We now move to the debate on the local government settlement, and I call on the Cabinet Secretary for Finance and Local Government to move the motion—Mark Drakeford.

Motion NDM6202 Jane Hutt

To propose that the National Assembly for Wales, in accordance with Section 84H of the Local Government Finance Act 1988, approves the Local Government Finance Report (No. 1) 2017-2018 (Final Settlement—Councils), which was laid in the Table Office on 21 December 2016.

Motion moved.

Thank you, Deputy Presiding Officer. I am pleased to lay before the Assembly for approval the local government settlement for 2017-18 for the 22 county councils and county borough councils in Wales. Next year, after taking everything into consideration, local authorities in Wales will receive over £4.15 billion in general capital funding. This is an increase of 0.2 per cent as compared to the year 2016-17. This is the first increase in the local government settlement since 2013-14.

The settlement reflects our agreement with Plaid Cymru to allocate £25 million in addition to local government to help it provide vital services, as well as £1 million for school transport and £3 million for a pilot scheme with regard to parking arrangements in town centres. Bearing in mind the pressure from all directions on the Welsh budget, I believe that this is a fair settlement for local government and that it is much better than what the majority of people within local government would have expected.

Ddirprwy Lywydd, mae’r Llywodraeth wedi diogelu cyllid ar gyfer llywodraeth leol yng Nghymru yn y blynyddoedd diwethaf, ac nid yw’r setliad hwn yn wahanol. Yn awr, rwyf yn cydnabod, er gwaethaf yr ymdrechion hyn fod y cyllid refeniw gros sydd gan yr awdurdodau 4 y cant yn is mewn termau gwirioneddol dros y cyfnod 2010-11 i 2015-16. Ar draws y ffin yn Lloegr, fodd bynnag, yn ôl y Swyddfa Archwilio Genedlaethol, roedd cynghorau yn gorfod ymdopi â gostyngiadau o 25 y cant mewn termau real yn y pwer gwario sydd ar gael iddyn nhw dros yr un cyfnod.

Wrth baratoi'r setliad, rhoddwyd ystyriaeth ofalus i gyngor yr is-grŵp dosbarthu a’r is-grŵp cyllid ynghylch diwygio fformiwla ariannu llywodraeth leol. Mae'r dosbarthu yn adlewyrchu'r asesiad mwyaf diweddar o angen cymharol, yn seiliedig ar drysorfa o wybodaeth am nodweddion demograffig, ffisegol, economaidd a chymdeithasol pob awdurdod yng Nghymru. Yn ôl yr arfer, cynhaliwyd ymgynghoriad ffurfiol ar y setliad dros dro, ac rwyf yn hyderus fod y nawdd a gyhoeddwyd yn rhoi’r cynghorau ar sylfaen gadarn ar gyfer eu gwaith cynllunio ariannol yn y flwyddyn sydd i ddod.

Yn y setliad terfynol, darparwyd £ 6 miliwn yn ychwanegol at y nawdd a ddynodir yn y setliad drafft ar gyfer gwaith cefnogol i atal digartrefedd. Mae digartrefedd, neu’r bygythiad ohono, yn cael effaith negyddol ar fywydau pobl. Mae ei atal, felly, yn cyfrannu at y bwriad sydd gennym o sicrhau bod Cymru yn wlad iachach ac at gyflawni ein hymgais i wneud yn siŵr bod rhagor o gartrefi diogel a saff ar gael.

