Right, we'll move on now to item 6, the Finance Committee debate on the Government's spending priorities, and I call on the Chair of the committee to move the motion. Llyr Gruffudd. 

Motion NDM7140 Llyr Gruffydd

To propose that the National Assembly for Wales:

Notes the representations made by participants at the Finance Committee's stakeholder event in Aberystwyth regarding the Welsh Government's spending priorities for the forthcoming budget 2020-21.

Motion moved.

Thank you very much, temporary Deputy Presiding Officer, and as Chair of the Finance Committee, I'm very pleased to be opening this debate today on the future spending priorities for the Welsh Government. The Finance Committee has expressed its concern that the Assembly does not have a formal opportunity to debate and, through that, to potentially influence the Welsh Government’s spending priorities prior to the draft budget being tabled.

During our scrutiny of the draft budget on 27 June, the committee agreed that Assembly Members should have the opportunity to debate future spending priorities at an earlier stage in the budget process. Indeed, our inquiry into the legislative budget process shows how other parliaments give much earlier opportunities to backbench Members to influence Government spending priorities in the early, formative period, long before the draft budget is tabled.

Now, while the committee strongly believes that an early debate is something that needs to be facilitated on a permanent basis in the future, it’s important, of course, that we have a debate on spending priorities this year, although a little later than we'd hoped, given the recent UK Government spending round and the proposed timings of the Welsh Government’s budget. Our scrutiny of the draft budget will follow the approach taken in previous years, focusing on the four principles of financial scrutiny, namely, first, affordability, also prioritisation, value for money and budget process.

The committee hosted an event in Aberystwyth on 27 June to gather the views of stakeholders on the spending priorities for the next financial year. Through discussion and following on from the recommendations in our continuous scrutiny of the Welsh Government’s budget, we identified a number of areas that we would like to focus on in this year’s scrutiny, and these include how the Welsh Government should use taxation and borrowing powers, particularly in relation to the Welsh rate of income tax, and how preventative spending is increasingly prioritised and how this is represented in resource allocation. We’re talking here about spending that focuses on preventing problems and eases future demand on services through early intervention, particularly in relation to funding local health boards, health services and social care. Another area we want to focus on is the sustainability of public services, and that includes innovation and service transformation to respond to changing demands and demographic change. Prioritising policies to promote economic growth, reduce poverty and gender inequality, and mitigate welfare reform, is also an important area. Also, the planning and preparedness work of the Welsh Government in relation to Brexit, of course, and how the future generations Act is influencing policy making. And in declaring a climate emergency, is it clear how the Welsh Government intends to respond to that challenge and ensure that appropriate resources are available, and that that is reflected clearly in the budget?

After the event in Aberystwyth, I wrote to the Chairs of the committees to share the views of the Finance Committee with them and to encourage the other committees to consider how they can contribute to scrutinising the Government’s spending plans in the most coherent and effective way. As in previous years, we are also undertaking a consultation on the priorities for the draft budget on behalf of all committees. Today is the closing date for that consultation, and the responses will be published in the coming weeks to assist the Assembly to scrutinise the draft budget.

The Chancellor of the Exchequer recently announced the UK Government’s spending plans for 2020-2021 as part of a one-year spending round. The announcement provided details of Wales's revenue budget for next year, which will increase by £593 million above the 2019-20 baseline. In real terms, this represents an increase of 2.3 per cent. The spending round also included an increase of £18 million to the capital budget for Wales, meaning that the budget was 2.4 per cent higher in real terms compared to 2019-20.

The Minister for Finance and Trefnydd responded to the spending round in a written statement on 4 September this year, stating, and I quote,

'The Welsh Government budget will be based on the needs of the people of Wales and we will aim to deliver the fairest possible settlement for Welsh public services.'

But what does this really mean? It’s a very broad-ranging statement, of course, but what will be the key drivers in how this additional funding will be spent in Wales? How should we balance the need to invest in preventative initiatives to reduce future demand with the need to support existing services that have, of course, suffered years of austerity? And how will we judge whether the Welsh Government has met its objectives? We need to ensure that the budget is used as effectively as possible in order to meet the needs of the population of Wales in the best way. Today’s debate is an opportunity for the Assembly to consider how the Welsh Government should be prioritising its spending in order to achieve this desired outcome.

There is little doubt that these are uncertain times, of course, with the likelihood of a 'no deal' Brexit still a possibility, and the possibility of another UK general election on the horizon, and all of this makes it increasingly difficult to predict the economic future for Wales. The fact that the UK spending round was only for one year is also frustrating for all of the devolved administrations, because it does not enable us to develop financial plans for the long term as we and the number of stakeholders that we’ve spoken to would wish to see.

However, this uncertainty makes it all the more important for us to have this debate today, in my opinion, and consider the priorities for next year’s budget carefully, to mitigate, as far as possible, any future impact resulting from Brexit and to protect the financial future of Wales and its citizens. I look forward very much to hearing the opinion, views and priorities of Members of all parts of the Assembly. Thank you.

