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Last Updated: Tuesday, 13 November 2007, 14:17 GMT
Warning of big council tax rises
Council tax letter (library)
Ministers have not said whether they would cap council taxes
Council taxes in Wales could rise by between 8-10% next year, the Welsh Local Government Association (WLGA) has warned.

It told the assembly finance committee that councils faced a "significant" funding shortfall based on the assembly government's draft budget.

The WLGA said big council tax rises or cuts in core services were inevitable.

Deputy First Minister Ieuan Wyn Jones said council tax increases should be "not unreasonable".

Derek Vaughan
To balance the books next year they really will need to increase the council tax by 8-10%
Derek Vaughan, WLGA leader

The WLGA had analysed the draft budget, published last week, and gave its considered response to the proposed settlement to the committee of AMs.

The figures indicated central funding for councils would increase by a basic 2.2%, although there was extra money for waste management and early years teaching in schools.

WLGA chief executive Steve Thomas said: "This budget proposal will diminish local government and it will diminish local government services".

WLGA leader Derek Vaughan maintained the planned increase had been "met with fury right across local government".

"The increase of 2.2% in our RSG (Revenue Support Grant) was the lowest we've seen in living memory," he said.

"To balance the books next year they (councils) really will need to increase the council tax by 8-10%, and we've had some local authorities telling us that already," he added.

Individual councils will find out on Wednesday what they are expected to receive.

'Tough settlement'

Mr Vaughan said some were expecting a funding increase of only 1%, a significant cut in real terms because it is well below inflation.

Monmouthshire head of finanance Steve Greenslade warned that some schools in Wales would be placed in an "irretrievable financial position."

The local government delegation told the AMs that it expected Powys to get the lowest settlement among the twenty two Welsh local authorities - possibly in the region of 1%.

The WLGA also suggested that a total of three local authorities were likely to face a settlement below 1.5%, but did not name the other two councils involved.

Plaid Cymru AM Mohammad Asghar accused the WLGA of scaremongering and called on local authorities to start making real efficiency savings.

Mr Jones refused to say whether the coalition government would cap council tax levels or not.

He told a media briefing that ministers accepted that this was a "tough settlement" but that it would expect local councils to set a level of council tax that was "not unreasonable".

He would not elaborate on what was "reasonable" in his view and what was not.



SEE ALSO
Tories offer votes on council tax
13 Nov 07 |  UK Politics
Union talks over council job cuts
07 Feb 07 |  Mid Wales
Homeowners 'must check tax band'
25 Jan 07 |  Business
Council warns of tax bill rise
19 Dec 06 |  North West Wales

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