Leader expresses ‘serious concern’ to UK and Welsh Governments over council funding

The cross-party motion was taken at a full meeting of Neath Port Talbot Council on Friday, July 26th, 2024.

It follows advice from Welsh Government that local authorities in Wales should plan for NO increase in Revenue Support Grant (the money given by Welsh Government to councils to run services) in the next financial year.

The motion says the letter from Cllr Hunt should express serious concern over the potential for no uplift to the Revenue Support Grant and call on UK and Welsh Governments “to provide adequate funding to enable the sustainability of councils”.

Addressing the council, Cllr Simon Knoyle, the council’s Cabinet Member for Finance, Performance and Social Justice said: “Recent years have been characterised by considerable volatility as a result of world and domestic events.

Specifically, Covid has left a significant legacy with high numbers requiring support from social services, homelessness services and more young people presenting with additional learning needs and more young people needing additional help to attend school and participate in their education.

“Energy prices – general inflation and interest rates have sharply increased. Although inflation has now returned to 2%, many goods and services remain more costly and energy prices and interest rates remain high. The cost of living crisis continues with many of our residents and local businesses experiencing financial hardship.

“Capital projects have become more challenging to deliver and while the council is engaged in a range of significant economic development opportunities and is also a key partner in responding to the challenging and complex changes at Tata Steel UK Ltd, the cumulative impact of these developments is challenging to resource while uncertainty remains.

“Revenue settlements from Welsh Government in the last two financial years – 2023/4 and 2004/5 fell substantially short of what the council needed to deliver its services and functions. Additional pressures of some £70m were identified for the two year period with Welsh Government providing some £26.9m in extra funding.

“The incoming Labour Government is yet to signal whether it will adjust current spending plans. Welsh Government advises, for 2025-26, we should base our planning on a zero per cent uplift to the Revenue Support Grant.

“The many years of austerity, coupled with the series of economic shocks in recent years and the prospect of further significant reductions to the council’s funding base, will have very negative overall consequences for the services and functions we operate, the number of people we will be able to employ and rates of council tax, fees and charges.”