I'm pleased to contribute to this afternoon's important debate on budget priorities, as we move into the all-important budget-setting phase of the Welsh Government and the budget-scrutinising phase of the Assembly's Finance Committee.

I was pleased to take part in the stakeholder event at the Marine hotel in Aberystwyth—a nice sunny day, as I seem to remember; it seems a world away now. We had a lot of discussion in the previous debate about the views of politicians and the views of Members in this Chamber and chambers like this vis-à-vis the views of the public, so I think those stakeholder events are all-important as a means of getting out there and finding out what people on the ground, in businesses and organisations in the third sector—what their priorities are, so that we, as a committee, can feed back to the Welsh Government and we can try and form a budget that is truly in the interests of all.

I think it became clear, through the course of the event in Aberystwyth, that there was universal agreement that prevention and early intervention are key words and concepts that should be at the heart of budget allocation. Yet, this core idea of prevention and planning ahead on the one hand—too often it was felt that that was being negated, or at least lessened, on the other hand, by the increased pressures on budgets, which public organisations and public bodies across Wales too often feel that they are sinking under—not to use too strong an expression. And those organisations find longer term planning really difficult.

We heard concerning evidence that many local authorities have reached saturation point—that was the word that they used—and cannot absorb any more additional costs. This is leading to cuts in non-statutory services, such as leisure, culture and transport, which can then have a knock-on negative impact on the well-being of the local population. I know that the Minister will have heard many of these concerns from local authorities for a long time; we've heard them on the committee for a considerable length of time. And it's too easy to think, 'Well, they would say that, wouldn't they, because they're at the coalface?' But, nonetheless, when these sorts of public services, local services, are cut, then there are knock-on effects and there are impacts on other budgets, because money has to come from other budgets to fund the non-statutory commitments. And, of course, when things like leisure centres see cuts and other cultural places see cuts, then local well-being can be affected and then the health service and social services have to pick up the consequences.

So, we can end up in a vicious circle, where there's greater pressure on the statutory services, which are at the centre of what the local authorities are providing. And, of course, these services are even more stretched in rural areas. Issues such as rural transport I'm constantly raising in this Chamber. Those issues apply even greater pressures in rural areas across Wales. It was very interesting that shareholders also questioned the affordability of some universal services, such as free prescriptions, which we don't discuss so much in this Chamber anymore, and it's probably become a little bit more a part of the accepted landscape. But when you talk to stakeholders out there, as we did, they are saying that universally provided things like that—yes, there might be a really positive thing that people want to have, but when budgets are stretched and local authorities and public services have to make important decisions, they feel that they have to look across the board at everything, otherwise you see important areas being cut.

The issue of cost neutrality came up time and time again. It's a key issue for the Finance Committee. We're often told by the Welsh Government that new legislation is cost neutral, and often by Members when legislation is coming through. Our stakeholders told us that it is rarely the case in practice, and often there are hidden costs, which we don't see at the time that we're looking at legislation, that are there and that have knock-on effects out there in communities. They wanted the Welsh Government to have a better way of assessing hidden costs that there can be behind legislation and budget decisions.

Brexit was, of course, raised during the session—impossible to avoid at the moment. By the way, for anyone who's read the Finance Committee report, I don't think there is such a thing as a 'new deal' Brexit, nice as that might be. I think stakeholders were actually talking about a 'no deal' Brexit. I think it was a merging of two different concepts there. Maybe it's, I don't know, a new term that's going to enter over the next couple of weeks. But with 'no deal' Brexit, they did feel there needed to be planning into that. No-one we spoke to wanted a 'no deal' Brexit, but they recognised that if that is looming on the horizon, there does have to be some work done to try and mitigate any potential consequences of that.

We know that the UK Government's spending round has resulted in an extra £600 million, or slightly less—I think it was £593 million or £594 million that the Chair said—coming into the Welsh budget, and £18 million extra capital. That's an over 2 per cent increase in real terms, and that is to be welcomed. The UK Government has said that we are turning a corner. I accept it's been a long time and pressures are still out there, but I think what's important to the stakeholders we spoke to and to people across Wales is that the Welsh Government does make sure that that money that's being spent on public services in Wales—the health service, education—does get passed on to the all-important public services, and the front line of public services in Wales, so that we can see the sort of improvements here that people really do want to see.

I think it's important that we start our conversations about the budgets right at the beginning of the process, rather than the legislature responding to the Government's proposals. The conversations that we've started to have, listening to people, in this case in Aberystwyth, were part of that attempt to ensure that we changed the way in which—we don't simply scrutinise budgets in the sense of scrutinising individual budget lines and individual spending decisions, but we look at the shape of a budget and we seek to influence the shape and priorities of a budget. I think, sometimes, as a Member, I've spent far too much time trying to catch out a Minister on a particular spending decision, rather than looking at the policy imperative and the policy ambition of that spending and then to look at how the Minister will then account for meeting or not meeting their priorities. So, I hope, as we move towards a legislative budget process over the coming years, we will be able to ensure that we hold more of these debates and we start the budget process with a debate of this sort, where Members here determine and inform the Government of their priorities, and then the Government, in publishing their budget, are able to respond to these debates and to the priorities that Members here and members of the public have actually identified.

