The WLGA has responded to the Welsh Government’s publication of the 2025-26 provisional local government settlement.
Councillor Andrew Morgan OBE, WLGA Leader, said:
“Whilst we will take time to consider the details, I warmly welcome Welsh Government’s commitment to supporting local government. Next year’s settlement is over £1bn higher than it would have been under the previous UK Government, which is proof of a decisive change in direction which will help to support public services and communities alike.
“Nevertheless, over a decade of savage cuts and lack of investment in the public sector cannot be undone overnight in one settlement. Local government is wholeheartedly committed to continue to work in close partnership with Welsh and UK governments alike to secure essential local services for the future so that they are still there to support those who need them. I thank the Cabinet Secretary for Housing and Local Government for her close engagement with us and will look forward to continuing our constructive dialogue during the consultation period.”
Councillor Mark Pritchard, WLGA Independent Group Leader, said:
“Whilst we have welcomed engagement with Welsh Government, this is a disappointing settlement which does not address the £560m gap in council funding for 2025-26. Local authorities have a statutory duty to present balanced budgets. To achieve this, they could now be forced into a ‘Sophie’s choice’ situation to meet the shortfall – either to look again at Council Tax levels to raise revenue, or to consider cuts to everyday services to lower expenditure. This would be in addition to the impossible decisions that councils are already taking due to the scale of the funding challenges and a chronic lack of investment in the public sector.
“It is clear that the position is unsustainable. I urge the Welsh Government to reflect on the settlement and explore all avenues available to them to invest in our essential local services. It is only with long-term, sustainable funding that councils can support residents, communities, and businesses, and help to deliver national ambitions.”
Councillor Darren Price, WLGA Plaid Cymru Group Leader, said:
“Local government has been clear of the perilous financial outlook for local services. The average 4.3% increase announced for next year by Welsh Government clearly falls short of meeting the 7% pressure on council budgets.
“Unless the Welsh Government increases the funding being made available to local councils in the final budget, Councils across Wales will have to make further cuts to services and significant increases in Council tax in order to balance the books.
“This settlement could very well be a case of the emperor’s new clothes, given that we are still awaiting clarity in relation to funding for employer National Insurance contributions. The increase represents a £109m pressure in direct costs, with £44m pressure for social care commissioning. We desperately need confirmation of that funding to ensure that we have confidence in planning our own budgets.
“The Welsh Government needs to respond fully to the spending pressures facing local authorities. This draft budget does not do that. There needs to be clarity regarding NI support, and discussions also need to be held to secure additional support for authorities falling at the lower end of the range in the settlement.”
Councillor James Gibson-Watt, WLGA Liberal Democrat Group, said:
“We know that the public purse is threadbare with all levels of governments having to face tough decisions. However, this settlement will be a difficult pill for many authorities to swallow. The demand on services such as social care, education, and housing are ever-increasing. Without the funding necessary to address those demands and rising costs, the ability of our essential local services to fulfil statutory duties, and support residents’ needs will be severely impeded.
“There is also significant variation in the levels of increase across the 22 authorities, ranging between 5.6% and 2.8%. Councils receiving less-than-average increases will feel particularly exposed to the severe financial headwinds facing local services. That is why we need to see a funding floor introduced to help these authorities. I look forward to making that case to the Cabinet Secretary and her government colleagues during the consultation period.”