5. Debate: The Local Government Settlement 2024-25

– in the Senedd at on 5 March 2024.

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(Translated)

The following amendments have been selected: amendments 1 and 2 in the name of Darren Millar.

Photo of David Rees David Rees Labour 3:24, 5 March 2024

(Translated)

Item 5 today is the debate on the local government settlement for 2024-25, and I call on the Minister for Finance and Local Government to move the motion. Rebecca Evans.

(Translated)

Motion NDM8500 Lesley Griffiths

To propose that the Senedd, in accordance with Section 84H of the Local Government Finance Act 1988, approves the Local Government Finance Report (No. 1) 2024-25 (Final Settlement - Councils), which was laid in the Table Office on 27 February 2024.

(Translated)

Motion moved.

Photo of Rebecca Evans Rebecca Evans Labour 3:24, 5 March 2024

Today I'm presenting to the Senedd for its approval the 2024-25 local government settlement for the 22 unitary authorities in Wales. First, I'd like to record my thanks to local government, both elected members and staff across local government services, for the critical work that they do for communities, people and businesses across Wales. It's been an extraordinarily pressurised few years for local government, from floods, to pandemic, to the ongoing cost-of-living crisis, and I hope you'll join me in thanking them for their hard work and dedication. In preparing for the Welsh budget and this settlement, we've engaged closely with local government throughout, and I'm grateful to local government for the way those discussions have been held.

The Welsh Government's budget is worth up to £1.2 billion less in real terms than it was when it was set at the comprehensive spending review in 2021. Our settlement, which comes largely from the UK Government in the form of the block grant, is not sufficient to meet all of the pressures public services face as a result of persistently high inflation and rising demand. Even before this period of high inflation, we knew that the third year of the spending review would be the toughest.

As we've developed the 2024-25 final budget, we've prioritised protecting core front-line public services as far as possible, supporting the hardest hit households, and prioritising jobs where we can. As I've already informed the Senedd, I've used the recently announced consequential funding allocations to increase the local government settlement by £14.4 million. This reflects the importance of these core public services and responds to calls from local authority leaders and others to prioritise local government if further resources became available.

This year, I propose to the Senedd a settlement for 2024-25 that is 3.3 per cent higher than in the current financial year on a like-for-like basis. And in cash terms there's an increase of £184 million. In 2024-25, local authorities in Wales will receive £5.7 billion in general revenue allocations from core funding and non-domestic rates. No authority will receive less than a 2.3 per cent increase. In addition, I've provided indicative information on revenue and capital grants planned for 2024-25. These amount to over £1.3 billion for revenue, and nearly £1 billion for capital for our shared priorities with local government. This includes the restoration of £10 million for the social care workforce grant, responding to specific points made by Members and local authorities. General capital funding for local government in 2024-25 will be unchanged from last year at £200 million, and this includes £20 million to enable authorities to respond to our joint priority of decarbonisation. I ask colleagues to support the motion.

Photo of David Rees David Rees Labour 3:27, 5 March 2024

(Translated)

I have selected the two amendments to the motion, and I call on James Evans to move amendments 1 and 2, tabled in the name of Darren Millar.

(Translated)

Amendment 1—Darren Millar

Add as new point at end of motion:

Regrets the substantial increases in council tax due to underfunding by the Welsh Government.

(Translated)

Amendment 2—Darren Millar

Add as new point at end of motion:

Calls on the Welsh Government, before the next local government settlement, to:

a) commission an independent review of the Welsh local government funding formula;

b) work with local authorities to use their useable reserves to keep council tax as low as possible; and

c) require any local authority proposing a council tax rise of over 5 per cent to hold a local referendum and obtain a yes vote before implementing the proposed rise.

(Translated)

Amendments 1 and 2 moved.

Photo of James Evans James Evans Conservative 3:27, 5 March 2024

Diolch, Deputy Presiding Officer, and I move the amendments tabled in the name of my colleague, Darren Millar. I'd like to begin by thanking the Deputy Minister for your statement today and by acknowledging the work of councillors and council staff, right across Wales, who are working on budgets at a very, very stressful time. As a former councillor and cabinet member myself, I remember the pressures all too well that we had to deal with in setting budgets, and it's not always a very pleasant experience, balancing the books, when many council services are crying out for more and more funding. This time it feels particularly difficult.

