The following amendments have been selected: amendment 1 in the name of Julie James, and amendments 2 and 3 in the name of Rhun ap Iorwerth. If amendment 1 is agreed, amendment 3 will be deselected.

That brings us to the next item, which is the Welsh Conservatives' debate on local authorities, and I call on Darren Millar to move the motion.

Motion NDM6875 Darren Millar

To propose that the National Assembly for Wales:

1. Recognises the important role played by local authorities in delivering public services across Wales.

2. Acknowledges the funding challenges currently faced by Welsh local authorities.

3. Calls on the Welsh Government to:

a) review and increase the 2019-20 local government settlement; and

b) commission an independent review of the Welsh local government funding formula.

Motion moved.

Diolch, Llywydd. While we in this Chamber debate policies and law making, it's our Welsh local authorities, our councils across the country, rather than the Welsh Government, that are actually at the coalface delivering many of the public services that our constituents rely on each and every day. Many of these public-facing services have a key role in reducing inequality, protecting the vulnerable and building a fairer and more prosperous society. Our councils are huge players in the local economy, employing 10 per cent of the Welsh workforce, including 26,000 teachers. And our motion today recognises not only the challenges facing local authorities, but it also urges the Welsh Government to consider further improvements to next year's damaging settlement, and to commission an independent review into the outdated funding formula that it uses to distribute cash to local government. 

Since 2009, local authorities in Wales have had their funding cut by £1 billion in real terms, equivalent to 22 per cent, and if you exclude money for schools, the core funding to councils has actually been reduced by some 35 per cent. Now, this is at a time when councils are facing many funding pressures, including pension funding shortfalls, public sector pay awards and increasing demand for services like adult social care, due to an ageing population. On top of the cuts that have been inflicted upon our councils, the Welsh Government has also cut funding to other funding streams via grants that are provided, for example post-16 funding, which has been cut by a fifth in the past six years, in spite of promises to protect education spending, and the education improvement grant, which was cut by £13 million in the current financial year. Now, these pressures have had huge implications for local authority services, including libraries, refuse sites, leisure centres, bus routes and even the frequency of bin collections. And, of course, budget reductions have forced our councils to pass on a greater burden in terms of the taxation that is paid by hard-pressed families across the country. The average band D council tax in Wales has trebled—trebled—since Welsh Labour came to power here in Wales back in 1999. Many fees and charges, which are levied by councils, have also had to go up. New ones have also emerged. Many of our local authorities now charge for the childcare element of the Welsh Government's supposedly free breakfast clubs, while collection of garden waste incurs a fee also in many areas. Just a few days ago, we dug out some of the figures regarding local authority parking charges: £10 million-worth of them in the last year alone. And who can doubt that that is not making a contribution to meeting the funding gap that has been exposed as a result of the very poor settlements that many of our local authorities have had? And, of course, charges like that are deterring people from shopping on our high streets. Now, I recognise that councils have to make some difficult choices, but they're having to make these difficult choices because of the pressure that you, as a Government, are putting them under.

And, of course, it's not just Welsh Conservatives who have been warning the Welsh Government of the potential damage of its funding decisions. The future generations commissioner, Sophie Howe, was very clear in her statement last month that the Welsh Government is spending too much of its budget treating ill health, and not enough of its budget on preventative services provided by councils, which help to keep people well and to maintain their independence. All 22 council leaders wrote to the First Minister—such was the situation with the draft budget—a few weeks ago, warning that the draft settlement that had been issued at the time for 2019-20 would lead to, and I quote, huge service cuts and significant council tax rises that would be, and I quote, damaging to our communities. Even a Welsh Government Minister has protested about the Welsh Government's council funding cuts by co-signing a letter with other Labour politicians, including Members of this Assembly, calling for a review of the way in which councils are funded. So, I'm very hopeful of her support in this motion today.

Now, part of the problem, of course, is that successive Welsh Government Ministers have failed to see their relationship with local government as a partnership. Instead, they've taken a very belligerent approach, particularly with reference to reorganisation. Indeed, some people have suggested across Wales that the withholding of funding for local councils is a deliberate attempt by the Welsh Government to undermine local authority finances, making them unsustainable, and to put forced council mergers back onto the agenda here in Wales. The current Cabinet Secretary, of course, inadvertently exposed his contempt for Welsh local authorities when he compared council leaders just a few weeks ago, when they requested more money for local government, to the starving Oliver Twist, asking for more gruel. It was no surprise to hear a chorus of condemnation and calls for the resignation of the Cabinet Secretary on the back of those comments, because, of course, he was compared quite rightly to Mr Bumble, the cruel beadle of the Dickensian workhouse. Now, it's this distinct lack of respect, I think, that threatens the delivery of the local authority services through the compact that the Welsh Government has with local government. I think it would be incumbent upon you today, in your response to this debate and motion, Cabinet Secretary, to apologise for those comments that you made about local authorities asking for the resources that they need to deliver services.

This year's draft settlement was further evidence that councils are being underfunded, and that the funding formula is outdated and no longer fit for purpose. The case for reform in terms of the funding formula has become more and more compelling in recent years. The current funding formula has been there for 17 years. It's based on many different elements and indicators, including how much council tax the Welsh Government considers each local authority should be able to charge, and population data that is based on the 1991 census—1991, even though we have census information that is bang up to date, and estimates of the population that are much more recent. Under the funding formula, the gap between the best and worst-funded local authorities widens each and every year, and it currently stands at £600 per head. That's tens of millions of pounds of underfunding for largely rural local authorities where, due to geography, delivering services is often much more expensive. The leader of the Vale of Glamorgan Council has quite rightly hit out at the underfunding of schools in poorly funded authorities, and I think—and I'm sure that others in this Chamber will think—that every child in this country deserves the chance to achieve their full potential. But how is it fair if we have a postcode lottery in terms of school spending, because of the arrangements for the distribution of cash from this Government? There's no level playing field for children here in Wales. Just last week, the leader of Pembrokeshire County Council, whose residents face an eye-watering 12.5 per cent increase in their council tax this year, called for the funding formula to be reviewed.

