And therefore the next item is the debate on the first supplementary budget 2017-18, and I call on the Cabinet Secretary for Finance and Local Government to move the motion—Mark Drakeford.

Motion NDM6353 Jane Hutt

To propose that the Assembly, in accordance with Standing Order 20.30, approves the First Supplementary Budget for the financial year 2017-18 laid in the Table Office and emailed to Assembly Members on Tuesday, 27 June 2017.

Motion moved.

Thank you very much, Llywydd. I move the usual motion for the first supplementary budget before the National Assembly. This is the first opportunity to improve budgetary considerations for this financial year, which were published and approved by this Assembly in January. The first supplementary budget is often quite simple in terms of its remit, and this year is no different. It’s mainly of an administrative nature. It regulates a small number of allocations from reserves, switches between resource and capital and transfers between portfolios. It includes adjustments to the Wales departmental expenditure limit budget to reflect transfers and consequentials received in the UK Government’s March budget 2017. It also reflects changes in the annually managed expenditure forecast, in line with our latest details provided to Her Majesty’s Treasury. However, it represents an important part of the budget and scrutiny system, and I would like to take this opportunity to thank the Finance Committee for considering this budget in detail and for the report that was published at the end of last week. I will respond formally to that report in due time.

Llywydd, mae nifer o’r newidiadau a nodir yn y gyllideb atodol gyntaf yn dod o gytundebau a wnaed gyda Llywodraeth y DU ac eraill. Mae cytundeb ar drefniadau llywodraethu ar gyfer y fargen prifddinas Caerdydd yn golygu bod yr £20 miliwn erbyn hyn wedi ei ryddhau ar gyfer y diben hwn; £7.18 miliwn gan y Swyddfa Gartref ar gyfer ein cyfran o'r derbynebau gordal iechyd mewnfudo wedi ei ddyrannu i brif grŵp gwariant iechyd, llesiant a chwaraeon yn y gyllideb atodol hon; mae £20 miliwn o bunnoedd o gronfeydd wrth gefn wedi ei ryddhau ar gyfer buddsoddi mewn gofal cymdeithasol, ac mae swm ychwanegol o £750,000 mewn refeniw a £1.6 miliwn o gyllid cyfalaf wedi eu dyrannu ar gyfer darparu Wi-Fi ar drenau ac mewn gorsafoedd. Ac rwyf, wrth gwrs, yn ymwybodol o'r un argymhelliad penodol a wnaed gan y Pwyllgor Cyllid yn hyn o beth.

Llywydd, mae'n rhaid i ni hefyd adlewyrchu’r addasiadau a wnaed i derfyn gwariant adrannol Cymru gan Lywodraeth y DU, ac mae'r gyllideb atodol yn diweddaru'r sefyllfa a nodwyd yn y gyllideb derfynol ym mis Ionawr ar gyfer symiau canlyniadol refeniw a chyfalaf. Mae'r gyllideb hon yn ein galluogi i adlewyrchu'r diwygiadau a wnaed yn y cyfrifoldebau portffolio gweinidogol. Yn dilyn trosglwyddo cyfrifoldeb am Gyrfa Cymru i'r Gweinidog Sgiliau a Gwyddoniaeth, mae £18.8 miliwn mewn arian refeniw a £6 miliwn o gyllid gwariant a reolir yn flynyddol wedi ei drosglwyddo o'r prif grŵp gwariant ar addysg i'r prif grŵp gwariant economi ac isadeiledd. Nid oes unrhyw gyllideb wedi'i thorri o ganlyniad i'r gyllideb atodol, ac mae unrhyw addasiadau negyddol ar lefel prif grŵp gwariant wedi eu gwrthbwyso gan addasiadau cadarnhaol cyfatebol mewn prif grwpiau gwariant eraill. Mae effaith net y newidiadau hyn ar y gyllideb gyffredinol yn sero.

Dros y misoedd nesaf, byddaf yn monitro ein sefyllfa ariannol yn ofalus, ac rwy’n bwriadu cyflwyno ail gyllideb atodol yn yr amserlen arferol. Rwyf yn parhau i archwilio gyda chydweithwyr yr achos dros ddyrannu yn ystod y flwyddyn o gronfeydd wrth gefn, gan gadw lefel ddigonol o adnoddau i gydweddu â'r cyfnod ariannol ansicr yr ydym yn gweithredu ynddo. Bydd hyn yn ein galluogi i ymateb yn ôl yr angen i bwysau ychwanegol posibl ar y gyllideb, ac i gario cyllid ymlaen drwy drefniadau wrth gefn newydd Cymru, i warchod yn erbyn toriadau pellach i'n cyllideb yn 2019-20 a thu hwnt. Bydd unrhyw ddyraniadau pellach o gronfeydd wrth gefn yn y flwyddyn hon yn cael eu hadlewyrchu yn yr ail gyllideb atodol.

