Warning merging Welsh councils could cut 15,000 jobs

The cost of reorganisation would have a 'huge negative hit' on the economy, Ceredigion council leader Ellen ap Gwynn said

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Reorganising councils in Wales could cut 15,000 jobs, the Welsh Local Government Association (WLGA) has said.

Research by the accountants Deloitte, commissioned by the WLGA, indicates the cost of the changes is likely to be more than £200m.

Next Monday, the Williams Commission on public services is likely to recommend a big reduction in the number of councils from the current 22.

The last restructuring in Welsh local government was nearly 20 years ago.

Last autumn, First Minister Carwyn Jones said he knew of no-one who argued to keep the existing councils in their current form.

The estimates on potential job losses and the cost were included in the WLGA's official submission to the review.

It says: "With workforce in local government being the biggest asset in cost and resources, a reduction stemming from larger scale and the removal of duplication could see large savings.

"A 10% reduction may be deemed not unreasonable in new structure. This could see 15,000 jobs reduced across management and other parts of the workforce whether through retirement, voluntary redundancy or downsizing. This is, of course, not factoring in potential job losses over the next five years as a result of cuts."

The WLGA asked Deloitte to carry out research into the potential cost of re-organisation, using examples of previous re-organisations around the UK.

The big criticism is that there are too many councils and some are too small. There are mismatches. Cardiff for example has a population of around a third of a million, while Merthyr has a population of around 50,000.

A number of negative stories about council chief executive pay levels have all contributed to the debate, and added to the calls to reduce the overheads of 22 separate senior management teams.

In time, that could free up money to go to frontline services but in the meantime there will be a big bill to pay for the changes.

Nick Servini's blog: Council reorganisation 'inevitable'

Deloitte came up with nine possible costs but the average is more than £250m.

The WLGA submission said it commissioned Deloittes to specifically address the issue of the cost of bringing in reorganisation and based on previous re-organisations in Wales, Scotland and England that could be anything between £200m to £400m in 2016-17 prices.

"Following the approach taken by previous reorganisations in England the cost fell to the council taxpayer and Deloitte's research shows that the capital financing implications of borrowing could put 1% to 2% on the council tax bill based on comprehensive past re-organisations in Wales, Scotland and England," it said.

'Fraught with risk'

Dominic MacAskill from Unison said the union had previously estimated that due to budget cuts over the next few years "we could be seeing upwards of 25,000 job losses in Wales alone in local government".

He said it was no surprise that local government reorganisation was on the agenda in Wales.

THE WILLIAMS COMMISSION

The Commission on Public Service Governance and Delivery - or Williams Commission - was established by the Welsh government in April 2013.

Its job is to "look thoroughly and objectively at the way public services are governed and delivered in Wales, and how they may be improved".

It is chaired by Sir Paul Williams, non-executive director of Natural Resources Wales. There are six other members.

The commission launched a public consultation to hear people's views last summer, and it is due to report back on Monday.

"We're always concerned about any of our members losing their jobs but I think, in terms of the long-term viability of local government going forward, it was never sustainable to have 22 different varieties of social services directors, directors of education, directors of finance etc," he added.

"So, at some stage, we were expecting this to happen."

But Mr MacAskill warned cutting the number of councils would be "fraught with risk".

"It's open to potential drift and, in that drift services could deteriorate, staff morale could go down.

"But during this time of austerity, we need to have lots of imaginative and effective responses in order to keep and maintain local government into the future.

"So this is a potential opportunity to create sustainability for local government into the future but definitely fraught with risk," he added.

'Dangerous recipe'

Jamie Adams, leader of Pembrokeshire council, said the idea of re-structuring councils was "superficially attractive".

He added: "It sounds very plausible but there are two things:

"One is the risk, the gamble effectively, that that places on the provision of services that the people of Wales rely on.

"Secondly, is about the timing and the financial capacity to bring about change at this particular point in time.

"It is a dangerous recipe."

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