While the Welsh Government has tweaked around the edges of the funding formula—adding a little bit of sparsity funding, making arrangements, putting a funding floor in place—the reality is that these are not solving the problem in a wholesale way. That's why the Welsh Local Government Association has described the funding formula as, and I quote, being held together by duct tape and sticking plasters. So, an increasing number of councils have passed motions across Wales this year, calling for better funding and a new funding formula. Many of those councils have Labour representatives on them who have supported those calls and supported those votes. So, we know that there are very low levels of confidence in the formula. It's led to considerable variation in the level of reserves held by Welsh local authorities as well. So, we know, for example, that the well-funded, Labour-run Rhondda Cynon Taf council is sitting pretty on £152 million-worth of reserves, almost eight times the level of reserves in Conservative-run Monmouthshire, almost seven times the level of reserves in Conwy—[Interruption.] I'll happily take an intervention.

I'm not challenging those figures, because, obviously, we had them published last week, but do you also recognise that, of the ones that you've just mentioned for Rhondda Cynon Taf, a larger portion are already allocated and therefore are not available for use?

That's an easy way of an accountant to be able to ring-fence cash and take it out of what they consider to be appropriate and to protect and justify what I believe are unreasonable levels of expenditure.

Let me quote some other figures to you as well. Labour in Labour-led local authorities are sitting on 57 per cent of the £1.4 billion that is held in reserves across Wales. Ten local authorities have increased their reserves since 2016, in spite of austerity, and this means that the increase in Torfaen, for example, has gone from 2 per cent to 21 per cent of their cash in reserves. I think this is absolutely barmy, and it's certainly not fair.

It's not fair either to local authorities in north Wales, which have consistently seen their settlements to be worse than those in the south. So, we have rural areas set against urban areas, we have areas that have older populations set against those with younger populations, and we have north and south set against one another as a result of this dreadful funding formula, which is well beyond its sell by date.

So, we have these pressures, and we have to address them, and that's why we're calling for an independent review—not a Government stooge that's appointed to do a review, not an internal review within the Welsh Government of this funding formula, but an independent review by somebody who is suitably qualified to take a look at all of these different elements in the funding formula and to come up with something that is fairer to the citizens of Wales, no matter where they might live.

I have selected the three amendments to the motion. If amendment 1 is agreed, amendment 3 will be deselected. I call on the Cabinet Secretary for Local Government and Public Services, if he's listening, to formally move amendment 1, tabled in the name of Julie James.

Amendment 1—Julie James

Delete all after 2 and replace with:

Welcomes the package of additional funding proposals for local government to improve the revenue support grant in 2019-20, to address pressures, as we enter the ninth year of UK Government austerity.

Notes that the announcement is supported by the WLGA as significant progress that demonstrates a concerted effort to offset the impact of austerity in Wales

Notes the local government settlement is distributed on a formula using nearly 70 distinct indicators, agreed with local government, overseen by independent experts, and based on the principles of relative need to spend and relative ability to raise income locally.

Amendment 1 moved.

Move formally.

I call on Dai Lloyd to move amendments 2 and 3, tabled in the name of Rhun ap Iorwerth.

Amendment 2—Rhun ap Iorwerth

Add as new point after point 2:

Regrets that recently announced additional funding from the Welsh Government to local government in Wales was only forthcoming as a result of consequential funding from the UK Government’s autumn statement.

Amendment 3—Rhun ap Iorwerth

Add as new sub-point at end of point 3:

continue to seek ways to provide further funding for local government in Wales for 2019/20.

Amendments 2 and 3 moved.

Diolch yn fawr, Llywydd. I'm pleased to move the amendments in this debate, reflecting the funding pressures on the local authorities—well, not just in my region, but all over Wales. Obviously, I've been receiving letters from people in the local authorities that I cover, so I'm happy to respond and to make the case for local government funding.

Obviously, I'm not also going to rehearse the argument again about Oliver Twist and various Dickensian wordplays, the Cabinet Secretary will be pleased to note, but concentrate my contribution on the wider point of local authority spend and its contribution to the whole Government agenda here in Wales, across portfolio.

Back in the day, I spent many years as a county councillor in Swansea. I do understand the pressures at councillor level—obviously, I'm not the only previous county councillor in Swansea here. But also back in the day, I was a full-time general practitioner. I remain a GP these days, although, obviously, having sacrificed my medical career on the altar of politics, I no longer have a financial interest in anything GP-wise and, in fact, do not any longer take a salary for my continued GP work. But in terms of even back in the day, when I was a full-time GP, I used to be concerned about the welfare of my patients and why they were falling ill all the time. We're always exhorted by our Royal College of General Practitioners to really go after why people are getting ill in the first place. So, I was exhorted to write to the local director of housing and explain wouldn't it be a good idea if we tackled bad housing in Swansea to stop my patients getting ill. And what I discovered as a GP was that I would write letters and, do you know what, absolutely nothing would happen. There was no acknowledgement of having received the letters and certainly no reply. So, eventually, I stood for the council. That's what you do, isn't it? I stood for the council and, eventually, I won a seat on Cockett ward. And now I would write letters to the director of housing as a councillor—still as a GP, but as a councillor with an expectation of a reply and a programme of action, which would follow, now being a councillor, nothing to do with being a GP. 