Llywydd, hoffwn ddiolch i'r Pwyllgor Cyllid unwaith eto am ei waith craffu ar y gyllideb atodol hon, a gofynnaf i’r Aelodau ei chefnogi.

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

Thank you, Llywydd. And, generally, the Finance Committee was content with the proposals, and noted that the allocations in this supplementary budget were relatively small. However, the committee welcomed the opportunity to discuss the changes with the Cabinet Secretary, particularly his commitment to continuing to use the supplementary budget process.

In terms of the social care, health, well-being and sport portfolio, the committee considered the two revenue allocations that had been made from reserves, namely £20 million for social care funding, and £7.2 million for the immigration health surcharge, as we’ve just heard. In relation to the £20 million, we note that transfers out of the social spending programme area to elsewhere in the MEG means that the overall increase is actually £18.7, because of changes to other parts of the MEG. However, having said that, we were pleased to see that the funding is being allocated to social services, and is being distributed to local authorities according to their needs, and I think my colleague Mike Hedges will have a little more to say about that.

In terms of borrowing, the committee is interested in decisions that have been taken to reclassify, for example debt guarantees and housing association debt, and how this may impact on the prioritisation of capital spending and borrowing plans going forward. We will consider this as part of the draft budget scrutiny in the autumn. We also had an opportunity to briefly consider the implications of the budget arising from the decision not to proceed to support the Circuit of Wales. The Cabinet Secretary assured us that no other projects face the same restrictions regarding off and on-book accounting. There is certainly more scrutiny to be done on the implications of this decision as the Assembly examines the draft budget, but it is an example of how beneficial it is to have a supplementary budget and to scrutinise the budget process with the Cabinet Secretary.

The economy and infrastructure MEG shows an additional allocation for Wi-Fi provision on trains and in stations. We urge the Welsh Government—and this is the only recommendations of the committee—to ensure that any future train franchise is contracted tightly to ensure that it’s the responsibility of the contracting company to reinvest profit to fund improvements.

In relation to the health board funding, the aggregate position for all local health boards for the three-year period up until 2016-17 was a net overspend of £253 million, which is almost £0.25 billion, of course. We note that the Welsh Government is continuing to provide cash support to meet the financial demands of the LHBs and repayment is yet to be agreed. We remain concerned about health board overspends and the impact of the NHS finance Act is something that is currently of interest to many Assembly committees. So, as Chair, I will be liaising with the Chairs of those committees in order to ensure that the issue is properly considered going forward.

I’m pleased to contribute to today’s debate, and to have taken part in the scrutiny of the supplementary budget by the Assembly’s Finance Committee that was mentioned by the Cabinet Secretary earlier, the conclusions of which are in our report, quite a succinct report, well worth the read—short, yes—well worth a read when Members get a chance.

This is the first supplementary budget, as we’ve heard from the Cabinet Secretary. Can I concur with the words of the Chair of the Finance Committee? A supplementary budget may be just one technical way of making in-year changes to a budget, but the Finance Committee did conclude that it was an appropriate way and the most appropriate mechanism to make this type of in-year adjustments. We need to ensure that it is continued to be used as the mechanism in future by future finance Secretaries. It’s transparent, understandable and it’s a system that has worked in the absence of a preferable solution. We believe that supplementary budgets are the way ahead. And we do believe that the finance Cabinet Secretary has dealt with the committee in a very open and transparent way, but we did question whether in future Cabinet Secretaries for finance might be quite so open, so there may be a case for looking at regularising the supplementary budget process to make sure that the process is as smooth in future as it has been hitherto.

Without going into all the areas that the Chair of the committee has mentioned, I do appreciate that this is a mainly administrative supplementary budget and it does include adjustments and various consequentials to the Welsh block, which resulted from the 2017 UK budget.

Specifically, I welcome the £20 million for the Cardiff capital region city deal, and also the £750,000 provision for Wi-Fi on trains and stations. That was discussed to a great extent during our scrutiny sessions. That was to be welcomed. However, I’m afraid to say Welsh Conservatives will be abstaining on today’s motion since it does ultimately amend the previous budget, which we did not support.

I will be very brief, Llywydd. We will also be abstaining because that is in accordance with what we did on the budget that this supplementary budget changes, of course. I know that I do have some previous with supplementary budgets, but I thought I should tell the Cabinet Secretary that we are going to allow this supplementary budget to go through. I think I’ve upset him once today already, so I’m not going to do it a second time. I don’t think that I have too much to add to the detailed scrutiny that has taken place. The only thing I would say is that there’s a great deal of scrutiny of supplementary budgets, and that’s a good thing of course, but are we getting the balance right in terms of the main budget and the level of information available to us? There was reference to the fact that there’s no need for additional funding for implementing the new policy on the new vehicle park in Ebbw Vale because funds can be vired within current resources, which does raise a question whether there is enough transparency and detail in passing the full budget in terms of the specific purposes of the sums allocated under the main headings. So, it’s a matter of getting the balance right. There’s a great deal of scrutiny of this supplementary budget, which in reality, as the Cabinet Secretary said, is mainly administrative in nature, where perhaps we haven’t had sufficient information yet, in looking at the full budget, to enable us to do our work as a Parliament.

