Item 7 on our agenda this afternoon is a statement by the Minister for Housing and Local Government on preparing our public services in Wales for a 'no deal' Brexit. I call on the Minister for Housing and Local Government to speak to the statement.

Thank you, Deputy Presiding Officer. As a Welsh Government, it is our view that a 'no deal' Brexit should be unthinkable. As we have already heard, the impacts could be severe and wide ranging. We know that it will be extremely difficult to mitigate the effects of no deal, and that is why we continue to work tirelessly against that possibility, as well as to reduce, so far as we are able, the disastrous impact of such an outcome. Deputy Presiding Officer, I would like to take this opportunity to elaborate on aspects of our 'no deal' action plan and wider work that some of our partners in the public sector, working closely with third sector partners, are doing to prepare.

Local authorities across Wales have responsibility for planning to ensure essential services such as education and social care can respond to all Brexit scenarios. They, and third sector partners, are key to providing a local response to the damaging impact of a 'no deal' Brexit on our communities. From the outset, we recognised this preparation would take significant resource and effort. We provided funding for dedicated Brexit co-ordinators in every local authority across Wales, and for work by the WLGA to support and advise them. This funding of over £1.3 million has enabled every local authority to prepare their own services to respond to 'no deal'.

They have worked with key partners to minimise the impact on our citizens of potential Brexit-related disruption to the ports, food supply chains, increases in the cost of food and fuel, as well as potential disruption to data flow. Disruptions to supply chains may impact food supplies to schools and care homes, or for vulnerable people at home. Any increases in costs of fuel and other goods or barriers for the workforce will impact on transport services and regeneration and construction projects, from housing to twenty-first century schools. Local authorities, like others, have had to work through these issues to explore alternatives and build resilience across their services. 

The impacts go wider than local authority services. Local economies, already hurt by a decade of austerity, are feeling the impacts of 'no deal' uncertainty. The role of local government in supporting local economies is significant, whether through direct support, purchasing decisions or wider regeneration. As part of our summer package of economic stimulus, the Government provided £20 million of capital funding to local authorities to support and stimulate their local economies against the impacts of Brexit. We have also funded the Wales Council for Voluntary Action to support the preparedness of the third sector. They recently published their report 'Empowering Communities'.

Deputy Presiding Officer, it is clear that a chaotic 'no deal' Brexit would impact across the piece, placing greater pressure on our already stretched public services. After years of austerity and cuts by the UK Government, these services can ill afford the consequences of another deep recession and potential increases in food and fuel prices, which could push a larger number of people into poverty and greater dependency on public services.

I want to say a few words about the impact of Brexit, deal or no deal, on our most vulnerable communities and citizens, including the risks for those already living in, or at risk of falling into, poverty. Housing and reducing homelessness is already one of our most urgent priorities. A 'no deal' Brexit will make this situation worse, putting people's livelihoods at risk, and increasing the cost of living, including mortgage and rental costs. That is why, under the first supplementary budget, an additional £50 million worth of capital expenditure was allocated to the social housing grant budget to help offset the economic impact of no deal.

Then, there is the potential for increases in the cost of food, due to economic shock or reduced supply. Demand for food banks has been on the rise for a number of years. Any increase in food prices would be a matter for grave concern. That is why the First Minister recently announced a £2 million fund for tackling food poverty and addressing food insecurity. We are also looking at ways in which our discretionary assistance fund could be used to support those most impacted by a 'no deal' Brexit.

Deputy Presiding Officer, we are absolutely clear about the value we place on those people of other EU nations who have made their homes with us, who contribute to our economy, our public services, civic life and culture. One of the most deplorable aspects of our current circumstances is the anxiety and uncertainty these individuals and families have been left in for so long. Let me be clear: the responsibility for this stands firmly at the door of the UK Government but we are not standing idly by. We have funded Citizens Advice Cymru to support citizens to apply for settled status through our EU citizens’ rights project, as well as funding an immigration advice service to provide more specialist advice.