But I was proud to be a county councillor because it became obvious, even to us in the health service, that actually the factors that influence good health lie outside of the health service and what we could do as doctors and nurses; they lie in local government. That's why I was proud to be a local county councillor, because environmental health is within local government, housing is within local government, public transport, planning, education, social services—they all lie within local government. So, local government has a huge role to play in tackling those determinants of ill health, those matters that make people ill in the first place. We're doing as a health committee now a review into physical activity, roles of leisure centres, school playing fields, schools, teaching—paramount in that in terms of education. The role of libraries, obviously, learning facilities, lifelong learning—paramount in actually staying healthy. There's cross-portfolio work here. And, yes, people want to see more of a spend on health, but I think, more widely, I would warrant people would want to see more spending on prevention of ill health. As a health professional, I'm not steeped in the ability of health promotion, and the dedicated spend within the health service for illness prevention is pitifully small. We depend on illness prevention happening elsewhere, and that elsewhere is in local government, tackling those determinants of ill health that lie outside the NHS but inside local government.

So, I would press the Cabinet Secretary—I'm sure he's aware of those points—to have that cross-portfolio discussion about how local government spend can actually help lessen the spend on health and vice versa. And, in terms of health, to finish, I would like to see free and open pathways for open government to actually accept referrals from health professionals directly. Not just over the years were my housing letters rejected, but now, if I deem that my patients would benefit from an education referral, I cannot refer to education or social services—I cannot refer directly to social services. That is a ridiculous state of affairs, and much of the clamour, I feel, for an autism Act would be removed with true joint working. If you allowed primary healthcare professionals to be able to directly refer to departments of local government, matters would improve significantly. I would implore, in closing, the Cabinet Secretary to engage with the health Cabinet Secretary to this end. Diolch yn fawr.

Of course, I share the same region as Dai Lloyd, South Wales West. It's home to three local authorities. They're all Labour-run, by some margin. What? No 'yay's? I was kind of expecting somebody to say 'woohoo' at that point. And, of course, this has been for many years as well, apart from a couple of short-lived experiments by the electorate in Bridgend and Swansea.

Welsh Government may wish to argue that, compared to other parts of Wales, South Wales West hasn't done so badly in the local government settlement for next year. I'm sure my colleagues from different parts of Wales, especially rural and north Wales, would argue that as well. More importantly for my constituents, though, these three Labour councils will say that, after eight years of real-terms cuts by Welsh Government, this year's settlement is the final straw for them as well.

So, we'll start with Bridgend. Their leader warned, back in the summer, of cuts not just to libraries and swimming pools but to bus subsidies and to nursery provision. So, we are just about to roll out free childcare for three and four-year-olds through legislation at a time when provision in Bridgend could be cut. Since then, the council leader has ended his commitment to protecting schools, and of course we already know about the difference per head that children in schools in Wales get compared to their English counterparts, and he's also ended his commitment to protect social services budgets, pointing out that, when the UK Government gives his party's Government an extra £950 million, his party's council gets a cut. 

A big chunk of that extra, of course, has gone to the national health budget—obviously, Dai's alluded to this—but when it comes to pooled budgets for health and social care, in the case of Bridgend, it is the council that is putting in 72 per cent of that budget, when it's the health service that will actually be getting the uplift from this year's budget. That actually sounds wrong to me. At the same time, the same council leader is looking at having to find £4 million for teachers' pay—not pensions, pay. Despite an assurance from the education Secretary that every single penny that Welsh Government receives from the UK Government for teachers' pay will go for that purpose, the leader claims he's only getting a fraction of what it would do to cover the cost.

The Deputy Presiding Officer took the Chair.

In Swansea, where the council is a major player in the Swansea bay city region, the leader has also pointed to teachers’ pay, saying he's only had £606,000 of the £7 million he needs via Welsh Government. And, as he too announced that no services can be protected, he snapped that, and I quote:

'Sometimes it feels that we don’t have a Cabinet Secretary for Local Government. He should hang his head in shame.'

And, in response to the infamous Oliver Twist jibe, this Labour council leader was prepared to meet Mr Bumble with, quote, 'the biggest begging bowl', because that’s what they’ve been reduced to: begging.

Neath Port Talbot has announced that they are—quote again—

'getting very close to not being able to run services safely'.

And they’re not just talking about the revenue support grant. A thousand vulnerable Gypsy and Traveller children in the county borough area will lose their support as the grant is slashed from £250,000 to £85,000—and that is just £85 per child. And that's despite the finance Minister saying that there would be millions for Gypsy/Traveller children in his statement announcing the draft budget. This, of course, has a knock-on effect to the RSG in Neath Port Talbot and that funding for inclusion, health and education. And, as Neath Port Talbot loses out, the merger by stealth being planned by Welsh Government, giving Gypsy/Traveller support to just four councils to operate regionally—well, that is being treated with deep suspicion that this route of funding itself will not be sustained.

Ultimately, it’s Neath Port Talbot that says it as it is, and I'm quoting again:

'Welsh Government cannot continue to use austerity as an excuse for not allowing Local Government to deliver vital services to all constituents.'

And even Labour councils are getting fed up of the budgie hitting that same old bell, particularly when we are getting 20 per cent more per head in Wales than England in terms of funding. And, while some councils must explain why they are not using those useable reserves, and others must explain how poor management has led to drops in earned income, they are, as the Labour leader of Bridgend says, at the end of the road.

Five of the seven constituency Assembly Members from South Wales West are members of Welsh Government and my constituents will want an explanation from them. [Interruption.] You're saved. Will they say publicly that these councils have been apparently protected from the worst of the cuts because they're being protected by Labour representation—the political message that their supporters will want to hear? Or will they claim that, of course, there’s no such partisan protection—it’s all based on need? In which case, can they explain why the need remains so high in their own council areas when they have been in Government for two years? Or will they have to admit that, despite making up over a third of the Government, they've had no leverage to meaningfully improve this local government settlement?

Now, Welsh Conservatives want to get rid of the duct tape and sticking plaster over this clapped out old formula, as do the WLGA. But I say to my South Wales West Government colleagues—. I'm not talking to you, Cabinet Secretary; it is my colleagues in South Wales West. It’s not about councils being at the front of the queue for last-minute UK consequentials—it’s about you being at the front of the queue to reform the funding formula from within Government. Thank you.

