We now move to item 6, which is a debate on the draft budget of 2020-21, and I call on the Minister for Finance and Trefnydd to move the motion—Rebecca Evans.  

Motion NDM7259 Rebecca Evans

To propose that the National Assembly for Wales, in accordance with Standing Order 20.12:

Notes the Draft Budget for the financial year 2020-21 laid in the Table Office by the Minister for Finance and Trefnydd on 16 December 2019.

Motion moved.

The Llywydd took the Chair.

I'm pleased to open the debate this afternoon on the Welsh Government's draft budget for 2020-21. This builds on the constructive debate that we had in the first week of this session. Since then, the Finance Committee and the other Assembly committees have scrutinised our spending plans set out in the draft budget. I'd like to place on record my gratitude to the Finance Committee and the other committees for doing so, and for publishing their reports in the truncated timescale as agreed before Christmas.

Today's debate provides an opportunity for me to provide some early reflections on the recommendations and the general themes arising during scrutiny, focusing in particular on the Finance Committee's report. Before I do that, Llywydd, I want to acknowledge the wider context in which this budget has been developed and the challenges that remain, before reminding Members how this budget delivers for the people of Wales.

As I have rehearsed a number of times, the failure of the UK Government to deliver on its multi-year comprehensive spending review last year means I am only in a position to lay a one-year revenue and capital budget. Despite claims that austerity is over, the Welsh Government budget in 2020-21 is nearly £300 million lower in real terms compared to 2010-11.

Within weeks of confirming the long-awaited UK budget will take place on 11 March, the UK Government has once again demonstrated its chaotic approach to managing public finances. With just over a week before we published today's second supplementary budget, the UK Government confirmed both positive and negative adjustments to our budget for 2019-20. Most of the positive consequentials had been confirmed by the Treasury earlier in the year, but not the reductions.

When compared to the planning assumptions we have based our plans on, the net result of these changes is a modest revenue uplift, with a simultaneous reduction of just over £100 million of financial transactions funding and nearly £100 million general capital. This is wholly unacceptable at this stage in the financial year without any prior notice, and by no means the first example of the UK Government ignoring the principles set out in the statement of funding policy.

I've written to the Chief Secretary objecting strongly to the principle of these changes being made so late in the day. We do not accept them, and have pressed for further clarity on the changes at a UK level that result in consequential reductions.

Notwithstanding this, however, we have agreed we will absorb the financial transactions reductions this year, which is prudent financial management in the circumstances. I have also secured the maximum flexibility from Treasury to manage the other adjustments as we move through the next year. Our decision to take this approach is without prejudice to the further discussion on the wider position and the handling of reductions carried forward.

At this stage, I believe it's also prudent not to adjust the spending plans for 2020-21 that I've tabled before the Assembly, given the strong likelihood our settlement for next year will change again on 11 March. It does, however, reinforce our case for additional funding flexibilities and a more formal role for the finance Ministers' quadrilateral in reviewing the statement of funding policy—a theme drawn out in the Finance Committee's report.

As well as possible changes to our settlement, the UK budget could also include changes to tax policy, which might affect decisions about the devolved taxes in Wales. As well as considering proposals to bring forward an early supplementary budget, I am committed to providing an early update on the impact of the UK budget, including the impacts on Welsh tax forecasts.

Llywydd, I'd like to turn to the spending priorities set out in this budget. I am proud of everything we have achieved as a Government, despite the uncertainty and the challenging context that we have faced. This fourth budget of this Assembly, which provides for the final full year of this term, delivers on the key spending pledges we made to the people of Wales in 2016 on all-age apprenticeships, school improvement, childcare, help for small businesses, quick access to new treatments, affordable housing, and much more.

We are bringing our total investment in health and social care to more than £8.7 billion in 2020-21, with an above-inflation increase of more than £400 million; providing a real-terms increase to every local authority through an extra £200 million through the revenue and capital settlement next year, which will bring total funding to nearly £4.5 billion; and we're supporting a world-class education system through the local government settlement and through our £1.8 billion education budget.

Prevention has been at the heart of this budget, supported by our focus on eight cross-cutting priorities of: early years, social care, housing, employability and skills, better mental health, decarbonisation, poverty, and biodiversity. We're investing in the areas where we can maximise our impact over the longer term, and this includes an extra £175 million capital next year, taking our investment to more than £2 billion in affordable housing over this Assembly term; and an additional £19 million to help some of the most vulnerable people living in poverty in our communities, building on existing action totalling more than £1 billion; and increased investment in better mental health and early years through the extra funding for the whole-school approach and Flying Start.

This is a budget that delivers a new level of ambition in the fight to protect the future of our planet, building on the wide range of investments that we're already making. That is why, in the first budget since our declaration of a climate emergency, we are allocating a new £140 million capital package to support our ambitions for decarbonisation and to protect our wonderful environment.

Llywydd, I'd also like to take the opportunity today to provide some early reflections on the key themes arising from scrutiny. With the process of leaving the EU now under way, the importance of ensuring a smooth transition to a post-EU UK funding framework that delivers for all parts of the union is imperative. I welcome the committee's recommendation that recognises the need to review the statement of funding policy, which will be particularly important in the context of post-EU-exit arrangements. I also accept the Finance Committee's recommendation that we continue to negotiate with the UK Government to secure more frequent and structured quadrilateral meetings of UK finance Ministers. This is a matter I will raise with the Scottish finance Minister and Northern Ireland finance Minister tomorrow.    

The interaction between our budget timetable and that of the UK Government's is a matter that's been considered in previous years, but the awkwardness this year has been more prominent. I welcome the acknowledgement of the committee that our approach to the timing of this year's budget was practical in the circumstances, and balanced the need to provide early funding certainty for stakeholders against providing time for scrutiny of our plans. 

Continuing to drive forward improvements in our budgeting is also an important consideration. For the first time, we have published a budget improvement plan that sets out how we intend to take continuous steps to embed the Well-being of Future Generations (Wales) Act 2015 into the budget process. This includes a number of areas identified by the Finance Committee, including improvements to how we assess the impacts of our budget decisions. I welcome the Future Generations Commissioner for Wales's statement that Wales should be commended for being at the forefront of a movement towards well-being budgeting, and I look forward to working with the commissioner as we take forward this ambitious plan. 