Dywedais yma yn y Cynulliad yn ystod ein dadl gyntaf ar y gyllideb ddrafft lawn fod hon yn gyllideb ar gyfer sefydlogrwydd ac uchelgais, a bod yr uchelgais hwnnw yn ymestyn yn uniongyrchol iawn hyd at yr ymrwymiadau hynny yn 'Symud Cymru Ymlaen' sydd i’w cyflawni mewn partneriaeth ag awdurdodau lleol. Mae'r setliad hwn, felly, yn darparu £ 4.5 miliwn ar gyfer ariannu'r ymrwymiad i gynyddu’r terfyn cyfalaf a ddefnyddir gan awdurdodau lleol sy'n codi tâl am ofal preswyl. Bydd y terfyn yn codi o £ 24,000 i £30,000 yn y flwyddyn ariannol nesaf, a dyma fydd y cam cyntaf yn y gwaith o gyflawni ein hymrwymiad i symud tuag at derfyn o £50,000. Yn ail, mae'r setliad yn darparu £ 0.3 miliwn er mwyn ariannu'r ymrwymiad i gyflwyno diystyriad llwyr o'r pensiwn anabledd rhyfel mewn asesiadau ariannol ar gyfer codi tâl am ofal cymdeithasol. Ac yn drydydd, mae £ 1.6 o gyllid ychwanegol y tu hwnt i'r setliad wedi ei gynnwys i sicrhau na fydd unrhyw awdurdod yn gweld gostyngiad o fwy na 0.5 y cant yn ei gyllideb, o'i gymharu â'i ddyraniad o refeniw nawdd cyffredinol yn 2016-17.

Ddirprwy Lywydd, mae'n ddyhead a rennir â llywodraeth leol fod grantiau penodol i’w defnyddio’n gynnil ac mewn modd strategol. Mae'r setliad ar gyfer 2017-18 yn cynnwys £ 3.1 miliwn o gyllid a ddarparwyd yn flaenorol drwy grantiau penodol. Mae hyn yn cynnwys £2.85 miliwn o gyllid a ddarparwyd yn flaenorol gan y gwasanaethau cymdeithasol drwy gyflwyno grant trawsnewid. Golyga hyn fod nawdd blynyddol o dros £ 194 miliwn wedi ei drosglwyddo i’r setliad ers 2011-12, ac, fel Gweinidog Cyllid, yn ogystal â Gweinidog llywodraeth leol, mae hon yn drefn y bwriadaf ei dilyn eto wrth i’r Cynulliad hwn fynd rhagddo.

Ddirprwy Lywydd, mae newidiadau i'r gyllideb yn digwydd yn y ddau gyfeiriad. Mae'r newid yn y trefniadau ar gyfer cofrestru’r gweithlu addysg wedi arwain at dalu £ 1 filiwn o'r setliad a ddarparwyd ynghynt er mwyn gwneud cymorthdaliadau i ffioedd cofrestru athrawon. Mae'r rhan fwyaf o'r newidiadau, fodd bynnag, wedi ychwanegu at yr adnoddau sydd ar gael ar gyfer llywodraeth leol yng Nghymru.

Roedd y gyllideb derfynol, a gymeradwywyd gan y Cynulliad Cenedlaethol yr wythnos ddiwethaf, yn darparu £ 10 miliwn yn ychwanegol er mwyn cydnabod yr heriau ariannol penodol sy'n codi oherwydd darpariaeth gofal cymdeithasol, gan gynnwys pwysau ar y gweithlu. Mae hyn yn ychwanegol at y £ 25 miliwn a gyhoeddwyd yn wreiddiol, a oedd yn cydnabod pwysigrwydd gwasanaethau cymdeithasol lleol cryf yn llwyddiant hirdymor y gwasanaeth iechyd yng Nghymru ac yn cydnabod y pwysau cynyddol sy’n wynebu’r gwasanaethau cymdeithasol.

Fel y gŵyr yr Aelodau, drwy gyhoeddiadau a wnaed cyn y Nadolig, bydd swm ychwanegol o £10 miliwn ar gyfer rhyddhad ardrethi annomestig yn 2017-18 yn cael ei ddarparu ochr yn ochr â'r £ 10 miliwn a gyhoeddwyd eisoes ar gyfer y cynllun rhyddhad dros dro. Cytunwyd ar y mecanwaith ar gyfer defnyddio’r nawdd ychwanegol hwn trwy drafod â Phlaid Cymru. Caiff ei gyflwyno trwy’r awdurdodau lleol a’i dargedu at fusnesau’r stryd fawr a’r sector lletygarwch.

Ochr yn ochr â'r setliad, cyhoeddais yr wybodaeth ddiweddaraf am gynlluniau grant Llywodraeth Cymru ar gyfer 2017-18. Mae'r wybodaeth ddiweddaraf am nawdd cyfalaf awdurdodau lleol wedi ei ryddhau hefyd. A chymryd y flwyddyn nesaf ar ei hyd, unwaith yn rhagor ni fu gostyngiad mewn nawdd cyfalaf cyffredinol, sy’n dal i fod yn £143 miliwn.