Will you take an intervention?

Yes, of course.

I’ll just bring the Member some news of great joy: there’ll be even more time to scrutinise the draft budget in the autumn, extending the period from five weeks to eight weeks. So, I hope that helps.

Well, I am absolutely delighted. ‘Hallelujah’, is what I would say, of course. We all look forward to that and it’s a pity that we have to wait until after the summer recess to undertake that scrutiny, but certainly I look forward to seeing the outcomes of the other negotiations that are ongoing between the Finance Committee and the Cabinet Secretary in terms of restructuring the whole process, in order to allow the kind of transparency I referred to earlier.

Thank you, Presiding Officer. I just want to raise three very brief points. First, I welcome the decision of the Cabinet Secretary for Finance and Local Government to produce a first supplementary budget for scrutiny by the Finance Committee. I strongly agree with the Finance Committee’s recommendation, and what’s been said by Nick Ramsay and Simon Thomas, that:

‘Whilst the changes in this supplementary budget are not significant, the Committee agrees with the Cabinet Secretary that bringing forward a supplementary budget is an appropriate mechanism at this stage and wishes that this procedure continues to be used.’

Unfortunately, it wasn’t put into the Standing Orders, but I think it’s becoming, now, custom and practice that we do have it, and I think that any future Cabinet Secretary who didn’t bring it forward would have a very unhappy Finance Committee and a very unhappy Assembly.

However small the change, I believe that a supplementary budget should be produced. It give clarity to both the Finance Committee and to this Chamber, far more than the alternative of a letter to the Finance Committee would do, just telling us what just happened. I think this the right way, and I’m very pleased that the Cabinet Secretary has kept on doing this.

The second point I’d like to make is how pleased I am that the additional social services money is provided to local authorities not through the full standard spending assessment, but through the social services part of the standard spending assessment. This will only make a small difference, but the principle, I believe, is an important one, and one I’ve called for previously. I think it is important, because if there were much larger sums involved, it would start having a significant effect on which authority got the extra money.

Finally, on health, the committee noted that, for some local health boards, the Welsh Government is still providing additional cash support to enable local health boards to meet their financial demands, and that repayment of these overspends is yet to be agreed. The committee recognises the importance of following up on the impact the National Health Service Finance (Wales) Act 2014 has had in terms of identifying improvements to financial, service and workforce planning, future sustainability of services and work to address whether the allocations between local health boards accurately reflect needs. Put simply, are the overspends due to poor financial management or is the funding share wrong?

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

Diolch yn fawr, Llywydd, and thanks to all those Members who have recognised the importance of bringing forward this supplementary budget.

Rwy’n cydnabod beth roedd Adam Price yn ei ddweud am y balans rhwng y prif gyllideb a’r gyllideb atodol, ond, fel dywedodd Simon Thomas, mae’n rhan o gylch y ffordd rydym ni’n gwneud pethau, a, thrwy weld beth rydym ni’n ei ddweud yn y gyllideb atodol, mae’r Pwyllgor Cyllid yn gallu paratoi’r tir am y gwaith y maen nhw’n mynd i’w wneud yn yr hydref ar y gyllideb lawn.

I just picked up a couple of points that were made, specifically about the budget. Nick Ramsay mentioned the £20 million for the Cardiff capital city deal. It’s a good example of what the supplementary budget can do. Once the arrangements were in place to oversee the deal, it unlocked the door to the money that comes from the UK Government in this case. It’s £10 million in the last financial year, it’s £10 million in this financial year, and it’s the UK Government’s part of the deal that has been unlocked by those arrangements, and which we report here. Mike Hedges pointed to the fact that the single greatest beneficiary in terms of Welsh Government investment in the supplementary budget is the £20 million being provided for social services, and I felt it was right to use the social services component of the local government formula to distribute that money, because it is for those social care purposes.

We will no doubt pick up those wider conversations about investment in health and other pressures on the Welsh Government’s budget when we come to the scrutiny of the draft budget in the autumn. The background to that, Llywydd, remains deeply uncertain. In recent conversations with the Chief Secretary to the Treasury, I continued to press the case for an end to the programme of austerity in the United Kingdom, but, to date, this policy remains firmly in place. Although this supplementary budget puts in place a strong foundation for the current year, until there is a change of course by the UK Government, there is no doubt at all that more difficult budgetary decisions lie ahead. I move the motion.

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.