The next item on our agenda is the debate on the final budget, and I call on the Cabinet Secretary for Finance and Local Government to move the motion—Mark Drakeford.

Motion NDM6192 Jane Hutt

To propose that the National Assembly for Wales, in accordance with Standing Order 20.25, approves the Annual Budget for the financial year 2017-18 laid in the Table Office by the Cabinet Secretary for Finance and Local Government on 20 December 2016.

Motion moved.

Thank you very much, Llywydd. The Welsh Government’s draft budget was laid before the Assembly in October and had to be developed in very challenging circumstances. The UK Government’s autumn statement, which promised to reset fiscal policies, was published a few weeks after the draft budget was tabled. In the final budget, which was published on 20 December, we had to consider the statement’s impact on Wales. The draft budget and the final budget contain measures that are the result of discussions with Plaid Cymru. I’m very grateful to Adam Price and his team for ensuring that they were available during the tight timescales that are involved in the budget-making process. I also look forward to working together on the significant agenda that has been agreed for the joint committee on finance over the coming months.

Llywydd, I don’t intend to reiterate the details of the draft budget today. The Finance Committee has ably summarised these measures and has scrutinised them in its report. I’m grateful to the committee for its work on the draft budget for 2017-18 and for its constructive recommendations. Yesterday, I wrote to the Chair of the Finance Committee to respond to these recommendations in the report. Today, I intend to focus on two aspects. To begin, I will note the main differences between the draft budget and the final budget, and I will focus specifically on the impact of the autumn statement. I will then look to the future and consider the process of preparing next year’s budget and the need to ensure that our budget processes are appropriate for our new fiscal powers.

Gadewch i mi ddechrau, felly, Lywydd, gyda'r prif newidiadau sydd yn gorwedd rhwng y gyllideb ddrafft a'r gyllideb derfynol. Mae'r gyllideb derfynol yn cynnwys swm ychwanegol sy’n werth £337 miliwn o gyfalaf dros bedair blynedd, a ddyrennir i flaenoriaethau allweddol. Mae hyn yn cynnwys £136 miliwn ar gyfer datblygu tai fforddiadwy, cynlluniau atal llifogydd a phrosiectau adfywio ledled Cymru. O'r swm hwn, bydd £33 miliwn o gyllid cyfalaf ychwanegol yn cefnogi gwaith Cyfoeth Naturiol Cymru ac awdurdodau lleol ar gynlluniau rheoli risg llifogydd â blaenoriaeth dros y cyfnod hwnnw o bedair blynedd. Mae hyn yn ychwanegol at y £150 miliwn o arian rheoli risg arfordirol arloesol a fydd yn dechrau o 2018.

Mae pum deg tair miliwn o bunnoedd o'r cyfalaf ychwanegol wedi ei ddyrannu i gyflymu'r broses o gyflawni ymrwymiad craidd Llywodraeth Cymru i gyflenwi 20,000 o gartrefi fforddiadwy yn ystod tymor y Cynulliad hwn. Yn gyfan gwbl, mae hyn yn dod â chyfanswm ein buddsoddiad cyfalaf mewn tai i £1.413 biliwn dros y blynyddoedd nesaf. Bydd pum deg miliwn o bunnau o'r cyfalaf ychwanegol yn cael ei fuddsoddi mewn rhaglenni adfywio sy'n canolbwyntio ar ein cymunedau mwyaf difreintiedig.

Yng nghefn gwlad Cymru, rydym yn buddsoddi £20 miliwn mewn cynllun grant cyfalaf bach i ffermwyr, gan ddod ag arian cyfatebol o £20 miliwn ychwanegol o raglen datblygu gwledig Llywodraeth Cymru. Bydd y £40 miliwn yn helpu ffermwyr i leihau allyriadau carbon a gwella eu cydnerthedd a’u cystadleurwydd, gan gynnwys trwy arallgyfeirio.

Mae system drafnidiaeth Cymru yn cael hwb dan y gyllideb derfynol gan gyfalaf ychwanegol gwerth £15 miliwn dros bedair blynedd i leddfu mannau cyfyng trafnidiaeth ledled y wlad, ac mae £50 miliwn yn ychwanegol mewn cyllid cyfalaf yn cyflymu darpariaeth ffordd osgoi Llandeilo yr A483. Ac mae'r ddau ddyraniad hyn yn rhan o'n cytundeb cyllideb gyda Phlaid Cymru.

Ym maes iechyd a gofal cymdeithasol, mae cyllid cyfalaf ychwanegol o £40 miliwn yn cael ei ddyrannu i wella ystad iechyd Cymru, wedi’i dargedu'n benodol at y gwaith o ddatblygu ein hadeiladau gofal sylfaenol mewn arddangosiad pellach o benderfyniad y Llywodraeth hon i fuddsoddi ar y rhyngwyneb iechyd a gofal cymdeithasol. Yn wir, Lywydd, mae hon yn gyllideb sy'n parhau i roi blaenoriaeth i anghenion y sector gofal cymdeithasol. Yn y gyllideb ddrafft, mae £25 miliwn yn ychwanegol yn cael ei ddyrannu i wasanaethau cymdeithasol. Yn awr, yn y gyllideb derfynol gerbron y Cynulliad y prynhawn yma, mae £10 miliwn ychwanegol o gyllid rheolaidd ar gael fel rhan o gytundeb tridarn rhwng Llywodraeth Cymru, llywodraeth leol a chyflogwyr gofal cymdeithasol i dalu costau cydnabyddedig yn y sector hwnnw.

Yn olaf, cyn belled ag y mae cyfalaf yn y cwestiwn, mae’r gyllideb derfynol hon yn darparu £40 miliwn ychwanegol dros bedair blynedd ar gyfer mesurau effeithlonrwydd ynni. Ymysg pethau eraill, bydd yn helpu 25,000 o gartrefi pellach i wresogi eu cartrefi am gost fwy fforddiadwy ac yn cefnogi mentrau twf gwyrdd eraill.