I am pleased that the Finance Committee has welcomed the single largest ever capital package to help combat climate change. I'm disappointed by claims that the action that we're taking does not match our commitment to tackling the climate emergency. The draft budget will deliver new investment in the areas where the current evidence tells us we can have the greatest impact, as well as investing in other measures such as £64 million next year to defend our communities from the most severe and immediate impacts of climate change. I and my colleagues will respond formally to the recommendations of the Finance Committee report and those of the other Assembly committees in advance of the vote on the final budget next month.  

So, Llywydd, to conclude, despite ongoing austerity imposed at the UK level undermining our ability to deliver the investment our country truly deserves, I am proud to introduce a budget that continues to invest in our vital public services while supporting our ambitions for a more equal, more prosperous and greener Wales. 

I call on the Chair of the Finance Committee, Llyr Gruffydd.

Thank you very much, Llywydd. I'm pleased to contribute to this important debate on the Welsh Government's draft budget for 2020-21 on behalf of the Finance Committee. Our report does make a series of recommendations, and I'll cover some of the most prominent of those in my contribution to this debate this afternoon.

Now, as we've heard, given the uncertainty around the UK general election and Brexit and so forth, the committee recognises that this draft budget has been delivered under exceptional circumstances, and this has impacted on the ability of the Government and other stakeholders to plan.

As a result, the Finance Committee has made every effort to engage with stakeholders on this draft budget. This began in June 2019 when we held a pre-budget stakeholder event in Aberystwyth. This formed the basis for a Finance Committee proposed debate here in the Siambr, which followed in September 2019, giving the Assembly an opportunity to debate the spending priorities of the Welsh Government prior to the publication of the draft budget.

This year, it was particularly pressing to hold such a debate given the uncertainty of the proposed timing of the draft budget. However, the committee believes that a debate should be facilitated on a permanent basis—every year—to afford Members the opportunity to influence budget priorities and allocations earlier in the process. We hope very much that the Minister agrees with us and that we can work with her to ensure a debate can be built into the scrutiny process in future years.

The UK Government has announced that its budget will be published on 11 March. The committee recognises that macro-economic forecasts for the UK could impact on devolved tax revenues and the associated adjustments to the block grant. We have recommended that an update is provided as soon as possible after the UK budget. We understand that there will be a need to reflect the impact of the UK budget in the first supplementary budget of the Welsh Government and we welcome the Minister's commitment to bring this forward as early as possible, should the changes be extensive.

During our scrutiny, we reviewed how the Welsh Government intends to spend its £17 billion budget in the next financial year, and overall—. We know that this is an increase of £593 million on last year's budget: a 2.3 per cent increase in real terms. The committee notes that the Welsh Government has spread this increase across all departments. However, we would have liked to have seen a more ambitious approach being taken to its prioritisation in terms of a focus on future sustainability and service transformation in the future.

Moving on now to borrowing and taxation, the committee heard evidence suggesting that increases in future budgets will be unsustainable without higher borrowing or increases in taxation. We also believe that a change in strategy will be needed to ensure that sufficient funding is available for investment in public services in future years. The Welsh Government has already said that it's pushing against the limits of its fiscal borrowing rules, and it has pledged not to raise income tax during this Assembly term. We as a committee have supported the Welsh Government's requirement for increased borrowing flexibility, and clearly changes in taxation will be a matter for all parties in their manifestos as we approach the 2021 Assembly election.

In April last year, the Minister for Environment, Energy and Rural Affairs declared a climate emergency in Wales. We've heard reference to that in the comments by the finance Minister. However, the Welsh Government’s draft budget does not reflect its own declaration of a climate emergency. While the draft budget shows, as we heard, an allocation of £140 million in capital investment to support decarbonisation, the committee is not convinced that the Welsh Government has a clear understanding of the impact that its decisions have on carbon emissions or the climate. While we welcome the allocation of £140 million, it's disappointing that a more radical approach has not been taken to mitigate climate change.

This is the fourth draft budget to be published since the Well-being of Future Generations (Wales) Act 2015 came into force. The committee has used the Act as a lens to assess the draft budget since its enactment. In terms of the progress made by the Welsh Government to embed the Act into its decision making for 2020-21, the office of the future generations commissioner told us that there had been, and I quote, a visible shift in relation to decarbonisation and preventative spending. However, and I quote again, there was still considerable scope for progress, and, in anticipation of an imminent UK spending review, the commissioner urges the Welsh Government to use this as an opportunity to make more transformational strategic decisions. The committee believes that the Welsh Government should consider ways that it can improve the integration of well-being goals in the presentation of future budgets to demonstrate more consistently how the Act is embedded in its decision-making processes.

Having left the EU on Friday, there is still uncertainty surrounding the future relationship between the EU and the UK. The impact of Brexit in Wales, including the continuation of funding previously provided by the EU, particularly regarding direct payments to farmers and other businesses in the fisheries and agriculture sector is a major concern for the committee.

We are concerned that the transition period, up to 31 December this year, raises the risk of trade deals not being in place. In these circumstances, we believe that further assistance would be required from the UK Government to minimise the impact on the Welsh economy. At present, Wales receives funding from the EU through structural funds and agriculture support. The expectation of the Welsh Government is that EU structural funds will be fully replaced. However, the transition agreement does not cover agricultural support, and the committee would welcome confirmation from the Welsh Government that it has obtained assurances from the UK Government that this funding will be provided.

The committee welcomes the inclusion of poverty in the budget priorities, but it believes that there’s a lack of clarity in the Welsh Government’s strategy for tackling poverty, its objectives and how the budget will drive long-term improvement, particularly in addressing the root causes of poverty. 

More action needs to be taken to reduce poverty in Wales. There are too many people in low-skilled and/or low-paid jobs, and upskilling the workforce and increasing employment will benefit the Welsh economy regardless of the outcome of Brexit. The Welsh Government should, therefore, evaluate its investment in into-work programmes and economic development programmes to ensure that they provide value for money.

