Item 5 is a statement by the Cabinet Secretary for Local Government and Public Services: local government reform—next steps. I call on the Cabinet Secretary, Alun Davies.

Thank you, Deputy Presiding Officer. When I first spoke with Welsh local government last November, I told them that I believe in the public good and the public purpose and I very much believe in local government. It is these principles, Deputy Presiding Officer, that drive this Government.

For a great deal of time, many groups and individuals, including local government leaders, have been telling me that the current system and structures for local government are simply not sustainable. In response to this in March of this year, I published the 'Strengthening Local Government: Delivering for People' Green Paper consultation to reinvigorate the debate on the future of local government.

The Green Paper set out our vision for stronger, more empowered local authorities that can provide bold, determined and focused local leadership. Councils with the space to flourish, to be innovative, to work effectively together and with partners, with clear lines of accountability to citizens. For me, this is not an issue of geography or population size, but one of empowerment of local councils. It is not a dogmatic argument based simply on numbers; it is a pragmatic, but principled one that should be rooted in the kind of local democracy we want as a country and that also recognises our communities, local identities and places.

I have been clear that I want local government to build on its strengths. I see local authorities as the shapers and makers of places, working to get the best outcomes for the people they serve. I want local government to have the freedom to make decisions to help them deliver the standard and quality of services that their communities expect and require.

The Llywydd took the Chair.

The Green Paper consultation set out proposals to create larger, stronger and more sustainable councils as we set out in our manifesto. The Green Paper offered three possible routes to achieve this: voluntary mergers; phased mergers with comprehensive mergers at the local government elections after next; and comprehensive mergers at the earliest opportunity. It also highlighted other proposals for consideration, including wider recognition of the valuable contribution of elected members, the potential scope for sharing services and additional powers, and flexibilities for local authorities. It also recognised the importance of continuing with clear, determined regional working by authorities, which is already seeing benefits to many services.

The Green Paper proposed a specified future footprint for local government reform. I was very clear from the outset that I believed that such a footprint would be important to deliver consistent and transparent change, and we have been engaged in a discussion on what this might look like, if and how it might be applied.

In total, Presiding Officer, we received over 170 responses to this consultation, and today, I will be publishing a summary of those responses. I am pleased that we have had responses from across Welsh society and that many members of the public responded, demonstrating the value that they place on local democratic accountability. The majority of those who responded were in favour of creating fewer, larger local authorities and this was particularly reflected in the responses from members of the public. At the same time, the vast majority of local authorities were not supportive of such change in principle, although there was an openness to locally led voluntary change.

I have said throughout this consultation that I was not wedded to any single map and that I was inviting debate and proposals for an alternative to the options we set out. It is plain from the responses to the Green Paper that there is no clear agreement on a definitive map, but at the same time, no alternative has been offered.

I have listened carefully throughout the consultation and have always said that I want to work with local government to agree in partnership a way to ensure a sustainable future for local communities. However, no change is not an option, and neither is finding more money at a time of continuing austerity and the confusion over Brexit. I want to work with local government to agree a shared vision for the future, and to jointly develop solutions to the challenges they face. Those challenges about how we maintain progressive public services in the context of long-term austerity are simply not going to go away.

The consultation has suggested that there is an appetite amongst local government to work together to progress voluntary mergers and to increase and improve regional working. I therefore intend to introduce the local government (Wales) Bill early next year to legislate to enable this to move ahead at the earliest opportunity. This, Presiding Officer, was confirmed by the First Minister earlier today. The Bill will also make provision for electoral reform, changes to the governance and performance arrangements for local government, and a number of other proposals, including the general power of competence, which has been broadly supported at consultation.

But we cannot ignore or move away from the need for more fundamental reform. I therefore intend to establish, in partnership with the Welsh Local Government Association, an independent working group to drive a shared approach that will shape the future of local government and service delivery in the future. I'm very pleased to say that Derek Vaughan has agreed to carry out the role of chair of this group, and the membership of the group will be drawn largely from local government and supported by a joint Welsh Government and WLGA secretariat. It will take into account the broad range of views and ideas expressed during the consultation period and debate. The group will be charged with proposing a way forward on structures, additional powers, flexibilities and support for change. The output will be a farsighted and long-term plan for change and will include proposals for structural change driven by local government and how those changes and this process and programme of reform might best be supported by and through Welsh Government.