Now, in doing so, and we had this conversation in Aberystwyth, the temptation, of course, is to list the whole range of governmental activities and, in different ways, to define all of those different activities as a priority. Some speeches we hear here on Wednesday afternoons certainly achieve that, and a good case, of course, can be made for much of Government spending at all times. So, I will resist the temptation to give our Minister this afternoon a list of a 1,000 different priorities, and try to limit myself to three priorities that I believe are important for us to consider over the coming weeks and months.

For me, the key priority is that of education. I spoke about this—and perhaps members of the Government will remember this—as a Minister last year. I was very, very clear that the public service I felt that we need to really focus upon in future years is that of education, and particularly schools. Schools have done great things over the last few years, and we've seen a fantastic improvement in standards and results. But we've also seen the pressures that schools and teachers, teaching assistants and others are under. The whole of the education community is achieving fantastic achievements, but we are, I believe, in a position whereby we need to ensure that schools are seem to be a priority.

I hope within this—and I will, acting Deputy Presiding Officer, ensure that my interest in this matter is on the record; my son receives additional learning needs education—I do believe that we need to ensure that, in implementing the additional learning needs statutory framework, we provide additional funding for additional learning needs education, which isn't done at the moment. I believe both the additional funding to education and the additional learning needs education should be provided by way of a direct grant into the education budget, or delivered through the pupil development grant to ensure that additional funding reaches schools with a higher population receiving free school meals. I believe it's important it's done through a direct grant through the education department, because I believe it's important that we ensure that this money is directed directly to the front line.

The second priority would be that of public transport. Members have already identified public transport as one of the key priorities that is quite often overlooked in some of these debates. Few weeks go by in my advice surgeries in Blaenau Gwent where people do not explain to me the difficulties that a lack of bus services, for example, mean for them in their daily lives—the impact it has on town centres, the impacts it has on people reaching public services, the impact it has on people being able to shop or socialise. If we are serious about cohesion and social justice in our communities, then access to an effective system of public transport has to be at the heart of that. It is clear to me that the bus services at the moment are simply collapsing in large parts of the country, and we need to identify that.

The third priority, in no direct order, is that of—[Interruption.] I think we're running out of time, sorry. But the final area that I wish to identify is that of preventative spending. We've seen some fantastic protests over the last week, fantastic activism from young people talking about the impact of climate change. I believe that we need to be able to fund action on climate change, decarbonisation of the economy and public service systems. We also discussed during health questions the impact of drug abuse on people, and young people particularly, and I believe that we do need to look at the services that are delivered specifically for young people. I don't believe that the Welsh Government does enough to learn from other countries and other territories where there are preventative services in place that are already delivering some significant advances and protections for young people, and providing greater opportunities for them. But climate change, of course, will be, I believe, the defining issue of our time. It'll be the defining political challenge that we face. It'll be one of those areas that people will look back on and look at Governments and look at legislators and ask the question, 'What did you do? You knew there was a crisis facing us. What did you do to face up to that crisis?' And I don't believe we can agree any budget in this place that does not include a significant investment in climate change and in addressing the causes of climate change.

We know that we’ve lived through a period of huge financial pressures, but what that means in reality is that, when it comes to setting priorities and trying to ensure that we are able to deliver on those priorities, to channel the funds in the right way to the right place in order to deliver against those priorities, it means that we will need to be more sophisticated in terms of how decisions are taken.

Back in July, the finance Minister noted eight priorities for the Welsh Government for 2020-1. Those included social care, tackling poverty, decarbonisation—I wouldn’t disagree with those priorities, but it’s one thing to identify a priority verbally, but it’s another thing to ensure that funds are channelled towards delivering the ambitions set.

Now, the Welsh fiscal analysis does show that there will be an increase in block grants for next year, and that will allow the Government to increase funding for more of its priorities, given that they take the right decisions. But, of course, we know from previous years that the ability of Government to respond to a range of its priorities will depend, to a great extent, on how much money the Government decides to allocate to the health service once again. It’s difficult to escape that fact. The fiscal analysis has outlined three scenarios that look at how much goes to health and how much that leaves for other devolved public services, and every time there is an announcement of additional funding from the Treasury for England, there’s always pressure from those who perhaps lack a little imagination in this place for any funding spent in England on health—for the equivalent to be spent on health in Wales, but it’s not that simple, of course, and this question of prevention has to be at the core of fiscal decisions made. The WHO, we were reminded this week, has said that 80 per cent of those things that keep us healthy are things that happen or are influenced by things outwith the NHS budget. So, we must ensure that the preventative side is maintained, and here I move immediately to local authority budgets. Now, local Government in Wales can’t face more cuts. They can’t take any more flat settlements because that will be a retrograde step.

