The Cost of Living

Part of 1. Questions to the Minister for Finance and Local Government – in the Senedd at 1:39 pm on 18 January 2023.

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Photo of Rebecca Evans Rebecca Evans Labour 1:39, 18 January 2023

Well, I'd begin by saying that we absolutely don't underestimate the challenge that our colleagues in local government are facing from the inflationary pressures that they're experiencing at the moment. Because, of course, just as the Welsh Government's budget has been eroded in value, so too has local government's budget been eroded in value. But, nonetheless, we've really focused our efforts within our budget for the next financial year on public services, which is why, next year, we'll be providing unhypothecated revenue funding of over £5.5 billion, and over £1 billion of specific grants to support local authorities in their statutory and non-statutory services. That means that core funding for local government for 2023-24 has increased by 7.9 per cent, or £403 million, on a like-for-like basis compared to this financial year. So, we're doing absolutely everything that we can to put local authorities in the best possible position, but, of course, we know that the additional funding that we're able to provide doesn't meet that gap caused largely by inflation, and, as a result, local authorities will be needing to make some difficult decisions.

Now, it is the case, of course, that local authorities set their own council tax levels. I know that many are consulting at the moment. The Welsh Government, as you say, does have the power to cap those, but I don't think that we're at the point yet at which we could make a decision on that, and it's certainly something that we wouldn't do lightly; it's something that we would do only in cases where those rises were palpably excessive. So, just to set out, we really do think it's for local authorities to be setting their council tax levels; it's an important part of local democracy.