BBC News
Launch consoleBBC News in video and audio
Last Updated: Monday, 5 November 2007, 18:32 GMT
Public service 'rise' condemned
The coalition government has said there is less money to go around

Council leaders have warned of cuts to key frontline services despite a Welsh Assembly Government promise of more money for public services.

Announcing his draft budget on Monday, Finance Minister Andrew Davies outlined 3.64bn new public service investment over the next three years.

The Welsh Local Government Association (WLGA) called its 2.2% rise "derisory".

It warned of job losses and council tax pressures but Mr Davies said councils had been funded "generously" for years.

Before the draft budget announcement, opposition parties had warned services could be cut as the assembly government was funding too many initiatives.

It's a balance between very significant additional funding, 3.64bn over the next three years, but also making sure that we get the best value for the Welsh pound
Finance Minister Andrew Davies

Tighter spending limits set by the UK Treasury also added to fears.

Although more money will be spent on public services, the increase is not as great as in previous years.

An extra 1.2bn has been promised for health services over the next three years.

There will be 120m spent on childcare, and 155m on transport.

By 2011, public spending will be in excess of 16 billion - it is already double the budget of the assembly government in 1999.

Total budget around 14.8bn (2008-2009), 15.3bn (2009/10), 15.7bn (2010-2011)
Health spending rising from 5.69bn to 6.01bn over three years, an increase of 320m
Local government grant rising from 3.8bn to 3.99bn over three years, a 2.2% rise
120m spending for childcare
155m for transport
700,000 for free laptops for primary pupils 2009-2011

It is the first budget under the new coalition government and includes promises made in the the Labour-Plaid deal, such as free laptops for primary school pupils.

There is no money for this in the first year, although 300,000 was promised for 2009/10, and another 400,000 the following year.

Mr Davies said a later announcement by minister Jane Davidson would be made on the pledge of 5,000 for first-time buyers, "targeted on those most in need."

This is part of spending on affordable housing of 30m.

He told BBC Radio Wales that as well as promising extra cash, there were plans for more efficient spending.

The Finance Minister said: "It's a balance between very significant additional funding, 3.64bn over the next three years, but also making sure that we get the best value for the Welsh pound.

"It's looking at areas where we can deliver things more efficiently, we can buy goods and services more efficiently, so it's a combination of additional investment, plus more effective use of the Welsh pound."

The WLGA said the 2.2% rise for local government actually represented a below inflation increase.

WLGA leader Cllr Derek Vaughan said: "Today's settlement again sees local government at the bottom of the pile when it comes to public finances in Wales.

"In this climate the assembly government must prioritise and inject realism in its thinking about what local authorities can achieve, in particular it needs to scale down its own expectations around costly new initiatives."

WLGA chief executive Steve Thomas said local government was again the "poor relation of public services."

He said: "We see an increase of 4% in health spending across Wales, but local government gets 2.2%.

"We see social services as equally important - keeping people out of hospital is as important as hospital services themselves."

But Mr Davies defended the local government settlement and said in 2008-2009 it would grow by more than 160m, a real growth of 0.5%.

The Welsh Conservatives also warned of future pressures in health, education, and local government.

Shadow finance minister Angela Burns said: "This is an extremely disappointing settlement which marks the end of the Assembly Government's reckless eight-year spending spree.

"It is clear that over the next three years we are facing some serious belt-tightening when it comes to government spending in Wales."

See a summary of the draft budget

Cutback fears over care deficits
06 Nov 06 |  South East Wales

The BBC is not responsible for the content of external internet sites

Has China's housing bubble burst?
How the world's oldest clove tree defied an empire
Why Royal Ballet principal Sergei Polunin quit


Americas Africa Europe Middle East South Asia Asia Pacific