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Written Statement - Provisional Local Government Settlement 2016-17

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These budgets provide local authorities with the information to set their budgets and council tax levels for 2016-17.
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Leighton Andrews, Minister for Public Services

Today I am publishing my proposals for Local Government funding in 2016-17, including allocations of core funding for individual Local Authorities.

The late timing of the UK Government’s Spending Review has presented significant challenges for the preparation and publication of the Welsh Government Draft Budget and the 2016-17 Local Government Settlement.

I am publishing the Provisional Local Government Revenue and Capital Settlements for 2016-17 the day after the announcement of the Welsh Government’s Draft Budget.  This is the earliest opportunity which is possible in the circumstances.  

The later announcement of this Settlement means that it makes use of the most up-to-date data in the calculations.  I intend to keep any revisions between Provisional and Final Settlement to a minimum, affording Local Government a more robust basis from which to start planning their budgets.

I propose to set Local Government revenue funding at £4.099 billion.  This represents a decrease of 1.4% (£57 million) compared to 2015 16.  This is a considerably better Settlement than Local Government was expecting and is good news for local services in Wales.

Due to the close proximity of the Settlement announcement to the publication of the Draft Budget, I am not yet in a position to release details of capital grants for 2016 17.  However, I can confirm that General Capital Grant for 2016-17 remains at £54 million for the fourth year running.

This Government recognises the crucial role Local Authority social services play in improving outcomes for the most vulnerable and we have included an additional £21 million through this year’s Revenue Settlement in recognition of this.

Building on our investment in previous years, we have continued our commitment to prioritise funding for schools with an additional £35 million in this year’s Settlement.

We have protected the funding for Local Government in Wales over the course of this Assembly term.  This means that Local Government in Wales has not been subject to the level of cuts experienced by Councils in England.  As a consequence of UK Government decisions, since 2010-11, spending on local services in England has decreased by around 10% in cash terms, while in Wales it has increased by 2.5%.

For 2016-17, I expect every Authority to take account of all the available funding streams in considering service provision and setting their budgets and Council Tax.  Whilst the Revenue Support Grant is the largest single source of funding for Local Authorities, it is not the only one.  

In setting council tax levels for 2016-17, I urge Local Authorities to think seriously about the funding challenges they face and to balance this with a consideration of the financial burden on households.  We offer considerable flexibility to Authorities in Wales which is not available to their counterparts in England.  

I am proud of our commitment to, once again, maintain full entitlements for eligible applicants under the Council Tax Reduction Scheme, and I am supporting Local Government to deliver the scheme in 2016-17 by distributing £244 million within the Settlement.  Local Authorities must take account of the scheme when making their decisions about council tax levels.

Transfers and revenue grants
Included within the provisional RSG for 2016-17 is £31.1 million of funding previously provided through the Outcome Agreement Grant.  This demonstrates my commitment to offer Local Authorities the maximum amount of flexibility in how they set their budgets.

In total, this means that annual funding of over £190 million has been transferred into the Settlement since the beginning of the 2010 Spending Review.

Alongside the Settlement, I am publishing as much information as possible on other Welsh Government grant schemes planned for 2016 17 in order to assist Local Authorities in preparing their budgets for next year. Included within this is £63 million of funding for the Single Environment Grant.  The recent publication of the Draft Budget means that details of some grant schemes, in particular some of the larger schemes, have yet to be agreed.  I will include more information with the Final Settlement.  My Ministerial colleagues and I are considering whether further flexibility might be offered in relation to certain grant funding for 2016-17 and beyond.   Our conclusions will be published as part of the information accompanying the Final Settlement.

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