£1bn needed to meet public service pressures, Hutt says

Public services in Wales need an extra £1bn to respond to an ageing population and rising NHS costs over the next three years, the finance minister has warned council leaders.

Jane Hutt said this would be on top of any cuts resulting from Chancellor George Osborne's spending review.

Welsh councils have faced average cuts of 3.4% in funding from the Welsh government over the past two years.

Ms Hutt also called on the chancellor to agree to "fair funding" for Wales.

The UK government has said it will provide a "funding floor", designed to protect the Welsh government from being squeezed by the Barnett formula that sets budgets for the four UK nations.

Ms Hutt was speaking at a conference of council leaders, who had gathered at City Hall in Cardiff on Thursday to discuss the financial challenges with senior members of the Welsh government.

Setting priorities

Local authorities have been making major cuts to departments other than social services, which are protected by law, and schools, which have been protected by the current Labour Welsh government.

Two years of reduced funding from the Welsh government followed a four-year freeze.

First Minister Carwyn Jones has said he will do all he can to prioritise spending on health and education.

However, he has warned he could not protect public services in Wales against what he called "enormous cuts" from Westminster.

The chancellor has asked non-protected UK government departments to find £20bn of savings ahead of his spending review announcement next Wednesday.

Ms Hutt also said she hoped to hear Mr Osborne announce funding for a "city deal" backing major transport and infrastructure projects for Cardiff and south east Wales.

Ten local councils and the Welsh government have set aside a combined £600m for the deal, and are waiting to hear whether the Treasury will match the pledge.