I would like to thank everyone who contributed at all stages of the scrutiny process and those who attended the stakeholder event as well as those who gave formal evidence. All of this has helped us as a committee shape our findings, and I look forward to seeing the formal response of the Government to our report before the vote on the final budget next month. Thank you.

I'm pleased to be speaking in this important debate today, a debate, of course, about the budget, but also about the future of the people of Wales. Let us be quite clear about the context of this budget: yes, the Welsh Government has found itself developing this budget during an exceptionally short time frame, with issues surrounding the recent general election, and we recognise the challenges that that has brought. But all of this is also set against the backdrop of an extra £600 million a year being provided by the UK Government. So, taxpayers in Wales have the right to question some of the Welsh Government's decisions when it comes to investing in the Welsh economy and driving the Welsh economy forward post Brexit.

I see as well that the budget narrative looks back on the achievements and the spending of the Welsh Government on each department since 2016, but there is, perhaps unsurprisingly, little mention of any of the missed targets that Ministers are, of course, aware of, which, I think, at least in part, in the spirit of fairness, the Welsh Government would be wiser to admit to.

The Welsh Government will, of course, blame the UK Government for all its woes, although, to be fair to the Minister, austerity wasn't mentioned in any great depth until quite late in your debate there, so maybe you have listened to some of my criticisms in the past. But the Welsh Government does have to take responsibility for its own financial mistakes. That's part of being a grown-up, devolved Government with far-reaching and growing powers.

So, what do the public expect to see from this budget? What should we expect to see? Well, I would expect to see the Welsh Government investing in the NHS for transformational change. To be fair, you have put £37 billion into the Welsh NHS since 2016. That is quite a difference from the real-terms funding cut that we saw earlier, between 2011 and 2016, although I know that was with your predecessor as Minister, rather than yourself. You are, I think as you mentioned, pressing ahead with an extra £400 million spend on health, which is positive news. All these are increases of money, so that's good.

But, of course, that doesn't mitigate the fact that A&E waiting times have been the worst on record for two months in a row in 2019 and four out of seven health boards are under some form of Welsh Government intervention—Betsi Cadwaladr, as mentioned earlier, in special measures for over four and a half years. That's received around £83 million in turnaround costs, yet it's predicted to end the financial year in deficit. So, it's not just a question of providing more money, Minister, is it? It's a question of what that money is actually achieving, because there's also a value-for-money argument to be spoken about here, too. 

This is, we are told, overall a green budget—a great label, and an admirable way to try and proceed, but the question is raised: is it ambitious enough to really deal with the environmental challenges that we face? Does it adequately deliver on the Welsh Government's promises in calling a climate emergency, for instance? I don't personally think there's anywhere near enough detail here on offering new, innovative thinking when it comes to how the Government will, for instance, meet its target of at least a 95 per cent reduction in greenhouse gases by 2050.

I appreciate, Minister, that these are enormous, bold commitments, and they will take enormous willpower to achieve, but it's not simply a case of relying on yesterday's outdated policies to achieve these goals; it's about delivering a bold, confident vision for Wales, and we need to see a budget that drives a vision, that takes the people of Wales with it, that inspires and motivates the people of Wales. Because these climate change policy targets are going to be tough. I don't think we should be in any doubt about that, and no Government should enter into these commitments lightly. I'm sure you would agree with that.

Interestingly, I was watching the clock earlier and you mentioned the future generations commissioner—I think it was about eight minutes in. Often raised on the Finance Committee over the years I've been on it is this question: during the budget-setting process, is the future generations legislation really at the centre of that policy from the start and throughout, or is it too often perceived to be added as an add-on towards the end of the process? I don't know. I put it out there that I think you do need to justify that the future generations commissioner is consulted at all points in that process, because what is the point, as our late colleague Steffan Lewis used to say, of legislation like this, which sets out a very bold agenda, but actually, when it comes down to the practicalities of policy making isn't factored there early on in the process? So that needs to be addressed.

What about north Wales? It's not specifically my comment today, but of course Labour leadership contender Lisa Nandy has also raised a similar question. Although the budget outlines an additional £20 million for the north Wales metro, to be welcomed, and I've been a big supporter of the investment action on the south Wales metro, and I think good momentum has been started there, but we need to see that followed through in the south. And we certainly need to see momentum in the north, and I think there is a question in the north about whether that has been happening.

Nothing has been said, aside from the metro, about investing in upgrades to the A55, the lifeline to the north Wales economy. I think this is a wasted opportunity. There is a need for a key transport artery from the port of Holyhead to Deeside; a need for that to be fully ready to deliver exports from Ireland to the rest of the UK now we're in the post-Brexit period. And by the way, of course, the UK Government is investing in upgrading part of the A55 to help drive the north Wales economy forward, so, surely, Welsh Government funding in this area would be wisely spent. It's not match funding, exactly, but it almost achieves a similar goal if the UK Government is going to be committing money like that.

Of course, no Welsh Government budget would be complete without some funding for Cardiff Airport, and the budget outlines yet more funding—£4.8 million, I believe you mentioned, of financial transaction capital in relation to this budget in your speech. 

Will you take an intervention?

I will now, Mike.

On 31 December 2019, the airport announced a pre-tax loss of £18.5 million in the financial year up to 31 March 2019. I've previously said that I don't think that the airport should be given what could effectively amount to a blank cheque, so I would be looking for assurances that that isn't going to happen. I give way to Mike Hedges.

Thank you. I'm very pleased this has happened yet again. Can I say that you've talked about north Wales transportation, you've talked about south Wales transportation; what about those of us in west Wales and the west Wales metro?

Well, of course I'm not the Minister. I mean, yes, there are gaps in west Wales, but you might want to raise that yourself with the Minister in your own comments. But okay, I take the point—all aspects, all parts of Wales need to be considered equally, and I think the point you're making is that if you set out a preference for one area, such as north Wales, then you automatically lose out in another area. We've had discussions about this in the past. I think that there is a case to be made for north Wales, because it does feel often particularly cut off from the south when it comes to Cardiff specifically. So I think there is a case for that to be made. But I understand what you're saying, Mike. 