There are huge increases to council tax being proposed across Wales, and hard-pressed taxpayers are going to be hit the hardest in their pockets. As an example, in Pembrokeshire, the proposed council tax rise is 16.31 per cent, which means the average band D council tax will raise by over £219. It'll be the third largest council tax rise in Wales since 1997-98 in percentage terms, and the largest council tax increase across the whole of England and Wales since 2012-13. In Ceredigion, the council tax hike is 11.1 per cent, the second highest in Wales. This means the basic level for a band D average property there will leap from £1,553.60 right up to £1,726.05. There are, of course, many other councils where there are substantial council tax rises, at the same time as services are being slashed. People are literally paying, across Wales, more for less.

These councils do not exist in a vacuum. They rely on a funding formula from you. Minister, it's pretty clear to most observers that the Welsh Government's funding formula for councils, which is agreed with the Welsh Local Government Association, is not fit for purpose, and we have a scenario in place where rural councils lose out, and so do those in north Wales. This creates a system of winners and losers by design. We, as Welsh Conservatives, want to see an independent review into the funding formula because the status quo isn't working; it isn't working for those councils in difficult positions, and it isn't working for the people we serve. And I know, when I was sat on the WLGA, along with my colleague Peter Fox, the Welsh Conservatives on there have long called for reviews of the funding formula, only to be blocked time and time again by Labour councillors.

There is also much work that the Welsh Government can do with councils on better use of useable reserves in order to protect the important services and support the most vulnerable at an increasingly difficult time. It is often said that reserves are there for a rainy day, and I would suggest to all those councils who are sat on large reserves that this is a rainy day now. People out there won't understand why better use isn't made of council reserves. Indeed, there is widespread bemusement at the entire budget-setting process and the way people are being slapped with huge council tax rises without the public being informed. That isn't right. People should be brought along in this process and their consent should be sought. That's why we would like to see, on these Welsh Conservative benches, any local authority that proposes a council tax rise over 5 per cent holding a local referendum for their tax rises. If they don't get the backing from the public, then rises don't go through. If they don't go through, the councils will have to go back and think again.

It is clearly a difficult time for councils, but there is more that this Welsh Government can do to be easing the way for local authorities, and steps should be taken in order to reduce the need for those councils who are pushing council tax hikes higher and higher. It is also jarring for the people we represent to see the Welsh Government filtering large sums of money on unpopular policies, like more politicians, a default 20 mph speed limit, and even buying Gilestone Farm in my constituency. Councils and councillors are told by this Welsh Government that there simply isn't enough cash to support them. If this Welsh Government believes that, perhaps they need to be better custodians of how public money here is spent. And all I can say to Members in this Senedd is, 'Support our amendments today', and, if the Deputy Minister's got something to say, I'll gladly take an intervention from him. Diolch.

Photo of Peredur Owen Griffiths Peredur Owen Griffiths Plaid Cymru 3:32, 5 March 2024

It's no exaggeration to say that this debate comes at a time when there's an existential crisis in our local authorities. Fourteen years of Tory-driven austerity has left local government finances in Wales in an utterly ruinous state, compromising the ability of local authorities to provide even the most basic level of public services. The prospect of bankruptcy, which has already come to pass in several councils in England, now looms large. A recent survey by the local government association has shown that almost one in five local authorities believe it's likely or very likely that they will need to issue a section 114 notice in the next 24 months due to funding pressures.

We welcome the 3.3 per cent increase to the core settlement for local authorities, which will alleviate some of the extreme pressures they are facing. We're also pleased that the Welsh Government has heeded Plaid Cymru's call for the £25 million in consequential funding that was received last month to be passed on to local government. While we remain of the view that a more effective use of the money would have been to raise the minimum funding floor for the revenue support grant to 3 per cent, any additional resources, regardless of how they are distributed, will make a positive difference. But in the context of stubbornly high inflation, high energy prices and an ailing UK economy, the reality is that the core settlement can only go so far. Councils across Wales are still having to make extremely difficult decisions on further cutbacks and significant hikes to council taxes. 

Now, it's clear from their amendment that Tory Members here are rightly concerned about the latter, but, as usual, they have completely failed to acknowledge the culpability of their Westminster colleagues in pushing local authorities to the brink. They also seem to be labouring under the delusion that resolving the situation is simply a matter of local authorities dipping into vast reserves of wealth they have been squirrelling away for no good reason. As for the suggestion of making increases of over 5 per cent to council tax subject to a local referendum, it's worth reminding everybody that Tory-controlled Monmouthshire County Council increased their council taxes above the Wales-wide average in 2021. Those Conservatives in Monmouthshire didn't feel the need to refer that decision to the local electorate. Moreover, Wrexham County Borough Council, which is currently run by a combination of independents, Tories and Lib Dems, will be introducing a near 10 per cent increase in council tax for the next financial year, again without holding a public vote. I'd also query the wisdom of forcing councils to conduct costly and time-consuming referenda every time they are forced to make a difficult decision on council taxes. I think that most councillors, of every political persuasion, would agree with me when I say that this will only exacerbate the squeeze on their already overstretched resources. Rather than talking down the efforts of hard-working councillors across Wales, or proposing unhelpful gimmicks, the time and energy of Tory Members would be better spent pointing the finger of blame squarely where it belongs. I'm of course talking about the UK Government, whose policies since 2010 have led to a 12 per cent real-terms erosion in the spending power of local authorities. They would also do well to highlight the fundamental unfairness of Westminster's current funding arrangements for Wales, and I am pleased that this was reflected in their contribution to last week's debate on budget flexibilities.