Thanks, Rhun. Just before you move on to the local authorities, with regard to health, I hear what you’re saying and I said in my own speech that the preventative agenda is all important, but, nonetheless, if a significant amount of money is going into the health service in England, and, as a result of that, we get money through a consequential here, you would accept that you would want to see at least a proportion of that going on increasing the health service in real terms here, so we’re not just playing catch up.

No, I'm not agreeing with you—I think what we’ve seen in England is them falling into the trap of thinking they can put all the money into the health service, starve other services delivered by local authorities, leading to a knock-on in additional pressures on the NHS. What I’m saying is that money should be considered in the round. Money going into social care, social services, is preventative money that can save money for the NHS down the line. So, no, that is exactly the point I’m not making. We have to be more imaginative. Yes, absolutely, fund the NHS adequately, but not consider it in isolation.

Therefore, funding provided for local government for the care provided by them is funding that provides savings to the NHS at a later date, and the WLGA estimate that local government has had to make real-term cuts of 22 per cent over the past decade. Now, clearly, this is not sustainable for the future and the priority has to be clearly set out in the 2020-21 budget, or the NHS will suffer down the road.

One comment on a priority there is consensus about, and that’s the issue of decarbonisation: the future generations commissioner has estimated that not far off £1 billion will need to be allocated for decarbonisation schemes in Wales. Now, the concern for many is that we at this point in time haven’t seen any real signs from the Welsh Government—despite setting decarbonisation as a high-level priority, the Welsh Government haven’t shown that they are willing to make that commitment in financial terms.

So, those are two areas that have to be reflected in the budget for next year. Just one final point: it is, of course, of great concern that we are only seeing a one-year spending round from the UK Government, and I think it will be a priority to strengthen our reserves as we face the risks of more austerity in years to come.

I'm very pleased to take part in this discussion because I think we need to have more discussions in generalities about expected expenditure rather than talking about lines of expenditure and whether there should be an extra £10 to £15 million here or there, but actually talking about it as a general point.

I was also very pleased we had a finance meeting in Aberystwyth, meeting with members of the public. It was very helpful to me, because I met with people from the environment groups, from local government, and further and adult education, but I met with them outside what I would describe as my comfort zone of Swansea. It was interesting to have views from people in the same areas that I’ve taken an interest in and have a small amount of knowledge on, but who actually live in another area, and I certainly learnt a lot from that. I think the one thing that we should all remember all the time is it's the public's money we are spending. Far too often, we talk about Government money and we talk about Assembly money, but it's the public's money and we are responsible to them.

It was very interesting to talk to them. We talked about, basically, the effect of austerity and cutbacks on public services, that local government has borne the brunt of public sector cuts, whilst social care has the greatest pressures of any service—and I include health in that. Social care is under tremendous pressure. And it's so incredibly important. If you don't fund social care then people will end up in hospital. If you support them in their homes, give them that little bit of help they need, then they will not be falling, they will not reach that stage where they need to end up in hospital. So, you're actually helping health by keeping people in their homes.

The local government representative, coming from the Ceredigion/Powys area, was very keen to point out—and I wish Russell George was here, because he keeps on pointing it out as well—the cost of providing rural services, and they're absolutely right about the cost of providing rural services. I counted with him, and I count them in here regularly—they're the additional demand in areas where you have social deprivation. So, it's the difficulty of providing the services, and the demand. But, basically, we're not—. It's not a debate between Blaenau Gwent and Powys for the money; it's really a debate that we need additional money into the system.

Cutbacks have had a huge effect on education. Local authorities have generally tried to protect social services and education, but that's been at—. What's been affected? Library services, leisure services, leisure centres, sports facilities—all the things that are non-statutory services, they've been cut back. And some of the statutory services have been pared back. So, I think it really is important that we realise just how important these non-statutory services are in basically keeping people well and getting them out of the house.

The importance of school transport was highlighted—or, as the Conservatives have said in here fairly regularly, 'bureaucracy'; that money held by local authorities centrally that pays for school buses, they describe as money being held back for bureaucracy. I think that they need to give further thought to what money being held by local authorities centrally is actually being spent on.

Adult and further education—that again has borne more than its fair share of any cuts. Whilst we've given protection to schools and we've given protection within further education to 16 to 18-year-olds, those people who are going into—they want to stay on and retrain and reskill—. And we talk a lot, don't we, about giving people a second chance and people getting the opportunity to reskill in a changing world? Those courses have been cut dramatically, because the money going into further education is being cut dramatically, and what has gone in has been mainly aimed at 16 to 18-year-olds. That's been a conscious decision of the Government. In fact, they actually sent letters out saying that—that's not just of this Government now, it goes back to the 2007-2011 Government, who sent exactly those letters out.

