NHS reform can cut costs, says local council leader

Councils can show health boards how to cut costs, a local government leader has said.

A report has claimed protection of health funds could make libraries and leisure centres unaffordable.

First Minister Carwyn Jones said it was the "inevitable" consequence of Westminster cuts to Wales' budget.

But Debbie Wilcox, leader of the Welsh Local Government Association, said councils had done "tremendously well" to protect front-line services.

A review by the Wales Governance Centre and Wales Public Services 2025 said about 56p in every pound spent by the Welsh Government on public services could go to the NHS within four years.

Mr Jones told BBC Radio Wales: "We know how important health is and we have got to the point where it takes most of our expenditure.

"But we have experienced austerity since 2010 and it is taking more of a decreasing budget."

Speaking to BBC's Good Morning Wales programme, he called on the UK government to support public services, saying finances were being "squeezed".

Newport council leader Ms Wilcox said health boards could do more to reduce their spending.

"I think there has to be a question asked about further reform," she said, pointing to management costs in the NHS.

"If the cuts keep coming, as this report has shown, local government is going to fall over.

"I think there is a responsibility on the NHS to sit down and talk to us and engage with us.

"We have made huge cuts. We have managed tremendously well. We can teach the NHS the ways in which to do that.

"We need to collaborate more and show them better ways of managing our limited resources."

Finance Secretary Mark Drakeford will set the next budget on 3 October.

The NHS currently receives 48% of the Welsh Government's revenue budget - up from 39% in 2009-10.

The two Cardiff University-based think tanks said under current UK government plans, the Welsh Government should expect another 3% cut to its budget for day-to-day spending by 2021-2022, on top of a 11.5% cut since 2010.

Welsh ministers have promised to protect the NHS, schools and adult social care, meaning local authorities take a bigger hit.

The share of the Welsh Government's revenue budget the NHS receives could rise to 56%, if ministers find the money needed to keep up with a predicted growth in demand, the report has warned.

Cuts to Welsh councils have been smaller than in England, but spending on unprotected services - such as libraries, roads and culture - could reach 50% by 2021-2022, the study estimated.

It added: "There may not be a single tipping point but continued attrition would call into question whether the full range of services we have now is affordable."

For the first time, Mr Drakeford has the option to raise some taxes.

But those powers are "likely to have only a limited impact" on spending during the next four years, the report said.

Ministers will have control over landfill tax and land transaction tax - formerly stamp duty - next year.

They will also get powers to vary income tax in 2019.

But Labour has promised there will be no changes to income tax, leaving spending heavily dependent on a shrinking block grant from the Treasury in London.

The Welsh government said the report illustrated the difficult budget decisions it faced.

"We have repeatedly called on the UK Government to end its unnecessary austerity agenda, which has resulted in ongoing real terms cuts to our budget since 2010," a spokesman said.

But the Conservatives said the problems facing the Welsh NHS were "the product of nearly two decades of Labour mismanagement".

Tory finance spokesman Nick Ramsay said: "Successive Labour administrations have singularly failed to get a handle on worsening public health, long-term workforce planning, and wasteful practices - all of which have been compounded by chronic underfunding."