And on that matter, every Labour Member here has a responsibility to call out the inaction and silence of their own UK party leader, because while the neglect of Wales by the current UK Government has been well established for some time, it's also apparent that Keir Starmer's Government-in-waiting is offering nothing but the same. I've heard the First Minister claim on several occasions that a change of Government at Westminster will deliver the investment that we need in Wales to restore the beleaguered public services. On the face of it, this seems somewhat naive, as it's at odds with the reality of Starmer's actual vision for being in power, which is predicated on a rehashed version of austerity and a pledge not to turn on the spending taps. Most damning of all, despite being given many opportunities to do so, Starmer has consistently refused to commit to the fairer funding model that Wales desperately needs. He is therefore failing our local authorities, who are crying out for a definitive end to this era of austerity. It's incumbent on us all, therefore, to stand up for our local authorities by sending a clear message to both major Westminster parties that business as usual is just not good enough and to demand better from them for the people of Wales. Diolch yn fawr.

Photo of Mike Hedges Mike Hedges Labour 3:37, 5 March 2024

The local government settlement is just one of the parts of local government income, albeit the major part. Prior to the centralisation of business rates, local authorities used to raise a much higher proportion of their income locally, and I would like to see business rates return to local authorities. Councils get income via council tax, and councils also get income from fees and charges that they levy. It is not possible to compare councils in terms of their Government support. In Blaenau Gwent, over half the properties are in band A. In Monmouthshire, there are 500 band A properties. So, for any council tax increase based on band D, Monmouth will raise considerably more.

The main driver of Welsh Government support increasing is population change. Councils with a population increase will get a higher percentage rise than those with a declining population. We see the largest percentage rises in Newport, Cardiff, Swansea and Denbighshire, which apparently has now moved its geographical location to south Wales. Second homes and homes registered as holiday lets are reducing the support for some councils. Changing the formula is easy—it just creates winners and losers. When I was involved, the highways standard spending assessment was moved from 52 per cent population and 48 per cent road length, to 50 per cent for each. It seems reasonable, doesn't it? This moved several hundred thousand pounds from Cardiff, Swansea and Newport to Pembrokeshire, Gwynedd and Powys. I again ask the Welsh Government to provide the detailed SSA and detailed aggregate external finance calculations—they've got to exist, in order to provide the final results. Why is the Welsh Government unwilling to show its workings? The Conservatives said that the percentage increases in north Wales are unfair and that the formula favours south Wales. Show it. The only way you can get the Conservatives to accept it is to show the calculations so that they can redo them themselves.

I would like to see councils get more Welsh Government support. But what's happened in England? We have seen councils such as Northamptonshire and Birmingham become, effectively, bankrupt, proving that large councils are not immune to serious financial problems. In the face of unprecedented challenges, we have been warned that several local authorities in England either have already issued section 114 notices, or are likely to do so, effectively announcing that they are unable to deliver a balanced budget. We've seen some of the smallest councils in England build up huge debts by buying supermarkets, business parks and offices, tying the future of their public services to the uncertainty of the property market. Councils across England have borrowed huge sums—in some cases, the equivalent of 10 times their annual budget—to finance the purchase of real estate. Spelthorne Borough Council have so far borrowed £1 billion, despite having a net annual budget of just £22 million. This equates to 46 times its spending power. Three other councils—Woking, Runnymede and Eastleigh—have borrowed more than 10 times their annual budget. In Wales, no council has gone bankrupt or gambled on the property market, at least in part because councils have been better resourced in Wales—not well resourced but better resourced. But there is a serious financial threat currently and budgets are tight. When additional duties are placed on councils by the Welsh Government and no additional money is provided, then pressure is put on existing services. Welsh councils need a better funding settlement that acknowledges the vital role they play and the very important services they provide.