Deputy Presiding Officer, we know the EU referendum has created divisions in families, communities and society that may take a generation to heal. In some cases, it has led to increased tensions and instances of hate crime. With the uncertainty of a 'no deal' Brexit, these tensions could be exacerbated. Therefore, we have expanded our community cohesion programme, co-ordinated by local authorities, with an additional £1.5 million of European transition funding over the next two years. This funding now supports small teams in each region of Wales to monitor community tensions and promote increased engagement in our communities. We have also increased funding for the national hate crime report and support centre, run by Victim Support Cymru, and developed a new hate crime minority communities grant to support third sector partners working with ethnic minority communities to mitigate the effects of hate crime and prevent it in future.

Of course, we do not hold all the levers to address these issues. Some impacts are outside the control of local government, or indeed Welsh Government, especially where they relate to non-devolved matters or macroeconomic issues. No level of planning and preparation either here, or by the UK Government, will adequately address the level of disruption a 'no deal' exit would mean for the people of Wales. That is why we have been working on 'no deal' Brexit contingency planning since the run up to the initial leaving date in March. The four local resilience forums across Wales have each identified their local risks and they have worked with Welsh Government and key stakeholders to ensure that we are as prepared as we can be to identify and mitigate these risks. We have contributed to the UK Government’s Operation Yellowhammer and continue to work with our partners in Wales to ensure that we have the right structures and processes in place to monitor the impacts and, where necessary, take the appropriate action.

Deputy Presiding Officer, the follow-up to the Auditor General for Wales's report, 'Preparations in Wales for a "no-deal" Brexit', was published on Friday. It observed that there is evidence of a more collaborative approach across Wales's public services and that Brexit planning constitutes the most comprehensive example of cross-Government working that we have seen the Welsh Government undertake to date. I very much welcome these comments and hope that they, alongside my statement, provide some assurance that we and our partners in local government and the third sector are doing all we can to minimise the impact on public services, and on our communities and citizens, of a catastrophic 'no deal' Brexit. May I take this opportunity to put on record my heartfelt thanks to colleagues across both the public and third sectors in Wales for their enormous and ongoing commitment to what can otherwise feel like a somewhat thankless task? Diolch.

Thanks for your statement. You referred, I think, near the beginning, to risks of recession. Of course, Germany, which is the motor of the EU economy, has 10 to 15 per cent of its GDP dependent on access to UK markets, including Wales, and we understand from press coverage during the summer that they might be on the brink of recession themselves. So there's clearly mutuality in ensuring that a deal is reached, because 'no deal' isn't going to help our continental friends either. 

You referred to hate crime. Can I just put a plug in? Next Wednesday evening, 9 October, I'm sponsoring the International Integration Day event in the Assembly, in the Pierhead. If we don't sit too late that night, I hope that many of you will come and show your support for that agenda and share in the multicultural celebration that'll be occurring that evening. 

You referred to the Auditor General for Wales's report, 'Preparations in Wales for a "no-deal" Brexit', published last Friday. Of course, he says that

'planning for a no-deal Brexit across Welsh public services has continued to accelerate.'

How, therefore, do you respond to the key challenges that he identified, facing public service leaders across Wales, in this revision of his February report? These being: to sustain collective working; strengthen communication with the public; enhance independent scrutiny, where those charged with the governance of Wales's public bodies need to enhance their oversight and scrutiny of Brexit preparations; to be collectively agreed to respond to the unexpected; and to plan and prepare for longer term impacts.

The auditor general, in his assessment, published last Friday, for a 'no deal' Brexit said that

'most public bodies across Wales are clearly taking their "no-deal" Brexit planning seriously. Many have significantly ramped up their activity since summer 2018'.

What assessment have you and colleagues therefore made of the £4 million from the EU transition fund so far provided to local authorities by the Welsh Government to help them plan for Brexit, both in terms of impacts and adequacy?

Whilst the impact of EU migration on the Welsh public sector workforce is listed as a concern of the Welsh Government in its 'no deal' Brexit preparation document, the auditor general found that the risk of staff suddenly leaving in a 'no deal' Brexit or any other was limited, and that public services,

'thought the workforce risks were more medium to long-term.'

