7. Will the First Minister make a statement on the Welsh Government’s overall strategy for the funding of local government? OAQ52266

We support local government services through a mix of core revenue funding, capital funding and specific grants as appropriate. Our strategy continues to be to protect local government from the impacts of austerity within the resources available to us as a Government.

Thank you, First Minister. I think in these times of Tory austerity, the approach that the Welsh Government has taken is to be welcomed. I'm aware, of course, that, for the current 2018-19 budget round, less of this money was hypothecated or ring-fenced, therefore giving greater flexibility and discretion over local authority spending priorities.

From my recent questions to the education Secretary, you'll be aware that, in Merthyr Tydfil County Borough Council, this means that school funding is being cut and breakfast clubs are under threat, which is actually contrary to the council's own budget consultation in which the public said that schools and education were their No. 1 priority for the borough. So, do you agree with me that this must draw into question whether the Welsh Government can risk removing ring-fenced funding from any further priority areas, such as Supporting People, for example, if some local authorities are going to choose to cut in your determined priority areas?

Well, the Member makes a fair point. We look, of course, to give as much flexibility as possible to local authorities and they are answerable to their electorates for the decisions that they take. I would've hoped that any local authority would see education as a very strong priority. I'm surprised to hear what the Member has said about her own local authority, and it is the case that local authorities need to demonstrate that, as they're given greater flexibility, they continue to prioritise spending in those areas where money is needed most. And education is one of those areas.

The 'Reforming Local Government: Power to Local People' White Paper acknowledged directly that there is a need, First Minister, for a more fundamental review of the funding of local government. The current Green Paper also notes that local authorities have highlighted a number of additions in relation to funding. Reacting to the Green Paper, the WLGA states that it

'will continue to press the case for proper funding' of authorities, and a number of our local authorities now remain committed to calling for appropriate and equitable longer term funding budgets. The Vale of Glamorgan note that there is a well-made case for changes to the formula, as do many other local authorities. When one considers the correspondence your Cabinet Secretary has received, but which he ignores—. He isn't listening now; he's actually preferring to completely ignore the question, and he is the Cabinet Secretary for local government. So, as well as ignoring those calls and ignoring this question today—. Will you liaise with and talk to your Cabinet Secretary, please, to ensure that there is a more sustainable funding model and formula to be established, going forward? It's the very least that our local authorities deserve.

Well, I think the Vale of Glamorgan need to explain why they spend less on education than anywhere else in Wales, per head. That is under her party, and that is something that they will need to explain to their electorate. So, what I can say to her is this: that we fund local authorities at a level far higher than would be the case if they were in England, we have sought to protect them as much as we can, but it's inevitable that there will be difficulties and a squeeze of local authorities, because we are ourselves being squeezed. Can I suggest that she takes up the issue with her party in London, who continue to impose a squeeze, year after year after year after year, on Welsh Government, on the Welsh budget, while at the same time chucking £1 billion towards Northern Ireland to buy a handful of votes? That is how low the current UK Government have got—no strategy, all about buying votes.

One of the main arguments made by your Government over the need to reform local government in the way proposed in the Green Paper is the need to ensure financial sustainability of councils for the future. Council leaders the length and breadth of Wales of all political hues have strongly questioned whether merging councils would save money. So, on the basis of that, what financial assessment has the Government undertaken in order to support the objectives of the Green Paper? How much exactly do you hope to save, and over what period of time? And what will be the initial costs of implementing this restructuring?

Well, there is a cost if we were not to look at any kind of reform in the local government system. At one point, there were six local authorities in special measures as regards education, and Anglesey had been taken over completely. That demonstrates to me that things are not currently sustainable. We must ensure that local authorities at least work on a regional basis together. It’s not good enough for them to say, 'We're just not going to work with those next door to us.' We’ve seen the great change and difference that has been made in education with the consortia, and no local authority in Wales can work properly on behalf of their people unless they collaborate with other authorities. So, funding is important—we all understand that—but the way in which people work together is also important too.