As part of the programme for government, the Welsh Government are committed to reducing the bureaucratic burden on local government, and I think that would be welcomed by all local authorities. Local authorities have highlighted grants management and administration as the area with the greatest opportunity for change. I am pleased that the work is under way to reduce the number of separate grants paid to local authorities and to consider moving grants into the dehypothecated settlement. I'm pleased that the Welsh Government will continue with this work this year. Putting money in or out via grants is incredibly expensive. I know it's done because there are Ministers who wish to micromanage council activity, or, more likely, ministerial civil servants who want to micromanage council activity—perhaps people who've never run a council or never been involved in the running of a council themselves, so their expertise cannot be underestimated.

Local authorities need more money, but if you compare the settlements, and we keep on comparing England and Wales, we've got no council that has gone bankrupt yet, and we've got no council owing over 10 times its annual income having bought lots of supermarkets and other businesses and office blocks. As we've seen throughout our own communities, office blocks and shops quite often end up empty. I think it's really important that our local authorities avoid doing that. It's not the best settlement. I would have given local authorities more, but it's the best the Welsh Government are prepared to give them.

Photo of Peter Fox Peter Fox Conservative 3:42, 5 March 2024

Local authorities play such an incredibly important role in providing services that the people in Wales depend on, and we all thank them for everything they do. True devolution, though, is not just supporting the Senedd; it's about supporting our local authorities, who are at the forefront of democracy and operate at the chalkface. Many of us across the Chamber, as we've heard, have been local councillors and know the responsibilities that come with the role, and we know the difficult choices that have to be made when given a limited budget. Sadly, this budget presents a huge real-terms cut, making it more limited this year as a direct result of the choices and decisions taken by this Government. We see ever-increasing pressures being put on local authorities, but with limited resources passed on to deal with them.

Whilst I am glad to see the £14.4 million of additional revenue from consequentials passed on to local authorities, and I'm also pleased at the reinstating of the social care workforce fund asked for by council leaders, we can't get away from the fact that the real-terms cuts that are being forced onto local authorities will inevitably punish residents across Wales. It is the people of Wales who are having to pay the price for the real-terms cuts, with Welsh families paying an average increase of a whopping 8.28 per cent in council tax at a time when households are under immense financial pressure.

I know the Welsh Government will revert—we've heard it already—to blaming the UK Government for the cuts to local government settlement.

Photo of Carolyn Thomas Carolyn Thomas Labour 3:44, 5 March 2024

I know, in the past, that some councils, rather than raise council tax, have cut education funding earlier, and other funding. They've been absolutely cut to the bone, which has meant they've not been able to deliver essential public services. I think that's what the case is now after all that austerity—they've been cut to the bone. Do you believe that that is the balance, really, and that is why they're having to put up council tax, because it's a balance and they can't cut those essential services any more?

Photo of Peter Fox Peter Fox Conservative

Okay, well, lots of leaders and lots of administrations in councils will decide how they arrive at their budget. Some will be more innovative and look at creating income streams in other ways. Others will be led very clearly by their officers and make decisions that lots of us wouldn't agree with. So, that's why you'll see a whole range of different types of levels of cuts to services across different authorities. In Monmouthshire, we always tried not to cut core services; we'd look for innovative ways to generate income instead, and I think more could be done across all the local government family to achieve that. I've forgotten where I was now, Dirprwy Lywydd.

I know, as I said, that the Government will revert to the UK Government for the responsibility for the cut, but the real-terms cut levelled on councils is nothing but a stealth tax on the people of Wales. The Government knew perfectly well that councils would have to pass on their pressures onto their residents through council tax or face cutting services.

I want to turn to the issue of the funding formula, which remains a contentious issue as it simply is not fit for purpose anymore. I will continue to raise it whenever I can, because we have a system that currently would allow some councils to descend to a point where they struggle to maintain many services, cutting both statutory and discretionary, whilst others can manage relatively well with significant accumulated reserves.

I've said it before and I'll say it again: we need an independent assessment, we genuinely do, and a review of the local government formula to ensure that councils across Wales get a fair deal, and that includes, as Mike has said, an assessment of the SSA and the many indicators within that: 70 plus indicators, indicator-based assessments, all need to be looked at. They haven't been looked at for many years.

I know the stock answer will be that if council leaders ask for it to be reviewed, the Government would facilitate. This is a cop-out. As we know, few council leaders will agree to it, as there would be winners and losers following a review. I've tried many times: turkeys don't vote for Christmas. But if we are to see a consistent model of service provision for all Welsh people, the Government has to demonstrate leadership and reassure itself that the formula is fit for purpose. That can only be achieved through an independent review of the formula, and that's outside of the funding forum or distribution sub-group.