However, the UK Government has been working to minimise any potential medium to long-term risks through the EU settlement scheme, and has been clear that they want EU citizens to stay. The 'no deal' immigration arrangements for EU citizens arriving after Brexit—the 5 September document detailed this. The EU settlement scheme, of course, is a free service that EU citizens living in the UK can access until at least 31 December 2020 in the event of the worst case scenario 'no deal', and will afford them similar rights and services to those they currently enjoy. As such, he said Welsh public services may experience only minimal, if any, disruption to staffing levels. So, what assessment are you making of that potential disruption to staffing levels as a result of the proactive approach taken by the UK Government to reassure EU nationals that they will still be able to access similar rights and opportunities in the event of 'no deal'?

The UK Government has guaranteed, in the event of a 'no deal', to cover all European regional development funding that would have been covered under the 2014-20 programme. This provides certainty and clarity to local communities and will allow them to continue to access important funding routes. So, how will the Welsh Government therefore ensure that local authorities continue to take advantage of this funding?

The Auditor General for Wales states that those local authorities that had adopted a 'watch and wait' approach to Brexit have since started to take action to progress their planning for a 'no deal' Brexit. He also called on public services across Wales to

'start having conversations with the public and key stakeholders, to help avoid unnecessary panic and disruption.'

His words. Of course, such actions will provide greater confidence to residents. How, therefore, will the Welsh Government ensure that the provision of information on Brexit preparedness is available, and continues to be available, in accordance with the auditor general's recommendations?

Public sector procurement rules will largely remain the same, thresholds won't change, but a key difference for contracting authorities will be the need to send notices to a new UK e-notification service, instead of the Publications Office of the European Union. How, therefore, will the Welsh Government ensure that contracting authorities in Wales are aware that similar levels of regulations provide further certainty for public procurement and public services, provided that they make this small change to their practices?

Are you winding up, please?

If I could conclude with this question. Earlier this month, the Irish sea south trade director for Stena Line, the port authority at Holyhead, said the UK is now far better prepared for Brexit than in March, the original Brexit date, and he says that some of the worst fears that could have become a reality are not going to be borne out. He also said, 'Yes, I think—

I'm sorry; you'll have to try and wind up please, Mark. You have been almost as long as the Minister took to introduce the statement.

Okay. How will you ensure or are you ensuring that public service providers in north Wales are engaged with his statement that there will be disruption for a day or two because of uncertainty, but that will only be very short term?

Thank you for that series of questions—quite a long series of questions. I'll do my best to do a little bit of an overview about them. I'll just start off by saying that, of course, I very much welcome the multicultural celebrations that Mark Isherwood mentioned, and I'm very happy to support that. It is absolutely essential in this climate of uncertainty and division that we make sure that the people who contribute to our rich multicultural culture here in Wales are celebrated properly, and rewarded for their contributions. I am more than happy to do that.

Just a quick canter through some of the more specific things about local government that Mark Isherwood raised. Obviously, we recognise the financial risks to local government and other public services overall, as I said in my statement. He could help, of course, by making sure that the UK Government met the commitment that Wales would not lose a penny of funding as a result of Brexit. Having that kind of certainty would certainly help in planning terms. Of course, at the moment, we have no such certainty. That is a major problem. It would also help if we had any clue what was happening with the budget, because although we have a lot of promises, we don't have a finance Act or any vote on it. So, that would also help.

Local government has very much stepped up to the plate, as the auditor general's report says. We have developed a good understanding of the implications of Brexit and engage across the Government. We have a partnership council tomorrow, in fact, where we'll be discussing the preparations. All local authorities have been asked to provide monthly updates to the advisory panel on preparedness across their local authorities, and, for example, those plans include work to ensure supply chains, particularly those supporting key services, are as resilient as possible; to support EU nationals to secure settled status; training and awareness on changes such as the few that he mentioned around export certification requirements and so on; raising awareness of best practice for the storage of food, for example the provision of advice and guidance on food safety; and, any changes to the inspection regimes at ports and so on.

I do think, though, Deputy Presiding Officer, that there's been some kind of irony bypass on the opposite benches because the idea that the only issue with procurement is that we will advertise our contracts to a different authority is risible, particularly as that was the only thing that they could remotely clutch at as a drowning straw for something that might be good to come out of Brexit. And I think I'll leave it there. 