Lywydd, trof yn awr, yn fyr, at y prif newidiadau refeniw a gynhwysir yn y gyllideb derfynol, yn bennaf o ganlyniad i ddyraniad o'r cronfeydd wrth gefn. Yn 2017-18, bydd £15.5 miliwn o arian refeniw ychwanegol ar gael ar gyfer prentisiaethau. Mae hyn yn ychwanegol at y £111 miliwn a gyhoeddwyd yn y gyllideb ddrafft ar gyfer prentisiaethau a swyddi dan hyfforddiant.

Lywydd, rwyf wedi gwrando'n ofalus ar sylwadau a wnaed yn uniongyrchol yn ystod y cyfnod ymgynghori. O ganlyniad, bydd refeniw ychwanegol o £10 miliwn yn cael ei ddarparu ar gyfer cynllun grant rhyddhad ardrethi wedi'i dargedu i helpu busnesau bach ar y stryd fawr ac mewn sectorau lletygarwch gyda'u hardrethi busnes y flwyddyn nesaf. Ac rydym wedi cytuno ar y mecanwaith ar gyfer dosbarthu’r £10 miliwn hwn gyda Phlaid Cymru, a bydd ar waith erbyn mis Ebrill eleni. Mae hynny'n ychwanegol at y cynllun rhyddhad ardrethi trosiannol o £10 miliwn yn y gyllideb ddrafft.

Lle mae awdurdodau lleol yn y cwestiwn, rydym hefyd wedi dyrannu £6 miliwn ychwanegol, a adlewyrchir yn y gyllideb derfynol hon, a fydd yn mynd i mewn i'r grant cynnal refeniw i helpu i fynd i'r afael â'r problemau penodol ynghylch atal digartrefedd.

Yn olaf, Lywydd, cyn belled ag y mae newidiadau refeniw yn y cwestiwn, rwy’n arbennig o falch i dynnu sylw at y £500,000 o refeniw ychwanegol i ddarparu cymorth newydd i blant yn ein cymunedau mwyaf agored i niwed yn ystod gwyliau hir yr haf. Mae hyn yn enghraifft glir o ble y mae defnyddio lens Deddf Llesiant Cenedlaethau'r Dyfodol (Cymru) 2015 wedi dylanwadu'n uniongyrchol ar wneud cyllideb.

Mae argymhellion 4, 5 a 6 o adroddiad y Pwyllgorau Cyllid yn canolbwyntio ar y cydadwaith rhwng y Ddeddf a phroses y gyllideb. Rydw i wedi ymrwymo yn fy ymateb i wneud mwy i adlewyrchu'r Ddeddf mewn paratoadau a chanlyniadau cyllideb yn y cylch cyllideb nesaf.

Lywydd, gadewch i mi droi yn awr, wrth orffen, at baratoadau’r gyllideb ar gyfer y flwyddyn nesaf. Y gyllideb y bydd y Cynulliad hwn yn ei hystyried ar gyfer 2018-19 fydd y gyntaf i arfer ein cyfrifoldebau cyllidol newydd a gwneud hynny o fewn y fframwaith cyllidol newydd a gytunwyd gyda Phrif Ysgrifennydd y Trysorlys ym mis Rhagfyr. Byddaf yn ateb cwestiynau ar fanylion y fframwaith cyllidol o flaen y Pwyllgor Cyllid yfory a byddaf yn gwneud datganiad yn ei gylch yn y Siambr hon yr wythnos nesaf. Bydd hyn oll yn gofyn am newidiadau i baratoadau cyllideb fewnol y Llywodraeth ei hun a chraffu arno gan y Cynulliad Cenedlaethol. Rwy'n edrych ymlaen at drafodaethau pellach gyda'r Comisiwn a’r Pwyllgor Cyllid i roi'r trefniadau newydd hyn ar waith wrth i ni ymateb i'r argymhellion yn y maes hwn a nodir yn adroddiad y pwyllgor.

Gadewch i mi orffen, felly, lle y dechreuais ym mis Hydref. Mae'r gyllideb o flaen y Cynulliad heddiw yn cyfuno sefydlogrwydd ac uchelgais. Mae'n darparu cyfnod cymharol fyr i baratoi ar gyfer cyfnod anoddach a dewisiadau caletach sy'n ein hwynebu yn ddiweddarach yn nhymor y Cynulliad hwn. Serch hynny mae’n buddsoddi yn ein dyfodol ac yn gosod y sylfaen ar gyfer y cyfrifoldebau cyllidol newydd sydd o'n blaenau. Rwy’n edrych ymlaen at y ddadl y prynhawn yma ac yn cymeradwyo'r gyllideb derfynol hon i Aelodau fel cyllideb i symud Cymru ymlaen.

I call on the Chair of the Finance Committee, Simon Thomas.

Thank you, Llywydd, and thank you to the Cabinet Secretary for opening this debate. Like him, I don’t want to reiterate what was said during the debate on the draft budget. I will also be focusing my comments on the changes since the draft budget, and also on some of the Government’s responses to the Finance Committee’s recommendations.

It is a shame, although the Cabinet Secretary responded appropriately to the recommendations, that the timetable that we set ourselves as an Assembly for this means that Assembly Members haven’t had an opportunity, in any meaningful way, to look at the Government’s response to the recommendations. Most of the recommendations, published overnight, relate to long-term budgeting, but there are some specifics that the Government has responded to in preparing its final budget.

So, I will be concentrating on some of the changes made, not necessarily because of the Finance Committee, although the Finance Committee is interested in these issues, but also other Assembly committees that brought evidence to the Government based on the draft budget, asking for further resources or shifts in resources, or, of course, further outcomes as a result of the autumn statement.

I think it’s important to underline that the Finance Committee looked in particular at sustainability in terms of health financing, and therefore I am pleased that the Cabinet Secretary has accepted our recommendations in relation to health funding and I am also pleased to see that additional capital of over £40 million has been allocated over four years to improve the health estate and accelerate innovation within that sector. That actually dovetails with the Finance Committee’s interest in preventative services and the balance between the increase in NHS funding and the funding available for social services. I am pleased, therefore, to see the final allocation of £10 million additional revenue funding for social services, which reflects the discussion in the Finance Committee, as well as discussions within subject committees.