Will you take an intervention?

Yes, I give way to the former First Minister.

He's mentioned Cardiff Airport. The mayor of Tees valley, who is a Conservative, has made great play of the fact that he has bought what is now Teeside International Airport, intends to invest in it and has said that it's a public asset. If it's the case that the Conservative mayor there can praise public ownership of an airport, why can't the Welsh Conservatives do the same?

Well, there's a question. Thank you for the question. Gosh; in at the deep end today, isn't it? I don't know that mayor specifically, but I would question what he paid for the airport to start with, did he pay over the odds for it and whether he has a strategy for that airport. I've not been questioning during this, the ownership of the airport, but I am questioning the strategy behind the running of that airport and I'm also questioning a blank cheque being provided for that and continual money. So, let's see a strategy, let's see a vision and I'm more than happy to look into the mayor of—was it Tyne? Tees valley. I'll look at what the mayor is doing up there, because perhaps we all in this Chamber could actually learn from what a Conservative mayor in the north of England is doing.

If I can just briefly turn, in the last few minutes, to supporting the economy and business taxes, Welsh Ministers could, of course, have lowered punitive business taxes to regenerate high streets, which are often talked about in this Chamber, to boost the Welsh economy. Look, we are still left with some of the most expensive business taxes in Great Britain, whatever reasons might be given for that. Both land transaction tax for non-commercial properties over £1 million and business rates outstrip our counterparts in both Scotland and England, and are set to do so again. Perhaps we need to look at all this afresh. Perhaps we've got the powers here to do something different. I think that other parties—Plaid Cymru might have mentioned this in the past. Perhaps we need to be looking at whether business rates can be addressed in a completely different way. At the moment, we're not at that point, so let's see some all-important relief for our businesses.

Now that we are the other side of the Brexit deadline, it's clearly important that we get on with developing our own external relations. Rightly or wrongly, Wales is too often perceived as trailing the rest of the UK when it comes to global investors' perceptions. The draft budget allocates an additional £2.5 million of EU transition funding in 2020-21 to support export, trade and inward investment activities, but we need to see more use of existing devolved economic levers, such as the taxation system, to provide a welcoming environment for businesses to invest and grow. Scotland has really built on this connection between the tax system and inward investment. It's something that we need to see in the future and it's a shame that we haven't seen more of that in this budget.

So, to finish off, Llywydd, let's drive Wales forward. The UK Government is delivering record investment this year with £790 million into growth deals and £500 million to the capital region city deal. There is money going in. Let's see similar investment from the Welsh Government. Wales has two Governments: it has a Government here; it also has a Government in Westminster. Those Governments need to work together to drive the Welsh economy forward now and in the future. 

There are plenty of yardsticks in the way that we in Plaid Cymru assess the budget of a Labour Government. Fundamentally, the question that we ask is: is the Government using its fiscal resources in the most efficient and effective way possible to transform Wales? Can the Government tell us that there is funding here that is innovative and that drives not only improvement in the way that public services are run in Wales, but also changes culture in a fundamental way in terms of how we think about delivering for the people of Wales? And the answer, I fear, quite clearly, is 'no'.

What we have is a Labour Government that is unwilling to be radical and the background of a Conservative Government that has proved to be totally uncaring as to the impacts of grave cuts to public expenditure for ideological reasons over a decade and more. We can't afford to be tinkering at the edges of the budget and expect transformation. I fear that this draft budget is another missed opportunity to tackle some of the main threats that we face. Yes, there is more money in the pot this time. There is some breathing space after 10 years of harsh cuts—I fear it will be temporary respite, however—but there is no change of direction here. There is no signal that the Government has realised, at last, that we need to tread a new path, otherwise we’ll face the same problems time and time again and nothing will change.

I would like to thank my former fellow members on the Finance Committee—I've left the committee now—for the detailed scrutiny of the budget in far too brief a period. And at this point, I will again echo what I and others have said in the past: yes, the circumstances have been unusual and extraordinary in that we had a UK general election at the very period when budgetary decisions would usually be made at a UK level, and that's what led to the fact that we are dealing with a Welsh budget here without knowing exactly how much is in the pot for the next financial year. But the fact that that has happened—that we are having to follow a scrutiny process without knowing exactly what we are scrutinising—is proof to me that being so closely attached to the Westminster system doesn't work for Wales.

There are a number of individual elements of this budget that I'd like to refer to, but there's also a theme. There is a fundamental weakness running through this budget, and that is the failure to start to think in a truly preventative manner in order to engender the kind of transformation that we need. If you look at the budget for tackling climate change—the most preventative funding possible, perhaps—yes, there are not insubstantial elements of this budget that are targeted at tackling climate change, but if we put that in the context that we are in, the fact that we as a Senedd and you as a Welsh Government declared a climate emergency recently, then the response in this budget to that, I believe, is inadequate.

The commissioner for future generations estimated that there is as much as a 28 per cent increase in the funding allocated for decarbonisation, which sounds great, but she also reminds us that we're starting from a very low level. And, crucially, what the commissioner has told us, which is damning, is that it appears that there’s very little evidence of strategic action from the Government—[Interruption.]

In a second.

And the main weakness that she's identified is the lack of assessment of how the funding allocated is likely to make a difference.

Diolch yn fawr. In regard to the fact that you've mentioned there is 28 per cent uplift in terms of the decarbonisation agenda, and that £140 million on top of what was before, you are absolutely correct in stating that we have announced an unprecedented climate change emergency. In that regard, where would you like to see that money come from? Would it be local government or health, or where would you like to have seen that money come from to go into that agenda?

Okay. It's up to Government to show it is prioritising through its budget, and, if we listen to what the future generations commissioner has said, this is what she said in an article for the Institute of Welsh Affairs last month:

'can the whole infrastructure of Government answer the question of whether its spend increases or decreases carbon emissions in Wales? From what I have seen the answer to that question is no.'

So, it's not just about how much—it's about how that money is spent.

