3. Will the Cabinet Secretary outline how the draft budget will assist local authorities in north Wales in light of the financial pressures being placed upon them? OAQ52739

Dirprwy Lywydd, the draft budget demonstrates efforts across the Welsh Government to assist local authorities to meet the very real pressures they face. The reduction of less than £15 million in revenue support grant in Wales is more than 75 per cent less than the cut imposed by the UK Government on English local authorities next year. 

Cabinet Secretary, according to the letter sent to local authorities by your colleague the Cabinet Secretary for local government, overall core funding for councils announced in yesterday's local government settlement will be cut by 0.3 per cent in the upcoming year. However, this hides the fact that the cut in spending will not be shared equally and fairly amongst councils in Wales. In north Wales, Conwy, Anglesey and Flintshire will all see their funding cut by 1 per cent—the highest cuts in Wales. My own authority of Conwy has already had to make £48 million in savings over the past six years and is now looking to find £16 million just to stay in business. Yet Rhondda Cynon Taf and Labour-run Cardiff have seen increases of 0.3 per cent. With £370 million coming from the UK Conservative Government to better fund our public services, many here in Wales consider this latest settlement to be a tribal and lazy approach by a Welsh Labour Government. What other excuse could you possibly provide for such an unfair and inequitable local government settlement?

Dirprwy Lywydd, the Member really should withdraw her accusation that the funding formula for local government in Wales is somehow tribal in nature. She knows that it is not. The funding formula is agreed every year with local government. I sat in the finance subgroup, where local authority leaders—[Interruption.]—no, no, local authority leaders agreed on the latest set of changes to the formula. By and large, those changes were ones that favoured more rural parts of Wales because they added an additional increment to the recognition of sparsity in the way that the formula operates. Welsh Government does not set the formula. It is set on expert advice and it is agreed by local government. The reason why Conwy has found a decrease in funding this year is because it has fewer people unemployed in its area than it did this time last year, it has fewer secondary school pupils than it did this time last year, and it has fewer children claiming free school meals in its primary schools. There is nothing tribal about any one of those factors. They are all empirical measures, they feed their way into the formula, and, every year, some local authorities see a benefit and some local authorities find that they are less so, and Conwy council is no doubt grateful for the fact that, in order to help that council address the changes in the formula, the Welsh Government will provide £513,000 more in funding to that council next year—not as they do where you are in charge, by taking money from some councils and giving it to others, but through central funding that this Government provides to provide the funding floor.

Although I don't think the taxpayers in Conwy will enjoy an increase of 11 per cent in council tax either—but that is something that is currently being considered. I raised a question with the Cabinet Secretary for public services last week, given the huge, painful pressures on local authorities now, as to whether he was confident that arrangements were in place by Government—that there was a process in place—to deal with the situation, should such a situation arise, of a council in Wales going bust, as we've seen happen in England. That’s something he admitted that they are looking at and developing at the moment. Can I ask you the same question: from a finance perspective, in terms of the budget you're responsible for, are you confident that you have the necessary arrangements in place should such a situation arise?

Thank you to Llyr Gruffydd for the question. As he said, Janet Finch-Saunders didn't raise this afternoon the possibility of an 11 per cent increase in council tax in Conwy, where the majority of people in the cabinet in that authority are members of the Conservative Party, so we'll see what will happen there. In general, I have spoken more than once with Alun Davies on the subject that Llyr raised. We are confident that we have things ready where we can be aware of where in the system local authorities are concerned for the future.

I think it is worth saying, Dirprwy Lywydd, that, despite those genuine anxieties, and I have real—. I take very seriously the things that local authorities say to me about the pressures that they face nine years into austerity. Nevertheless, revenue spending by local government in Wales last year grew by 1.3 per cent—it didn't fall at all; it grew by 1.3 per cent—and capital funding by local authorities in Wales last year grew by 5.5 per cent. And, difficult as things are for us all, trying to provide public services with falling resources and growing demand, that is the background against which this year's local authority settlement has been laid.