On the environment, there was a call for more trees. I always call for more trees. I got into trouble with the Farmers Union of Wales when I said, 'We need more trees everywhere', but we need to protect the environment. The budget does not allocate anywhere near enough resources for environmental matters, and we also have the situation that Natural Resources Wales is massively underfunded. I don't think it was a good idea merging the three organisations together, and merging the three organisations together and then not funding them adequately has only led to problems.

I've got two things I would like to finish with. As we know, we've got real growth of 2.3 per cent in income next year. I would like to see the Welsh Government now say that no service will get an increase less than in line with inflation, and that includes every local authority. There is no reason why that can't be done, because you've still got the growth area to give to Government priorities, but let's protect everybody. 

We talk about preventive spend—and we always talk about preventive spend— can we put some money into public health? Because we lost the public health part of Communities First, which did a tremendous job on things like physical activity and promoting healthy eating, but we do need to get people better rather than waiting until they get ill and treating them.

The Finance Committee works hard to engage with stakeholders and the wider public as part of its budget scrutiny process. Nonetheless, during my intermittent membership of the Finance Committee, I have found a bit of a disconnect between the engagement that we have with stakeholders and others and the budget process. And I think it's a real challenge to engage people in a productive and useful way that feeds through to our scrutiny of a particular year's budget. 

I think a lot of that is because we have an Executive, Government, led budget process and we as a committee, as Assembly Members, to the extent that we meet stakeholders, who've come to perhaps push their particular priorities for spending, we engage with them and I think sometimes perhaps leave that meeting with the impression that the people invited expect more of us as a committee than we are likely to be able to deliver, because it's a Government-led process for the budget. 

I think there are also challenges in who you have to those meetings, how you can engage broadly. Do they favour organisations who employ people who have the time to go and join consultations and engage with Assembly Members in this way? How do we know we're giving fair priority to the different type of invitees and guests that we may wish to discuss their particular priorities? I think also, as we increasingly have devolved tax powers, another area comes into this. Whereas before we were largely block-grant funded—in fact, you'd lots of different people competing to tell you how important their area was for spending fed into a block grant-driven process where, largely, what we were about was dividing that spending cake. Now, we have increasing tax powers and, since April, 10 per cent of the income tax rate is set by us—what should we do to ensure that taxpayers are involved and consulted and part of that process and we consider that tax-spend trade-off rather more than we have when we've raised less of our own money?

The final area where I think there's a disconnect is the timescale. I think, when we look at the budget lines and go down to the main expenditure group level and perhaps below, what we hear from the stakeholders are very often their priorities about policy programmes or cross-cutting areas that don't necessarily fit neatly into one or even a combination of those different lines. Certainly, I find it challenging to take the lessons from stakeholders and then scrutinise the Minister in a line-by-line budget discussion for a particular year. And I think that plays into the other issue, which Rebecca Evans has spoken about here and elsewhere, about the difficulties she and the Government face with a one-year budget that they're putting forward because the UK Government has only put the block grant for one year ahead. I sympathise with much of what she says on that, but I would question whether it's a binary issue. I wonder if we could go a bit further in giving a little more certainty in at least some areas of spending. The UK Government itself doesn't know what its revenue is going to be in two or three years' time. It doesn't know when the money that we pay to the European Union is going to become available for other priorities. It has set some budgets for more than one year, and I think the Welsh Government could potentially, at least, set budgets for more than one year for some of its areas, or for particular priorities or areas where that certainty is particularly important.

I give way to Mike. 

Thank you. The advantage, of course, Westminster has is that they can borrow for revenue expenditure, can't they, so they have that certainty because they know, even if they don't have the money coming in, they can borrow it to meet the gap. 

Yes. And, clearly, we have our capital programmes and some ones where there is borrowing capacity, but there are greater hoops we must jump through than the UK Government to use those. But not quite such a dominant proportion of our income is coming from the block grant in the future and therefore that block grant only being set a year ahead isn't as defining a knock-down argument as it might have been as to why we can only budget a year ahead. And I just wonder if there are priority areas, or particular ones where certainty is needed, that the Minister could consider giving a firmer indication of likely plans. I think, last year, there was quite a good initiative in terms of communicating to local authorities potential year-ahead pressures to give them a bit more warning, and the Government at Westminster—they have budgets ahead, but sometimes they change. I remember, in 2010, the UK Government—new—came in and it made in-year cuts. That's not ideal, but it may still be better for some organisations to have at least an indication of what future budgets may be, even if they're subject to change.

I thank the Finance Committee for bringing forward this report. I'm not a member of the committee, but, obviously, I have an interest and remain concerned that there are a number of uncertainties that continue to surround the recent UK spending round—for example, the fact that a long-term solution to the funding of social care was, once again, not addressed by the UK Government. While we seek to find our own solutions to that challenge, it would help to know exactly what the long-term funding plans of the UK Government are in that respect. I think that is a major failing of the recent UK spending plan, and it casts a shadow over one of the key long-term challenges that we face here in Wales.