The commissioner goes on:

'we don't know whether the worthy and important new investment in climate and nature in this budget is being undone by business as usual elsewhere in Government.'

That is damning. There's the £29 million for electric buses. Well, excellent. The figure itself is fine. You'll know that I'm a keen campaigner for electric vehicles, but, with a budget such as this, we need evidence to show whether giving £29 million for new buses is the best way of having the best impact in terms of decarbonisation from that expenditure of £29 million. And, in addition to that, there are elements of the budget that could be negative, even, in terms of their impact on the environment.

'Without a comprehensive assessment of all spending decisions,'

said Sophie Howe,

'positive progress in some areas may be undermined by high carbon projects or programmes in others. The Welsh Government have an opportunity to become a global leader on budgeting in a climate emergency, by publishing a "carbon impact account" alongside its annual budget.'

They haven't taken that opportunity in this budget. To respond to the question that was asked earlier, it's not just where the money comes from, but what message the Government is conveying through this budget as a whole. It's not just looking at environmental sustainability that the commissioner is doing. It's the commissioner's role to ask more general questions as to whether decisions we're taking now are going to have a positive impact on future generations. And how we spend public funds is at the heart of that: are we making the right choices now?

This is the fourth budget since the passing of the well-being of future generations Act, but we're still not seeing real culture change in Government. We must do more to ensure that that Act is not simply a piece of paper but the basis of future budgets. That's why we in Plaid Cymru have committed to a well-being budgetary process, similar to New Zealand's, and officials in the commissioner’s office have said that they also wish to see a similar process adopted here.

Health and care is another area where so much more could be achieved by securing a real shift to a preventative approach, thinking of the future now. It's a very small percentage of the budget that is allocated for that real preventative work. Certainly, there is no sign of transformation here, and I'm not just talking here about expenditure on the NHS, but the failure to bring together all of those elements that have an impact on people’s health.

We know full well about the relationship between ill-health and poverty. There's nothing new in this budget when it comes to tackling poverty. Time and time again, the Government is trying to do the same things rather than introducing the ambitious change required to bring those who are most in need out of poverty. We see concerns about the shortage of funding in areas such as housing, homelessness and the Supporting People programme—the Bevan Foundation say that there's little evidence of new methods being adopted to prevent poverty. For example, it's critical of the same old practice of emphasising the numbers of jobs created, whatever the levels of salary or the terms and conditions of those jobs.

Local government plays a key role in delivering preventative elements of public services. Again, while we see an increase of £184 million, or 1.8 per cent in real terms, in the support for councils in Wales, the Welsh Local Government Association has estimated that councils need an increase of £250 million just to stand still. Local government can't play its full part in the preventative agenda that we want to see develop without receiving the support to do that.

I'll turn to the Welsh language briefly. We can all agree on the value of having a target of a million Welsh speakers, but how can you square that with the real-terms reduction of £400,000 in expenditure on the Welsh language directly? In addition to that, there's a cut of £1.65 million for the Welsh language within schools. I had an opportunity in the Chamber last week to push the Minister for the Welsh language not to cut the budget for Welsh for adults. Now, I know that her view is that perhaps we need to look at spending on giving people opportunities to use the Welsh language. Now, whilst that is important, in places such as my constituency, there are plenty of opportunities to speak Welsh—it's giving people an opportunity to have those skills to participate in those opportunities that's important in those constituencies and those areas. And, as a whole, it appears that the Government's decisions on expenditure on the Welsh language are entirely contrary to what is needed in order to ensure the viability of the Welsh language in future years.

I will conclude, Llywydd: the budget is part of the furniture of this Senedd, part of our governance, but it's more than that. It is crucial in terms of setting direction. It tells us what kind of Government we have. This is where rhetoric is supposed to become reality, the proof of the willingness of Government to implement their pledges. Yes, there are challenges. There are challenges in terms of Brexit and the costs of that, there are challenges in that we still don't have that full budget available to us, there is uncertainty as to how long the increases coming from the UK Government will continue, but this is not an innovative budget, it is the contrary of salami-slicing—where we see every department getting a slight uplift. That, I fear, is the most unimaginative form of budgeting that the Welsh Government could have adopted.

I thank Rhun for his contribution there and for his service on the Finance Committee. We're sorry to have lost him. And I also welcome Nick Ramsay back to the Chamber and thank him for his contribution.

He mentioned the airport, and the Conservatives were criticising the further expenditure on that, and Carwyn Jones, the ex-First Minister, who is no longer in his place, came back by saying, 'Well, you have opposed the spending here, but you support it in Durham Tees', where a Conservative bought the airport. I've looked at how much was spent on it, and it was £40 million they paid up on the Tees, and that airport only had 130,000 passengers. 

So, while we thought £52 million was quite a lot for the Welsh Government to spend on Cardiff Airport, compared to the KPMG estimate of a valuation of £25 million to £35 million, it suggests that, actually, the £52 million compares relatively well to the £40 million, when Cardiff had 1 million passengers compared to the 130,000 there, but whether that's the right valuation I don't know. But I would note, in response to Carwyn's comment, the response of five Labour council leaders to the Conservative mayor buying the airport in Durham Tees: they warned that the mayor's plans to sink money into the struggling airport would create a black hole in investment plans.

I hope we'll look at these issues on merit, rather than simply from party political allegiance. I think the important point I'd like to make, in terms of cash going from Government into the airport—yes, if it's a black hole and it's consistently taking cash and there's no prospect of it generating cash to pay back down the road, then that wouldn't be a good idea. But, at the margin, what they are doing with the additional money? When I met with Roger Lewis and others, when he was chairing the airport, I think they made a case that at least some of the extra cash they were looking for was going to get a payback within a year or so, in terms of extra retail units and improving terminals. If that payback is the case, then it would be sensible to put the cash into it, and, given that the Government is the shareholder, for now that duty falls to Welsh Government.

We heard, as Nick said, relatively limited mentions of austerity from the finance Minister, at least compared to previous contributions. However, she did emphasise—and her comparison was one, again, back to 2010-11, and how we, she says, have £300 million less in real terms now than then. I just think it's more helpful, in scrutinising and considering the budget, and deciding what we think of it, to compare what the budget is for the year ahead compared to the previous year. What are you actually doing in this budget? For that, I think the important number is that £593 million increase in spending, or 2.3 per cent in real terms. 