Presiding Officer, I will continue to update Members on the work of the group as it progresses.

Cabinet Secretary, thank you for your statement. Now, from the start, we as Welsh Conservatives did raise initial concerns about the Green Paper proposals. You and your predecessors, for the past three or four years, have been playing with the hearts, minds and lives of many working within our local government organisation. The aim of your Green Paper in March was supposedly to invigorate the debate on local government in Wales, and you mentioned at the time your vision for stronger, more empowered local authorities, focusing on local leadership. Yet, in reality, you pushed the button of turmoil, demoralisation and destabilisation once again within offices and council chambers across Wales.

You might see this as flexing your muscles of power, but, frankly, many, including members of your own party, thought that your actions were insensitive and calculating. You undermined the intelligence and dedicated commitment of our council group leaders, our councillors and our officers in their rejection of your preposterous proposals. You boast about 177 responses to the Green Paper consultation, in a population size of over 3 million people, it's not a lot, and, to be honest, I take credit for some of those, because we were actually writing it up in our news column in the local papers and making people across Wales aware of this consultation, because, too often, these go above the heads of the very people whose lives they affect.

You also know that the local authorities were sending copies of their responses to me at my request, so we were ahead of the game in analysing these responses, and we've challenged and scrutinised you since March, all the while, whilst people were very worried in local government about what you were moving towards. This clearly proved that you were going off on a mission well above the heads of these good people who work in local government, delivering vital services.

There are other ways of going about achieving some of the fundamentals that you are aiming for. You mention that no-one is bringing forward alternative proposals, yet I would beg to differ. Local authorities and the WLGA broadly noted the ongoing success of collaborative and regional partnership working, and they want longer for these principles to enable and to bed in. Of concern, though, is that you did not actually ask for any alternative suggestions, but merely offered these three possible routes towards forced mergers. You speak of empowerment for local authorities, but your Green Paper gave them very little. Would you not agree with me that expecting responses to a question you did not ask is a very poor way to undertake consultation?

Moving on to voluntary mergers, in reviewing the responses of local authorities, I must admit that I did not note the appetite that you describe, still, for voluntary mergers amongst local authorities. Denbighshire stated,

'The past experience of some authorities with regard to voluntary mergers and Government’s response to them is hardly encouraging.'

Conwy noted that,

We do not agree now that merging local authorities is appropriate.

That opportunity was lost when Leighton Andrews rejected them offhandedly at the time. The Vale of Glamorgan said that it was,

'taking the position that a merger with any other local authority is an untenable prospect in securing the quality of services rightly expected by our citizens.'

Now, given that sections 3 to 10 of the Local Government (Wales) Act 2015 already provide local authorities with the opportunity to voluntarily merge, can you advise as to why, if such an appetite exists, that you are not pushing that model forward? This, what you're bringing forward now, appears to be just another recycling of Leighton Andrews's plans. Why do you not consider amending the Act rather than bringing forward another raft of costly new legislation?

I also note your proposal to establish a new working group with the WLGA. As a result of all this local government reorganisation over the years, we've seen a Public Services Staff Commission set up, and there's now been a workforce partnership council. So, what is the point of setting up another costly group for local authorities to feed into? Why not consider streamlining these structures? You say that finding more money is not an option. However, we now know that local government, housing, education, social services and health are all intrinsically linked. Why, oh why, will you not seek to work with your other Cabinet Members around the table and seek a wholesale reform of all our public services across Wales, removing the numerous and costly tiers of bureaucracy and waste that exist within all five areas of this service delivery, and which have actually grown in 20 years of devolution in Wales?

The Williams commission gave us 62 recommendations, yet your Government and your predecessors have only ever taken four forward—all relating to local government reform. Is it not time now to get that report out again, blow the dust off it, and work with the panel, who were very good cross-party individuals, to revisit those proposals, and work with key stakeholders towards a wholesale reform of our public service delivery in Wales? Until you grasp that nettle, we are just going to carry on and on on this magic roundabout.

Presiding Officer, I'm afraid I'm going to start my response this afternoon by breaking Janet's heart. I'm sure she didn't intend this, but I actually think her remarks are very helpful, and I actually agree with much of what she said. I know this is somewhat unusual; I can see the Presiding Officer looks quite surprised as well.

