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Austerity is at a tipping point

October 17, 2017

 

We often hear the lament about belts having to be tightened in town halls. In some respects, repetition has diminished the message but that doesn’t disguise how we’ve reached a tipping point.

 

Indeed, when a local government leader starts to question why NHS boards in Wales can overspend by millions when councils face continual cuts, the signs are that we’ve entered uncertain times.

 

It is not a huge break in public sector solidarity for Wrexham leader Mark Pritchard to call for an "adult conversation" about how councils and the NHS are financed but it represents a marked shift in perspective.

 

If Welsh government ministers expect better partnership working between health and social services, say council chiefs, then the funding approach in Cardiff Bay should at the very least reflect this.

 

You can argue of course that the public have far more emotional affinity with the health service than refuse collection. There’s also the factor that after decades of making do and preaching value for money, councils still stubbornly keep building schools and resurfacing roads.

 

Councils may be the victims of their own adaptability, but as someone recently pointed out, the amount wasted on unused medication alone – freely dispensed at public expense - could help pay for nursery school provision across 22 local authorities. 

 

Unease at imbalanced funding has not been helped in any way by a recent review that reckons around 56p in every pound spent by the Welsh Government on public services could be going into the NHS within four years.

 

Comments by First Minister Carwyn Jones and Welsh local government association leader Debbie Wilcox infer an acknowledgement that a joined-up approach should start at the top. How that is actually achieved however seems a bit fuzzy.

 

The bottom line is that you can’t have near enough a decade of austerity and think services are going to be unaffected. You can finesse the weed-spraying timetable and transfer libraries and leisure centres into arms-length outfits. But sooner or later you have to close things.

 

So far education and social services have largely escaped. I can’t see that lasting much longer.

 

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A confusing matter of interest

 

Today sees the publication of the latest set of inflation figures. The betting is that Bank of England governor Mark Carney is going to have to write another letter to the government explaining why the headline figure is above the 2% target level.

 

There’s also speculation that successive hikes in the Consumer Price Index (CPI) mean interest rates could well be raised by 0.25% next month as a result.

 

The traditional perspective is higher interest rates are good for savers, bad for borrowers and that business will cope somehow. That’s not the prevailing view in many quarters however.

 

The British Chamber of Commerce feels “uninspiring” economic growth figures would be made worse while several economists suggest the current inflation trend is down to post-Brexit “currency wobbles”.

 

Of course, the unhelpful backdrop to all this is the possibility that Mrs May could be about to dump her Chancellor for disloyalty. Strong and stable, was it?

 

 

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