grant which Gwynedd Council is due to receive from the Assembly Government for the next three years. 

During the meeting, Councillor Hughes impressed upon the Minister the particular difficulties facing rural councils in coming to terms with such a low local government settlement at a time when Gwynedd Council has already faced three years of below average funding settlements.

Gwynedd Council is due to get a below inflation 2% funding increase from the Assembly Government in 2008/9 and a 1.8% increase in 2009/10.  Council officers have emphasised that this will mean significant cuts in local services in the next three years on top of the £4million budget reductions already implemented in 2007/8 and over £10million of efficiency savings achieved by Gwynedd Council over the past three years.

Councillor Richard Parry Hughes said:

“With Gwynedd Council’s energy bills projected to rise by 36% in the next year, a 2% increase in grant funding isn’t likely to make much of a dent in these increased bills.  

“Whilst we appreciate that the Assembly Government is itself having to cope with a poor settlement from the Treasury in London, the low settlement which Gwynedd Council will receive is bound to have significant repercussions locally with services being reduced. 

“There is no getting away from the fact that this is a direct result of the poor grant settlement, compounded by the fact that Gwynedd has already had to use up many of our money saving ideas in order to find the cuts which we have had to find over the past three years.

“Gwynedd’s below average settlement is a result of anomalies in the formula used to allocate grant funding to local councils.  Whilst we accept that Gwynedd’s declining population relative to other areas has an effect, the present local government funding formula does not adequately recognise the additional cost of providing services in rural areas – a fact which has already been recognised by the independent body which reviewed the formula back in 2000 and studies conducted in England – but the Welsh formula continues to be deficient on this issue.

“Taken together, the grant increases for the past three years along with the grant increases for the next three years, show that the four authorities receiving the lowest grant increases are all rural authorities.  This is surely not a coincidence.

“Gwynedd Council was given a fair hearing by Dr Gibbons, and I think he understands our concerns.  The challenge facing us now is to get action on this point, and we will be pursuing the issue further with other rural councils through the Welsh Local Government Association.”   

Gwynedd Council received the lowest financial settlement in 2005/6 [3.5% against a Welsh Average of 5.1%; the third lowest in 2006/7 [4.5% against a Welsh average of 5.1% and the fifth lowest (out of 22) in 2007/8 [3.7% against a Welsh Average of 4.4%].

- By the end of the next three year period, Gwynedd will have received the lowest increase in its Assembly Grant of any council in Wales [20.39% against a Welsh Average of 25.04%].

- Had Gwynedd Council received the average grant increase for Wales it would have £6.3million of additional funding to support local services equivalent to 15% on the Council Tax.