I also note that some capital funding has been returned to the budget of the Cabinet Secretary for energy, climate change and rural affairs: £10 million additional capital for the energy-saving schemes that have just been mentioned by the Cabinet Secretary for Finance and Local Government; an additional £3 million in funds for flood alleviation measures, which were originally cut and which caused great concern to the climate change committee as well as the Finance Committee; and an additional £5 million of capital support that has just been mentioned as well for rural communities.

So, there have been significant changes that have been facilitated by the autumn statement between the draft budget and the final budget, but the Cabinet Secretary has said that he did keep some reserves in hand in case the autumn statement would be detrimental to the Assembly and to the Government. As it hadn’t been detrimental to such an extent, then some of these funds could be released for Government aims, which correlate with a number of things that the Finance Committee was very interested in.

The Finance Committee would have liked to have seen more assurance on local government revenue for the future, because the Cabinet Secretary, wearing his other hat, is to prepare a White Paper on local government reform, and the Finance Committee will follow the issue of local government funding with some interest during this ensuing period, including the possibility of moving away from annual funding to more long-term funding on a three yearly basis, similar to the pattern that should happen with health boards—some such pattern. That would certainly be of interest to the Finance Committee.

We also heard evidence during our debates in the Finance Committee on the possible impact on the workforce in the NHS and the social care sector of the UK’s exit from the EU. We recommended that the Welsh Government work closely with local government and the NHS to mitigate any potential repercussions. I’m pleased that the Cabinet Secretary has accepted this recommendation and is committed, therefore, to exploring all options to facilitate the retention of the NHS workforce that we have, a workforce that is very reliant on migrants from the rest of the EU as well as the rest of the world, of course.

I would also make reference to the fact that the Government has accepted the committee’s recommendations on the way the well-being of future generations Act impacts upon the way in which the Government prepares its budget. I would have liked to have seen more evidence of this in the draft budget and the final budget, in terms of how that Act has steered Government decisions. The Cabinet Secretary did give us an example in the area of children’s services of the way that that particular Act had been of assistance in making Government decisions, and I very much hope that when we look at the next budget, there will be more evidence of this Act being implemented. Certainly, stakeholders were very eager to see that.

In closing my comments on this budget, it’s fair to mention that the Finance Committee will scrutinise enthusiastically the changes that will ensue over the next year or two. We will turn to those in the next few days in the Assembly, with the further devolution of fiscal policy, the framework agreed between the Government here and the Government in Westminster, and the possibility that we as an Assembly do move to a far more parliamentary system of budget scrutiny through a full finance Bill, which could be amended, and, in light of that, of course, could impact on taxation rates. That, in my view will certainly add to democracy here in Wales.

I’m pleased to contribute to this debate today on the final budget. Can I firstly concur with the comments made by the Chair of the Finance Committee and also welcome the Cabinet Secretary’s response to some of the Finance Committee’s recommendations, some of which I received earlier today?

As the Cabinet Secretary said in opening this debate, the lateness of this year’s budget, due to the timing of the autumn statement, has understandably caused difficulties for him and his team. It has also caused the now increasingly familiar headaches for the Finance Committee, which the Chair alluded to.

During the draft budget debate before Christmas, I welcomed the news that the UK Government was to deliver an extra £436 million of capital funding between 2016 and 2021 on capital projects, as a result of extra infrastructure spending in England. We are all well aware of the pressing need to invest in infrastructure to grow our economy. I think we’d all agree that Wales needs a truly sustainable budget that looks to the future.

I note that, in the Cabinet Secretary’s response, he’s accepted in principle the idea that the budget should deliver on the goals that have been set in the programme for government. You’re right, Cabinet Secretary, it’s not always easy to draw a line between funding and outcomes, but it is very important that the Government attempts to do so.

Now, it’s quite clear that this additional capital money needs to be carefully spent and the budget proposals talk about an integrated long-term approach to capital funding. I would say, of course, we have heard this a number of times before. Assembly Members who were here in the fourth Assembly may recall, if you were listening of course—you may not recall—that two years ago I warned that the lack of commitment to phase two of the eastern bay link road, beyond phase one, would inevitably lead to greater congestion on Rover Way in southern Cardiff, at the so-called roundabout to nowhere. There is still no sign of the rest of that link road, but I notice that we do today have a commitment to the Llandeilo by-pass, and progressing that—a very popular road scheme, I’m sure, with the people of Llandeilo and further afield who would use that road—but what I would ask is: are we absolutely convinced that these decisions are being taken on the right basis, with long-term sustainability in mind, which I’m sure the Chair of the Finance Committee would talk a lot about? We need to be sure of that, and the public do as well.

The point is that there is sometimes the appearance that decisions are being taken, dare I say it, as part of a short-term budget deal, that doesn’t just look—well, doesn’t even look three years ahead, doesn’t even look one year ahead, but looks just a short space of a few months ahead. That is something that all of us, in principle, want to get away from, but at the same time it is easier, I know, to fall into some short-term deals that we might regret later. Too often budgets have been for short-term political gain, rather than long-term economic advantage. The Finance Committee report recommends that in future years the draft budget should clearly demonstrate how the programme for government has informed and driven the budget-setting process, and how it integrates with the future generations legislation—or doesn’t, as too often the case seems to be.

I’m pleased that the Cabinet Secretary has accepted the Finance Committee’s calls for a strategic impact assessment of budgets on the well-being of future generations objectives. That’s positive. Government is all about priorities and making do within the constraints set. Of course we know those constraints are set to be relaxed: this budget will be the last to cover a period in which the Welsh Government does not have tax powers or significant borrowing power. In the draft budget debate, I pointed out that given that the devolution of tax is now a little over a year away, we might have expected some recognition of this, and an indication of how tax powers will be used as a tool to support the programme for government in future. I know we don’t have those powers yet, but it’s not far off, and if we want other areas of the public sector and Government organisations to work in multi-year budgets and multi-year cycles, then I think we do need to start leading by example in that respect.