I think the finance Minister was a little unfair to criticise the UK Government for its chaotic approach to the budget timing, since I think the timing of that 12 December general election, or the necessity of having it, was not entirely in the UK Government's hands. Opposition Members in Westminster had at least as much responsibility for those timings and the impact they had on the budget process.

However, I would like to commend the Welsh Government on its pragmatic response to those timing difficulties, its, I think, sensible liaison with the Finance Committee in terms of scrutiny and the debates we've had here. I think it's worked okay, in light of the challenges that we had. Certainly, compared to the Scottish Government, and the huge problems they've had, I think we have acquitted ourselves well in terms of those timings working together.

I also think, in that context, we, on the Finance Committee, are looking to give greater consideration to the budget process, stepping back from the specifics of this budget to ask if this is the right process. The thing that I've become most concerned about, about the process and how it works, being on the Finance Committee on and off over the years, is that the draft budget, and then the scrutiny and the debates and the stakeholder meetings, I think possibly lead to heightened expectations from stakeholders, interest groups, those who are funded—AMs here, to an extent—of the prospect for change. And I wait to see what happens in the finance Minister's final budget to see what is changed then.

But, if the scrutiny process is to have any value—. I'd just give one example of an area where I think there's been cross-party consensus, and that is bus services. Yes, it's welcome to have this £29 million of capital funding for electric buses, and I'm sure that those who use them and those in city centres who benefit, perhaps, from reduced air pollution because of them will appreciate that spending, but we're not clear as to whether that is the best value of spending compared to other projects, to the extent that the Minister is focused on climate change objectives. Obviously, there are other benefits to these as well, but are those benefits greater than how that money of £29 million could be used elsewhere to support bus services?

Myself and the Member for Blaenau Gwent both brought this up repeatedly in committee: that, actually, if in Ebbw Vale you've seen the frequency of the service halved, whether it's an electric bus is much less important than whether there is a bus. I just hope the Minister, if she is listening to the scrutiny—and it's come from Plaid, us, Conservatives and from her own back benches. A real-terms cut in the subsidy for bus services on a revenue basis does not seem to gel well with her purported climate change objectives. And I just would, again, encourage her to reconsider that aspect prior to the final budget. 

I also wonder, given we've had this long period of relative austerity and we've come out of it—yet the approach of Welsh Government is largely to hand out fairly similar increases across the board. Some areas have particularly benefited; I see the Minister for the international side in her seat, and that's a significant percentage although quite small as an absolute-terms increase, and I hope she won't go overboard with opening too many offices across every EU country with the extra cash, but that's a big area of increase.

But I just wonder, in terms of that core decision—the NHS versus local government—similar increases to both—. Yet, what has happened in dealing with austerity in Wales is there have been relative cuts in the health service compared to England, yet local government has been protected much more than has been the case for English local government. The Welsh Government used to tell us that we needed structural change in local government, and I agree with them. Why do we have so many councils, 22 unitary councils, much smaller generally than those in England that are delivering unitary services? There's a desperate need to try and encourage regional working to mitigate some of those inefficiencies. But ultimately, would it not be better if we had fewer and larger councils that were better suited to carrying out those tasks? 

I will give way to someone who will disagree strongly with what I've just said—Mike. 

Thank you for giving way. Would you not accept that the councils in Wales are substantially larger than those on mainland Europe and north America?  

It depends which council you refer to. Some of the activities carried out by unitary councils here would be carried out by states in the United States, which are of course much bigger. But what I would say is: I believe 22 is too many, and I think we should require local councils to merge with at least one other. I think Cardiff and Powys should probably be exceptions on account of their size. I think it should be a bottom-up process with councils deciding on their merger partner, rather than a top-down map. I think that would allow savings to be deployed into front-line services. And while we're about it, I would cut the number of councillors and I would question why they all need to be paid a minimum of £14,000, which is far more than I saw when I—. Many councils in England have substantially less, despite being larger unitary councils than those who are paying that sum. 

Finally, I look forward to seeing the final budget done. I thank the Minister for scrutiny in difficult circumstances, and it's good to see a budget where we have some opportunities to deploy and invest some money after so many years of austerity. Long may it continue now that the United Kingdom is once again an independent country. 

Firstly, can I say how nice it is to see so many people taking part in this debate for such a major debate? Far too often, four of us used to debate the budget and the Minister used to reply. We're dealing with substantial sums of money, and I think it really is worthwhile for the Assembly to give it a full debate. I want to address this debate in two parts; firstly, on the overall budget, and then on the budget covered by the areas scrutinised by the Climate Change, Environment and Rural Affairs Committee. I want to address how money is spent, because the increases are welcome, but how it is spent within departments is at least as important—I would argue more so.

The role of Government can be broken down into three areas: health and well-being, security, and the economy. Starting with health and well-being: health is no more all about hospitals than car maintenance is about cars being repaired in garages. People's health and well-being begins with having a warm, waterproof and safe home with enough nourishment. Stopping people being homeless and providing supported accommodation will keep many people out of hospital. I want to highlight two areas that are important: the provision of social housing so that people have a home; the provision for supporting people who aren't able to look after themselves to have a home in which they are supported. These are fundamentally important for the lives of people.

Within health provision—and my concern about the size of the geographical areas of the health boards is well known—the funding of primary care needs to increase. What is happening is that people cannot get an appointment in primary care and then go to A&E. Often, the default position in A&E is to keep patients in for 24 hours' observation when they come in with non-specific symptoms. On hospital discharge, it's ensuring that the hospital pharmacy provides the medication, so that patients can go home rather than waiting until the following day when the pharmacy is able to provide their medication. Why do so many patients who go into hospital able to look after themselves get discharged either to nursing homes or to a substantial care package? Whilst understandable for stroke patients, I find it less understandable for people who go in, sometimes for orthopaedic operations they've asked to have, and they end up then being no longer able to look after themselves.