Fel y gŵyr yr Aelodau, er mai’r setliad heb ei neilltuo yw'r ffynhonnell unigol fwyaf o nawdd sydd ar gael i awdurdodau, nid honno yw’r unig un. Wrth iddyn nhw osod eu cyllidebau a lefelau eu treth gyngor ar gyfer y flwyddyn nesaf, rwyf yn disgwyl i bob awdurdod ystyried yr holl ffrydiau ariannu sydd ar gael a meddwl sut y gallen nhw sicrhau’r gwerth gorau er budd trethdalwyr Cymru drwy ddarparu gwasanaeth effeithiol ac effeithlon, a defnyddio cyngor diweddaraf Swyddfa Archwilio Cymru yn eu hamgylchiadau arbennig.

Rydym yn cynnig cryn hyblygrwydd i awdurdodau yng Nghymru, nad yw ar gael i'w cymheiriaid yn Lloegr. Mae’r hyblygrwydd hwn yn caniatáu iddyn nhw ymarfer hunanlywodraeth ac egwyddor wrth reoli eu materion ariannol. Yn gyfnewid am hyn, mater iddyn nhw yw llunio eu cyllidebau yn gyfan, gan gyfuno adnoddau sydd ar gael yn genedlaethol â refeniw a godwyd yn lleol.

Ddirpwy Lywydd, mae hwn yn setliad teg ar gyfer llywodraeth leol mewn cyfnod heriol ac yn rhoi cyfle i awdurdodau ganolbwyntio ar y newidiadau mawr a fydd yn ofynnol i reoli'r lleihad mewn nawdd yn y cyfnod hwy.

Ailadroddaf y neges yr wyf wedi ei rhoi i bob gwasanaeth cyhoeddus yng Nghymru a'u partneriaid ers y gyllideb ddrafft gyffredinol ym mis Hydref: nawr yw'r amser i gynllunio ymlaen llaw yn bendant ac yn ddibaid ynglŷn â’r penderfyniadau hynny sydd eu hangen i wneud dewisiadau anos ac wynebu'r cyfnodau caletach sydd o'n blaenau yn y dyfodol. Yn y cyfamser, ac ar gyfer y flwyddyn nesaf, gofynnaf i Aelodau'r Cynulliad gefnogi'r cynnig ger eu bron y prynhawn yma.

It’s almost seven years since the Conservatives formed a Government in Westminster—seven years since they introduced their destructive austerity programme; seven years since the budgets of public services in Wales have been cut to the bone as a result of that. It was disappointing to see Labour Members of Parliament supporting the austerity charter before the general election of 2015.

The reductions in public services are truly having an impact on our communities. In light of the attention given to Brexit at the moment and the way in which the European Union was blamed for many of the problems in our society that arise as a result of austerity, we are at risk of forgetting that it’s ideology that drives austerity. It is ideology that leads to the dismantling of public services—the safety net that is so important to support our most vulnerable people—and it’s an ideology that I and Plaid Cymru reject entirely.

Following years of cuts to local authority budgets in Wales—a cut of 1.4 per cent in 2016-17 and 3.4 per cent in 2015-16—as part of the agreement on the budget recently reached, my party has ensured that an additional £25 million will be available to fund local authorities. As a result of this agreement, in 2017-18, some Welsh local authorities will see the first increase in their budgets for some years. But of course, in real terms, and taking into account factors such as inflation and the inevitable pressure for more services in areas such as social care, additional taxation and the apprenticeship levy, in real terms, this represents a cut to some local authorities. Although the settlement is an improvement on previous settlements, it is no cause for celebration, particularly bearing in mind that all other Government departments apart from central services have seen a far bigger increase in their budgets.

One issue I should highlight is the annual request that the Welsh Government should publish indicative figures for ensuing years with the settlement. In a post-election year, the local authorities would have expected Government to express their intent for 2018-19 and 2019-20 along with the 2017-18 settlement. The public purse is shrinking and we are all aware that more cuts are in the pipeline. And although local authorities in Wales have made savings of £700 million since the inception of austerity, a deficit of some £900 million is anticipated by 2019-20.