Thank you, Deputy Presiding Officer. Well, can I say, on a positive note, I'm very pleased to hear new people taking an interest in local government and being supportive of local government from the opposition benches? I've only been used to Siân Gwenllian and David Lloyd supporting local government over recent years—so, glad to see other people joining.

Can we look—? [Interruption.] Can we look—? Can I just remind people that it wasn't that many years ago when the Conservatives wanted to cut local government funding? And they still haven't— [Interruption.] And they still haven't decided where they're going to take the money from. If you look at the formula, is the formula perfect? No. But why did it come in? It came in to ensure that authorities were adequately funded through our rate support grant. But that was before the position of business rates was taken, and they were then removed from local government.

What the council needs to spend is calculated in a standard spending assessment, and it's amazing, really, when you look at the league table of standard spending assessments for education and expenditure for education, how very close they are to each other. What causes the amount to go up and down is mainly population change. That is the main driver—

Will the Member give way?

Yes, certainly.

He refers to population change, but it's nearly 30 years, surely, now since the census was taken. Between a third and half of the people who were measured have now, probably, died. Is that an appropriate basis on which to measure population, or is it just because the Labour councils disproportionately have the falling populations?

Well (1) that's untrue, and I was talking about year-on-year changes.

Business rates were centralised and collected locally and then redistributed with the rate support grant as part of aggregate external finance. Now, how does the money go out? Blaenau Gwent gets £1,587 and Monmouth gets £995. Is that fair? Well, Blaenau Gwent has 8.8 per cent of its properties in band D; Monmouthshire has 65.8 per cent of its properties in band D. So, a 1 per cent increase in council tax in Blaenau Gwent and a 1 per cent increase in council tax in Monmouthshire makes a huge difference. The average is £1,344 per capita. For half the councils that would be more; for half, it would be less. 

I'm going to read out the councils in order, to get this on the record. First is Blaenau Gwent, second is Merthyr, third is RCT, fourth is Neath Port Talbot, fifth is Denbighshire, sixth is Caerphilly, seventh Torfaen, eighth Newport, ninth Gwynedd, tenth Carmarthenshire, eleventh Ynys Môn, twelfth's Bridgend, thirteenth Ceredigion, fourteenth Powys, fifteenth Conwy, sixteenth Pembrokeshire, seventeenth Swansea, eighteenth Wrexham, nineteenth Flintshire, twentieth Cardiff, twenty-first the Vale of Glamorgan and twenty-second Monmouth.

We regularly hear calls for the formula allocating money to be changed. Representing Swansea, in seventeenth place, I could say how it would benefit us, but, give everyone a standard amount, the top 12, in terms of how much they get, would end up getting less, and the bottom 11 would get more, unless there's an increased amount of money there. I was a member of the distribution sub-group many years ago, when it made a minor change to the highways formula. It was 52 per cent population, 48 per cent road length; it went to 50 per cent for each. What happened was there were winners and losers. Powys and Gwynedd won, Cardiff and Newport lost. 

For everyone who says we should have greater regard for sparsity and rurality, there is someone saying we need to take greater account of poverty and deprivation. Councils such as Pembrokeshire will say, with some justification, their population increases massively during the  summer months, and thus their costs. Councils such as Cardiff will say they have major events and a daily influx of people, and that increases their costs. All say they need additional funding. 

And I think, really, you could change the formula—. Everybody thinks: you change the formula and everybody's going to win. That's financially impossible and numerically illiterate. If you've got the same amount of money to be distributed around 22 councils, every time you get a winner you get a loser. Local government has had an increase since the initial funding was announced. Wales should have an additional £800 million, based upon 2008 expenditure, according to the Cabinet Secretary for Finance, a figure no-one has yet disagreed with. We are being short-changed by Westminster. There are those saying—[Interruption.] There are those saying—

Will you take an intervention, Mike, on that?

Yes.

You've heard repeatedly said that, for every £1 spent, in the end we get £1.20 here in Wales. How is that short-changing us?

Because we aren't having the money that we should be having if we had gone up in terms—[Interruption.] If we went up in terms of where we were just 10 years ago. 

Of course, there are those saying that merging councils will solve part of the problem. For that, I have two words—Betsi Cadwaladr—or three words—Natural Resources Wales. Further additional money—[Interruption.] Further additional money—[Interruption.] Further additional money for local government can be found from, for example, transportation and economic development. When local government needs more money to support current services, it doesn't help when ring-fenced money is provided for something new. The teachers' pensions cost is going to have to be met. Councils do not say to schools, 'You have to meet it from efficiency'; they look to try and find the money for them. 

Finally, it's no good pitching public services against each other or asking for more money for each public service—one a week. The amount of money we get is the block grant—and they used to say it was a block grant, until some people criticised me, but it's the amount of money we've got to use. Can I just ask, when the Conservatives sum up, if they can explain where they're going to get the additional money for local government from? And, if they're taking it out of health, exactly how?

Thank you for this opportunity to reply and to make a few comments about the Plaid Cymru amendments. I agree with the content of the motion, and it’s our intention to strengthen the motion with our amendments today. In terms of the Government amendment, we are going to hear from the Minister, without doubt, about the effect of the austerity policies of the Conservative Government, and, before that, the Conservative and Liberal Democrat coalition Government in Westminster, and, of course, I agree entirely. I can't forgive the swingeing cuts that have put such pressure on public services for almost a decade now. It’s ideology that’s driven those cuts, we know, and, as we’ll be discussing in another debate later on this afternoon, it’s the poorest who suffer, but we’re talking here about what the Welsh Government has chosen to do with the budget that it has. Yes, the budget has been under pressure over the years, but this year, against a background of a small increase in the total funding available for 2019-20, local government continues to be a very low priority for the Labour Welsh Government. Last week, of course, we had the announcement from the Cabinet Secretary for Finance that there was some additional funding that would be allocated to councils in Wales, as compared to the draft budget, and, of course, every penny helps, but we do have to ask why it’s taken a consequential from the UK budget for the Welsh Government to give those crumbs to these councils.