What we need to remember is the simple fact that the failure to fund our local authorities fairly and appropriately only results in families across Wales paying the price. Sadly, Labour Ministers are forgetting that. These decisions have very real consequences, as councils are forced to cut services or hike council tax, and it's the people of Wales that will be shouldering the cost. Diolch.

Photo of Rhianon Passmore Rhianon Passmore Labour 3:47, 5 March 2024

Minister, I do welcome the Welsh Labour Government's continued dedication to prioritise protecting core front-line public services as far as is possible in the face of extreme budgetary pressures to Wales. This commitment is values-based and cognisant of the holistic and critical work of local government.

The local government settlement for 2024-25 ensures that no authority will receive less than a 2.3 per cent increase. My constituency of Islwyn is governed by Caerphilly County Borough Council, and under these very difficult budgetary circumstances for Wales, I do welcome the 2.5 per cent increase that Islwyn's local authority receives from the Welsh Government. The Welsh Labour leader of Caerphilly County Borough Council, Councillor Sean Morgan, was quoted addressing the council chamber in the South Wales Argus last week, where he decried the Tory UK Government's funding settlement to the Welsh Government. Indeed, he called Rishi Sunak's Tory UK Government funding for Wales totally inadequate and a raw deal for the people of Wales, and he's dead right. His calls for Caerphilly council to condemn the current funding levels from the UK Tory Government and demanding a fair deal won rare and unanimous support from the entire council and across all benches. Indeed, the leader of the Plaid Cymru group on Caerphilly council, Lindsay Whittle, a former Member of this Senedd, told the meeting:

'There are times when all political parties in Wales need to…fight this oppression', and on that he's right too.

Minister, you rightly acknowledge the close working relationship between the Welsh Government and local government in Wales. It is vital—[Interruption.] Well, this is what they said—that the Welsh Government and Senedd Cymru, the Welsh Parliament, listen to colleagues in local government and continue to develop and grow that close dialogue. This is why I enthusiastically support the Welsh Government's commitment as part of the programme for government to reduce the bureaucratic burden on local government. I know that work is under way to reduce the amount of separate grants paid to local authorities and to consider moving grants into the dehypothecated settlement if the wider context makes it appropriate. 

The Welsh Government's budget has protected the core local government settlement that funds schools, social services and social care, our collections of waste and local leisure services. But we do know that it's not enough and that we do need a fair funding settlement for Wales. And however much you slice the cake up, Peter, I'm afraid if there's not enough cake—[Interruption.] You may, yes. 

Photo of James Evans James Evans Conservative 3:50, 5 March 2024

Do you not realise that a lot of people out in the constituency that I represent, Brecon and Radnor—when you keep talking about the funding settlement from the UK Government—are extremely annoyed with the way the Welsh Government spends its budget, when they spend £4.25 million on Gilestone Farm, they spend money on a default 20 mph limit, and more politicians for this place? Do you not realise that my constituents get very angry when you keep blaming the UK Government when, actually, I think you need to look a bit closer to home for better budget management?

Photo of Rhianon Passmore Rhianon Passmore Labour

If I can just respond to that, I think if you actually look at the amounts of money that we are talking about, if we look at the billions that we have lost, and then if you look at some of the issues that you've brought to us on your agenda today, you'll find that that does not equate to a single crumb of that cake. [Interruption.] I will continue, Deputy Llywydd, if I'm allowed to.

Photo of David Rees David Rees Labour 3:51, 5 March 2024

I would hope that all Members will ensure that the Member for Islwyn can continue her contribution in peace.

Photo of Rhianon Passmore Rhianon Passmore Labour

Thank you, Deputy Llywydd. So, Minister, will you use this opportunity to underscore, once again, how dedicated the Welsh Labour Government is to funding Welsh local government under the most dire circumstances, and that it values local government, and that it understands local government and its commitment to delivering the vital public services that it's charged with delivering for the people of Wales, not just with us, but for us, together, collectively? Thank you.

Photo of Janet Finch-Saunders Janet Finch-Saunders Conservative

So, here we are, then, after years of fiscal mismanagement and failed vanity projects, we have finally arrived at the inevitable: some of the largest cuts in devolution history to local services, and the highest hikes to council tax across north Wales.