Austerity doesn’t work. Plaid Cymru has consistently argued since 2010 that we need to invest in infrastructure—roads, railways and broadband—in order to secure a strong economy that can lead to quality public services, which is what the people of Wales deserve.

I actually welcome the Cabinet Secretary’s final local government settlement for 2017-18, and we also welcome the commitment to a funding floor for local government settlements, as outlined in the programme for government. This, of course, complements the Barnett formula funding floor introduced by the UK Government and we hope that this will lead to some longer-term financial stability for our local authorities. This is the first increase in the settlement for four years, but of course it doesn’t compensate whatsoever for the £299 million that have been taken out of local government budgets since 2013.

I would actually agree with the Member Sian Gwenllian when she talks about indicative budget, because I know when I meet with council leaders and chief executives, they would like longer-term financial planning. I think in any business environment, you would want some indications as to what your settlement in going to be. The Wales Audit Office notes that, since 2010, local authorities in Wales have faced a real terms reduction of £761 million in aggregate external finance, which forms the bulk of its general revenue funding, including this year’s settlement. That’s cuts of around 7 per cent since 2013-14. However, in Powys, we see 10.88 per cent cuts; Monmouthshire, 9.98 per cent. Yet the eight local authorities who have faced the lowest cuts to their budgets—surprise, surprise—are all Labour led. These cuts have seen regulatory services spending slashed—planning, environmental health and food safety teams. All these have a significant role in the protection and well-being of our local residents.

We have called for years for a fundamental review of the funding formula. The standard spending assessment unit for a secondary school pupil in years 7-11 is over three times that of a pensioner aged 85 or over, and over 6.7 times that of a person with severe disablement. In an ever-aging society, and with so much evidence pointing to the need for a massive increase in spending on social care, it is disappointing that this is not addressed through the formula, by the Welsh Government, on an annual basis by the means of a fundamental review. Figures for dispersion, settlement and population thresholds are from data taken from 1991. And the deprivation grant was taken in 2000—during the millennium. Basing our local authority spend and requirements on such out of date figures is not boding well for our citizens in Wales.

Whilst welcoming the £25 million for social care, it must be remembered that a recent Health Foundation review on social care found that pressures on their budgets will require the budget to double over the next 14 years. Further, Cabinet Secretary, council tax in Wales has risen by, on average, 3.6 per cent in 2016-17. In 2016, Ceredigion, Pembrokeshire and Conwy have increased their council tax by an inflation-bursting 5 per cent—higher than all but three councils in England and Scotland. The average band D property is now liable for £1,374, yet in 1997, when you came into power, it would have been £495. Council tax in Wales has risen by 178 per cent under Welsh Labour. I understand, Minister, that you’ve mentioned previously that you would be reviewing council tax in Wales, and I would ask you, really, to outline some of your thoughts on how you intend to do this, moving forward.

Between 2011-12 and 2015-16, the Welsh Government received over £94 million in consequential funding as a result of the UK Government’s decision to provide grants for council tax freezes in England, but your Government, sadly, refused to utilise this money. It is a fact that council tax payers in Wales now pay the highest proportion of council tax in mainland Britain—in 2015—and Citizens Advice label council tax now as Wales’s biggest debt problem for the second year running. Cabinet Secretary, the Welsh Government has committed to undertaking this review, and I would really urge you to come forward.

Of course, the finger of blame is always pointed at UK Government austerity measures. Well, that argument is wearing rather thin now, given that it was the overspending policies of the previous Labour Government that have led to such measures being implemented. Let us not forget: £15 billion comes into Wales from the Treasury for a population of three million people. This is a devolved budget. You get the money, you set the priorities. These are your priorities. Please do not blame the UK Government for how you decide to spend your money. Thank you.

I was very tempted to get up and say that I agree with what Sian Gwenllian said and that I disagree with everything that Janet Finch-Saunders said, but unfortunately for everybody else, it’s not going to be quite as short as that.