Now, we have the figures; the draft budget for Welsh Government shows an increase of 2.4 per cent in the revenue expenditure for 2019-20, but as that funding increased—not by much, but it is an increase—we saw a cut of 1.9 per cent in the local government budget. That’s a political choice, namely, that decision to cut; not something where there was no choice but to do so. It’s Labour austerity.

Welsh local government can only see this as Labour's austerity here in Welsh Government, compounding a decade, almost, of deep and, to me, unforgivable Tory austerity cuts. Cutting spending by nearly 2 per cent when overall revenue funding is up by over 2.4 per cent—or 2.4 per cent—is about local government not being given the priority we on the Plaid Cymru benches say it deserves. Now, UK budget consequentials did loosen the constrictor grip on Welsh councils, but I do question why Welsh Government chose to opt for putting councils in that vice-like grip in the first place.

What do we see elsewhere in this budget? We see a significant uplift again in health spending. Now, I'm not going to argue against giving money to health and social care, but we really have to see the delivery of public services in the round. Local government is a major part of the delivery of health and social care. And with councils starved of money, social services struggle, the pressure then on expensive secondary healthcare goes up and up, they overspend, additional funds are directed to them in budget after budget. It's a vicious spiral. Are we just seeing here Government reacting to a public cry for more money for health? Possibly, perhaps, that may be the case, but we need to see investment in those things that help the delivery of healthcare, not just the NHS. And that not only means funding hospitals, it means funding councils so they can provide strong social care, so they can provide strong leisure services in order that people are kept healthy, in order that education gets the investment that it needs, because education clearly is the route to making sure that people have the tools to equip them for making the right decisions. 

Diolch. So would you then be stating that you would wish to cut the £30 million for social care budget or the £20 million for mental health care budget? Where would you place those cuts if you don't wish, as you stated, to cut the health budget now?

There are particular grants, and I certainly welcome any additional funding that finds its way into local government budgets, but unless we look at the overall local government budget and give them the freedom to make spending decisions themselves, they will not be able to face up to that overall squeeze on them, and that will end up putting more pressure on mental health services, on care. 

So, let me wrap up. This is not sustainable. I know, in my council area, reserves are rapidly running out. They need a strategy now to build up their reserves, and they can't see past next year, when they're concerned that things will get even worse than they are now. It is not sustainable, and I'm not willing to stop calling on this Government to seek those additional funds that local government needs. Some councils may have been persuaded not to make any more noise at this point in time, in order to take the pressure off this Minister and his Government, but I'm not ready to give up just yet. 

Local government in Wales is facing a funding crisis. Since 2009, local authorities in Wales have received a real-term cut to their budgets of 22 per cent—£1 billion of funding cuts due to the policy of this Welsh Government. Under the original draft funding proposals, 15 of the 22 local authorities in Wales would have seen a reduction in funding. Needless to say, the proposals were met with considerable dismay by Welsh local government leaders, dismay quickly turning to anger when the Cabinet Secretary for local government compared them to Oliver Twist, always asking for more. 

The leader of Swansea council said that the First Minister should

'distance himself from the comments of the cabinet secretary and consider whether or not it is appropriate for him to remain in the cabinet in his current position...We make no apologies for asking for more resources from Welsh Government to save those services provided by hardworking teachers, youth workers, librarians and care workers that protect the communities of Wales.'

Firstly, this backlash—this Scrooge-like Welsh Government performed a humiliating u-turn. Thanks to extra funding Wales will receive due to the Chancellor's autumn budget, more money was found for Welsh councils. However, even when the new arrangements were taken into account, the fact remains all local authorities in Wales received a real-term cut in funding, the eighth consecutive year of cuts to council budgets.

Councils have also faced problems caused by a funding formula that is not fit for purpose. Firstly, the chorus of discontent about the current funding arrangements—the Cabinet Secretary has contemptuously refused to engage with the sector. The provisional local government settlement for 2019-20 highlighted a clear divide between councils in north Wales and those in the south. All six councils in—[Interruption.] Yes, go on, Mike.    

The sixth highest aggregate external finance is Denbighshire.  

All right, thank you very much for the statistic, but I think you know better than—. Your Government has cut the funding for the most prosperous councils in Wales. All six councils in north Wales would have seen their budget cut by at least half of 1 per cent. Three would have received a 1 per cent budget cut already.

Once again, rural councils will suffer compared to Labour-led urban authorities. This complex and unfair formula resulted in a situation where Rhondda Cynon Taf council has been able to stockpile unusable reserves of £152 million. That is a staggering figure. Yet, Monmouthshire and Powys councils have been forced to introduce severe budget cuts to balance their books.

This Labour Government has constantly failed to recognise the particular problems faced by rural council authorities in Wales in delivering public services. There are higher costs in delivering public services in rural areas, and this Government action will inevitably result in cuts to services and increases in council tax. In 1997, the average band D council tax in Wales was £490. It is now nearly £1,492, a staggering rise of over 200 per cent. That is all during the Labour Government. Excessive council tax rises have had a devastating impact on Welsh households. Citizens Advice has labelled council tax as our biggest tax problem in Wales.

Local authorities have tried to ensure as much money as possible is directed to front-line services by cutting out waste and unnecessary bureaucracy. But Labour's unfair funding formula will mean people, particularly those living in rural areas, will face damaging cuts in public services and rising council tax bills. We need a strategic review of the funding formula to ensure a fairer settlement. We need a funding formula that takes into account the needs of rural Wales and that ensures that rural councils are no longer penalised. I call on the Welsh Assembly to support our motion and deliver greater fairness in local authorities in Wales. Thank you. 

I rise to support the Welsh Government amendment to this Tory motion, and I view the unedifying spectacle of the Tories opposite standing up saying that local authorities are struggling—well, let's be honest, quite frankly, shake that magic money tree, and we will have more money, more bang for our buck to do so.