I appreciate it’s not just a question of the Welsh Government planning better for the future; the Cabinet Secretary knows, I believe, that the UK as a whole needs to do this too. I’m pleased that since the draft budget debate we had before Christmas, we do now have an agreement on a fiscal framework, which is a massive step forward. We are going to have that statement on the fiscal framework, I know, in a short time to come, so I won’t go too much into that now; suffice to say it will hopefully make it easier for the Welsh Government to plan further ahead. In relation to tax powers, I agree with the Cabinet Secretary that it’s vital that future reductions in the block grant are properly indexed and appropriate. We can’t afford to get this wrong.

Can I say, Cabinet Secretary, in moving to a conclusion, we welcome the move towards a new treatment fund? I still think it’s a shame that the previous Welsh Government didn’t heed our calls for a cancer treatment fund all those years ago. I’m not clear about this new fund in terms of the extent to which it covers existing treatments and those drugs that haven’t been fully approved. Perhaps the Cabinet Secretary can clarify some of the confusion on that. But in conclusion, Cabinet Secretary, we do welcome this budget today. Clearly we have to have a budget, but if sustainability is at the heart of the Assembly’s constitution, then I think we do need to do far more to plan further ahead and to make sure that our budget processes are as modern as possible. It won’t surprise you to know we are not supporting this budget. There are some good things in it, but it falls short of the truly sustainable long-term budget that Wales needs, and this is why we are unable to support it.

Thank you to the Cabinet Secretary for his statement today and for introducing the final budget of the Welsh Government. As has already been mentioned, of course, this budget is partly the fruit of discussions between Plaid Cymru and the Welsh Government—discussions that arose from this new method of collaboration that we have devised. I have to say that I do believe that our politics and our democracy benefit from this kind of dialogue, and perhaps we need more of this approach. Through improving the budget—[Interruption.] If the Member opposite wants to stand on his feet, he is welcome to do so.

This is the very root of democracy, isn’t it? We are elected to this place on the basis of a manifesto, and our main duty, of course, is to deliver on those promises that we have put before the people who have elected us. Of course, we haven’t been able to secure agreement between us on everything in this budget; we don’t agree on everything, but, as a minority party in this place, we have been able to have an influence for the benefit of the lives of the people of Wales. Isn’t that at the heart of democracy, ultimately: improving things? It would be a very bad thing to see democracy as a way of opposing things, and only to oppose at all times. I would encourage other parties to have this more constructive attitude towards politics, to put forward ideas, and if they disagree, then be part of the dialogue. I do welcome Simon’s comments about creating a more parliamentary method for the budgetary process.

We succeeded, through the agreement, to secure additional funding for sectors that have, in our view, suffered financially over the past few years—sectors such as further and higher education, the arts, the Welsh language and local government, capital investment for diagnostic equipment, as we heard in the statement over Christmas, and funding for mental health, and so on. And, of course, in the discussions that we had after the autumn statement, we succeeded in getting further funding to get to grips with problems that arose as a result of the revaluation of business rates, for example, and it was good to see further funding for flood prevention. That’s the prize for those of us who are willing to be part of democracy on the basis of dialogue, and I would defend that as an important principle if this place is to do its work properly.

In looking to the future, I do think that there is room for improving the process and I think that the Cabinet Secretary is open to that. We have to ensure that this Senedd, this parliament, grows in maturity and capacity in terms of its ability to influence the budget, and that’s true for all parties. We need additional transparency if we are going to do our work as Assembly Members and as groups. For the draft budget, we collated, with the assistance of the Government, ultimately, the different items—the main expenditure groups, the expenditure programmes, the action points, the BELs, and so on—around 7,000 different budget lines. If we’re going to do our work, then we have to give that information and present it in a clearer way and a more open way to all Assembly Members and to the groups. I agree with Nick Ramsay, I think that we have to connect expenditure with aims and objectives. I referred in the debate on the draft budget to the programme budgeting of Robert McNamara from the 1960s in the United States. That is, in laying a budget, it’s important to set out what outcomes you aim to ensure through that expenditure so that you can measure against achievement at the end of the budget period.

Finally, I think that it’s totally unacceptable, of course, with the process that we have today, that we can only approve or reject the budget. That is, if you look at the OECD, over half of those parliaments have an unrestricted right to amend a budget. We’re right at the other end of that, where we can only, at present, say ‘yes’ or ‘no’ to a budget and, through that, we lose all of the ideas that we have. Nobody has a monopoly as a party or Assembly Member on good ideas, and through this binary process that we currently have, we’re losing that wealth of different perspectives that exist across the Chamber. So, I do very much hope that we will be able to move towards a parliamentary system that includes everyone—and I do mean everyone—as we put together budgets for the future.

It’s a pleasure to follow Adam Price and I’m very interested in the perspective and the nuance of what he says, because it does seem to me that there is clearly a range of views within his party, and those who were previously part of it, as to the appropriate extent of co-operation with the Labour Government and the degree to which Plaid takes responsibility for this budget. When we started the process, I at least had the impression that it was a transaction between Plaid and the Labour Government, and, in return for Plaid abstaining on the budget, the Government would agree to a number of very specific measures that Plaid wanted, and that was the deal. But, to listen to him speak now, he appears to take a far greater degree of responsibility, even pride, in the budget that is before us today, even if, in the event, his party is still to abstain. He describes it as a sort of fruit of discussions between Plaid and Labour, but isn’t the reality that the fruit of those discussions were a number of particular projects? We heard about a particular bypass and the prioritisation of that over perhaps other road schemes. But it wasn’t in the event a deal on the overall budget and this isn’t Plaid’s budget to defend every part of, because you’ve only agreed to let it through in exchange for getting a series of specific things. I think we would benefit from a greater degree of clarity about how much Plaid or particular individuals who may be spokespersons take responsibility. I give way.

I’m not sure if the honourable Member was following me in that section of my speech. I think I did say pretty clearly that we did not agree with everything in the budget and, indeed, there were demands that we made as part of our discussions that were not met. So, we’re very clear: we were able to improve the budget, but we are abstaining because we do not agree with the budget as a whole.

