'Painful cuts' fears as energy bills plunge Welsh councils into funds black hole

"It's absolutely horrendous": ITV News Wales reporter Rhys Williams speaks to a Welsh council leader about his fears of public service spending cuts

It’s clear the combination of soaring inflation and rocketing energy bills is affecting households across the country, but the concerns over the funding of public services are just as severe.

The Welsh Local Government Association (WLGA) said councils were facing pressures "on a scale never seen”, with “painful cuts” to come. 

Higher energy bills mean Wales’ 22 councils have £200m less to spend next year.

Swansea Council is expecting its annual energy bill to increase from £5m to £20m, and as Swansea’s leader Rob Stewart reminded me, most of this energy is used to power buildings which can’t afford to be cut like schools and care homes.

Vital community assets like gyms and pools are also at risk of going under.

The Chief Executive of Freedom Leisure, which runs Leisure Centres in Swansea, Powys and Wrexham, told me some of their centres could close due to the astronomical increase in the cost of heating swimming pools and powering gyms.

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The rising costs of gas and electricity alone would be enough cause for concern, but inflation is eroding budgets further. Local authorities in Wales receive most of their funding from the Welsh government, which in turn is funded by the UK government.

The Welsh government says it’s budget is now worth up to £4bn less in real terms than it was when the three-year funding settlement was set last year.

Finance Minister Rebecca Evans says this was exacerbated UK government’s “mishandling of the economy.”

A Treasury spokesman says it has provided the Welsh government with a “record” £18 billion per year for the next three years - “the highest spending review settlement since devolution.”

The Welsh government, though, is worried about the spending cuts that it says could be needed to fill the hole “created by the fallout from the mini-budget.”

This could mean more cuts in funding for the Welsh government, which is preparing to publish its draft budget in December.