Thank you, Deputy Presiding Officer. In opening this debate, Mark Isherwood, as usual, took absolutely no responsibility whatsoever for the political choice of austerity perpetrated on Wales by the UK Tory Government. Every successive Tory speaker did exactly the same thing all the way through. I'm really sorry that you're so bored by the conversation on austerity that you cannot see the suffering that that policy has visited on the people of Wales and the councils who deliver its hard-pressed services. Lynne Neagle, on the other hand, provided a very realistic analysis of what the actual purpose of what we're here to discuss actually is. [Interruption.] You started the debate on that point. I sat and listened carefully to what you had to say, and that's what you said, by and large.

Local government services have an impact on all of our lives. They provide the schools for our children and the care for our vulnerable neighbours. They create the civilised spaces where we can live and work and be sociable. Of course, we recognise the challenge that local government currently faces. We set our draft budget against one of the longest periods of sustained austerity in living memory. The UK Government has consistently and persistently cut funding for public services, following an ideological commitment to reducing the role of government in our lives. We now face the consequences of those decisions. This decision has a real impact on our budget. Against that backdrop, we have continued to protect local government as best we can from the effects of that austerity.

In 2019-20 local authorities will receive £4.2 billion from the Welsh Government in core revenue funding and non-domestic rates to spend on delivering key services. This equates to an increase of 0.2 per cent on a like-for-like basis compared to the current year. In line with our programme for government commitment to provide funding for the settlement floor, the settlement includes a £3.5 million fully funded Welsh Government amount to ensure that no authority has to manage with a deduction of more than 0.3 per cent in its aggregate external finance next year. Of course this is not enough to maintain the level of local service provision that we would all wish to see, but we have prioritised local government. Our commitments to NHS spending in Wales are well known and understood; once those are met, we have given the highest priority to local government.

In the last budget round, when the UK Government made more money available between the draft and final budget, we allocated extra money to local government as part of turning a £43 million decrease in funding for local government into a £10 million increase. We have recognised in our funding decisions the specific areas where local government has said it has the most pressure, such as social services, education and teachers' pay. Outside of the local government settlement, over £900 million of grant funding is also provided in support of local authority services in 2019-20. We've invested £30 million through the health and local government partnership boards, where health and local government work together. Earlier this month we also announced additional funding above the Barnett consequential roof received from the UK Government to enable local authorities to meet the additional costs of the UK Government's pension changes for teachers and firefighters.

We worked hard to offer local government the best settlement possible, but we recognise that the settlement is a real-terms cut in core funding when authorities face real pressures from things such as ageing populations, pay awards and other inflationary pressures. This has indeed meant some hard choices for our councils. In setting their budgets, councils will have been taking account of all available sources of funding, efficiency plans, income generation and management of reserves, as well as local priorities and pressures around local delivery of services.

I join Rhun ap Iorwerth in seeking to delete point 4 in the motion. This is not an accurate reflection of the position on council tax. In fact, council tax levels for band E properties in Wales are, on average, lower than those in England, which is what the Government amendment seeks to clarify. Councils will be engaging local people in decisions about how local resources are spent and what services are provided. Hard choices are inevitable. I want to pay tribute to the councillors who engage in these difficult decisions and work hard to improve the services that authorities deliver.

Unlike in England, we continue to provide authorities in Wales with the flexibility to set their own budgets and council tax levels to help manage the financial challenges they face—flexibilities that have not been available to their counterparts in England. We do not require authorities to conduct costly local referenda, nor is the funding raised through council tax ring-fenced for specific purposes.

Unlike in England, we have maintained a national system for council tax support for those least able to pay. We have continued to maintain full entitlements for council tax support under our council tax reduction scheme. We are again providing £244 million for our council tax reduction scheme in the local government settlement. This ensures almost 300,000 vulnerable and low-income households in Wales are protected from any increase in their council tax liability, contrary to what was said on the opposite benches. Of these, 220,000 will continue to pay no council tax at all. We are making progress on making council tax fairer. My colleague, the Minister for Finance and Trefnydd, issued a written statement to provide an update last week.

I also support the principle of Rhun ap Iorwerth's amendment, calling for longer term funding settlements to support longer term planning. We recognise and are sympathetic to the calls from our public sector partners for budgeting over a longer period whenever possible in order to support forward financial planning, and our ambition is always to publish plans for longer than 12 months. However, this must be balanced with our ability to provide realistic and sensible planning assumptions in light of the continuing fiscal uncertainty, ongoing pursuit of austerity by the UK Government, and the considerable uncertainty surrounding the shape and nature of the shambolic Brexit negotiations currently being undertaken by the UK Government. The Welsh Government does not have a funding settlement from the UK Government beyond 2019-20 for revenue and 2020-21 for capital, which is why I, reluctantly, have to oppose amendment number 3, although I support the principle entirely.

I do not support the call for an independent review of the funding formula. The funding formula is reviewed annually through a partnership between Welsh local government and Welsh Government. The underlying rationale for the distribution formula is straightforward. It uses indicators of relative need, which are not influenced by local choices. These include demographic factors, deprivation indicators and sparsity. Where the data for these indicators change then so does the distribution. Each year, we renew and test the significance of existing and newly proposed indicators.

I've said many times, and I'll say it again, that, if there is anyone in local government or in this Assembly or in the wider world who has well-argued proposals for new or different indicators of spending need, then I will ask that this is considered in our continuous review of the distribution formula alongside local government, with whom I have a very good working relationship. I take some comfort in the fact, however, that urban areas continue to feel the formula favours the rural and vice versa, that southern areas feel the north is favoured and vice versa, and that poor areas feel the affluent benefit and vice versa, because, actually, local government and this Government have agreed, in partnership, what that formula looks like, and some of the people that you mentioned sat beside me in the distribution formula working group only a few weeks ago. And my colleague the Minister for Finance and Trefnydd also attended, and we had a very good meeting, where there was certainly a consensus.

I take no comfort from the sale of misinformation and misunderstanding that surrounds this formula. We have a responsibility to explain how it works, and so does every Assembly Member, every council leader and chief executive. Deputy Presiding Officer, I would like to state at this point that we will offer technical briefings on the exact nature of the formula, its weighting and how it works, to every Assembly Member, either individually or in groups or in any way that would most benefit you. I think we share a responsibility to understand the formula and make it work, and we can't pass it over to some independent panel. 

Deputy Presiding Officer, I feel very strongly that local government should be supported in terms of austerity. I feel that we need to be realistic about the cuts in the grant to this Government of £800 million equivalent a year. We have done our very best to protect local government. They have worked very well with me in my time as Minister, and I pay tribute to their continued perseverance to deliver services in the face of this continued austerity. Diolch.