3. What discussions has the Minister had with the Minister for Housing and Local Government about funding pressures in local government? OAQ53523

4. What discussions has the Minister held with the Minister for Housing and Local Government on local authority budgets? OAQ53482

Thank you. I understand, Presiding Officer, that you've given your permission for questions 3 and 4 to be grouped together. Together, the Minister for Housing and Local Government and I met representatives of local government at the finance sub-group on 23 January, where we discussed a range of matters, including the funding challenges facing local government.

Thank you, Minister. Because of Tory austerity, Torfaen council yesterday were forced to put up council tax by 5.9 per cent in order to protect vital public services, especially schools and social care. I'm very proud to represent a Labour council that is fighting so hard to protect local services, and although I welcome the additional funding the Welsh Government announced for local government after the draft budget, it is undoubtedly the case that local authorities are facing huge funding pressures, especially in education and social care.

In terms of education, you may be aware that the Children, Young People and Education Committee is currently conducting an inquiry on school funding in Wales, and I have to say that the evidence we've received so far from teachers and school leaders paints a very worrying picture. 

Hear, hear.

Can I ask what discussions the Minister will have with both the Minister for Education and the Minister for Housing and Local Government, and what assurances you can give that ensuring sufficient funding for our schools will be a priority for you?

Thank you for raising this, and I do find it quite staggering to hear the shouts of 'good question' and 'hear, hear' from the Conservative benches when, as a result of austerity, funding per head of the population for day-to-day devolved public services, such as schools in Wales, will be 7 per cent lower next year than it was a decade ago. Between 2010-11 and 2019-20, the Welsh budget will have fallen by 5 per cent in real terms, when repayable funding's excluded. So, that's equivalent to £850 million less to spend on public services every year, but nonetheless, we're clearly prioritising the NHS, we're prioritising education, and we're prioritising social services.

So, with regard specifically to schools, we are directing to local authorities all of the £23.5 million announced by the UK Government last September towards funding school teachers' pay award in 2018-19 and 2019-20. And, in addition to this, we've gone further and announced an additional £15 million of funding that is being deployed over this financial year and next to help local authorities meet those cost pressures associated with teachers' pay in particular.

However, I do absolutely recognise the huge pressure that local authorities are under at the moment. We've given the best possible settlement, but we're under no illusion that it does mean difficult choices for our local government colleagues.

Minister, one of the consequences of Tory austerity is not only does the Assembly have less money, but also it means that local government has less money. And, of course, one of the pressures is on the leisure centres that are provided, which are of considerable public value to our communities. We are already seeing leisure centres having to close or be transferred into trusts. What I'm asking you, Minister, is to consider this: there is an opportunity, by removing the obligation in respect of council tax on local authority leisure centres, to actually put them on a level playing field with trusts. That would save, certainly in my council of Rhondda Cynon Taf, in the region of £800,000 a year. If those authorities have to actually close or transfer those leisure centres into a trust, we lose that money in any event. So, this would be, I think, an imaginative way of actually supporting our community publicly owned leisure centres where we pay decent pay—decent conditions, accountable to the community. And, by removing the obligation and creating a level playing field, we could do a lot to protect them and to protect this element of public service.

Thank you very much, and I know that you raised this particular issue in the Chamber with me a week or so ago, and I've certainly had some further opportunity to explore the issue further. I think that what we have to remember is that all non-domestic rates revenue received in Wales is distributed to local authorities to help fund local services. So, the vast majority of local authorities in Wales will receive more as a result of the payment of non-domestic rates than they see paid out within their own areas. Providing rates relief or exemptions to councils or other public bodies could distort competition and markets, giving publicly run facilities an unfair advantage over the privately run ones, and that could have some state-aid implications, as I've been told. But, obviously, I know that this is an area of particular interest to you; I'd be more than happy to continue that conversation.

Minister, council tax payers in south-east Wales are facing huge increases in their bills thanks to the Welsh Government's inadequate local government settlement. People living in Newport, Torfaen and Merthyr Tydfil are facing bills increased by nearly 6 per cent, and Caerphilly council is set to rise by nearly 7 per cent. Given that the Welsh Government 5 per cent cap has proved to be just a PR exercise, I think, what discussions has the Minister had with her colleagues about the devastating effect that these huge increases will have on hard-pressed families often in the poorest parts of Wales?

I think the brass neck on the Conservative benches is quite incredible this afternoon. If public spending had kept pace with growth in the economy, we would have an extra £4 billion to spend next year, and imagine how generous we could be to local authorities then. But I do have to say to the Conservatives, if the Conservatives want more money for any area of Welsh life, be it local authorities or the NHS or anywhere else, then they would have to tell us where the cut would fall.

Minister, the Welsh Local Government Association is always pleading with the Welsh Government to reduce the amount of specific hypothecated grants allocated to councils on an annual basis. They argue, obviously, that this funding should instead be provided directly by the revenue support grant, giving local authorities as much freedom as possible to respond to local need. Now, do you recognise this call, and, given the current state of local government finance, will you commit to listening to local authority leaders on this point during the next budget-setting process?

Thank you very much. It is always the case, obviously, that local authorities would like to have as much of the funding in the revenue support grant as possible, and we have taken steps, on an annual basis I think, to explore what more we can do in order to give local authorities the kind of flexibility they need. We have a further meeting of the finance sub-group coming up very shortly, and I'd be more than happy to pursue that conversation there.

Despite all authorities seeing increased financial demands, it's widely known across Wales now that, as regards social care, we have a ticking time bomb. Local authorities just cannot manage their social care budgets. We now know, as of a protest in north Wales this weekend, and through speaking with unions and people, teachers and leaders within our educational area, that we have an educational funding crisis within our local authorities.

Now, you must be aware that local authorities such as Conwy County Borough Council have already striven to make serious financial savings: £15.6 million this year alone. So, there's nothing left for them to trim. Now, as a result of that, a 9.6 per cent council tax increase in Conwy, Ynys Môn 9.5 per cent and Flintshire 8.75 per cent. Yet many local authorities, and those with over £100 million in actual reserves—they received an increase in their funding. At what point will this Welsh Labour Government look across the whole of Wales and actually provide the financial funding that's required on a demographic base need, and stop this political meandering of actually rewarding local authorities that are Labour-led? And really, frankly, you are letting down local authorities in north Wales, and none more so than my own in Aberconwy.

Well, look, there's absolutely no truth whatsoever that there is any politics involved in the local government funding formula. The local government funding formula is developed in collaboration with local government. The local government Minister and I have been very clear with local government that, if they want to come forward with a different way of apportioning funding amongst local authorities, then we would be happy to have those conversations, but such an idea and such proposals have not yet come forward.