However, here in Wales I do welcome the indication given by the Minister in the Chamber only last week that, in addition to the priority that we're rightly giving to the Welsh NHS, we do intend to look carefully at the best possible settlement for local government. There are many discussions about the ways in which money is spent on local services, but it's apparent to all of us that, despite far more generous settlements in Wales compared to England, our councils are, nevertheless, under severe pressure, and we must take further steps to seek to sustain local services. Sadly, we know that a one-year UK spending plan is all about short-termism, ditching long-term strategy and ambition for a few short-term populist announcements. So, in spite of what stakeholders told the Finance Committee, from what I read we may still be facing some of the limitations on our actions due to that UK plan only covering the year 2020-21. 

Now, as others have already said, we know that focusing on prevention in health and care, and looking to longer-term planning in our public spending, is an established track record on which the Welsh Government can build. So, alongside the uncertainties that we face, perhaps this forthcoming Welsh budget can drive further shared priorities between the Welsh Government and local government. Because if both believe that spending for a clear long-term purpose is the right thing to do, then clearly a new bargain should be made in order for us to make that common purpose with local government, whether that lies in the debate around school and education or the demands for social care, including looked-after children, or the provision of vital leisure services that can deliver things like social prescribing, which, in the longer term, helps to alleviate some of the ever-growing pressures on the NHS. If there's a common purpose, then let it be a common bargain to deliver those priorities through local government.

Now, because of the short-term nature of the funding settlement that we're facing this year, now may not be the time to consider this, but I do wonder whether we should start thinking more about health and social care not just as an integrated portfolio for a Minister, but also in the reality of joint budgets to deliver a more agile, responsive solution in those vital health and care services. I think that was the point that Rhun was alluding to in his contribution, in terms of how we deliver those integrated services. As I say, this may be a longer-term consideration that we have to come back to, but today I think the overriding message for this budget round has to be to give local authorities the ability to not only function, but to start recovering and deliver those local services that have been so badly hit by the harsh years of austerity. We might only be able to start that process this year, but even the longest journey has to start with a single step. 

I'd like to support those Members who've mentioned education as a priority for Welsh Government expenditure, and I'd very much like to applaud the report by the Children, Young People and Education Committee on school funding. I know the Welsh Government has accepted all of the recommendations, but I think it does set out a very strong case for prioritisation for school funding to a greater extent than has happened up to now.

To me, if we are to be about preventative spend, we must put more money into education and our schools. I very much agree with what Mike Hedges said about further education as well, which I think has been rather overlooked in terms of adequate funding and should be better provided for. But the essential case, I think, is for schools funding because of the importance to so many of our young people, and, of course, early years educational funding and early years in general. Because if we are to be preventative, I do believe that education does just about everything for us. Education is a good in its own right. It's extremely important in terms of personal development. I think there are lots of studies worldwide that show that if you prioritise educational spending, then you will have a much stronger economy, and it's actually the most effective thing you can do. If you want to build your economy, put money into education.

Also, of course, it's very important for health. Better educated people enjoy better health throughout their lives and better well-being, and better general quality of life. They have more opportunities, better careers; it's just a win-win-win. It's also very important for culture and, indeed, the environment. So, I think if we look at things in the round and we look at prevention, we would be driven to put more money into education, and there's a very strong evidence base for that. That's why I very much agree with the committee's report.

I think part of that should be—and I've mentioned this many times in the past—more effective funding for community-focused schools, because it's an existing resource, isn't it, our schools, the buildings, the grounds, the facilities, and too often they're not well enough used in school holidays, at weekends, during evenings. That's an awful waste of existing resource, isn't it? There is some good practice, but not nearly enough, and I think we need to provide an effective funding mechanism that ensures community-focused schools are operating effectively right across Wales.

That brings more opportunities, because a lot of children do not get the mum's taxi or dad's taxi—or even grandma or grandad's taxi—experience when it comes to wider opportunities to develop their abilities and talents. They don't go to the activities and the clubs as they might. If it's provided on the school grounds as a part of an extension of the school day, very many more families, particularly families from deprived circumstances, will have those wider opportunities, and community-focused schools are essential to that.

One other thing I would mention—and again, I think it's very much on the preventative front—is youth services. Sadly, because of the pressure that local government and others are under, we've seen far too many cuts to youth clubs, youth activities and youth services generally, and that really is preventative. The police understand that. Local government understands that. The voluntary sector understands that. People, when you go around door-knocking, they understand that, but because of the pressures that 10 or more years of austerity have brought, we've seen far too many cuts to that incredibly valuable provision. I think Welsh Government really needs to look at how we can not just shore up the provision that remains, but get back and beyond the levels of provision that we had in years gone by. 

I call on the Minister for Finance and Trefnydd, Rebecca Evans. 

Thank you. I'm really grateful to have had the opportunity to listen to the debate today and to respond to it, and I thank all Members for their contributions. I really do welcome the work that the committee is doing in this area, and really value the input that the stakeholders who took part in the event in Aberystwyth in June have made. I really look forward to the committee's final report following the closure of their consultation.