On the economy, we can either try and make a better offer than anyone else to attract branch factories, or we can produce a highly skilled workforce, creating our own industrial sectors and having employers coming because of our skills mix not our financial inducement. Education is key to producing a workforce that can transform the Welsh economy. Money spent on education in schools, colleges and universities is an investment in the Welsh economy and economic growth, and I believe that really is important.

Having declared a climate change emergency, I don't think I'm the only person who felt it was disappointing to see that this area had the smallest real terms revenue budget increase. On the budget, can I ask that future budgets are accompanied by a comprehensive assessment of its overall carbon impact? The current spend on decarbonisation and a long-term funding plan is needed. Whilst I very much welcome the development of an environmental growth plan and the funding allocated to that plan, the plan is not intended to be published until later this year. How are we going to ensure that money is effectively spent?

The climate change committee is currently undertaking an investigation into fuel poverty. The Welsh Government target of eradicating fuel poverty by 2018 was derailed by the economic crash and the austerity of the Conservative Governments that followed, so I'm not going to blame them for that. But what I am going to say is, in my constituency, I have older properties in both the private-rented and the owner-occupied sector that lack basics such as central heating and double glazing. Surely dealing with these should be a first step to dealing with fuel poverty? Also, the fuel poverty definition excludes those who keep their property cooler than optimum or go to bed early—and I've talked to people who go to bed at six o'clock at night because they can't afford to keep their house warm—in order to save on heating costs. These people are not in fuel poverty against the definition. I think they're in fuel poverty against what most of us would describe as fuel poverty, because they cannot keep their houses warm.

Money is needed to protect the environment, and NRW needs to be adequately funded. I'm one of those people who is not convinced that merging three distinct bodies was a good idea, but we have an organisation that is as it is now, and it does need to be adequately funded. There's a huge amount of work that needs to be done in protecting the environment. For some of us, that really is important. Can I just talk about something that doesn't often get much mentioning, apart from by my friend Joyce Watson, and that's marine conservation areas? That does need funding. We need more marine conservation zones, and they need to be designated, but not just designated, but having adequate staffing. It's pointless saying, 'We'll have a marine conservation zone there', if there's not the money and the staff to support it. And finally, money needs to be spent on stopping species becoming extinct. That's what climate change is doing to this country, and I think it really is important we do all we can to stop that happening.

I agree with much of what Mike has said, particularly the issue around how we keep people well is going to be a much bigger saving on the health budget than if we are constantly piling money into things that aren't working particularly well at the moment.

I just wanted to talk about the allocation of the housing budget, particularly the supported housing grants. Because on Friday, I visited one of Llamau's supported housing for young people aged 16 to 25, an age when most young people still have, either part time or full time, a place in the family home. But these are people who, for one reason or another, are unable to live with their families and are still not ready to hold down their own tenancy, whether as a result of the trauma of homelessness, which makes them vulnerable, or being sexually exploited, or because they're experiencing the withdrawal of support that was previously available to them as looked-after children, or whether they have addiction to alcohol or drugs, which makes it impossible for them to hold their own tenancy.

We know that the pain of adverse childhood experiences makes such young people hugely more likely to end up with a serious mental illness or, alternatively, end up in prison. So, either of those routes is a much bigger drain on public resources than the preventative spend that we need to put into the housing support grant. So, the work by Llamau and others to prevent that descent into either criminality or mental crisis is a huge saving to society.

Llamau has 10 houses in Cardiff, each supporting living accommodation for between three and six people. In many ways, it's no different to the arrangements devised by the many students in houses in multiple occupation in my constituency. Each individual has their own room, and they share the bathroom, kitchen and living room with others. There are differences, though. Each tenant in Llamau gets to choose their own bedroom furniture and their decorations. Pink sparkly wallpaper is not everybody's choice, but it was the choice of a particular young woman, and it was what made her feel that it was her home.

Llamau tells me that three quarters, at least, of all these young people then successfully move on to holding their own tenancies, or a training tenancy, either in the social sector or a private-rented tenancy. One of the important features of their support is that they continue to be supported for the first 12 months by the same group of professionals that they came to trust while they were in the supported accommodation.

So, the Llamau grant from Cardiff Council's preventing homelessness service covers four fifths of the cost of this imaginative, tailored support. The rest—£250,000—has to be fundraised, and I was very happy to support the Sleep Out event in Cardiff castle in early December, which was supported by a huge range of individuals and organisations. But I do wonder whether, in light of the proven success of this Housing First intervention, it's right to only have a cash-flat settlement for this line of the budget, which in reality means a cut. Without additional investment in the housing support grant, there is a risk that services will not have the capacity to meet people's needs, and obviously that's a huge issue in Cardiff, where we have a very significant number of people either homeless already or at risk of homelessness.

Turning to another matter, which is the Climate Change, Environment and Rural Affairs Committee's inquiry into fuel poverty, which is ongoing, it does demonstrate that there's far more that can be done to join up the approach. I wonder whether we're really adequately using all public services boards to ensure that we are maximising the collaboration of different stakeholders.

Small sums of money can often be game changers, and I applaud the £5 million in the environmental growth budget for a local places for nature fund, which as the Minister said can be seen from the doorstep and is much more significant in its impact than the £137 million general capital for this item. So, I think we could be doing a good deal more of this sort of thing, such as the innovative housing fund, which has demonstrated, time and again, that we really can be building much better housing than the Legoland approach of the five big house builders. Thank you.

The Labour UK Government's March 2010 budget forecast the UK deficit to be 11 per cent of gross domestic product that year. According to the International Monetary Fund, the UK had the highest deficit among the G7 and G20 economies. Alistair Darling's March 2010 budget statement revised down the growth forecast, reduced borrowing, and stated that the deficit would be more than halved over four years, because its scale meant that the UK didn't have enough money, something defined as 'austerity'.

In its September 2010 annual health check on the UK economy, the IMF backed the then coalition Government's deficit-reducing austerity measures, calling the UK Chancellor's plans credible and essential, and said the plan:

'greatly reduces the risk of a costly loss of confidence in public finances and supports a balanced recovery.'