No, I'm merely smiling. It's the end of term; I'm smiling.

We can agree on some things. Much of what has been said by the Conservative spokesperson, I think, makes a great deal of sense, and this is why I hope that the way in which we work with the WLGA and take forward a reform programme won't simply look at the structures, but it will look at how we work together as a Government and systems of governance within this country. I agree that there is a great deal of complexity, and I agree, and I know my colleagues in Government agree, that one of the objectives that we need in taking these matters forward is to streamline existing structures, and to streamline existing processes, to make Government appropriate and not as large as perhaps we're able to do so. The way in which we're going to take this forward will clearly look at the sorts of structures we have in place, but I hope that it will not be limited to a dry and sterile debate about either the number of local authorities we have in this country or the boundaries of those local authorities. I hope that we will be able to have a much more stimulating conversation about where services are best delivered and how services are best delivered for the citizen.

And I think, if I may say this, where I do disagree with the Conservative spokesperson, it was her lack of emphasis on the citizen and the place and the rights of the citizen. We all exist to serve the people of this country. Local authorities and this Government and this place exist to serve people, and it is the people that we serve that should be at the centre of our thoughts, and not simply the structures that exist in order to provide those services.

So, let me say this: it is not right to suggest that this process has either created turmoil, destabilisation or is insensitive, which are the words the Conservatives used. In fact, one of the issues that is constantly brought up to me, and brought up with me, by people like public service workers and by elected leaders up and down the country is the impacts of austerity on their budgets and their ability to deliver services. In all the debates that we've had here—and I've told her this before, and I will tell her again, I'm afraid—there isn't a single local authority leader, not one, across Wales who is saying what we need in Wales is the sort of Conservative policies that are being delivered in England. Nobody says that—nobody at all. I think it's fair to say that she can read the consultations throughout her summer break, but she will find very little evidence of that in any of the responses that we received. What we want to be able to do, though, is to do something that is very different. We want to take the best from the collaborative and regional working that she's described, and I accept that that is an important and central part of how we take these forward. We want to empower local authorities, but we want to empower local people as well. What we want to be able to do is to ensure now that we deliver the sorts of structures in Wales that are appropriate to a country with a devolved Government, and that are appropriate to a country of 3 million people. I hope that we will be able to do that in consultation with each other, and that we will see a far greater and far-reaching and far-sighted reform programme that goes beyond a dry and sterile conversation about the number of local authorities in Wales.

Thank you for the statement. Today's statement, of course, confirms what was reported in the press following the WLGA conference in Llandudno, which, of course, is that you are giving up on your plans to force council mergers—for the time being, at least. So, thank you for making the statement in the Chamber, which is the appropriate place for announcing important policy changes.

The Green Paper was deficient in that there was no cost analysis carried out. Your summary of the responses to the consultation on the Green Paper states that a third of the respondents had commented on the financial case. It was suggested that that case hadn't been made and that the costs in the Green Paper weren't complete, that people believed that the costs of merger would be higher than anticipated, or that the savings anticipated had already been made by local authorities. This is the argument that I've put forward consistently over the past few weeks, and one that I heard regularly from council leaders across Wales.

I have to say that I never understood the purpose of the change of direction from the regionalisation approach of your predecessor. Through introducing the Green Paper, valuable time was wasted, and uncertainty was created that was unnecessary. Therefore, we have taken a step backwards once again, and you are looking to create legislation around enabling voluntary mergers. But, as far as I can see, there are only two councils that are willing to consider that, and they are Swansea and Neath Port Talbot. But, even there, there is disagreement on the timetable, with Swansea wanting to merge swiftly whilst Neath Port Talbot sees some merit in merging with Swansea by 2026. So, it is clear that councils aren't willing to merge voluntarily. So, my first question is this: how confident are you that any councils would be willing to undergo a voluntary merger as a result of this legislation?

Now, as the legislation won't bring any radical proposals forward in terms of reorganising councils, perhaps we should turn our sights to other aspects of the new legislation, and try and see to what positive end we can turn this new Bill. Now, perhaps there may be opportunities in creating provisions for electoral reform. I know that you, like me, support proportional voting as a way of bringing life to elections and enhancing participation. Your predecessor mentioned introducing proportional voting to local government elections, but it wasn't to be mandatory. Now, for me, this should happen across Wales so that there is no postcode lottery created. If it isn't made mandatory across councils in Wales, then there's a risk that it won't happen at all. So, my second question is this: will you introduce proportional voting that will be mandatory for local government elections as part of this legislation?

