What Price Devolution Now?

Here is the starkest of all messages from Powys County Council and an explanation of how the 'One Wales' agenda seeks to unite Wales. I quote extensively from a briefing note for County Councillors which I have just received.

Powys receives 80% of its funding from the Welsh Assembly Government and 20% from Council Tax. The provisional settlement gives Powys a 1% increase in WAG funding. Against inflation of 2.7%, this is a real terms cut of 1.7%, equivalent to £2.9m.

This is the lowest increase for any Welsh Council. The average is 2.3%. If Powys received the average increase, that would deliver an additional £2.2m.

In 1996, Powys received the 2nd highest level of funding in Wales per capita. That was recognition of the costs of delivering services over a huge rural area. Powys has now slipped to 9th and will slip further. This relative loss has been compounded by grant streams, notably Deprivation Grant. On average Welsh Councils receive £1m of Deprivation Grant, Powys receives £48,000.

The Council has 3 main “tools” to manage its budget:

1. Manage more efficiently – “do more, with less”. Powys has a good track record of making efficiency gains and achieved savings of £5m to balance the 2007/08 budget. The Wales Audit Office says “Powys has made good progress in achieving, measuring and demonstrating efficiency gains.” However, efficiency gains are not painless. They may involve job losses and building closures. They are often perceived by the public as service cuts, although the same services are still available, only in a different form;

2. Reducing services. Powys’ net budget is structured:

Education 44%
Social Care 24%
Transport and Waste Management 14%
Recreation and Countryside 6%
“Uncontrollable” Costs – Levies etc 5%
Other services 7%

The scope for making significant savings without impacting key services such as Education, Social Care and Transport and Waste is extremely limited. Indeed, we should be strengthening these services to deal with challenges such as the Foundation Stage in Education, an aging population and increased recycling targets;

3. Increasing Council Tax.
Powys’ Band D Council Tax is £800, which is not far from mid-table for Welsh unitary authorities. Council tax only raises 20% of income. Each 1% on Council Tax raises £0.5m. Council Tax is likely to be capped if the increase exceeds 5%.

Whichever of these options, or combination, that the Council chooses to use will not be palatable to the citizens of Powys. Efficiency savings are the preferred route but Powys has already been active in making efficiencies and there comes a point when the returns diminish and the other options have to be pursued.

The cliche about being 'between a rock and a hard place' only hints at the magnitude of the dilemma now facing the 73 County Councillors in Powys. At least we can all go to the first class Millenium Arts centre in Cardiff, and after all, we have the 2012 London Olympics to look forward to !