The Member gave an example: he said that the future further funding for flood protection was one of the prizes he would defend through this process. Actually, there is some increase in the flood protection budget between this final budget and the draft budget, but the overall budget I believe for flood protection is still very significantly reduced. And, yes, our Finance Committee has been listened to and there has been some put back on the capital side to Lesley Griffiths’s budget, but there are still very significant reductions affecting what for a signalling of great virtue are described as ‘climate change projects’. There are cuts there, and he talks about defending these further increases with pride, but that is not actually the situation. If he looks at the full budget—[Interruption.]—rather than the specifics. Well, I’m not quite sure that you did, Adam. I’m talking about this section here. You agreed a series of very specific things, which Labour then have to find money elsewhere to pay for what they’ve agreed to give you in order to abstain, and the largest single element of that, mostly on the capital side, is those reductions to climate change projects. I think you need to recognise that, rather than like to claim support for the things you appreciate but not for others.

However, I do recognise what you say and what Simon said in terms of a move to what I think Simon said was a more parliamentary process of a fully amendable finance Bill. Of course, in the Westminster Parliament, the finance Bill solely deals with tax and that will, even next year, remain a fairly modest amount of what we do. The key criterion for me is whether the spending side of this budget is going to be amendable and, in particular—and some of our comments in Finance Committee have been listened to and I appreciate that—will there be an opportunity to amend spending lines of the budget in Finance Committee, where, at least notionally, we have an opposition majority.

We have some changes. The finance Minister spoke about the £46 million increase in revenue spending between the draft budget and the final budget. He described that as coming primarily from reserves. I’m not quite clear how he assesses it that way, given that, between the draft and the final budget, we had an increase in £23.4 million in revenue spending available from the UK Government through the autumn statement. That’s slightly over half of the increase he now has in the revenue. So, I’m not clear that that does come from reserves. Some of what that’s been spent on—£10 million for the business rates relief and some of the big increases being mitigated there—I just wonder whether we could perhaps indicate more clearly in advance through the valuations as to what businesses would be required to have. I particularly welcome the £6 million for the homelessness prevention. I note that there’s a number of other items that feed through to local government that was given a broadly flat budget before and my worry still is that there are severe cuts coming in the local government area, but that the Government has found it politic to put those off until after the local elections.

Note the further changes in capital budgets: we’re going to have another £7 million for roads next year and then £83 million over the course of the four-year period on capital. That sum, of course, is swamped by the amount of money that Welsh Government would put into the black route, estimated at £1.1 billion plus. I just make a final appeal: couldn’t we consider that money better spent on the cheaper, but, I think, faster, more deliverable version of the blue route, and look at putting that very large sum of capital to other projects that might get quicker and more appropriate returns across Wales?

Firstly, can I say I very much welcome the Llandeilo bypass? We are allowed new roads in south-west Wales as well. The budget needs to be put into the context of policies being pursued at Westminster. Although almost all of the Welsh Government’s budget comes through the block grant, cuts in expenditure in England generate, via the Barnett formula, cuts in the Welsh block grant. What we’ve seen since the Conservatives came into office is a substantial real-terms cut in the Welsh budget. This is the economic equivalent of the practice of physicians until the eighteenth century of using a single treatment to treat every malady—bloodletting. The theory behind the practice changed over time, but the practice itself remained much the same, with doctors often bleeding patients until they were weak, in pain, and sometimes unconscious. That is what the Tory austerity policies are doing to Britain—bleeding the economy until it’s weak.

From Hoover in 1920s America, who turned the stock market crash into the Great Depression, to Argentina and Greece more recently, austerity has always failed. The Tories are committed to austerity, not as an economic policy, but as an ideology. They want to reduce the public sector and what they cannot cut they seek to privatise.

I want to talk about the two largest lines in Welsh Government—health and local government. Firstly, health: if current trends continue, health will exceed 50 per cent of the Welsh budget in the next two years, and my guess is probably next year. I’m now going to quote from page 16 of the Nuffield report in 2014, ‘The four health systems of the United Kingdom: How do they compare?’ Across the four countries, there had been a reduction in total in inpatient admissions per hospital doctor and dentist between 1999-2000 and 2011-12. This is an inevitable outcome of the rates of increase in numbers of hospital doctors exceeding the rates of increase in hospital admissions. Wales fell from just under 140 to approximately 90—approximately a drop of about a third. What the current figures are, I do not know, but I would be amazed if they were anywhere near the 1999-2000 figure.

Health, of course, is more than about hospitals. There’s primary care and lifestyle choices. Since health boards were created, the proportion of the health budget spent on primary care has reduced. Too often, we seem to think, ‘For health, see hospitals’. One of the biggest boosts to health has been the reduction in the number of people not smoking. Getting people to stop smoking, getting people to have a more active lifestyle, reducing obesity and increasing physical exercise will all improve health, and I’m not the only one who believes that reducing the number of sports facilities such as leisure centres will impact on the health of Wales.

Turning to local government, while this year’s local government settlement is better than expected—substantially better than expected—it’s still a real-terms cut. I believe that social care within social services is under greater pressure than health. Social care is something that people need over a long period of their life. Whilst there are people who end up in hospital or having major health problems in the last 12 months to two years of their lives, people can end up needing social care support for anything up to 40 years of their lives. That is going to bear costs that will come across through local government. As more and more people are living to be 100—I’m speaking, probably, to a room full of people who all hope to do the same—I think it is important that we realise that people are going to need more and more care as they get older. This is, really, the time bomb that is sitting there, not just in Wales, but throughout the rest of western Europe.

We’ve got a health crisis in England that the Tories have created. They’ve cut local government expenditure, they’ve cut social care, and what they’ve ended up with is hospitals being unable to discharge patients. They’ve discovered where they’ve gone wrong, they’ve changed what used to be their policy on local government, and we haven’t had a local government debate without Janet Finch-Saunders getting up and saying, ‘We should have a freeze on council tax.’ But you’ve changed it in England now; you say you can raise money to pay for social care, which is not going to be particularly advantageous in the poorest regions. It’s almost like going back to the old Poor Law, where the poorest areas, which have the most people in need, have the least capacity to raise money, while the richer areas have the greater capacity to raise money. That’s where social care is going and I, for one, am not happy with that, and I’m very glad that we’ve got a Labour Government in Wales, which is not following on from what the Conservatives have done to destroy health and local government in England.