The new legislation could also start to tackle the lack of diversity in local government. At the moment only 20 per cent of Welsh councillors are female, and we need far-reaching changes if the desire of the First Minister for a feminist Wales is to be made a reality. The Equality, Local Government and Communities Committee has started an inquiry into this, looking specifically at how we can overcome some of the barriers that exist. Why don't you also think about means of generating change through this new legislation—introducing quotas, for example, or allowing job sharing among councillors?

So, to conclude, will you commit to introducing electoral changes as part of this new Bill that will create a more diverse and equal local government? Thank you.

I would be very happy to do that. We have been discussing for some months the parts of the legislation that will be dealing with electoral reform, and, as the Member has acknowledged in her contribution, like her, I agree with PR, proportional voting, and I do think that that would be a help in creating much more diversity within local government and in ensuring that many more people have the opportunity to stand for election and to be elected as councillors, and I'd like to see that. If the Member has any additional suggestions for doing this through changing the law, I'm very happy to consider them, and I'm very happy to consider asking the working party to consider different options to ensure that there is more diversity within local government. I'm very willing to ensure that we have scope to discuss that over the next weeks and months.

When it comes to proportional voting, the Member is aware of the statement that I made back in January about the Government's proposals in this area. We want to offer councils the power to change the system themselves. I would like to introduce a policy that would ensure that we had proportional voting here and for councils across Wales, but the Member is aware that the support for that isn't available to us. So, until there is support for that, we will continue with the current policy, but I'm very happy to join the Member to campaign for proportional voting across Wales and in every part of our democratic institutions, from councils to this place, the Senedd, and the Westminster Parliament. I do think it's important to change our politics.

When it comes to the changes, can I say this? The Plaid Cymru spokesperson has focused on one side of this, namely council mergers. I'd like to look more broadly than that. What's important to me is considering the importance of the citizen and looking at how we ensure that citizens, wherever they live, whatever their geographical situation and whatever community they live in, whether urban or rural, have the kind of services that they need, and that we create the kind of democracy, democratic accountability and democratic structures to ensure that that happens.

I think that we have an opportunity here to go much further than talking just about mergers, and I don't want the discussion that we're going to have over the next few months to focus just on mergers. What I want to see is how we run our systems on a regional basis, how we decide that some services can be shared between different authorities, the relationship between local government and other parts of the public sector, the relationship between local government and the health service, for example, how local government ensures that it plays a greater role in economic development—there are several questions here for us to answer, and there are several discussions that we can have over the coming months.

So, I do hope that we will have a discussion that's more broadly framed than just discussing mergers, and a discussion that is richer than that. And I do think that the process over the past few months has created a foundation and a different situation, where local government leaders do acknowledge that we need change and are willing to discuss what kind of change we're going to have. And I look forward to the kind of discussion that we will have in the coming months.

Thanks to the Minister for today's statement. We seem to find ourselves in a bit of a strange situation now with this long-running local government reorganisation, and I appreciate that it was long-running before you came into the job, so I'm not casting aspersions at your efforts so far—at least not totally casting aspersions at your efforts so far. We seem to be in a position where the 22 local authorities in Wales are being encouraged to go for voluntary mergers now, even though many or indeed most of them have already suggested strongly that they're against mergers full stop.

There is evidence that many of them are now working collaboratively on sharing services with their neighbouring authorities. Indeed, this isn't really a choice for them, given the shortage of money in local government; it's more of a financial imperative. Councils are going to have to work more collaboratively in this financial climate or the alternative will be cutting more services. So, collaborative working is coming in, whether councils want to do it or not.

What is not so clear is whether we are moving with any purpose at all towards actual mergers. The Minister now proposes to set up a joint working group with the WLGA to talk about possible mergers—and other matters, no doubt. It's probably a good idea to have this group in some senses, in that it does represent some form of consultation. But, as I said at the start of my response, this has been going on for some time now, this whole reorganisation. So, at some point, presumably, you or some other local government Minister will have to decide whether or not to make any mergers. Your group, chaired by Derek Vaughan, does sound a little bit like kicking the can down the road. When do you think we might now expect a decision on mergers? Will we have a definitive decision by next summer, for instance?