May I thank the Minister for her statement on preparing our public services for a 'no deal' Brexit? Clearly, as you've mentioned in your statement, there’s a great deal of hard work going on behind the scenes, and a lot of it in front of the scenes as well, in front of us, and we're very grateful for that work.

There are clear and obvious questions—I’ll keep it brief. With all of these preparations for a 'no deal' Brexit by our county councils, I note the allocating, the funding of different organisations, and that’s to be welcomed, but what additional funding, specifically, has been allocated or that you are certain that you can allocate to our counties, to our local authorities, to facilitate the preparation work?

Specifically, we heard in the discussion earlier on with regard to transport: what support is there to alleviate the traffic jams that will result from a 'no deal' Brexit in our ports? In places like Holyhead—we heard from Rhun ap Iorwerth earlier—places like Holyhead, Pembroke Dock and Fishguard will face terrible traffic jams with lorries everywhere, and of course there will be additional costs for our local authorities emanating from that. So, what specific support is available to our counties in that situation? Thank you very much.

Well, thank you very much for that, Dai Lloyd. We have been working very hard behind the scenes to plan, but just to be clear, there is no way to cover off all of the risks inherent in a 'no deal' Brexit, and I echo my colleague Vaughan Gething's remarks about the real shame of watching money that could otherwise be spent on improving services and assisting communities being spent on preparations that are, we hope, entirely needless but must be carried out.

There have been specific sums of money—and I detailed in the statement—around capital support to local authorities to do a range of things, including looking at traffic impact assessments and so on. Some of them were detailed by other colleagues who spoke here today. Each local authority has been asked to use the Grant Thornton impact assessment study to discover what it needs to do specifically, and obviously those authorities with ports in them will have had specific advice and help from transport officials who are in the Welsh Government and elsewhere to plan for that.

But, in the end, of course, we are preparing for the classic known unknowns and also unknown unknowns, and all we can do is make sure that our resilience fora are ready and willing to step up to the plate as soon as we realise what the task in front of us entails. But I have to say that my heart just breaks for the things that we could have done with this money and that we're now not able to do while we shoot ourselves in the foot for no apparent reason.

Thank you for all the information you've given us about extra money for community cohesion, for the social housing grant, and the First Minister has announced money for food banks. But I suppose, looking at all these statements in the round, I just wonder where all the money's coming from, because Philip Hammond laid aside £26.5 billion to deal with Brexit, but his successor, Sajid Javid, has raided that by £13.8 billion for all sorts of pre-election promises. And we now know that £12 billion is going to have to be assigned to write off unpaid student debt. That leaves £800 million for the whole of the UK, which sounds a lot of money to you and me, but, obviously, in the round, that's not very much money.

So, given that you are in charge of civil contingencies, how are we going to cope, given the extent of the crisis that may ensue if we have a so-called 'clean break', otherwise known as a catastrophic 'no deal'?

Yes, well, actually, civil contingencies are in the portfolio of the First Minister and the Deputy Minister and Chief Whip, but I'm doing the statement on behalf of the Government today—just to be clear about that. The Deputy Minister has been working very hard with third sector partners to ensure a state of preparedness, as good as we can get it, in what we have.

I mean, the short answer to your question is: there has been some money coming from the European transition fund, but other money has been diverted direct from service delivery in order to do this work. So, it's absolutely heartbreaking to consider what we might've been able to do with this money, had it been available for services, and that's the short answer. The other answer is that we just don't know how much it's going to cost, because until we see what the challenges are, if we do crash out, we won't know. So, we will have to put contingency funding in place to make sure, and I'm at a partnership council only tomorrow to discuss with local authorities what their best guess for what that might look like is. So, it's not good news, by any stretch of the imagination, but I was very pleased that the auditor general felt that public services and the third sector had worked very hard to get themselves into the best position they can be.

I was particularly pleased of the work we'd done around community cohesion, and our ability to put better planning and better support into local authorities for those communities who are, let's face it, feeling very vulnerable. We want very much to help them feel as cherished as we can make them feel in Wales while this goes on, but—. We'll all be familiar in our own constituencies—yours is a very similar constituency to my own—of people who have hitherto felt Welsh and very much part of our culture being made to feel unwelcome, and I very much regret that.

Thank you very much, Minister.