Local government has faced disproportionate cuts by the Tories in England, and I’ve followed the Tories’ policies over the last six years of what they want to do: the total local government settlement should be cut and additional money should be given to health, council tax should be frozen, and local government should concentrate solely on statutory services, and central expenditure by local education authorities should end. What does it actually mean? Because people often talk about cutting things, but what do they actually mean by that? It’d mean closure of most libraries, closure of all parks, closure of all leisure centres, no free school transport, and an end to the school building programme. More importantly, as I said earlier, we would end up like England, with hospitals unable to discharge patients because they had no-one to look after them and nowhere to go.

It took centuries to discover bloodletting did not work. Let us hope the failure of austerity is going to be identified a lot sooner, preferably when we get a different type of Government.

I welcome the moves in the budget to implement some of the key pledges in the Welsh Labour manifesto from last year, specifically, the £53 million towards delivering 20,000 affordable homes, the £15 million for widening access to apprenticeships as part of the move to implement 100,000 all-age apprenticeships, as well as some of the smarter economic measures—the £40 million for energy efficiency, which, as the Minister mentioned, will cut bills for 25,000 homes, as well as producing local jobs—and also some of the smaller interventions, such as the £1.5 million for genomics, as well as the £20 million small grants fund for rural communities, which enables communities to fund things like ICT and data and develop towards the precision agriculture model that we’ve discussed in this Assembly. So, this budget, I think, is a huge achievement and a concrete step forward towards implementing the Welsh Labour manifesto.

I think, in spirit of the discussion that’s been had in the Chamber this afternoon, it’s beholden on us to acknowledge that we do not have a majority in this Chamber, and this budget has only been possible because of the co-operation across party lines. We’ve seen that in terms of offering a place to the Liberal Democrats in Government, and also in terms of the compact with Plaid Cymru, which has borne fruit in this budget, and I think we should acknowledge their constructive influence in that. I think I should, in keeping with some of the things that have been said, offer some pause for reflection on how we’re going to conduct these discussions in future years. It is not my preference that we make annual deals like this, but, if that is to be the way, then, inevitably, we are going to be tempted towards the lowest common denominator. I think there is a real challenge in this Assembly—the first Assembly elected in the aftermath of the future generations Act—to take a longer-term view. There’s clearly going to be a tension in that in the necessary political arrangements we have to meet to get a budget passed in the short term. I’d hate to see us go the way of other democracies, most notably the American political system, where we descend towards a pork barrel politics. It’s a mark of the American budget system that hardly a budget is passed without a museum or a bridge or a bypass being awarded in the name of the chair of various committees. Much as I know people in his own party believe Adam Price to be the future prophet, I would hate to see statues to the ‘Mab Darogan’ littering the countryside of Carmarthen East.

But I think there is—the one bit of the budget I am struggling with, and Nick Ramsay did make the point, as did the Minister, about the need to reflect the future generations Act in future budgets, and I look forward to Nick following through the logic of that and revising his position on the M4. But I think, when it comes to the spending priorities we make, the figures I’ve mentioned for the manifesto priorities, compare also then to £50 million for a bypass on top of £24 million for pinch points on roads, and £15 million for local transport network funds, two thirds of which is anticipated for highway projects, and we have this cognitive dissonance we’ve discussed in the Chamber before between accepting that our commitments to planning for the long term and taking into account carbon emissions, those do have policy and spending implications that we need to build into our thinking and not simply revert to the practices of the past, and not simply to revert to projects to win support for political parties to show that they’ve exerted influence. That’s not an easy thing to do. We need to be grown up about this. There is a real tension there. It was a cross-party commitment to doing things differently. If we mean what we say, that has got to be reflected in our discussions around the budget. Thank you.

I welcome this budget and the opportunity to contribute to my first final budget debate as Assembly Member for Delyn. I particularly welcome a number of the recent revenue and capital allocations, including an extra £10 million a year for social care. I think it’s right that we address the pressures on social care—the growing pressures as people are growing older and living longer—and recognise the role of the often much undervalued workforce who take care of our nearest and dearest. Also, the additional £32 million over four years for flood alleviation measures. Communities in my constituency, like many other areas across the country, have been devastated by flooding in the not-too-distant past, and I hope that, with this extra investment, we’ll see steps taken in the areas that need it. And finally, the £84 million more over four years to support road and transport schemes. Transport networks are crucial to regeneration—the regeneration that drives investment and sustains better jobs closer to home. So, it’s important to me and to others that this is a budget that addresses and meets the needs of the whole of Wales.

A further £15 million to relieve transport pinch points across the country will be music to many commuters’ ears. As somebody who regularly travels from north to south, I appreciate the opportunity this funding provides to tackle junctions that are causing congestion and to look at improving overtaking on key routes from north to south. The same also needs to happen east to west in north Wales. The extra money is needed and will be well received to help ease congestion and the well-documented difficulties on the A55 and other trunk roads in north Wales, such as the A5, the A483 and the A494. The £50 million put forward to develop the metro in north Wales will innovatively complement the investment in our roads and will be significant in the economic development of the region and unlocking our links to prosperity across north Wales with our near neighbours in the north-west of England. So, going forward, I think we really need to make sure that this investment sees practical steps taken to get north-east Wales metro ready with a better integrated public transport system, and also press ahead now without delay with much-needed and much-wanted improvements to the A55 gateway to north Wales.

