WLGA warning on council deficits

Council budgets rose between 1% and 3% this year

Councils in Wales could be facing deficits of hundreds of millions of pounds within four years, a councils' body has predicted.

The Welsh Local Government Association (WLGA) issued the warning ahead of its annual conference on Thursday.

A report by local government managers, prepared with support by Deloitte, show large councils could be £120m and smaller councils £30m in the red.

The local government minister said his door "would be open" to councils.

The report has been released by the Society of Local Authority Chief Executives and Senior Managers (SOLACE) Wales, the professional society for senior strategic managers working in local government in Wales.

Carl Sargeant AM acknowledged how difficult financial pressures were likely to prove for councils, and said his door would be open to authorities facing problems.

However, he added that councils must live within their means.

Mr Sargeant said his "over-riding priority" was that the quality of services should not suffer whatever he depth of the crisis in the public finances.

Speaking ahead of the conference in Llandudno, which he will address, he added: "We have to face up to a double whammy, a combination of greater demand for services from citizens coupled with less resources with which to provide those services.

"I want to see collaboration become the norm everywhere, more shared services and more shared appointments between local authorities. This is the only way that we can preserve the front-line services that citizens need."

WLGA chief executive Steve Thomas said the 22 councils in Wales were awaiting next week's Budget from Chancellor George Osborne with "trepidation".

He said those services hardest to protect would be the likes of leisure, but education and social care were not immune.

"The biggest cost with local government comes through the people we employ, and if the cuts do hit in a very severe way I'm afraid it's going to hit head count," he told BBC Wales.

"In terms of services received, you can't protect every single service."

Mr Thomas said councils had already announced between 3,000 and 4,000 job losses in the next few years, but that number had been based on previous figures and could rise depending on the content of the Chancellor's budget next week.

He added: "With capital funding, those projects in infrastructure are going to be dramatically cut over the next five years."

When council budgets were announced last October for the present financial year, councils said at the time they were facing at least five years of "severe financial pain".

Councils were granted rises of between 1% to just over 3%.

In June, Cardiff council sent letters to staff "reminding" them of its voluntary redundancy scheme as it said it would have to cut £21m from its budget.