I, for one, am tired of hearing about austerity, as the people of Islwyn are, who are suffering at the hands of this cruel, political ideology—an ideology that has failed to cut the UK deficit—

Will you take an intervention?

I haven’t finished yet, thank you. I will do it later—[Laughter.]—but has actually grown the UK deficit—[Interruption.] I will do this later, okay.

We have been suffering now for nine long years, and it is not a laughing matter for the people in my constituency, who are suffering from the results of austerity and welfare reform. This is outside—[Interruption.] This is outside the UN criticism of bedroom tax causing homelessness and the UN criticism of welfare reform and universal credit. It is completely linked, causing poverty and causing real harm to our people. And although the UK Tory Government has now got into the habit of intermittently declaring that austerity is at an end, well, in reality, the suffering goes on, as the suicides and the deaths are now being directly attributed to the disability benefit and personal independence payment assessment travesty. And I know, as a former councillor, first-hand, how valuable and how important local government is as a delivery arm to Welsh democracy and to delivering public services on the front line, and that it’s the vulnerable people who will continue to use local government services as the first front-line service.

But it is an absolute fact that Welsh Labour Government has protected local government in Wales from the worst effects of nine years of austerity and in the face of a cut—

Will you give way now?

Let me just finish—and in the face of a cut of £850 million to our budget by the UK Government since 2010. That is a fact.

Thank you very much for taking an intervention. I agree wholeheartedly with you, as I said in my comments earlier on, about the devastating effects of Tory austerity, but isn’t the reality this time that we have a 2.4 per cent increase in the overall budget coupled to a 2 per cent decrease in local government budgets?

Thank you for that. I think you cannot divorce that from the fact that, since 2010, there has been an £850 million cut to Wales. This is strategic, this is long term, and we know that there is more to come unless there is a general election, and there’s quite a simple fact here: if your coat is too tight, you will get wet.

I met with elected members of Caerphilly County Borough Council last week—[Interruption.] Well, let me just explain my comment: if you do not have enough money coming in, you will not be able to deliver the services that your people need. I called the leader of council to the Assembly, because I’m very concerned about the status of local government per se across the UK, with me for frank discussions about the challenges that councils face and the prudent use of reserves, but the fact is that councils are scared when they look across the water at England. The South Wales Argus stated on 12 November that, since 2008, cuts of £89 million have been made by the authority. A further £60 million will have to be found over the next five years. And I know that no Labour politician has ever spoken to me about coming into public life to cut public services. These are the lifelines of the community. No Labour politician that I know has ever stated that that’s why they came into local government.

It is a fact that local government provides services that directly benefit and impact on the very poorest in our society. It is local government that pays for respite, care, music, sport and non-statutory support services for our people, and I applaud the determination of Welsh Labour councillors and our citizens, who continue to speak up loudly for the need to fight back against Conservative austerity.

It is thanks to the Welsh Labour Government and our local authorities in Wales that they will have to manage cuts of not more than 0.5 per cent. And this is in stark contrast—[Interruption.]—if I wish to continue, and I do if I can—. This is in stark contrast to the situation in England, where council budgets have been decimated. And I would take more truck from the party opposite if, where they are in Government, they had not got the travesty of cuts to local government that England has. Research by the Local Government Association has found local government in England, under the Tories, will face an almost £8 billion funding gap—that is the reality—by 2025. It cannot be right that the Conservatives opposite call for more money whilst cutting, over time, strategically, the Welsh budget. It is disingenuous at most and farcical.

The Tories' cuts to local government in England are deeply unfair. They hit some of the councils with the greatest need the hardest. The top-10—[Interruption.] If you would just let me finish. The top-10 most deprived councils in England are set to see cuts higher than the national average, with nine on course for cuts more than three times higher than the national average. So, where is the Conservative compassion there for the poorest in our society, where you govern?

I know that Welsh people are better served by Welsh Labour councils, governed by the Welsh Labour Government, and I suggest, finally, Deputy Llywydd, that the Tories opposite shake that magic money tree that they found for Northern Ireland—the £1 billion that you gave to them—and give it back to Wales. Thank you. 

I'd like to take part in this debate today and support the Welsh Conservative motion, in particular our motion calling for an independent review of the outdated Welsh local government funding formula, which so desperately needs to be revised.

When I started thinking about my contribution today, I thought, 'Well, I'll dust out my speech from last year, the year before, or the year before that; the one that Mike Hedges intervenes on every year.' So, that is evidence, I think, Mike, that we do speak about this on this side every year because you intervene every year. But, this year, I thought, rather than asking the Cabinet Secretary to contribute towards what I'm saying, I'll ask you to contribute to what the leader of Powys County Council is saying. She wrote to all AMs represented in the Powys County Council area, and, I thought, in my contribution, I'd relay some of what she has said, so you can reply directly to her. Her letter sets out the funding gap of £14 million in the next financial year for Powys County Council, and a further £20 million over the following three years, and she talks about the budget reductions taking little account of the cost of providing services across large areas of rural counties like Powys. She goes on to say,

'Powys has been in the unviable position of having the poorest, or joint poorest budget settlement in nine out of 10 years.'

To put this in context, in the last 10 years between 2010 and 2020, there would have been approximately £100 million from our budget, and this in a time when other local authorities across Wales are seeing an increase in their settlements. This is the example that Darren Millar was talking about in his opening comments about the divide between urban and rural Wales. [Interruption.] Yes, Mike, as always. 

As always—if Russell George did have to provoke me. Powys has the fourteenth highest support per capita in Wales and its problem is population loss. 

Well, isn't it interesting that the UK Government, in its block grant, provides every person in Wales with £1.20 for every £1 that is spent in England? And why is that? Because there is more need here in Wales. But that need isn't reflected in the local government formula when it comes to rural Wales and needs across Wales.