Now, it strikes me that the councils in Wales don't seem too keen on mergers, but they are involved in this collaborative working. Given this, might it not be a good idea to move away slightly from the idea of mergers and more towards collaboration? I don't mean abandoning the idea of mergers, but at least beginning a parallel course in favour of collaboration. Could you perhaps effectively monitor collaboration, incentivise it, and reward those councils who can demonstrate that they are saving the public purse effectively by such collaboration? Would this be a way forward?

Now, if you can get voluntary mergers, that would be a good outcome, but we do need to steer clear of one-sided forced mergers, by which I mean one local authority that has designs on another local authority. We have the local example of Cardiff county council, which has expressed its designs on a merger with the Vale of Glamorgan, as evidenced by Huw Thomas's recent statements. Well, we went through this last time—the Vale of Glamorgan never wanted a merger with Cardiff. They never expressed any desire to merge with Cardiff. In fact, when they had the idea of voluntary mergers last term, they expressed a desire to merge with Bridgend. So, given that the Vale have never suggested that they have any inclination towards merging with Cardiff, could you assure us that we won't have this outcome if it's demonstrably the case that the majority of the Vale council has no desire for this outcome?

Lastly, Mike Hedges isn't here today, but he normally is present on these occasions. I think he has raised a quite valid point on numerous occasions, which is—. He talks about the fact that we've had local government reorganisations at regular intervals, roughly every 20 to 25 years, and they're always called the definitive reorganisation, and then, 20 years later, we start talking about another one. The one point that he's made flowing from that is: can we demonstrate from any of these reorganisations that bigger councils necessarily lead to significant cost savings? I think we do need to look at this and to see if there is any evidence basis that bigger councils will necessarily lead to reduced costs to the public purse. There is also the example of the enlarged health boards as well. Diolch yn fawr iawn.

I'm grateful, Presiding Officer, for the comments. Can I say this? I have never argued for a one-size-fits-all approach to local government reform and never have I argued that, necessarily, significantly large councils are always a good thing. In fact, if you look at a much wider basis than simply Wales, you will see that the councils that were being proposed in the Green Paper are not large themselves. These aren't very large institutions. Many of the local authorities across the border in England are significantly larger than the authorities that were being proposed here, so we're not talking about significantly large institutions.

What I'm concerned about is to create institutions that are sustainable, and I think it's fair to say—and I've heard no argument again this afternoon, and I've certainly heard no argument in the last few months—that the 22 local authorities we currently have in Wales are a sustainable structure. Nobody argues for 22 local authorities. What you tend to find is that people argue for, 'My local authority, and I agree with mergers at the other end of the country.' That's what you tend to find in this debate. I think we need a more mature debate, and I think we need a debate that is rooted on the citizen and rooted in the citizen, not rooted in what might be convenient for politicians and what might be called the political class. So, I think we should root our debate in what is right and proper for the citizen of this country and not what is easiest for ourselves. 

I will not answer the question or give any assurances about the future of the Vale of Glamorgan, Presiding Officer. It's not my place to do so. It seems a little curious to be starting a process of debate and discussion by setting out a whole series of sacred cows at the beginning of that process. I won't do that. What I would seek to do is to say that the Member is absolutely right in his view that this has been going on for some time. It's been going on for nearly 20 years. The point I made—and the Plaid Cymru spokesperson referred to this in her contribution—the point I tried to make in my speech in Llandudno some weeks ago is that there has not been a mature relationship between this place and local government and other parts of the public sector since devolved Government was established in 1999. And it is the responsibility of all parts to ensure that we do develop a more mature relationship. I'm not seeking to place blame for this or to point fingers. What I seek to say is that there has been, over many years, many opportunities and many proposals for change, but for all sorts of different reasons we continue to have this debate, and we will continue— and I'll be very clear on this—we will continue to have this debate, and people who follow us in this place will continue to have this debate, and Ministers in the future will continue to have this debate, because we have not settled these fundamental issues of governance.

