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A Capital Deal

The Assembly Government announced this morning how much money it will give to local councils next year to pay for schools, social services and everything else that they provide.

It’s just over £4 billion –a cut of 1.4%. In addition, of course, they will raise a further chunk of income from council tax. Just like in England, the councils are being told that their grants include an element meant to avoid a 2.5% increase in council tax.

Cardiff is the only council receiving a cash increase next year (Photo: Peter Morgan)

But though English local authorities are being told that should mean a freeze in council tax next year, Welsh authorities can choose for themselves.

They could spend that money and also put up council tax by as much as 5%. Anything higher than that and they would penalised.

Where the councils are expected to follow Assembly Government order is in passing on all the money earmarked for education and social services. What’s more at least 80% of the education money must actually reach the schools –and that will rise to 85% in future years.

The Local Government Minister, Carl Sargeant is calling it a settlement to protect key council service, whereas his English counterpart, Eric Pickles preferred to headline his settlement as freezing council tax.

In Scotland of course, they claim to be freezing council tax and protecting services but that’s another story.

Here in Wales, what’s really interesting is who gets what. The Assembly Government has provided a helpful table:

So in the whole of Wales, just one local council gets a cash increase next year –our fair capital city of Cardiff. Even that is a measly 0.1%, so considerably less than inflation but still a lot better than the 1.7% cut that most authorities are getting.

These figures aren’t worked out on a political whim but based on population shifts and levels of need. Indeed the only political intervention was the decision to introduce a ‘floor’ or maximum cut. Without it many councils would face bigger cuts, with more money going to Cardiff.

Still no doubt Cardiff’s relatively good deal will get a mention in Labour leaflets in Cardiff North and Cardiff Central in the assembly election next year.

They are constituencies where Labour needs a big swing from the Conservatives and Lib Dems.

However party tacticians are eyeing them up as the seats that could deliver the overall majority that eluded Alun Michael and Rhodri Morgan and Carwyn Jones would love to secure.




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