It is reflected.

And the Cabinet Secretary will be able to respond to that in his final comments.

Also, the leader of Powys County Council talks about the efficiencies that have already been made in management and back offices. What she says in a letter to me and other AMs in our area is that,

'This approach is no longer sustainable, as the cuts are simply too deep.'

Simply too deep. Savage cuts. She talks about school budgets; job losses—of course, the local authority's the biggest employer in the area; service reductions; highways; maintenance; introducing or increasing charges to some of the public services, such as cemeteries, garden waste, car parking, et cetera.

So, we, on this side of the Chamber, on these benches, we want to make sure that local councils are empowered to make the decisions that affect their communities. Regrettably, there has been a trend towards a centralisation of funding in the form of specific Welsh Government grants rather than empowering those councils, in town councils, community councils, county councils across Wales, to make locally made financial decisions in their own areas—decisions that are suitable for their own communities. So, let's see a more flexible approach and let's see an increase in the revenue support grant rather than specific Welsh Government grants, then allow local authorities to protect more of the services that matter to them.

I will finish my contribution by reading the last-but-one paragraph from the leader of Powys County Council to myself and other AMs:

'It is not too late to reverse the position. The Chancellor's budget has provided additional support for the Welsh block and local government should be first in that queue to receive additional resources. Powys is the authority that has suffered more than most; it should be at the head of that queue.'

Well, I agree with the leader of Powys County Council, and let's agree to an independent review of the Welsh local government funding formula, Cabinet Secretary, and let's see a fair system that works for all parts of Wales.

Thank you. I now call the Cabinet Secretary for Local Government and Public Services. Alun Davies.

Thank you very much, Deputy Presiding Officer. I'm sure you'll agree it's been another uplifting debate on the nature of austerity here. I think it is something that does no credit to this place, or to politics, to listen to Conservative Members stand up and decry the policies and the impact and the effect of policies of a Government they claim to support in the United Kingdom whilst, at the same time, washing their hands of all responsibility for the impacts of those policies. But let me say one thing, as I begin my remarks this afternoon. Let me say this: whatever we do to the formula or with the formula in terms of taking it forward, developing it, I will never, as Cabinet Secretary, fix the formula to support either Labour-supporting councils or councils in my particular region.

We have heard, over the last hour, Conservative after Conservative stand up and tell us, basically, that the formula should be fixed. They have rooted community against community in this country this afternoon in all of their conversations. I am not going to do this. But I tell you what I will do, let me tell you what I will do. When I receive a letter from the WLGA, signed by all four political leaders, telling me that they request a review of that formula, I will grant it; I will not stand in its way. Let me say this: the formula was first introduced, of course, by a predecessor of mine, a Member for Blaenau Gwent, but I feel no ownership of it, I feel that it is a shared formula between us and local government. So, let us hear that voice, let us hear what those council leaders have to say. Let us hear their voice, and if they request that fundamental review, then I would be minded to grant it. But, it will be focused on the needs of people and not to satisfy the needs of political parties. So, it won't be a Tory review; it'll be a review led by this place, independent of political parties, and independent of political chicanery of the sort we've heard behind me.

Isn't the important point today not the formula—and we're getting dragged into discussing the funding formula—but isn't the important point here that there's been an increase in the budget for this year that gave the Government here a golden opportunity to start to shift the emphasis towards preventative services in local government? You've missed that opportunity.

I was responding to one area of the debate; I will come to the other parts of the debate in due course. My assumption was that you wanted to intervene on the formula aspects of it. But we will refer to other parts of this.

What I would like to be able to do, though, is to have a little more of—how shall I put it—an elevated debate on how we fund local government and the challenges facing us. Let me say this: over the last few years, we have seen a significant impact as a consequence of austerity. We have seen an 8 per cent fall, in real terms, in the budget available to this Government since 2009 and 2010. We have seen the impact of a failed economic policy and a failed financial policy from London. It has failed to achieve all of its objectives. One of those objectives—[Interruption.] I'm not going to take another intervention at the moment. It has failed to achieve any of its objectives, and that, I suspect, is why the current Chancellor has thrown the whole lot into the bin.

Let me say this: the Conservatives tell us that they would do things differently, and they're right, they would. They would—they would—because, in England, they are reducing core Government funding, not by 10 per cent or 20 per cent, but to zero. To zero. They reduced it to nothing at all. But you don't hear that from these voices here, and you don't hear it from Conservative councillors either. You know, I've seen the same letters as others have seen here, but I am yet to see a letter from a Conservative leader anywhere in Wales—and I'll take the intervention if somebody has one—where they are saying, 'We want the same policies being pursued by the Conservative Government of the United Kingdom in England here in Wales.' [Interruption.] I'm yet to see it, and I notice that the interventions behind me have dried up.

What we have seen—[Interruption.] What we have seen—[Interruption.] They're silent now. They're silent now, because they recognise—[Interruption.] Because they recognise—[Interruption.] They recognise that the 24 per cent cut in spending for councils in England is compared to 12 per cent in Wales—not 35 per cent, Darren. You got your numbers wrong again; you need a new researcher and you need a new speech writer. So, let me tell you this. There is no—[Interruption.] There is no local authority in Wales that is facing anything like the same reductions in spending as the average council in England—not one, not one at all.

But let me go further than that, and this is the real debate we need to have this afternoon, and Rhun ap Iorwerth came close to saying these things. Let me say this: it's the easiest thing in the world to repeat and rehearse arguments—we've heard at least one Member say that he's made the same speech three times in the last three years—but that is not an adequate response. It's an inadequate response to the challenges we face. We know that a Chancellor in a speech saying that austerity is at an end will, depending on different scenarios, still lead to significant reductions in the Welsh block grant to 2021-22, either by -3 per cent, -0.5, or -0.8 per cent. So, we will still see reductions. And we know—and this is the challenge, Rhun—it's not good enough to offer a commentary and to offer an analysis of different areas of funding, because nobody would disagree with you, but you have to take decisions. We're not sitting in this Chamber to provide a commentary. We're sitting in this Chamber to take decisions, and if you do question the amount of money spent on health, the honest approach is not simply to critique it, but to argue to cut it. Argue to cut it.

