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Extra £3.64bn for public services Public service 'rise' condemned
(about 1 hour later)
The Welsh Assembly Government has promised more money for public services over the next three years. Council leaders have warned of cuts to key frontline services despite a Welsh Assembly Government promise of more money for public services.
Announcing his draft budget on Monday, Finance Minister Andrew Davies outlined £3.64bn new public service investment over the next three years.
The Welsh Local Government Association (WLGA) said the 2.2% increase promised to local authorities was "derisory".
It warned of service cuts, job losses and pressures on council tax.
Before the draft budget announcement, opposition parties had warned services could be cut as the assembly government was funding too many initiatives.Before the draft budget announcement, opposition parties had warned services could be cut as the assembly government was funding too many initiatives.
Despite tighter spending limits set by the UK Treasury, ministers said there would be £3.64bn new public service investment over the next three years. It's a balance between very significant additional funding, £3.64bn over the next three years, but also making sure that we get the best value for the Welsh pound Finance Minister Andrew Davies
However, the increase is not as great as in previous years. Tighter spending limits set by the UK Treasury also added to fears.
Although more money will be spent on public services, the increase is not as great as in previous years.
An extra £1.2bn has been promised for health services over the next three years.An extra £1.2bn has been promised for health services over the next three years.
There will be £120m spent on childcare, and £155m on transport.There will be £120m spent on childcare, and £155m on transport.
By 2011, public spending will have reached double the budget of the assembly government in 1999. By 2011, public spending will be in excess of £16 billion - it is already double the budget of the assembly government in 1999.
Councils had urged the assembly government to make areas like schools and social services the priority. Mr Davies told BBC Radio Wales that as well as promising the extra cash, there were plans for more efficient spending.
The Welsh Local Government Association (WLGA) met ministers beforehand to discuss their concerns. It is clear that over the next three years we are facing some serious belt-tightening when it comes to government spending in Wales Shadow Finance Minister Angela Burns
Speaking before the budget announcement, Derek Vaughan, Labour leader of the WLGA, said: "In the past we've had a large number of initiatives, for example free school breakfasts was one, and more recently the countryside rights of way. The Finance Minister said: "It's a balance between very significant additional funding, £3.64bn over the next three years, but also making sure that we get the best value for the Welsh pound.
"All these things are very laudable and we all wanted to do them, but sometimes it is a question of priorities. The assembly and ourselves just can't fund everything." "It's looking at areas where we can deliver things more efficiently, we can buy goods and services more efficiently, so it's a combination of additional investment, plus more effective use of the Welsh pound."
The Labour-Plaid coalition created after May's election did warn that there was less money to go around, and local authorities are already struggling with overspends. But the WLGA said the 2.2% rise for local government actually represented a below inflation increase.
This includes an overspend of more than £18m in Welsh social services, according to figures obtained by BBC Wales's Politics Show. WLGA leader Cllr Derek Vaughan said: "Today's settlement again sees local government at the bottom of the pile when it comes to public finances in Wales.
Jeff Jones, the former leader of Bridgend Council and now a local government consultant, warned councils had braced themselves for the tightest budget settlement in 10 years and were having to make "large savings up to 2011". "In this climate the assembly government must prioritise and inject realism in its thinking about what local authorities can achieve, in particular it needs to scale down its own expectations around costly new initiatives."
"That's going to be very difficult for the 22 Welsh authorities which are fairly small, do not have the reserves of the former county councils when it was tough in the 1980s and will find it very difficult not to hit services like education, social services and so on," he said. WLGA chief executive Steve Thomas said local government was again the "poor relation of public services."
He said most local authorities would find it very difficult not to go up to the 5% cap imposed by the assembly government on council tax charge increases. He said: "We see an increase of 4% in health spending across Wales, but local government gets 2.2%.
"We see social services as equally important - keeping people out of hospital is as important as hospital services themselves."
The Welsh Conservatives also warned of future pressures in health, education, and local government.
Shadow finance minister Angela Burns said: "This is an extremely disappointing settlement which marks the end of the Assembly Government's reckless eight-year spending spree.
"It is clear that over the next three years we are facing some serious belt-tightening when it comes to government spending in Wales."