Part of the debate – in the Senedd at 8:00 pm on 4 December 2018.
Diolch yn fawr, Llywydd. Can I begin by thanking particularly the Chairs of the Assembly committees for taking part in the debate this afternoon.
It’s a really important moment in the scrutiny of the budget that we get to hear from all our committees, in the way that Bethan Sayed said—a moment to focus on those parts of the budget that don’t often get talked about here on the floor of the Assembly, but which are very important indeed in the wider life of Wales.
I’m going to mention four issues that I think came up repeatedly in what the Chairs had to say. First of all, anxiety about pay, which I share. The policy of the Welsh Government, Llywydd, has been this: whenever we get money from the UK Government to match pay settlements that they have agreed, we pass that immediately on to the organisations responsible for paying that. That’s certainly been true of teachers’ pay, augmented by a further £7.5 million this year and next from our money to make sure that local authorities are able to discharge their responsibilities in that area, and that is exactly what we expect that money to do.
John Griffiths mentioned pensions in his contribution, and of all the things that we’ve mentioned this afternoon, Llywydd, that is my greatest anxiety as your finance Minister. The UK Government has changed the rules as far as pension contributions are concerned, and it will mean that public services here in Wales will have a very large bill that they have to pay over and above anything that they were planning for or were able to influence. The UK Government says that it is providing funding to cover those costs, but we are yet to see how much of that will come to Wales, and we are yet to see the extent to which that funding will meet the bills that we have to pay. Now, I say again this afternoon that the Welsh Government will act simply as a postbox in those circumstances. Any money that we get will go directly to the health service, to local authorities for teachers pensions, to the fire service, to further education, and so on. But if the UK Government does not cover the costs that it has engendered, then I have to tell Members around this Chamber: there is no sum of money set aside in our budget that we will be able to go to to bail out the UK Government in that situation. Indeed, as I explained to the Finance Committee when giving evidence there, next year I will only make our budget balance by taking money out of the Welsh reserve. I’m able to do that because of the careful management that we have made of reserves. But in order to go on doing all the things we want to do, to the extent that we are able, we rely on spending over and above the money that we have on a year-in, year-out basis, and there is nowhere else to go if we are landed with a pension bill for which we have no responsibility and have not been able to make provision.
A third theme in what the Chairs of committees have said is on prevention. I’m grateful to what Members have said about the usefulness of the definition and I agree with what has been said about making sure that we now go on to refine the definition and to make greater use of it in drawing spending down the hierarchy that the definition provides, so that we spend more, in the end, on primary prevention than we do today.
I’m very pleased to hear what the Chair said about joint committee meetings. The leader of the house and I both attended such a meeting, which was scrutinising equality matters in the budget, and I look forward to receiving the outcome of that work.
Llywydd, can I say, in as gentle a way as I can, that everybody in my world wants to talk to me about cross-cutting budgets; everybody is quite keen to make sure that their own budget is protected. I detected quite a bit of that in what Chairs of committees had to say again. It’s understandable—Chairs of committees are responsible for an area, they are passionately committed to that area, and everybody can see that there is more that we could do, but you only get cross-cutting budgets if everybody is willing to give up a bit of what they have in their hands to be able to carry out that wider work.