I think the point I made about that, and I'll make it again, was that these are decisions that, yes, we can look at in the context of today, but we should be looking at in the context of years. We've been talking for a long, long time about the need to think transformatively about how we spend money on health and social care—it hasn't happened. Now, as a result of the parliamentary review, perhaps we might see some change, but this is a failure on behalf of nearly 20 years of a Labour-led Government.

I would suggest, in many ways, it's a failure of the political class rather than any particular political party, because let me say this: because things are going to get worse. Because things are going to get worse. We all saw, and I'm sure many of us read, the report of the National Institute of Economic and Social Research yesterday, which discussed the impact of Brexit. We could see the UK economy fall by anything from 2.8 per cent to 5.5 per cent. We know that will lead to a significant reduction in tax take; we know that it will lead to a significant reduction in the funding available to us; and we know that if we're serious about the sorts of spending increases that are being discussed this afternoon, we would have to increase Welsh rates of income tax by 5, 6 or 7 per cent in order to make up for those reductions, and are you prepared to argue for that? Are you prepared to argue for it?

What I will say, and I'll say this to Members on all sides of the Chamber this afternoon, is that a sterile debate about how we allocate funding is not an adequate response to the challenges being faced by local government or by other areas of spending within the Welsh Government. We have to ask far harder and far tougher questions, because in the future we will have significant reductions in the funding available to us, and that means asking the hard questions about the structures of governance. It means asking the difficult questions about how we deliver services. It means asking the really searching questions of ourselves and our colleagues about how we are able to create the structures of service delivery and local accountability and governance that can deliver and protect those services, not just in the age of austerity but the age of Brexit-fuelled austerity. By walking away from that debate, we walk away from the responsibility that our offices give us. I know I am testing your patience, Deputy Presiding Officer—I'll finish with this point: I do not need any lectures at all from the Welsh Conservative Party and their crocodile tears about cuts to public funding and their impact on public services. Nobody needs those crocodile tears. Nobody wants those crocodile tears. What we want—[Interruption.] What we want—and what I will lead, and what this Government will lead—is a debate on how we deliver and protect our public services at a time when the people behind me, who are happy to shout, offer no new ideas but offer more of the same. We will lead change in Welsh Labour, and we will lead fair change for everyone across the whole of this country.  

Members must realise that when you all start shouting, I will let the Minister carry on. So, if you feel you are—[Interruption.] So, if you feel—as I heard many, many sedentary comments, you will have to sit and listen, because I will allow Ministers—and only Ministers, I might add very quickly—to go on. So, there we are. Think about that for the next debate. I now call Mark Isherwood to reply to the debate. Mark, you've four minutes. 

Thank you. Thanks to all contributors. As Darren Millar highlighted, a letter by local government leaders, signed by them all, warned that cuts to preventative services would be a false economy. As the chief exec of the Welsh Local Government Association told committee, there was an announcement of £30 million going into regional partnership boards, but that's in the NHS budget line. Why not make that £30 million preventative spend fund?

Summarising the broader issues—. As Darren said, there are suspicions that the Cabinet Secretary is using underhand tactics to force council mergers and, as he said, the Welsh Government's 17-year-old local government funding formula is no longer fit for purpose. As a health professional, Dr Dai Lloyd highlighted the need to see more money spent on illness prevention in local government, and the need to allow GPs to refer to social services. Suzy Davies said that local authorities were close to not being able to run services safely, and that the Welsh Government can't continue to use austerity as an excuse. Mike Hedges provided a formulaic defence of an outdated formula. Rhun ap Iorwerth moved Plaid Cymru's amendments 2 and 3, which we will be supporting. He also noted that it's taken consequentials from the UK Government budget to persuade the Welsh Government to issue crumbs to local government. And, as he said, it's Labour's austerity. Mohammad Asghar referred to the humiliating u-turn performed by the Welsh Government thanks to extra funding from the UK Chancellor. Rhianon Passmore provided us with her usual shouty speech about the austerity inherited by the UK Government in 2010. Russell George highlighted the funding formula divide between urban and rural Wales and said that local authorities should be at the front of the queue for additional funding from the Chancellor.

All we got from Cabinet Secretary Mr Bumble was the usual economic illiteracy, buck-passing and political chicanery. Of course, he referred to the impact on the economy if Labour votes down the Brexit deal negotiated between the UK Government and all 27 members of the EU. Currently, for every £1 spent by the UK Conservative Government on devolved matters, £1.20 is given to Wales. But Welsh council tax payers are bearing the brunt of poor Welsh Government decisions over almost two decades. The Cabinet Secretary again compared funding between England and Wales, claiming that councils there are worse off. But local government funding policy has diverged significantly since devolution: for example, direct funding for schools in England, not Wales, and business rates retention there, not here. It's impossible to make the percentage comparisons he keeps making.

We also know that there is an overly bureaucratic, complex and outdated funding formula that's resulting in skewed local government finances. Therefore, on that note, I will finish by quoting a Labour-led county council in Wales, because last week, Flintshire County Council Labour-led, launched its #BacktheAsk campaign in full council and received unanimous support of all councillors of all parties to take, quote, the fight down to the local government department in Cardiff to get a fair share of national funds. I'm delighted to show my support for them and I'm grateful that people who live in the county of Flintshire, and Wrexham, and the other disadvantaged councils are now standing up to the bullies in Labour, in Cardiff, who will not listen, who have ceased to be accountable and who should go once and for all.

The proposal is to—[Interruption.] The proposal is to agree the motion without amendment. Does any Member object? [Objection.] Thank you. We defer voting under this item until voting time.

Voting deferred until voting time.