Item 14 is the next item, and it's the Local Authorities (Capital Finance and Accounting) (Wales) (Amendment) (EU Exit) Regulations 2019, and I call on the Minister for Housing and Local Government to move the motion—Julie James.

Motion NDM7014 Rebecca Evans

To propose that the National Assembly for Wales; in accordance with Standing Order 27.5:

1. Approves that the draft The Local Authorities (Capital Finance and Accounting) (Wales) (Amendment) (EU Exit) Regulations 2019 is made in accordance with the draft laid in the Table Office on 05 March 2019.

Motion moved.

Diolch, Llywydd. I move the motion. Regulation 3 of the Local Authorities (Capital Finance and Accounting) (Wales) (Amendment) Regulations 2018 amended regulation 1 of the Local Authorities (Capital Finance and Accounting) (Wales) Regulations 2003 by amending the definition of 'money market fund'. That definition included references to EU directive 2009/65/EC, the directive on the co-ordination of laws, regulations and administrative provisions relating to undertakings of collective investment in transferable securities. The Local Authorities (Capital Finance and Accounting) (Wales) (Amendment) (EU Exit) Regulations 2019 remove references to the directive. The amendment is one of a technical nature and I want to assure Members that my officials will work with local authorities to ensure that they are aware of these changes.

I should be upfront and clarify that ordinarily amendments to these regulations would have been through the negative procedure. However, officials were liaising with their counterparts in Whitehall to better understand how equivalent regulations were going to be amended and reviewing the policy here. As a result, the Welsh Government were not in a position to meet the deadline of 5 February for laying through the negative procedure.

Money market funds are collective investment schemes that are used by local authorities for shorter term, risk-spreading investments. In amending the definition, we are continuing to give local authorities the flexibility to choose the most suitable investment funds for them. Giving less prescription, of course, can mean more risk, but we have considered this and feel it is managed by each authority having an investment strategy as part of its treasury management policy. These are supported by the Chartered Institute of Public Finance and Accountancy treasury management in the public services code of practice.

I should also like to thank the Constitutional and Legislative Affairs Committee for identifying minor errors in the explanatory memorandum. These will be corrected and the EM has been relaid. Members will be aware of the Welsh Government's position on withdrawing from the European Union and the handling of the transition period, but it is essential we have a fully functioning statute book that works from the exit date onwards, which is why these changes have had to be made at pace before we leave the EU. Diolch.

Suzy Davies to speak on behalf of the Constitutional and Legislative Affairs Committee. 

Diolch yn fawr. We like to keep you guessing. [Laughter.]

The committee considered these regulations at our meeting on 18 March and we reported one technical point and two merits points to the Assembly. The technical reporting point relates to regulation 2, which amends regulation 1(4) of the Local Authorities (Capital Finance and Accounting) (Wales) Regulations 2003. The explanatory memorandum to the regulations contains inconsistencies and indicates variously that the amendment amounts to removing reference to,  quote, 'EU regulations' or the, quote, 'European Directive and Council meeting' without identifying those.

Further, regulation 2 omits paragraph A of the definition of 'money market fund' in its entirety, which has the effect of omitting provision defining such a fund as being an undertaking for the collective investment in transferable securities. It was, at the time, therefore, not clear in light of the then explanatory memorandum whether the change was intended or not. We note, in its response to our report, that the Welsh Government has confirmed that the change is intended, and it's been confirmed again today.

So, as regards the first merits point, we noted that these regulations would ordinarily have been made through the negative annulment procedure, as the Minister has already referred to, but, because of the reasons that the Minister has given today it wasn't possible to do that within the usual period for a negative procedure and so you weren't able to make those necessary changes on clarity at that point. 

Our second merits report point noted that the explanatory memorandum to these regulations appeared at that time to contain a number of errors, and therefore we welcome the fact that the Welsh Government has corrected and relaid the explanatory memorandum. Thank you. Diolch, Llywydd.

No further speakers. Does the Minister wish to respond?

Can I just say thank you very much to the Constitutional and Legislative Affairs Committee for its help in this matter? It is important that local authorities have access to a range of investment options to maximise their income, including investing surplus funds on a short-term basis. We do expect all local authorities to balance risk and return of investment in line with the treasury management policies. Suzy Davies very kindly confirmed the points. We agree with those points and we have relaid the explanatory memorandum. I'm grateful. Diolch, Llywydd. 

The proposal is to agree the motion. Does any Member object? The motion is, therefore, agreed.

Motion agreed in accordance with Standing Order 12.36.

Which brings us to the end of our business for the day. Thank you very much.

The meeting ended at 17:18.