Diolch, Llywydd. I'd like to start by thanking Members for their contributions and for contributing to the debate. I first want to respond to the comments on the sufficiency of the settlement. This Government has recognised the priorities and pressures we and local government are facing through this settlement and the wider funding available to local government. Indeed, I went out of my way to say that, whilst this settlement is not calamitous, it's hardly good news for local government in the light of austerity policies driven by the UK Government. The party opposite and many other opposition Members—you'd think that austerity was a home-grown policy made here in Wales and not something that the Conservative Government has been pursuing for longer than any other Government in history. The settlement we have today is very much as a result of those austerity-driven policies.

However, as a result of the comments made by a number of Members around the Chamber—some more helpful than others—I would like to just reiterate that I am extremely happy to meet with any Member or groups of Members who wish to discuss the settlement in general or the specifics of the settlement for their local authority. I'm more than happy to meet with Members to explain why the formula is as it is, which is very easy. It's because the partnership council's finance group and sub-group come up with this formula in partnership with local government. It is constantly reviewed, it is agreed by the partnership council in partnership with local government. It's not something we are imposing on local government, and if any Members think that they have a better way of distributing the money that they think would work across Wales, then I'm more than happy to discuss it with them. This formula is very much an agreed formula with local government, and it takes into account population numbers, density, sparsity, deprivation and a number of other things, which result of course in differential expenditure across Wales, depending on the social and economic circumstances that each local authority finds within its borders.

And in response to other Members asking about different decisions, of course local government is the first—first, or second if you have a community council—tier of democracy, and, of course, the democratically elected members of those local authorities make those decisions on behalf of the people that they represent, and that is as it should be. And as I said in my opening remarks, we want a lively, diverse and able local authority constituency in Wales, and I applaud their efforts to do so.

I just want to start by reminding Members quickly where we were at the beginning of this budget round. In January 2018, we published the local government settlement for 2018-19 and an indicative figure for 2019-20. Local government was clear last year that it needed as much certainty for future years as possible. The Assembly voted then to give local government the certainty that core unhypothecated funding for 2019-20 would be at least £4.2 billion. That's not a position, which is a 1 per cent cut, that we have wanted to leave local government in, but reflected the degree of certainty we felt able to give against the backdrop of our own budget position and the uncertainty of public finances. As a result of the final budget confirmed earlier today, core unhypothecated funding for local government in Wales is an increase, in fact, of 0.2 per cent over last year.

So, the issue for Members here is that you can't have both certainty and timeliness. So, either we have to give certainty earlier in the year as a base and then allow us to move as the budget moves, or we wait very late in the year to have complete certainty, and then you don't have the time to plan. You can't have both of those things, given where the UK Government is in terms of when it announces its budget. So, I think if local authorities would prefer to have this absolute certainty later on without the time to plan, then that's something we can discuss, but, currently, they're asking for the longer time to plan with the knowledge that that means we have continuing challenges and difficult choices to make during the course of the budget. It's something that I'm sure the finance Minister and I will be more than happy to discuss with them as we go forward. 

The settlement does mean that local authorities will have to look at how to transform services in order to respond to changing needs and expectations or, where necessary, choose how to reduce them while carrying the public with them, as well as deciding the level at which they will set council tax to reflect those choices. And those are rightly matters for local government. I believe those are challenges that local government in Wales can meet. While I would not seek to persuade them or you that this is a good settlement, neither is it a catastrophic one, and they ought to be able to work well within this settlement. 

The Government's priority is and always has been to protect councils from the worst cuts passed on to us by the UK Government, and this is reflected in the settlement for 2019-20 I've presented to you today. We have, despite opposite benches groaning every time I say this, ensured that local government hasn't seen the attack on services that the English local government sector has. We have seen protections of budgets in a way we have not seen across the border. We've sought to work alongside local government at all times to ensure we are able, where possible, to protect services and protect the most vulnerable. We will continue to maintain full entitlements under our council tax reduction scheme for 2019-20, and are again providing £244 million in the local government settlement in recognition of this. 

We remain absolutely committed to protecting vulnerable and low income households, despite the shortfall in the funding transferred by the UK Government following its abolition of council tax benefit. The arrangements for 2020-21 onwards will be determined as part of our wider considerations about how to make council tax fairer, as I think Jack Sargeant and a number of other people mentioned. This will include funding for new responsibilities and, taking today's settlement and confirmed grant funding together, local government in Wales will receive nearly £5 billion in revenue for 2019-20, a cash increase of around £70 million on 2018-19. This additional funding reflects our priorities of social services and education, in particular. 

Aside from the funding announced through and alongside the settlement, we have made other commitments to support authorities in the coming financial year. We will continue discussions with local government to take forward a new housing investment fund between large-scale sites of development. This will be met with a combination of capital and financial transactions capital of up to £15 million. We will increase the Welsh Government's intervention rate for capital schemes under band B of the twenty-first century schools and education programme.

We have written jointly with the Welsh Local Government Association to the Chancellor to repeat our calls for the UK Government to fund the increased costs to employers associated with changes to pensions, in answer to Mike Hedges's question. We have not yet received a response, but we continue to press for an answer, as we absolutely understand the difficulty that the uncertainty about pension costs gives to local authorities and other bodies when trying to set their budgets appropriately.

With the uncertain times that we are in and that lie ahead, it is more important than ever that we work together in partnership. Despite the Prime Minister's pledge, however, there is no sign of an end to austerity. I am committed to working with local government to provide flexibility where possible. We are committed to considering how local government might be more empowered and better strengthened. I will continue to work with authorities to support them to ensure that each authority makes the most effective and efficient use of all of the resources available to it.

This means there must be a commitment from local authorities to regional working. There must be greater collaboration with health boards and the education consortia to secure improved outcomes and increased resilience. There must also be a recommitment to the spirit and letter of the terms of reference of the working group on local government. I do believe the settlement reflects a reasonable outcome for local government within the current financial climate. It has been achieved in yet another challenging year, and recognises our commitment to invest in essential public services such as education and social care.  

In closing, I will just once more reiterate the positive work on the distribution formula with local government. The annual changes to the formula are agreed each year, as I said earlier, between Welsh Government and local government through the finance sub-group. This means we are confident that we deliver an equitable and objective distribution of the funding available. I certainly deplore any suggestion that there is deliberate bias or unfairness in the formula, and to suggest that that is so is very unfair to those who engage so positively in the work to deliver it.

I'd like to add, too, that we've continued to publish the settlement for local government in Wales earlier than other parts of the UK. As I said, that is an agreement with local government to give them the maximum possible time limit to plan. The provisional local government settlement in Wales, published over two months earlier than in England, allowed for that final planning. In England, the provisional settlement was published only six days before our final settlement. On that basis, Llywydd, I commend this settlement to the Assembly. Diolch.