But the situation actually isn't funny, despite you laughing. Since 2000, council tax in Conwy has increased by 256 per cent, 20 per cent of this in the last two years alone, the highest of any in Wales. Therefore, I hope this debate goes some way to outline to voters, those who may just be watching today—if a good enough Welsh media pick up—just how bad things are for local government under Welsh—. This is after a quarter of a century of Welsh Labour. And, of course, Plaid Cymru are culpable also, particularly so—and I have to say, Peredur, that your contribution just, well, it surpassed all forms of comedy—because you've just spent the last three years working and voting with Welsh Labour nine times out of 10.

Once again north Wales has had to contend with a harsh reality: a consecutive year of receiving a lower council funding settlement compared to those in south Wales. Conwy has received the lowest increased settlement of only £3.9 billion from 2023-24, a reduction in real terms, a 2 per cent increase on 2022-23—[Interruption.] Go on, being as it's you, Mike.

Photo of Mike Hedges Mike Hedges Labour 3:53, 5 March 2024

Denbighshire had the fourth highest increase.

Photo of Janet Finch-Saunders Janet Finch-Saunders Conservative

Thank you. That is a whopping 1 per cent less than the national average of 3 per cent. As I have stated here before, Conwy is facing huge cuts to local services. Education is seeing cuts of over 5 per cent this year. Nowhere in Wales is this more clear than in Conwy, with many constituents and parents writing to me, saying these cuts are simply unacceptable and heartbreaking. And I haven't held back in my response to those constituents. We've been calling for years for schools to be funded directly, looking at the second tier—you know, in north Wales, it's GwE. And there's the amount of bureaucracy and wasted money that my colleague James Evans has already mentioned.

To add insult to injury, Conwy is set to see one of the highest council tax rises across Wales, and, of course, it's Labour, Plaid Cymru and independent now in power there. It's a scandal. We must end this spiral to the bottom of the barrel. North Wales is being left to wither, and I say enough is enough. I would like to ask the Minister for finance—you must be having talks with your Labour colleagues—if, and only if, people were silly enough to vote them in to Government, not realising what they've done to Wales, what settlement in funding would you be providing to this Welsh Government

Our leader, Charlie McCoubrey, said 30 per cent of the data used is long out of date, and that's to do with the funding formula. I held the role of shadow local government Cabinet Secretary, I think it was, in those days, and I asked for a funding formula review going back all those years. I was told by the Minister at the time, 'You're the only person who's asked for it, no leader of any of the councils has asked for it'. So, I wrote to all the council leaders and they wrote back to me in no uncertain terms that they agreed with a funding formula review. I'm going back now to around 2014, and here we are in 2024—we're still arguing about this funding formula. It's time that you looked at places like—

Photo of Janet Finch-Saunders Janet Finch-Saunders Conservative

No, sorry, Rhianon. We can discuss this another time this week. But the point being, Minister, you're just going to keep defending this position year after year, term after term. What is it that you're so frightened of in holding an independent review of the local government funding formula? Is it the blatant reality that you know that Labour-controlled councils are doing much better, and those local authorities that hold high reserves? We've got one of the oldest demographics in Wales in Conwy with the older people, and our social care is on its knees. Surely you should be concerned, and every Minister around the Cabinet table concerned, when there's no real equality. It's word that's often overused in your agendas, but the real equality is missing in local authorities such as Conwy, where our older people now are being failed miserably and let down. Diolch yn fawr. 

Photo of Carolyn Thomas Carolyn Thomas Labour 3:56, 5 March 2024

Following the mishandling of the economy with 14 years of Tory austerity, a failed Brexit, COVID cronyism and rising inflationary pressures caused by the Liz Truss mini-budget, public services are on their knees. Local authorities are cut to the bone right across the UK, so they no longer have enough to deliver essential services, and in England are facing bankruptcy. George Osborne started it in 2010. Philip Hammond continued it in 2017, saying to councillors, 'We just have to tighten our belts further'. There were no holes left on the belt then following seven years of cuts. How Jeremy Hunt thinks he can continue astounds me. How can he talk about more efficiencies when there are so many councils facing bankruptcy in England, with no more efficiencies to make? The utter devastation of services has been years in the making under the Tory Government.   

When I was first elected as a councillor in 2008, we used to say it cost £1 million a day to run a council. We're the second-biggest employer in Flintshire after Airbus, delivering education, social care, public protection, planning, and hundreds of other services, which have run smoothly and been taken for granted until now, when they are closing or difficult to access. Councils in north Wales have each made between £90 million and £120 million of savings over the last 14 years. Local authority officers already share staff back-office facilities and many don't have enough staff to deliver essential services, with vacancies taken as efficiency savings. 