In preparation for the budget, I also wanted to listen to the views of stakeholders about how Government funding is being invested across Wales, and the impact that it's having on people and their communities. So, over the summer, I visited a series of settings across Wales that reflect our eight cross-cutting priority areas of early years, social care, housing, skills and employability, better mental health, decarbonisation, poverty and biodiversity. These eight areas are at the heart of this Government's ambitions for a more equal Wales, a more prosperous Wales and a greener Wales. I wanted to understand the day-to-day challenges faced in these areas and to learn more about the difference that can be made by focusing on them. And it was also a great chance to explore the opportunities that exist for us to do more in these areas.

In north Wales, I saw first hand a community taking control of its own energy consumption through the Ynni Ogwen hydropower project in Bethesda. I also visited the I CAN mental health urgent care centre at Ysbyty Gwynedd in Bangor. The visit highlighted a preventative model where people experiencing low-level social and mental health difficulties are offered emotional support outside of the usual working hours. In mid Wales, I visited RSPB Lake Vyrnwy, which demonstrates how significant areas of the Welsh landscape can not only deliver positive biodiversity outcomes but also support sustainable farming enterprises. In Aberystwyth, I met with board members and staff of Tai Ceredigion, along with prospective residents of an exciting new affordable housing development at Maes Arthur. And in Penarth, I visited the holiday hunger play scheme at Ysgol y Deri that provides support to ensure healthy eating continues throughout the school holidays for some of our most deprived families.

These visits showcased the passion, talent and commitment of those who will drive the outcomes of our cross-cutting priorities. They represent real examples of how, despite austerity, we've continued to prioritise our limited investment in the face of challenging budgets and have worked with partners to deliver our priorities. And these priorities stand on the strength of a budget approach that protects and promotes what matters most. They are boosted by our commitment to prioritise health and social services and a genuine partnership with local government. And that stands in stark contrast to the experience in England, where cuts to councils have been twice as deep as in Wales, doing untold damage to local communities.

From early years to housing, our focus is enhanced by the building blocks that this Government has put in place by putting its money where its values are: a childcare offer with 48 weeks of provision that's delivering across Wales ahead of time, and the drive for 20,000 affordable homes this term—again, on course, ahead of time. I'm determined to maximise the impact that we can have on these priorities for Wales within our forthcoming budget, and I want to thank colleagues from across the Cabinet for the work that they have been doing to support this collective approach to the budget in recent months. Looking to the future, as a Government, we've been very clear that health will continue to be at the heart of our budget considerations, along with providing local government with the best possible settlement.

Before turning to some of the key messages that stakeholders have raised with me over the summer and I think have been echoed in the Chamber today, it's really worth setting the debate in the wider context. As we've heard from the Chair of the Finance Committee, the UK Government published its one-year fast track spending round on 4 September, and behind the headlines, this spending round doesn't turn the page on austerity, as the Chancellor claimed, as our budget in 2020-21 will still be 2 per cent lower, or £30 million less in real terms, than in 2010-11, and we will face some tough choices over the coming weeks. And we'll also continue to face—[Interruption.]

You must have expected me to rise with that comment. As I said to you previously in questions, I accept what you're saying about comparing the figures with 2010-2011—there's still a long way to go—but even you, when you're being optimistic, Minister, must accept that, compared with last year, this is over a 2 per cent real terms increase—that's real terms. So, this really will improve the Welsh budget next year.

Well, based on the discussions that we've previously had in the Chamber, I was going to go on to say that. I wasn't going to labour the point this afternoon, especially after what I think has been a constructive and useful debate. But we will continue, it is fair to say, to face some major risks and some uncertainties whilst we are making our preparations. For example, the timing and the content of the UK's autumn budget remains unclear, as are the implications of Brexit and the potential of a 'no deal' on our spending proposals. So, we do need expectations to be cautious within that wider context.

But during my summer visits, stakeholders have raised with me many important issues and, as we've heard again this afternoon, the ability to plan for the long term with stability of budgets for future years is often raised as an issue. And it's always our ambition to provide longer-term clarity over budgets whenever possible, however this does have to be balanced with realistic and sensible planning assumptions, which we don't have beyond next year. However, to provide as much certainty as possible to our partners and stakeholders, I have brought forward our plans to publish the Welsh Government budget, and I can confirm that, with the agreement of the finance and business committees, for which I am very grateful, I will be bringing forward the publication of our draft budget to 19 November and the final budget to 4 February.

During my visits and my wider meetings and engagement, there's been much support for that preventative approach to investment, which we've heard about this afternoon, and it's been very much the theme of recent budgets. We fully recognise the importance of funding preventative activity and its potential to have a transformative impact on public services and to make a real difference to people's lives. Preventative approaches such as the I CAN project at Ysbyty Gwynedd, remain an important consideration in the allocation of Welsh Government budgets. And, of course, Brexit is never far from my considerations. I've visited many communities that have benefited from EU funding in the past and there are concerns, obviously, with regard to post-Brexit funding. Across all of my visits and meetings, there was a real understanding of the challenges facing all of us across public services in Wales, but despite this, I was really heartened to hear how services across the board are looking at new ways of working to respond to the challenge. So, invigorated by these conversations, I'm more determined than ever to look positively to the future and support our public services in Wales as best we can.