Budgets are about choices. Although none of us would feel, in this Chamber, that we have the resources available to the Welsh Government that we would need to do what we want to do, this budget, I believe, shows—as Mike Hedges indicated—the shortcomings of austerity and the possibility, even within reduced resources, of making the right choices. The choice that the Welsh Government has made in this budget is to stand on the side of people who are doing their bit but are finding it hard. So, if, like a young parent in my constituency, you were able to send your children to Food and Fun in Melin Junior School this summer, giving you a little bit more time to go to work, taking some pressure off your care budget, giving them two meals a day and playing and reading with their fellow pupils, the great news is that the Government’s going to expand that project, both in our area and elsewhere. If you’re an apprentice, you’ll be comforted in knowing that the Welsh Government is spending every penny of the apprenticeship levy on expanding its apprenticeship programme. If you’re looking to buy a home and finding that hard, then £53 million to bring forward the commitment to affordable homes is going to be good news. If you’re going into care, doubling the capital limit and making a start on that in this budget is very significant. Knowing that the care worker who is looking after you is on the path to earning the living wage, as a result of the Welsh Government’s commitment, is going to be a good thing. So, these are choices; and the Government, in my opinion, within the limited constraints of the budget, are making the right choices.

I’d also like to say, in relation to the fiscal framework—I’d like to congratulate the finance Secretary on his achievement in negotiating that settlement. This is the last budget that will be taking place under the old—or the current—regime. It’s incredibly significant that he has managed to bake into the formula a needs base for Barnett, and incredibly significant that we will have an independent review for the formula and an independent dispute resolution mechanism. It doesn’t, in my view, go far enough, and I believe that to be his view and the view of others in this Chamber as well. Nevertheless, that is a major step forward. My personal preference would be for a statutory mechanism that enshrines these principles in law. We take our powers on the basis of statute, and we get our funding on the basis of a handshake, and this mechanism starts us on the journey of moving away from that. In that, it is very significant, and he is to be congratulated on that achievement.

I am very pleased to speak in this very important debate, and I would like to congratulate the finance Secretary for his handling of these issues in the challenging circumstances that he referred to at the beginning of his introduction. I welcome the final budget and the additional revenue and capital funding that has been allocated, and I just wanted to speak briefly about a few of those additional areas today.

I am particularly pleased that there is £6 million in additional revenue funding to help prevent homelessness. I think that one of the messages, certainly from the Finance Committee and from many of the discussions that we have had about how we plan our finances, is that we want to work on prevention. I think this is clearly an area where we have made great strides, and I think it is widely acknowledged that Wales is leading the way in the UK in preventing homelessness. I think this £6 million—although, obviously, not a huge amount—is certainly going to make a significant difference. It is important for us to remember that this is an area where we are making progress. There have been calls from homelessness charities for the UK Government to follow the example of Wales in its legislation, in placing a legal duty to help people in housing crisis, to prevent and relieve homelessness. I know that the statistics have shown that that is working. So, I think that the money that is given towards preventing homelessness is really putting money where it should go. So, I really want to very strongly welcome that money towards homelessness.

Many speakers have mentioned the additional £10 million for social care, and how vitally important social care is. Mike Hedges, of course, referred to the long-term nature of social care, and this additional funding, I know, will help meet the extra cost of funding the national living wage, and is in addition to the extra £25 million announced in October. So, I think, again, it shows the priority that the Labour Government in Wales is giving to social care.

I also want to take the opportunity to comment on the £1.7 million funding to provide financial support for people and their families with contaminated blood. Obviously, there is a consultation on payments for people infected with contaminated blood and their families, which is still ongoing until 20 January. So, I know that no decisions have yet been made about how this £1.7 million in funding will be distributed. I am very pleased that the Cabinet Secretary for health came along to the last meeting of the cross-party group, which I chair, to hear concerns and worries about the people who are hoping to benefit from this money. He was able to listen to the experiences of many of the families and people directly affected by this scandal, which of course dates back to the 1970s and 1980s. I wanted to mention that group in this budget debate because, obviously, the decisions that we make about money are of huge individual importance to all of those people who have suffered from this major tragedy. I am hopeful that we will be able to come forward with a solution that will help satisfy some of their greatest concerns. I think it is very important to remember that the families of those who have had hepatitis C and liver disease suffer greater financial hardship as a result of family members receiving contaminated blood, because they are penalised when it comes to getting loans and getting insurance. That has a massive detrimental effect on their financial stability. That’s why they argue for ongoing support, rather than one-off payments. So, I wanted to make that point in the budget debate, although I know that decisions haven’t yet been made.

Finally, I'd just like to echo the good news about the progress that has been made about the financial stability that we hope will be obtained. I particularly welcome the idea of having the independent regulator, and I think that this is a final budget that is much to be applauded.

I call on the Cabinet Secretary for Finance and Local Government to reply to the debate.

Thank you, Llywydd.

A gaf i ddiolch i’r holl Aelodau hynny sydd wedi cymryd rhan yn y drafodaeth? Mae llawer o Aelodau wedi cyfeirio at y pethau hynny yr ydym wedi gallu eu cyflawni yn y gyllideb, yn y buddsoddiadau newydd yr ydym wedi gallu eu gwneud rhwng y drafft a'r gyllideb derfynol. Roeddwn i’n credu y byddwn yn y fan yma yn ailadrodd y llwybr gwneud penderfyniadau a nodais gerbron y Pwyllgor Cyllid mewn cysylltiad ag unrhyw gyfalaf ychwanegol a allai fod wedi dod i ni yn natganiad yr hydref. Fy mlaenoriaeth gyntaf i oedd adfer arian i gyllidebau lle’r oedd cyfyngiadau ar y cam cyllideb ddrafft yn golygu nad oeddem wedi gallu gwneud popeth y byddem wedi hoffi ei wneud. A dyna pam yr ydych yn gweld yn y gyllideb hon fuddsoddiadau newydd mewn rheoli risg llifogydd ac mewn adfywio trefol.

Yr ail flaenoriaeth oedd edrych ar yr ymrwymiadau allweddol hynny yn y rhaglen lywodraethu a, lle bo modd, cyflymu ein gallu i gyflawni hynny. Rwyf wedi ymrwymo’n arbennig i’r 20,000 o gartrefi fforddiadwy—targed heriol, ond mae’r angen am dai yng Nghymru yn fater real iawn, iawn i lawer o deuluoedd, ac mae unrhyw beth y gallwn ni ei wneud i ymateb i'r agenda honno yn rhywbeth yr wyf yn awyddus i’w gefnogi yn y gyllideb hon.

