Questions now from party spokespeople. The Plaid Cymru spokesperson, Rhun ap Iorwerth.

Thank you very much, Llywydd. Minister, can you confirm that the Government is using the period of delay that we have now in terms of the budgetary process to consider how to increase local authority funding, and by how much?

Thank you very much for raising that issue. I had the opportunity just this morning to meet the local authority finance sub-group, alongside the local government Minister, to explore the issues relating to the budget this year. They share our frustration, as I know that Members in the Assembly do, about the delay in terms of publishing the budget. What I will say is that, over the course of the summer and since the spending review announcement was made in terms of the additional £593 million to Welsh Government for the next financial year, I've been working really closely with colleagues across Government. We've developed what we think is a really good budget. It prioritises health, as we said we would, and it also seeks to give local authorities the best possible settlement. We had a discussion today that recognised that, in the interim period between publishing our draft budget and our final budget, there is more than likely going to be a budget from the UK Government, which will obviously have knock-on implications for us, but we'll maintain that effort to give the best possible settlement to local authorities.

I will return to the funds likely to come from the UK Government in just a moment. May I ask whether you agree with the principle of invest to save? It is clear that investing through local government can make significant savings and can improve people’s quality of life. Investing in housing through local government can improve health, investment in social services can take pressure off the health service, and investment in sports facilities can also be very successful as a preventative tool in preventing obesity, and so on. If you do believe in those principles, then why has the Government failed to prioritise local government sufficiently in recent budgets given the central role of local government in that preventative process?

I think Welsh Government and local authorities have had a real difficult job over recent years in the face of ever-declining budgets, so, year on year, looking to areas where we can cut rather than looking to areas where we can invest. But, nonetheless, I think Welsh Government has worked closely with local authorities to try and focus money in those areas where we can achieve the best preventative spend. So, the work that Vaughan Gething has been doing through the health department in terms of supporting social services has been really important as a preventative measure, looking to see how we can support people through the intermediate care fund to avoid hospital admissions where they are unnecessary, and then to get people out of hospital as quickly as possible when they're ready to come home. That's a great example, I think, of preventing people's needs from escalating and from getting to a point where they're more expensive, yes, for the public purse, but they also have a detrimental impact on those individuals' lives. In terms of invest-to-save itself, we have an important invest-to-save scheme. I think we might have the opportunity in other questions this afternoon to explore that, and I'm happy to expand on that if the Member wishes.

You talk a good game there in terms of expressing the importance of the preventative agenda. The point I'm making is that that hasn't been reflected in the actions of Government through budgets, and in taking decisions not to prioritise local government in a way that we believe you could have. Now, nobody is surprised to see the Labour and Conservative leaders promising a post-election bonanza—that magic money tree does tend to appear around this time in the electoral cycle—but how you spend that money, if there is additional money coming to Wales, will be vitally, vitally important. And can you not understand that people are lacking faith in Welsh Government's ability and willingness to act in a proactive, preventative manner, simply by looking at the evidence of how you have budgeted in recent years? Yes, talking up the preventative agenda, but not following that up with real investment through local government in ways that can make significant savings and improve people's lives down the line.

Well, I would disagree with the way in which our recent budgets have been portrayed in that way. I know the Future Generations Commissioner for Wales has been really keen to provide the maximum challenge to Welsh Government in terms of prevention, and she's asked every single one of the Welsh Government Ministers to demonstrate what each of them are doing in the area of prevention within their own portfolios.

Just in the example of housing and regeneration, we've got the investment in the Welsh housing quality standard. Now, 93 per cent of social housing has now completed and come up to that standard, and we know how important that is in terms of preventative spend to ensure that people live in a safe, warm home. The work that we're doing in terms of independent living, aids and adaptations; the work that's going into the innovative housing programme, which is supporting decarbonisation to ensure that we're building the right houses for the future, which aren't going to be homes that are cold, but which are going to be homes that people are able to afford; the work we are doing on modern methods of construction; the integrated care fund capital programme, which is ensuring that we have housing-led solutions to social care issues; the homelessness action group, again, doing lots of great preventative work in that space; and our regeneration strategy, which is looking to ensure that we have communities that are resilient. Those are just a few examples within one small area of one portfolio that demonstrate the focus that we are putting on prevention. 

Conservative spokesperson, Nick Ramsay. 

Diolch, Llywydd. Minister, can you update us on the funding being made available for the rural affairs portfolio for the rural development programme? 

The rural development programme provides much needed investment in our environment, our farming and rural communities, and this investment is very much about maximising the way in which we manage our ecosystems, ensuring that we use energy efficiently and that we reduce our greenhouse gases in Wales. So I can confirm that to date Wales has drawn down 45 per cent of our EU funding from the RDP, and that is comparable with other EU member states. At the end of 2018, EU member states had on average drawn down around 42 per cent of their funding, so we are slightly ahead and I can confirm that we have no plans to send back any unused money to the EU.

We are making good progress, so, at a project level, a total of £664.9 million has been committed, representing around 80 per cent of programme funds, and plans are in place to achieve the full commitment of the programme by the end of 2020 and full spend by the end of the n+3 period. 