This has been a much better settlement for local government than expected. Whilst generally welcomed by councils, it is still—let’s get the reality in there—a real-terms cut. The relative share of Welsh Government expenditure in health and local government continues to move in favour of health. I intend to do three things. First, I intend to again discuss the pressures on social care. I make no apology for that, as I strongly believe that social care is under greater pressure than any other service supported by the Welsh Government. Secondly, I intend to raise the importance of a range of council services, and finally I intend to link council services with health and well-being.

Social services departments in Wales are under more financial pressure than any other service area in the public sector, and I include the health service in that. We know that the population is ageing and that people are living longer—and many of us are very pleased about that—but we also know that, as people get older, they have greater care. We also know that people generally have their major health problems, having to go into hospital, in the last 12 months to two years of their lives.

Janet Finch-Saunders rose—

In a second.

But we know that they can need social care for 40 or 50 years. Janet Finch-Saunders.

Thank you. I appreciate you taking an intervention. You’ve heard so many times about the integration of health and social care. Moving forward, after the social care and well-being Act, nothing has changed. The amount of wasted resources at the moment, through bedblocking and delayed transfers, it’s just really unbelievable. I would ask you: which one of your Government Ministers is actually taking responsibility for this and driving that agenda forward?

I think you ought to ask a Government Minister that. But it’s really a lack of resources. Merging primary and secondary care worked so incredibly well, didn’t it?

Social care can be needed for decades. We have seen the effect of cutting local government expenditure and thus expenditure on social care in England. We know what it leads to: beds being blocked by those medically able to be discharged, but where a care package is not available, so the person cannot be discharged; a greater need for hospital care because of the lack of support at home. We also know that hospitalisation can reduce people’s capacity to look after themselves. Too often, those who are capable of living alone end up, after a short or medium-length stay in hospital, needing residential care. We need to value the services provided by social care. We need to ensure that social care is adequately funded.

I’d like to talk about the important range of local authority services. I could just list the services, but I’ve got two and a half minutes left and I wouldn’t get past the letter C. So, to highlight just a few of the less-talked-about ones: the importance of keeping the street lights on; trading standards ensuring that the public are protected against rogue traders; archive services; public protection regarding road safety, including school crossing patrols; ensuring buildings are safe, healthy and sustainable, and access for all users, whether domestic, commercial or public services; registering births, marriages and deaths; licensing taxis; art galleries, museums and theatres—just a few of the things that local authorities are providing to their communities.

Apart from community care, these are just a few of the ways that councils help reduce demand for the health service. One of the biggest boosts to health has been the reduction in the number of people smoking, and the work done by Communities First in promoting smoking cessation needs acknowledging. Getting people into a more active lifestyle; reducing obesity by increasing physical activity while providing more affordable leisure facilities, such as affordable gyms and affordable sports pitches; ensuring food hygiene in food premises; promoting cycling; and community centres allowing people, especially the elderly, to mix together—they’ll all improve health. We all know how important loneliness is, and the effect loneliness has on a number of elderly people. Community centres give them an opportunity to meet and mix together. Am I the only one who believes that reducing the number of sports facilities such as leisure centres will impact on people’s health?

Finally, I believe in the importance of local government services. I believe we must thank the Welsh Labour Government for not going along with the huge cutbacks made to local government in England, not slashing local government as they have in England, and the effect it has had on a whole range of services. Local government is important to all of us. We need to fund local government adequately or we will all miss the very important services it provides, which we all use.

This local government settlement is the first for four years to show an overall increase in funding, and this is welcome, and UKIP will be supporting the settlement. However, we do need to ensure that local authorities make the best use of this funding, and this entails clamping down on wasteful council spending.

The Llywydd took the Chair.

One new problem area is the use of Government procurement cards. Some £92 million has been spent on these cards by Welsh councils over the last five years, so we are talking about significant amounts. The National Audit Office reported in 2012 that procedures relating to these cards were too lax, and there was a lack of central guidance on when it was appropriate to use such a card. Rather remarkably, Pembrokeshire council has spent most on procurement cards, a total of £26 million since 2011—almost £8 million more than any other local authority. Given that the same council was also involved in a long-running scandal over senior officer pay, this should perhaps set the alarm bells ringing. And senior officer pay is another element that we need to rigorously monitor.