Ac yna, pan oeddem wedi gwneud hynny, edrychais i weld a oedd unrhyw syniadau nad oedd wedi bod yn bosibl eu cefnogi o gwbl tan nawr, ac yno, y buddsoddiad o £40 miliwn yn yr ystâd gofal sylfaenol —enghraifft arall o benderfyniad y Llywodraeth, ac rydym wedi clywed nifer o enghreifftiau ohono y prynhawn yma, i wneud pethau pwysig ym maes gofal cymdeithasol, yn ogystal â meddygaeth sylfaenol a chymunedol, i gydnabod y system honno fel system o fewn y cylch.

Lywydd, rwy’n credu bod tair thema wedi rhedeg drwy'r drafodaeth. Byddaf yn dweud rhywbeth yn fyr iawn am bob un ohonynt. Yn gyntaf oll, bu rhywfaint o drafodaeth ddiddorol am y ffordd y mae'r gyllideb yn cael ei gwneud. Gadewch i mi gytuno â'r hyn a ddywedodd un o’m cyd Aelodau: ein bod yn Llywodraeth heb fwyafrif, ac nid oes gennym fonopoli ar syniadau. Felly, mae gweithio gyda phleidiau eraill i ystyried ein cynigion, i fod yn gallu ychwanegu at y rhestr o bosibiliadau, yn fy marn i, yn rhywbeth y dylem ei groesawu fel ffordd o gynnal busnes yma. A yw'r gyllideb yn wahanol o ganlyniad i'n trafodaethau gyda Phlaid Cymru? Wrth gwrs ei bod. A oes unrhyw beth yn y gyllideb hon na fyddai Aelodau Llafur yn falch i’w gefnogi? Wrth gwrs nad oes. Dyna natur trafodaethau. Ochr yn ochr â'r trafodaethau uniongyrchol hynny, felly, fe welwch, oherwydd ein bod wedi ei chyhoeddi fel rhan o gytundeb y gyllideb, mae gennym agenda o faterion tymor hwy y byddwn yn eu trafod yn y grŵp cyswllt cyllid. Eleni, heb etholiad a heb y cyfyngiadau y mae hynny’n eu rhoi ar ein hamserlen, byddwn yn gallu rhoi sylw i’r materion hynny hefyd.

Bu dadl y prynhawn yma am ansicrwydd a chynaliadwyedd. Wrth gwrs, roeddwn wedi dymuno gallu darparu cyllidebau tymor hirach ar yr ochr refeniw i fynd ochr yn ochr â'r cyllidebau cyfalaf pedair blynedd yr ydym wedi gallu eu cynnig. Ond, fel y dywedodd Simon Thomas, mae ansicrwydd yn ein hwynebu, nid eleni yn unig, ond yn y blynyddoedd i ddod. Bydd yn rhaid inni ymgodymu ag effaith gadael yr Undeb Ewropeaidd. Mae gennym anhawster parhaus y polisi diffygiol a hunandrechol o gyni y tynnodd Mike Hedges sylw ato a'r ffordd y mae hynny yn gwasgu ar ein cyllidebau. Mae gennym yr anhawster penodol a gadarnhawyd gan y Canghellor ei fod yn bwriadu mynd ymlaen â gwerth £3.5 biliwn o doriadau refeniw yn 2019-20. Byddai hynny ar ei ben ei hun yn dileu unrhyw un o'r enillion refeniw a gawsom gan Lywodraeth y DU dros y blynyddoedd diwethaf. Felly, er fy mod yn gwbl barod i gydnabod pa mor ddymunol yw cynaliadwyedd mewn cynllunio tymor hir, mae’n rhaid i chi ddal i ymdopi â'r ansicrwydd real iawn sy'n eich wynebu chi yma, ar hyn o bryd, ac a fydd yn parhau i fod yn gyd-destun anodd ar gyfer gwneud cyllideb yn y Cynulliad hwn ar gyfer y cyfnod nesaf.

Yn olaf, bu trafodaeth am broses y gyllideb, ac rwy’n cytuno yn llwyr, wrth inni ddechrau ymarfer ein cyfrifoldebau cyllidol newydd, y bydd angen i ni ail-bennu ein prosesau i wneud yn siŵr ein bod yn gallu canolbwyntio ar y penderfyniadau ehangach a fydd wrth wraidd y ffordd y mae'r gyllideb yn cael ei pharatoi a'i datblygu mewn blynyddoedd i ddod. Rwy'n credu bod gwahanol syniadau ynglŷn â’r ffordd orau y gellid gwneud hynny, ond mae'n drafodaeth y mae adroddiad y Pwyllgor Cyllid yn darparu sylfaen ddefnyddiol iawn ar gyfer cytuno ar fanylion hynny dros y flwyddyn nesaf.

Lywydd, mae cynllunio a pharatoi gofalus o'n blaenau, felly, er mwyn wynebu her y dewisiadau caletach hynny a’r ystod amrywiol o bosibiliadau sy'n ein hwynebu dros y 12 mis nesaf. Rydym eisoes yn paratoi ar gyfer y cylch cyllideb nesaf, a thu hwnt byddwn yn defnyddio adroddiad craffu'r Pwyllgor Cyllid fel cyfraniad pwysig at hynny. Rwyf eisoes wedi dechrau trafodaethau gyda fy nghydweithwyr ynghylch sut y byddwn yn bwrw ati yn ystod gweddill y flwyddyn hon. Serch hynny, yn yr holl amgylchiadau hynny, Lywydd, mae hon yn gyllideb sy'n mynd â Chymru yn ei blaen. Mae'n buddsoddi yn y meysydd pwysig hynny a fydd yn gwneud y gwahaniaeth mwyaf i fywydau pobl, ac fe'i cymeradwyaf i'r Cynulliad y prynhawn yma.

The proposal is to agree the motion. Does any Member object? [Objection.] I will defer voting under this item until voting time.

Voting deferred until voting time.