All of these conversations are informing our preparations for the draft budget that we'll publish in November. The budget will be focused on the priority areas where we can have the greatest impact over the long term to meet the current and future needs of Wales, and deliver the services and outcomes that the people of Wales deserve. Diolch.

I call on Llyr Gruffydd, the committee Chair, to reply to the debate.

Could I thank everybody who has contributed to the debate? I think the debate that we've had in the last hour has shown how valuable having this kind of discussion is, and indeed how having an even broader discussion in terms of timing and the number of contributions would enrich and help the Minister and others in developing the Government’s budget, but that it’s important to do that at the early, formative stage, rather than as we now find ourselves, unfortunately this time, having it later in the process than we would wish.

I'll pick up on a couple of points. I think Nick Ramsay started by reminding us of the importance of engaging with the public more broadly, and evidently that’s something that the Finance Committee is trying to do. It’s something that every committee in this Assembly should be doing. Indeed, every Member should be embracing each and every opportunity to engage with constituents. I think that Mike Hedges's point was about that geographical broadening as well, in terms of who we speak to. And, of course, the consultation by the committee, which finishes today, as I mentioned earlier, is an opportunity to throw that net out wider.

It was interesting and encouraging to hear many Members referring to rural factors as one of the areas that is seeing a great deal of pressure at present. And I want to thank Alun Davies particularly for just asking the question, 'Well, what are we scrutinising?' Because we do get sucked into scrutinising line by line, where, very often, we don't take that step back to look at the shape of the budget as a whole and how that links with the ambitions or policy objectives of the Government. I think that is a central factor of our work as a committee, and other committees. When he mentioned that he had three priorities, I was afraid that he was going to say, 'Blaenau Gwent, Blaenau Gwent and Blaenau Gwent', but he didn't, to be fair to him. 'Education, public transport and climate change' is what he said. And, of course, that's the point. Every Member will have their three priorities, I'm sure, as we've heard from others today, and that’s the exact intent of this debate, to give a platform and a voice to those priorities as the Government forms its budget.

Rhun, Dawn Bowden and others talked about the tension between funding health services and other services, as did Mike Hedges in the context of the preventative value of investing in social services or social care services particularly. We've heard in the context of local government—. Nick Ramsay used the term 'saturation point' and I've heard 'tipping point' and 'we're on the edge'. These lines are often repeated to us, but I do think that the time has come for the Government to front up to this and we need to do something now about the situation.

Mark Reckless raised an important point, I think, in terms of the disconnect between engaging with stakeholders and our scrutiny of the budget. It is inevitable, as he said, because it is an executive-led process and maybe the perception of the public is one that suggests that they think that we have more influence than we would like, certainly. But that’s not only true in the context of finance. I think that’s true of other contexts very often: the lack of differentiation between the Welsh Government and the role of the National Assembly for Wales. But it does underline the need to strengthen the voice of backbench Members and the Members of the Assembly as part of that discussion.

I do share the frustration about the one-year spending round by the UK Government. Of course, if I'm right, that hasn't stopped the Scottish Government from offering more long-term assurance to their public bodies, but I do understand, of course, that it’s not easy to do that. But doing that does allow them to use that funding more effectively, and in the climate that we face now, we need every pound to work as hard as possible.

I thank John Griffiths for reminding us about education and the need to fund schools, again in this preventative context. And what we're looking for in general is this shift, this decisive shift to preventative investment, and youth services are a very important part of that.

And just to respond quickly to some of the comments made by the Minister, who did give us a list of projects: Ynni Ogwen, I CAN in Bangor, the RSPB at Lake Vyrnwy, Tai Ceredigion and so forth. I do feel that that is the danger, isn’t it? That is, you can point at individual projects to highlight something, but it doesn't necessarily represent a systemic change in the way that the Government proceeds to create its budget. And that comes back to the point made by Alun Davies: how can we strengthen that link between the budget lines and the policy ambition and the policy outcomes of the Government? That is, the difference between outputs and outcomes, and I do think that if we manage as a committee, as an Assembly and as a Government to resolve that conundrum and to create that clear link, rather than listing projects, then I think we will reach the point where I would like us to reach.

So, with those comments, could I thank all the Members for contributing? I do feel that we have had a flavour of the kind of discussion that we should be having around the budget priorities of the Welsh Government, but to do that in the years to come much earlier in the process. Thank you.

The Llywydd took the Chair.

The proposal is to agree the motion. Does any Member object? No. The motion is therefore agreed.

Motion agreed in accordance with Standing Order 12.36.