Thank you, Minister. I'm pleased to hear that you don't intend to send any of that money back. I've asked you the question today because you have, in your time, worn hats as both rural affairs Minister and also obviously now finance Minister. As you'll be aware, and as you've just said, the rural development funding programme has been providing support across a wide range of areas for a long length of time, not least to farmers, but also rural medium-sized businesses and tourism ventures, and you mentioned energy as well.

At the outset, the RDP was meant to bring about transformational change in farming—that was the term used by the Welsh Government—but there have been a number of concerns, particularly recently, that it's fallen short of this. I understand that only 41 per cent of RDP funds for the programme period have been spent up until the end of August 2019. Perhaps you can confirm or otherwise on that. Can you update us on any discussions you've had with the Minister for rural affairs about how we got into this situation and how the spending situation may be improved in future?

As I mentioned, to date Wales has drawn down 45 per cent of our EU funding for the RDP, and that compares to 42 per cent for the average across other member states. That really is a feature more of the way in which European funding works in terms of the profiling of those projects over a number of years, and the full spend has to be achieved three years after the closure of the programme. So the current period would be 2023, by which time we would have to have spent all of the money that has come to us. So that 42 per cent, or 45 per cent as it is now, doesn't suggest that there is a small amount of money that has been spent; it just reflects the spending profile of the particular programme.

I underestimated the amount with my 41 per cent, so I'm sure 45 per cent is more accurate. But leaving aside the reasons, some of which you detailed in terms of how the European funding works, that is still only 45 per cent at this juncture and I know that it's not just me with concerns about this; I know that members of the farming community have also expressed concerns. With Brexit well under way many farmers have been holding off from making investment decisions, so funding such as RDP has had an important role to play in keeping farming sustainable. 

Many farmers, Minister, and many in our rural communities feel that an opportunity has been lost here. I appreciate that it might have been lost in other parts of the world as well, but they certainly feel that the opportunity has been lost and that the focus has been taken off that transformational change part of the agenda, which was there early on. It certainly seems to have been watered down by modifications to the plan and changes to the co-financing obligation that were there at the outset. If you look at sustainable production grants, they appear to have been oversubscribed, and there's been a lack of SPG windows.

Given that farming is the backbone of the Welsh economy and a huge part of our cultural identity here in Wales, and so important to the large part of Wales that's in our large rural areas, do you agree that the Welsh Government must now take the opportunity, get back to that message of delivering transformational change for our farming industry, do this as a matter of urgency, so that Welsh farmers and those in our rural communities can be confident of the sustainability of their industry in the future?

I think the comments that Nick Ramsey has made this afternoon just recognise how vital European funding is for our farming communities, and we've only been talking at this point about the rural development programme, but, of course, if you look at the basic payment scheme and the amount of money that that ploughs into rural enterprises and farming businesses, I think that we can recognise the important role that it plays and how we should be concerned about what comes next, because we've been really clear that we would expect the UK Government to ensure that Wales isn't a penny worse off—I know that this is something that's shared right across the Chamber—as a result of leaving the EU, and that we should have full flexibility to manage those funds here in Wales.

But I think it's really important to recognise that neither the UK Government's guarantee or a withdrawal agreement would provide the long-term replacements for EU funding. They would cover substantially all of our existing programmes for the short term, yes, but in terms of the longer term, unless there's progress on putting replacement funding on the table, then we won't be in a position to manage any new spending from December 2020 for the common agricultural policy pillar 1, and from January 2021 for other funds. So, I think it's really important that whoever is in Government in the UK following the general election provides us with that absolute clarity and certainty on the way forward, to ensure that we can support our rural economy and our farming businesses in the way that Nick Ramsey has said this afternoon.

Brexit Party spokesperson, Mark Reckless.

Will the finance Minister make a statement on the Welsh Government's relationship with Gavin Woodhouse, Afan Valley Limited and Northern Powerhouse Developments Limited?

It's my understanding that we have provided no funding to the individual or the company that Mark Reckless refers to.

The economy Minister visited Gavin Woodhouse's Afan valley project and starred in a promotional video for it. The project has now stalled after administrators were appointed. Since Dai Lloyd questioned you about this in July, the administrators have stated there were signs that Gavin Woodhouse's hotel projects were a Ponzi scheme.

I'm sure we're all pleased to hear that no Welsh Government funding was in the event released to Woodhouse entities, despite prior reports that a £0.5 million grant was offered. However, one way Ponzi schemes work is by burnishing a positive reputation to persuade investors to part with their money. Do you accept that Welsh Government's public support for Mr Woodhouse played a part in burnishing his reputation? And does the Welsh Government feel any sense of responsibility to those who've lost money by investing in Welsh projects associated with Gavin Woodhouse?

No, I don't recognise the picture that the Member seeks to try and paint this afternoon. I've been very clear, as I was in my response to Dai Lloyd several months ago, that Welsh Government provided no funding for any of the schemes related to Mr Woodhouse.