Until we do settle these issues of governance, whether there are White Papers or Green Papers, there will always be a country of 3 million people wondering why they are governed by so many different organisations, bodies and institutions, none of whom seem to talk and work effectively together. The people of Wales have a right to expect their elected representatives, in whatever chamber they sit, to take these matters seriously and to find answers to these issues. It is not good enough for any politician of whatever party they represent, or in whatever chamber they sit, simply to wring their hands and complain about other people's solutions. It is incumbent upon all of us to take this matter more seriously than that.

So, I hope what we'll see over the coming months is a public sector reform programme that goes far beyond a dry and sterile debate about lines on maps or the merger or not of individual authorities, but a fundamental review of how the public sector operates in Wales, how we deliver public services in Wales, and how we ensure that all our public services in Wales remain rooted in citizenship, rooted in active citizenship and empowered citizenship.

I absolutely agree with you that compulsory mergers are unlikely to produce good local government, because people will be focusing on that rather than on the services they need to deliver. So, I welcome very much your proposal to go ahead with voluntary mergers where local authorities feel comfortable about merging, but we obviously have some considerable challenges ahead, as you say, not least that there's no more money coming from the UK Government. Indeed, the risk is that Mrs May's promise of more money for the NHS will be paid for by withdrawing money from local government. But, even if that were not to be the case, I'd like to hear from the Cabinet Secretary as to the impact of the UK Government's proposal to eliminate all centrally funded rate support grant from English local authorities and what impact that will have on the block grant that the Welsh Government receives for the population of Wales. Clearly, their proposal to allow local authorities to sink or swim based on inequitable council taxes and inequitable business rates is very worrying for people in England, but our focus has to be on Wales.

I think there are several ways in which we are going to need to encourage local authorities that don't yet feel ready to merge to, obviously, focus on the way in which they are going to collaborate to reduce the cost of services they need to provide, as well as reshaping them to better meet people's needs. I struggle to understand why payroll could not be shared across all 22 local authorities without any loss of democratic accountability, and I wonder whether that's something that you think that local government colleagues might be prepared to consider.

Other than that, I've spoken before about the really important collaborative work going on through public services boards, and I hope that that will give local authorities the appetite for collaboration and partnership across public services and in future, hopefully, across current local authority boundaries.

Presiding Officer, the point made by the Member for Cardiff Central is very, very well made—the challenges ahead are serious and significant. Given the way in which the United Kingdom Government, in acting as the Government of England, is seeking to reduce support for local authorities to virtually nothing and to make local authorities—to compel local authorities—to be self-sustaining, it will clearly have an impact on this side of the border as well. 

It's a very good question—exactly what impact it will have. I dearly wish, Presiding Officer, that I could provide the Member with an answer to that. I don't know what impact it will have. Clearly, it's an important question for the future of the settlement, but it is a matter that we do need to address seriously.

I think, in terms of a comparison of different approaches to support for local government, you will see significant divergence over the coming years. As the UK Government in England walks away from local government and seeks to diminish and emasculate local authorities, diminishing the role of local democracy, in Wales we want to invest in the future of local government and invest in the future of local democracy. I want to see local authorities, as a consequence of this working group, doing more and not less. I want to see them having greater powers and not fewer powers. I want to see them being able to act as shapers and makers of communities and places in a way that many are unable to do today, and I want us to have local authorities that are able to be sustainable into the future.

The way in which that is achieved is clearly a matter for conversation. Presiding Officer, the Member for Cardiff Central raises the issue of PSBs. I believe that PSBs are a good way of delivering services across a wider geography, and I'm interested to understand how PSBs could be used as a means of greater service planning and joint service delivery, and I think there's a very good opportunity for us to root much of the initial work, at least, of the working group in the PSB model of service delivery. 

In terms of other matters, the issue of payroll is an interesting example to use, as to what services could be shared and how we would deliver shared services in the future. I know many leaders of local government—and I've discussed this very issue with some local government leaders—are looking at the moment to ensure that there is a greater shared responsibility for delivery of some of those administrative functions, and I am hearing some really innovative, exciting and creative ideas from local government on how that can develop in the future.

The purpose, Presiding Officer, of this working group is to bring these ideas together, to look at the future and to develop and to deliver a plan that is not simply about mergers, but which is a wider reform of the public sector in Wales, which is to simplify and to streamline how we do Government in Wales, and then to deliver that over a longer time frame. I believe that's a very, very exciting agenda, and I hope that Members on all sides of this Chamber will contribute towards that vision.  

Thank you, Cabinet Secretary.