Another major issue is the decline of council services. Many local authorities are now providing much less of a service than hitherto, evidenced by things like the closure of local offices and their replacement by a call centre, the outsourcing of community facilities, and reductions in essential services like rubbish collection.

So, although it’s a reasonable settlement, we do have to rigorously hold local authorities to account as far as we can in how they spend their money.

I call on the Cabinet Secretary to reply to the debate.

Diolch yn fawr, Lywydd. Thanks to all those who’ve taken part in the discussion. And thank you to those parties who’ve indicated their support for the motion this afternoon. I’ll take the four contributors in reverse order, if I could.

Gareth Bennett is quite right to say that, in these very difficult times, no local authorities can afford to do anything other than in the most efficient manner. We work hard with them to try and secure that, using the advice that comes from the audit office and others. In the end it is for electors to make sure that they hold local authorities to account for the way in which they discharge their responsibilities.

Mike Hedges outlined those large number of services that local authorities provide, which very rarely make the headlines, but which make such a difference to the ability of citizens to go on leading lives of the sort that they would wish to see. In my discussions about these services with local authorities over the summer and beyond, they point themselves very strongly to the way in which regional arrangements can help to pool resources, to share scarce staff, to make sure that there is expertise available. I hope to say more on that to the National Assembly as those discussions with authorities draw to a close. Mike is of course right to point to the pressures on social care. That’s why there is £25 million in the settlement for social services. That’s why we’ve added another £10 million in this final settlement, to recognise pressures on social care. That’s why the £60 million intermediate care fund has been sustained into next year as well, to help bring those services together.

Janet Finch-Saunders intervened to point to delayed transfers of care figures. It took a bit of bravery, I thought, on her part, given the headlines that we’ve read every day over the last 10 days about the utter collapse of social care in England and the impact that that’s having on social services there. And here, in Wales, we provide, from this Government, the investment that is needed to sustain our social care services. We do not invent some hokey scheme in which those most unable local authorities are asked to pick up the pieces for the failure. An autumn statement with not a penny piece for social care services in England and no consequential for us in Wales. But, working with Plaid Cymru, we were able to create—[Interruption.] Well, yes, working with Plaid Cymru, we were able to identify some common priorities, and the investment in social care reflects that.

I agreed with what Janet Finch-Saunders said about the need to make sure that we have a funding formula that is fit for the future and, next week, I will meet with the finances sub-group that involves people from local government and beyond, and independent experts, to look at ways in which we might be able to reform the formula here in Wales. Where she was quite wrong was to suggest that the information that we feed into the current formula is not up to date. It’s updated every single year to reflect population shifts, to reflect the number of children in our schools, and this year, for next year’s settlement, to implement some very important changes in relation to sparsity. The two local authorities who do best of all out of the changes for next year are Ceredigion, which sees its budget go up by 0.9 per cent, and Gwynedd, which sees its budget go up by 1.1 per cent. I don’t think either of those are run by the Labour Party, as Janet suggested.

Let me go to the points that Sian Gwenllian made in opening, because she absolutely rightly drew our attention to the ideological drive that lies behind the flawed, failed and self-defeating policy of austerity, and the real and direct impact that this has on the lives of people across Wales. Through our efforts and the discussions that went on behind the budget, we’ve managed to protect local authorities as best we can next year. But, as Sian Gwenllian said, despite those efforts, the settlement remains very challenging. What we know, sadly, because of the budgets that lie ahead of us as a National Assembly, is that the impact of austerity in the budgets that we can provide to local authorities will go on being challenging, and more challenging, over the rest of this Assembly term. In the meantime, Llywydd, I believe that the settlement in front of the Assembly this afternoon reflects a fair outcome for local government. It allows them to go on investing in vital local services. They will now have to intensify their efforts to achieve the changes needed to be able to sustain those services and deliver the best outcomes for people across Wales. The settlement in front of Members this afternoon provides a platform for that to be carried out, and I commend it to the Assembly.

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

Voting deferred until voting time.

We now move to voting time, and unless three Members wish for the bell to be rung, I will move immediately to voting time. Do three Members wish for the bell to be rung? Okay, yes, there were three there. Therefore, the bell will be rung.

The bell was rung to call Members to the Chamber.