WAG vs Local Authorities

Just as another row between the Welsh rugby regions and the Welsh Rugby Union flares in up over training availability for the Autumn internationals, a similar argument is now brewing between local authorities and the National Assembly for Wales.

Last week, the Assembly finance minister revealed councils in Wales had over half a billion pounds in reserves. This, he argued, could be spent to compensate for the lower financial settlement to local authorities from the Assembly.

Of course, council chiefs disputed this, arguing three quarters of the reserves had already been committed for future capital projects with the rest literally being stored for a rainy day to deal with emergencies such as flooding.

They also suggested councils are merely following good financial practice, having been told by the Welsh Audit Office to hold up to five per cent of their revenues in reserve accounts. In contrast, the Assembly currently has only one per cent of its annual budget in its reserves, having been determined to continue with its spending commitments despite the worsening economic climate.

Therefore, there is a stand-off in place where the Assembly Government will not change its budget priorities and has no reserves left to increase the settlement to local authorities. On the other hand, local councils will be breaking their own auditing practice if they raid their reserves and, more critically, could be bankrupted if they were hit by a financial crisis and had no money left to deal with it.

It would seem the only alternative to this dispute will be to cut services or raise council tax bills. As a result, both parties are clearly trying to make sure they do not get the blame for either course of action which will clearly be unpopular with a general public that is already facing other financial hardships.

There is also the question of whether this is a political or financial dispute? For example, there seems to be a growing consensus that we may have too many local authorities in Wales and it is time for another reorganisation, especially as the current number of councils was arrived at in 1994 and did not take into account the creation of a new devolved government in the form of the National Assembly for Wales.

For example, some would argue that there is a strong case for only two councils in North Wales, as was previously the case under Gwynedd and Clwyd prior to 1996, as this would ensure efficiencies and economies of scale that would save money and, in the long run, cut council taxes.

Given the current economic crisis, I believe this issue is as critical to Welsh public life as the current convention on further powers for the Assembly. The question is whether the Assembly has the powers to do this and, more importantly, the political will?

Recently, Assembly ministers stated that they did not envisage any local government reorganisation prior to the next elections in 2011. However, as far as I am aware, the 2006 Government of Wales Act states it is the Assembly Government, and not the UK parliament, that is responsible for the establishment of councils.

Therefore, with the growing dispute between the two levels of democracy in Wales and growing demand for better use of public funds, it may be time for AMs to bite the bullet and put such an argument to the Welsh electorate. Certainly, it would finally give us a system of government at a local and national level that reflects the new Wales.

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