The Tory cost-of-living crisis and COVID have seen rising pressures of need in social services and in education. Now is when they need it most, not just during COVID. Recently, I visited Rhyl High School and Cian was keen to ask about education funding after being told he can no longer print off artwork for his art GCSE. They simply cannot afford the basics. Many schools this year are having to work with deficit budgets, and have to scrimp and save and cut back on the basics. They can't afford the rising energy bills, the staff, the curriculum, and these will have to be part of the council reserves going forward. Councils are using their reserves this year, borrowing from Peter to pay Paul for emergencies. I remember when we had the beast from the east, and we had snow that was 5 ft high in places—

Photo of Peter Fox Peter Fox Conservative

I know what an advocate you've been for local government for many years outside of this place, and you've challenged often the level of funding going to Flintshire. Do you agree then that the system is wrong, the formula is wrong, and it would benefit Flintshire so much more, as you've advocated, and your leaders have advocated, if it was looked at? 

Photo of Carolyn Thomas Carolyn Thomas Labour

Yes, I have asked for the funding formula to be reviewed, but I know that the pie is too small. So, even if the funding formula was reviewed, all councils—

Photo of Peter Fox Peter Fox Conservative

It's the same pie—it's how you cut it up. 

Photo of Carolyn Thomas Carolyn Thomas Labour

It's not big enough. I know that the council in Denbighshire has got much more funding than Flintshire—they play each other off against each other. That’s unfortunately what happens now. People are in-fighting, basically, so it’s not helpful anymore. We just need more funding for public services.

Homelessness is on the increase, and we’ve heard on the Local Government and Housing Committee that we are actually becoming a generation of renters, as people cannot afford mortgages. So, I welcome the extra £5 million of funding to the housing support grant, and that the Minister for Climate Change has now been able to allocate an additional £30 million for the housing support grant, taking it to just over £182 million. It’s an essential part of funding that helps people stay in their homes, as well as provide support and accommodation. The organisations, including local authorities, that provide this service are at breaking point and are struggling to pay the living wage, so it’s really welcome.

I am pleased that during the difficult 2024-25 budget round, which has presented the most difficult budget choices for Wales since devolution, local authorities have been made a priority. But it will be difficult, because the funding settlement is not sufficient to respond to all the pressures they’re facing, for any councils in Wales or England or Scotland. There has to be a change and we need an end to austerity from the UK Government Treasury. I join the calls for Jeremy Hunt to increase funding for public services and help those struggling the most due to the cost-of-living crisis in tomorrow’s budget. Thank you.

(Translated)

The Llywydd took the Chair.

Photo of Elin Jones Elin Jones Plaid Cymru 4:01, 5 March 2024

(Translated)

The Minister for Finance and Local Government to reply to the debate. Rebecca Evans

Photo of Rebecca Evans Rebecca Evans Labour

Thank you. I'll just begin by recognising that the settlement doesn't match the impact of inflation or the increasing demands that we're seeing on local authorities, but we also have to remember that this settlement does build on what have been improved allocations in recent years. I was really pleased to hear Members talk about the work that we've been doing to reduce the administrative burden on local authorities. That work has been really important and really effective this year in terms of moving a number of grants in their entirety into the revenue support grant, and then in other cases combining a larger number of small grants into a bigger grant, but then also that commitment to keep the other grants under review for the future as well. We’ve identified, perhaps as the next phase of this work, the need to look at our capital grants to local authorities as well, to ensure that the way in which authorities apply for those grants is proportionate, but then also that the monitoring and information requirements that we put on those grants is also proportionate moving forward as well. So, those pieces of work will be really important.

Alongside reducing the administrative burden work, we’ve also identified annual reports as a particular area that we are keen to explore, as to whether or not, again, our requirements there are proportionate and modern. So, that piece of work is important. Again looking at that work around reducing the administrative burden, we’ve been looking closely at the Verity House agreement that they have in Scotland, and I had the pleasure of meeting the Scottish Minister for local government recently to talk about their experiences there. And we are keen to explore how we might in Wales move forward formalising that relationship of trust that we have with local government, so that it’s put on that sound footing and we have the structures there that will be able to withstand the change of personnel and so on in future. So, I think that work is really exciting.

And then I was interested in Mike Hedges’s remarks around non-domestic rates as well. Just to let colleagues know that we are undertaking some work looking at rates retention for the city and growth regions as well, and that piece of work is ongoing in partnership with local government colleagues.

