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The Public Services minister has urged local councils to 'think seriously' and find other savings before increasing council taxes.
Announcing a cut of £57m or 1.4% in the amount of money the Welsh Government gives to Wales' 22 authorities, Leighton Andrews said the settlement was better than expected by local government leaders.
He said he wasn't considering imposing a cap on council tax rises, but urged authorities to look at reserves and finding savings in administration before putting bills up.
Some of the cuts councils were expecting have been offset by extra money stemming from Welsh Government commitments to spend more on schools and social care.
Councillors who decide local budgets won't be obliged to pass on that increase, but the minister told Political Editor Adrian Masters that he thinks most will.
One of the minister's fiercest critics, the Labour deputy leader of Flintshire Council, Bernie Attridge, took to twitter to give Leighton Andrews credit for listening to the concerns of local councillors.
Can I personally thank Comrade Andrews for listening to LG, although a cut to our budget it's better than what was being peddled!
Wales had 13 counties that hardly changed for centuries. then politicians got into the habit of shaking up councils every 20 years or so.Read the full story ›
The Welsh Government has published its plans to shake up local government. The current 22 local authorities would be replaced by either eight or nine new councils, with the only question left open is whether north Wales should have two councils or three.
The plans go further than the Williams Commission proposals for between 10 and 12 councils. The idea of following health board boundaries has also been rejected, with Bridgend grouped with Rhondda Cynon Taf and Merthyr Tydfil rather than Swansea and Neath Port Talbot.
But to get its plans through, Labour will have to win an outright majority at next year's Assembly election or do a deal with another party. All the opposition parties have other ideas so today's map is not yet a done deal.
This announcement provides further clarity on the future configuration of local authorities in Wales. It sets out our preference for the future structure in south, mid and west Wales while facilitating further discussion around north Wales. The case in north Wales is finely balanced between two or three local authorities. We therefore feel that there is a case for a further debate and would welcome views. I want to emphasise this is not a final decision. It is the next phase in our public debate.
The full list of proposed mergers is:
- Gwynedd, Anglesey and Conwy
- Denbighshire, Flintshire and Wrexham
- Ceredigion, Carmarthenshire and Pembrokeshire
- Swansea and Neath Port Talbot
- Bridgend, Rhondda Cynon Taf and Merthyr Tydfil
- Cardiff and Vale of Glamorgan
- Newport, Monmouthshire, Torfaen, Blaenau Gwent and Caerphilly
Powys would remain unchanged and the option of merging Conwy and Denbighshire into an additional county is also on offer.
The local government union Unison says today's proposals have left council restructuring no further forward and that the uncertainty is leaving workers demoralised and fearful for their futures.
There is a general consensus across Wales that council restructuring is both necessary and inevitable.
However, despite the fact that this debate has been ongoing for some time now, we appear to be no further forward in terms of a blueprint for the future map of local government in Wales.
This lack of certainty is dangerous for the future of Welsh local government. Ongoing deliberations are leaving the local government workers feeling demoralised and fearful for their futures.
Our members are experiencing a double whammy effect as a result of this indecision.
On the one hand councils are far too often turning to staff to make up budget shortfalls through job loss and cuts to terms and conditions, and on the other hand staff will face further disruption when councils are eventually restructured.
Mr MacAskill warned that further delays will exacerbate the damage being done to services as a result of austerity. He called for council mergers to go ahead as a matter of urgency, as local services could not continue to operate "under a shadow of doubt and indecision".
Public Service Minister Leighton Andrews has rejected all three of the plans for voluntary mergers put forward by local councils. The proposals would have seen six councils become three ahead of the scheme for compulsory mergers which Labour plan to introduce if the party wins the 2016 Assembly election. They were:
- Bridgend to merge with the Vale of Glamorgan
- Torfaen to merge with Blaenau Gwent
- Conwy to merge with Denbighshire
The proposal from Bridgend and the Vale of Glamorgan broke guidelines that a new authority shouldn't cross health authority boundaries or include areas entitled to different levels of European aid.
The Torfaen-Blaenau Gwent merger was seen as partly an attempt to pre-empt a forced three-way merger combining both councils with Caerphilly.
Conwy and Denbighsire appeared to fit in with the Welsh Government's own thinking but the council leaders had made it clear that they would only go ahead if the costs of merger were fully funded by Cardiff Bay.
I welcome the leadership shown by the political leaders of each of the authorities concerned and their willingness to help shape their futures. I understand that securing agreement from their prospective partner councils took a good deal of work and personal commitment.
I have considered each Expression of Interest carefully against the criteria set out in the Prospectus. I am disappointed to report that on the basis of this assessment I am not persuaded that any one of these Expressions of Interest sufficiently meets the criteria for moving ahead to prepare a full Voluntary Merger Proposal.
There will now be a rethink on whether to go ahead with legislation that would have enabled voluntary mergers to take place.
The Conservatives are accusing the Welsh Government of actively encouraging big council tax rises next year. The tax has been frozen by the Scottish and Westminster governments but annual increases are allowed in Wales, where tax levels have historically been lower. The UK minister for English local government, Eric Pickles, claims that what's happening in Wales is a warning to voters in England.
Labour haven't learnt their lesson. If anyone needs an example of why Labour can’t be trusted with the interests of British people, this is it. After presiding over one of the worst economic crises in living memory, Labour’s answer to everything is still more borrowing, more spending and higher taxes.
Welsh councils face an average cut of 3.4% in cash terms in their main source of income -the support grant from the Welsh Government. When he announced the cut, Public Services Minister Leighton Andrews refused to say by how much he expected the tax to rise. However, he told councils that the Welsh Government remains "flexible" about increases.
In setting council tax levels for 2015-16, 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, where restrictive freezes apply.
Ultimately, Welsh council tax rises are nothing to do with the Westminster Government but it's inevitable that Conservative Ministers preparing to fight a General Election will make much of this issue as they have of comparisons between the Welsh and English health services.