4. Will the Cabinet Secretary make a statement on the local government settlement for Pembrokeshire County Council? OAQ51952

For 2018-19, Pembrokeshire County Council will receive £162 million from Welsh Government through the local government settlement.

I thank the Cabinet Secretary for that response. The medium-term financial plan of Pembrokeshire County Council says that the county has the largest shortfall between its actual spending and what the Welsh Government predicts it needs to spend to deliver services. And because the Welsh Government assumes that the council tax is collected at the same level for every authority, Pembrokeshire loses out significantly. Welsh average band D council tax for 2017-18 is £1,162. That's £279 more than Pembrokeshire at £883. That's a 31 per cent variance, which is, of course, enormous. It looks as though Pembrokeshire County Council here—and others that are in the same position, or perhaps not quite so severe—is, in effect, being penalised by the Welsh Government for its past success in containing costs while continuing to deliver services. The perversity of the system is that the more you spent previously, the more you would get by way of a block grant from the Welsh Government. Isn't it time to address this perversity?  

The variance, of course, is caused by decisions taken by Pembrokeshire County Council, and I strongly support Pembrokeshire's right to take those decisions. Pembrokeshire County Council then deal with the consequences of the decisions that they themselves take. I think it's important that we do have a vigorous debate locally about local taxation. I believe that it's important that local authorities are empowered to take decisions over taxation, and I think it's important to have a strong debate about the consequences of those decisions, and we have had a flavour of that in this Chamber and elsewhere over the past few months in reference to Pembrokeshire.

I hope that we will see, through the reforms that we are debating, more decisions taken locally. I hope that we will see more vigorous debate in the future about both those decisions themselves and the consequences of those decisions. Of course, I'm always open—as I've said in reply to previous questions—to a conversation about the funding formula. I'm always open to conversations about amendments to that. But, fundamentally, decisions on local taxation are decisions, quite rightly, for local authorities, and the consequences of those decisions are also, quite rightly, for local authorities.

Of course, if I were to move from Ceredigion to Pembrokeshire I would save £300 per annum straight away, but I would live in a county where a national intervention has been required by the Welsh Government in terms of children’s issues and education, and where there have been a number of failings over the past few years because of decisions taken locally to keep council tax low, not just in terms of the whole of Dyfed, but for the whole of Wales—the lowest possible council tax across Wales. And there is a price to pay in terms of the underinvestment that there’s been over the past few years. The council has now taken the decision, and, like you, I support the decision taken both ways—it's a local decision. They’ve taken the decision to increase council tax substantially. My question to you is: do you see this as part of a plan to move the county council to a more central position in the range of council tax that we see in Wales? Is this a one-off that won’t truly tackle the problems that the county council has, or is this something that they are discussing with you as something that will work over the next two or three years to re-establish the best services that local people deserve to have in Pembrokeshire?

I have discussed this with Pembrokeshire council, but they have a local mandate, of course, and it’s a mandate that they have to carry out. They are currently considering the implications and the legacy of the decisions that were made in the past and looking at how they will develop a financial strategy that will ensure the future of local services and also having a reasonable level of council tax. But we agree that that is a matter for them. I don’t want to use this platform here to offer comments on that. I don’t think, as someone who lives outside of Pembrokeshire, that it is for me, because it is for the people of Pembrokeshire to make these decisions and to hold the discussions locally and then for the council to act upon the decisions that are made.