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Wlga Warning On Council Deficits

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http://news.bbc.co.uk/1/hi/wales/10335563.stm

Councils in Wales could be facing deficits of hundreds of millions of pounds within four years, a councils' body has predicted.

The Welsh Local Government Association (WLGA) issued the warning ahead of its annual conference on Thursday.

The figures, calculated by Deloitte and the WLGA, show large councils could be £120m in the red, with smaller ones holding £30m deficits.

The local government minister said his door "would be open" to councils.

Carl Sargeant AM acknowledged how difficult financial pressures were likely to prove for councils, and said his door would be open to authorities facing problems.

However, he added that councils must live within their means.

Mr Sargeant said his "over-riding priority" was that the quality of services should not suffer whatever he depth of the crisis in the public finances.

Speaking ahead of the conference in Llandudno, which he will address, he added: "We have to face up to a double whammy, a combination of greater demand for services from citizens coupled with less resources with which to provide those services.

The wonderful problem of deficit.

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Can a UK council go bankrupt or can it always expect a government bailout?

It can go bankrupt. Some definitely will in the coming 2-3 years because they will not manage cuts properly and may be legally unable to just put up Council tax beyond a certain amount, depending on policy.

It is just like dieting. First you ate too much and got fat. Then to correct it you are told to eat even less than your correct weight would need. Since you are used to gorging, the change will be painful.

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Is it so hard for councils to have a spreadsheet with two columns: Expenditure and Receipts?

If one is greater than the other, then do something about it.

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It can go bankrupt. Some definitely will in the coming 2-3 years because they will not manage cuts properly and may be legally unable to just put up Council tax beyond a certain amount, depending on policy.

Are retired council worker pensions paid on a pay-as-you-go basis (and liable to be reduced if council goes bankrupt) or does the council pay a lump sum to an annuity provider to sort it?

I suspect it's the former so are ex-council pensioners are at risk of having their pensions reduced. (My mum has one).

One of the main theme in Mish's US blogs are the unaffordable public sector pensions and the only way to get out of it is for a state to go broke, seems to have parallels with the councils here.

VMR.

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  • 140 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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