THE status-quo will "not be an option" as cash-strapped Pembrokeshire County Council expects to lose nearly £600,000 in Welsh Government money next year.

The outline draft budget of the provisional local government settlement 2019-20 sees the council’s core funding allocation drop by 0.4 per cent, against a national average of 0.3 per cent, with neighbouring Ceredigion dropping by 0.3 per cent and Carmarthenshire by 0.5 per cent.

Pembrokeshire’s allocation will drop from £162,247,000 to £161,656,000, a reduction of £591,000.

This announcement starts a formal six-week consultation on the provisional local government settlement, ending on November 20.

Cabinet Secretary for Local Government and Public Services Alun Davies AM said: “After the announcement of the Final Budget last year, despite the additional £40 million to support ongoing pressures in local government, authorities were facing the prospect of a one per cent reduction in core funding for 2019-20, equating to a £43 million reduction in cash terms.

“We have worked hard, across Government, to offer local government the best settlement possible in the current financial climate, and we have made further allocations to the local government settlement to mitigate most of the reduction local government had been expecting.

“In 2019-20, local authorities will receive £4.2 billion from the Welsh Government in core revenue funding and non-domestic rates to spend on delivering key services. This includes £2.5 million of floor funding, fully funded by the Welsh Government, to ensure that no authority has to manage with a reduction of more than one per cent in its Aggregate External Finance next year.

“Within this settlement, we have provided funding for additional costs arising from changes by the UK Government through the teachers’ pay award, and to reflect the importance of local government’s role in the health and social care system. We are also providing funding for our proposals for new eligibility criteria for free school meals given the continued rollout of Universal Credit by the UK Government.

“Specifically, in line with the proposals in our recent consultation, we are making an additional £7 million available to local authorities, through the settlement, for free school meals in 2019-20, based on the latest forecasts. We will also be providing additional funding of £4 million to local authorities in 2018-19 for free school meals via a grant scheme. This will support local authorities in meeting the costs associated with our proposed threshold and transitional protection measures.”

He added: “While we have worked hard to offer local government the best settlement possible, I recognise that this settlement is a real terms cut in core funding, when authorities face real pressures from things such as an ageing population, pay awards and other inflationary pressures. Therefore, it is vital that we continue to work together to deliver efficiencies and develop more effective ways of delivering services.”

Pembrokeshire County Council’s Cabinet Member for Finance, Bob Kilmister, said: “The council faces huge financial challenges - principally around adult social care, children services and education.

“These equate to over 70 per cent of our budget and with massively increasing demand, big increases in national minimum wage costs and the requirement to fund our 21st Century Schools project, we are likely to see other service areas face substantial cost reductions.”

Cllr Kilmister added: “Central government has saved huge amounts of money on their tax credit bill but simply passed those costs onto local authorities without providing us with any additional finance.

“A real term decrease in budget, coupled with these service pressures, will result in councillors facing very difficult decisions when setting next year’s budget.

“The status quo will not be an option.”