Yesterday, the Cabinet Secretary for Local Government and Public Services (Alun Davies AM), published the Provisional Local Government Settlement 2019-20. Aggregate External Finance (AEF), which is the general revenue funding available to local authorities, will reduce by 0.3% compared to 2018-19 (adjusted).
Total AEF for 2019-20 is expected to be £4.2 billion, a reduction of £12.3 million. AEF is made up of Revenue Support Grant (RSG) and Redistributed Non-Domestic Rates (NDR) (also known as business rates), and whilst there is an overall reduction, NDR is due to increase slightly from £997.5 million to £1.0 billion.
Out of the 22 local authorities, 7 will receive a (cash) increase in 2019-20, with Cardiff receiving the highest increase of 0.4%. The remaining 15 local authorities will see a reduction in funding. Of those 15 authorities, 5 are receiving top-up funding (referred to as “floor-funding”) to ensure funding does not reduce more than 1%. In real terms, all local authorities will receive a cut in funding.
Those authorities receiving top-up funding, and the amounts received, are outlined below:
- Powys – £979k
- Monmouthshire – £703k
- Conwy – £513k
- Flintshire – £218k
- Isle of Anglesey - £83k
The provisional changes to local authorities’ AEF is outlined in the below infographic:
Non-hypothecated general capital funding has been maintained at £143 million.
The Cabinet Secretary also made specific announcements on funding within the settlement. His written statement (PDF, 171KB) outlines:
- funding for the additional costs arising from the UK Government’s decision around the teachers’ pay award (£23.5 million total, with £8.7 million made available through a specific grant in 2018-19. For 2019-20, £13.7 million is included in the settlement and £1.1 million will be delivered as a specific grant)
- funding “to reflect the importance of local government’s role in the health and social care system” (£20 million, within the settlement, £30 million targeted funding outside of the settlement)
- funding of £7 million in relation to proposals for new eligibility criteria for free school meals (£4 million will also be provided to local authorities in 2018-19 through a specific grant)
- an additional £15 million for schools, allocated through the Education Main Expenditure Group in the Welsh Government
The Welsh Government is also providing £600,000 in 2019-20 (as it did in 2018-19) to support local government eliminate charging for child burials.
The Cabinet Secretary also announced £60 million of capital funding over three years for a local authority road refurbishment scheme in response to extreme weather conditions.
Last year the Welsh Government hinted that there may be changes to the Council Tax Reduction Scheme (CTRS) for 2019-20, however, the CTRS will be maintained for 2019-20 at £244 million, with arrangements for 2020-21 onwards to be determined as part of the Welsh Government’s considerations to “make council tax fairer”.
The Welsh Government’s two stage budget process means information on revenue and capital grants is published in-line with the detailed budget, which will be on the 23 October (last week we published a blog on the outline budget, which you can read here).
The Cabinet Secretary’s letter to local authorities and background tables are available on the Welsh Government website.
Article by Owen Holzinger and Helen Jones, National Assembly for Wales Research Service