Turning to the amendments tabled in the name of Darren Millar, local authorities have had to make some difficult decisions in setting their budgets and their council tax over recent weeks, and we all recognise the impact of increases in council tax on households across Wales, and we know local authorities and our colleagues there are facing incredibly difficult choices as they work to do their absolute best for their local communities. The answer, however, isn’t to go about imposing arbitrary caps on local authorities, forcing them to further cut services, which we all know will have the greatest impact on the most vulnerable people. Neither is it to decide for authorities how they should use their reserves, interfering with their plans and risking their longer term sustainability. Across Wales, councils will have sought to balance the different needs of their communities, the level of their useable reserves and the impact of council tax rises, and they’ll be doing everything that they possibly can to provide efficient, cost-effective services that provide value for money. I think it’s just wrong to suggest otherwise.

The answer is for the UK Government to choose to invest—

Photo of Elin Jones Elin Jones Plaid Cymru 4:04, 5 March 2024

Can I ask for some silence? There's a lot of chitchatting going on, especially by the Member who probably shouted 'Hear, hear' at that point as well. [Laughter.] If I can ask for the Minister to be heard, that would be great. Thank you very much.

Photo of Rebecca Evans Rebecca Evans Labour 4:05, 5 March 2024

Thank you. The answer is for the UK Government to choose to invest in public services in its budget tomorrow, providing public services, including local government, with the resources they require in order to deliver the services that their communities need. And it's also important that we all promote the range of support that we have in place to support people who are finding it difficult, and that we act to improve the fairness of council tax. Our council tax reduction scheme provides for consistent support right across Wales, and it does mean that 211,000 households receive full support and pay no council tax at all, but we do know that many more are eligible and are missing out. 

On the formula, the core funding that we provide to local government is distributed through a well-established formula. It's created and developed in collaboration with local government, and agreed annually with local government through the finance sub-group of the Partnership Council for Wales. The formula is free from political agenda and it's driven by data. It balances relative need and relative ability to raise income, so that authorities across Wales are treated fairly and even-handedly. And I was reminded, as colleagues on the Conservative benches were talking in the debate this afternoon, of Rishi Sunak, when he was caught on camera saying that he wanted to transfer funding away from disadvantaged areas, and it seems that the Welsh Conservatives want to do the same. There's an ongoing work programme to maintain and update the formula, including how the formula needs to respond to our work to make council tax fairer, and to the other changing policies and circumstances. Sorry, I didn't see the Member seeking an intervention.

Photo of Mark Isherwood Mark Isherwood Conservative 4:06, 5 March 2024

Thank you very much for allowing me to intervene. Do you recognise the concern in north Wales where, once again, four out of the six north Wales councils are four out of the six receiving the lowest settlement, including the area with the lowest GVA prosperity per head, and the area with the highest older people's population?

Photo of Rebecca Evans Rebecca Evans Labour 4:07, 5 March 2024

The settlement itself is a result of changes in deprivation—it's changes in population, it's reflective of sparsity, and all of those things do change, every year, meaning that there are some shifts in the relationship between individual councils and the settlement they receive. The funding formula in and of itself is not unfair, and more than 70 per cent, I think—probably 80 per cent now—of that formula is updated annually. And the point that I was trying to make in the last sentence there was that we're moving into a period now of council tax reform, and that in itself is going to result in some churn to local authorities, and it will have an impact on their tax base. So, we really do have to be careful in terms of how much stress that system can take at one time. But, of course, we continue the discussions with local authorities in that space as well.

So, I'll just conclude, Llywydd, by saying that I commend the settlement to the Senedd. It does reflect our commitment to public services and continues to support local government across Wales to deliver for the people of Wales.

Photo of Elin Jones Elin Jones Plaid Cymru 4:08, 5 March 2024

(Translated)

Thank you. The proposal is to agree amendment 1. Does any Member object? [Objection.] Yes, there are objections to amendment 1. We will therefore defer voting until voting time.

(Translated)

Voting deferred until voting time.

Photo of Elin Jones Elin Jones Plaid Cymru 4:08, 5 March 2024

(Translated)

The next question is that we agree amendment 2. Does any Member object? [Objection.] There is objection to amendment 2. And therefore we will defer voting on amendment 2. 

(Translated)

Voting deferred until voting time.

Photo of Elin Jones Elin Jones Plaid Cymru 4:08, 5 March 2024

(Translated)

Which brings us to voting time. And unless three Members wish for the bell to be rung, we will move immediately to our first vote. That vote—[Interruption.]

Photo of Elin Jones Elin Jones Plaid Cymru

Okay. I see three Members wishing for the bell to be rung for the vote. We'll ring the bell.

(Translated)

The bell was rung to call Members to the Chamber.

(Translated)

Plenary was suspended at 16:09.

The Senedd reconvened at 16:14, with the Llywydd in the Chair.