The UK Government's prudent economic management since 2010 has reduced the UK deficit to less than 2 per cent of GDP, below the average now amongst the G7 economies, enabling the UK Government to boost the Welsh Government budget now. Yet, four of the five bottom local authorities in terms of funding increases are again the same authorities in north Wales—Conwy, Wrexham, Flintshire and Anglesey—whilst Monmouthshire remains bottom. The local government Minister repeatedly states that the splitting up of the local government settlement between local authorities is done by the democratic processes of the Welsh Local Government Association. However, as senior councillors in north Wales have told me cross-party, the losers do not want to openly challenge the funding formula on the basis that, in order to gain, other councils will have to receive less. Therefore, in a 'turkeys don't vote for Christmas' attitude, they would not receive any external support.

Nonetheless, council leaders in north Wales have written to the leader of the Welsh Local Government Association stating that the benefits of this provisional settlement are not shared sufficiently fairly and leave most of the councils in the north with a settlement significantly below the net cost of pressures, inflation and demographic change. And in a letter to the First Minister, the leader of Conwy states it is a great concern that the aggregate external finance position across Wales is in a wide range of between 3 per cent—the worst—and 5.4 per cent—the best. The span of 2.4 per cent is the highest it has been for a number of years.

Writing to the local government Minister, Julie James, the leaders of all six north Wales councils cross-party state that, in light of continued challenges for the 2020-21 financial year, they wish to ask for a funding floor of 4 per cent in the local government finance settlement, to be met from Welsh Government reserves. Because, they say, for the 2020-21 provisional settlement—four of the five bottom councils are from north Wales—without a floor, most north Wales councils will be faced with the biggest challenge in terms of seeking cuts to services. A floor will help to protect services and work against the above-inflation council tax rises in the bottom six councils.

We also need to see an end to false economies, which see key early intervention and prevention services delivered by the third sector starved of funding, adding millions to the cost pressures on statutory services. As we recently heard in debate here, there is no statutory funding for the agencies and charities helping bereaved people. Charities in Wales providing essential support to autistic people and their families also report zero statutory funding. The Wales Council of the Blind has warned that the Welsh Government's move away from the core funding model to project funding means that the sustainability of the specifically Welsh umbrella organisations is under immediate threat. Responding to the cash flat settlement for the housing support grant in the Welsh Government's draft budget—a cut in real terms—Cymorth Cymru, Community Housing Cymru and Welsh Women's Aid warn that services preventing homelessness and supporting independent living have now reached a tipping point. As a supported-living service provider in north Wales told me during a visit last Friday, the consequences will be increased pressures on the NHS, A&E and blue-light services, adding that this, combined with the Welsh Government's planned redistribution of housing support grant, will be devastating to north Wales, where five local authorities stand to lose between 25 per cent and 40 per cent of their funding to south Wales. The consequences in terms of refuges, hostels and housing-related support that enable people to tackle the complex problems that have prevented them living the lives they can will be, as we heard, devastating. I hope that this is not allowed to happen.

As Chair of the Equality, Local Government and Communities Committee, I'd like to refer to our report on the draft budget passed last week. Within that, Llywydd, we reiterated our view that Welsh Government would benefit, Wales would benefit, from a tackling poverty strategy that provided an improved focus on those very important issues. We welcome the additional £18 million across portfolios for tackling poverty in the draft budget, addressing, for example, period poverty, the pupil deprivation grant, holiday hunger, school meals and indeed fuel poverty. But we do believe that a more coherent strategy, pulling all the Welsh Government's work on tackling poverty together, would be more effective and we believe that there should be more emphasis on tackling the root causes of poverty rather than the symptoms.

Our headline recommendation in the report, Llywydd, was about the budget allocations to the housing support grant and the homelessness prevention budget line. Over the past two years, we have done a lot of work as a committee looking at rough sleeping in Wales. We've welcomed the increased activity and focus that Welsh Government has brought to this issue in recent months, and in particular, the establishment of the homelessness action group and the Government's acceptance of the group's first set of recommendations.

Throughout our work it has been clear that there is a particular challenge in this area to make the shift from providing emergency reactive support while at the same time reshaping services to deliver more preventative help. There is a clear cost to delivering both types of service at the same time. As we say in our report, any increase in funding both is likely to be temporary until the preventative work starts to bear fruit and we move towards meeting the aim of making homelessness rare, brief and unrepeated.

We therefore do not believe that the maintenance of the funding for both the housing support grant and the homelessness prevention budget line at the same levels as 2019-20 is sufficient—it is, in effect, a real-terms cut. While the Welsh Government told us that the increase in funding in previous years has been maintained to support its ambitions, others in the sector suggested that budget increases had been insufficient. The sector told us that despite additional funding in recent years, the increasing number and complexity of cases they are dealing with means that they are still struggling to deliver all the necessary support in the right place at the right time.

The Welsh Government have stated that reducing homelessness is a priority. We can see this prioritisation in the policy choices being made, but we do not believe that we are seeing it sufficiently within the 2020-21 budget allocations. The release of the figures from the annual rough-sleeper count today show an increase in the numbers sleeping rough, and we believe that this illustrates the need to tackle this issue now. We acknowledge that the count itself has its limitations, but we still believe it underlines the importance of ensuring that there is sufficient funding to address this problem. Protecting the budget is not enough; it needs to be increased.

We are therefore calling on Welsh Government to increase the allocation of funding within the 2020-21 budget for housing support and homelessness prevention. The human cost as well as the financial cost to public services of homelessness is too high not to do this. Diolch yn fawr.

I speak as Chair of the health committee. As part of the committee’s consideration of the draft budget, we heard evidence from the Minister and Deputy Minister for Health and Social Services in respect of health and social care funding, and from the Deputy Minister for Culture, Sport and Tourism in relation to funding for sport and physical activity.

In addition, we have engaged in a programme of scrutiny of all health boards and trusts over the summer term, which has included scrutiny of their financial performance. The two main things that emerge are prevention and transformation.

Transformation and prevention. Following last year’s budget scrutiny, we raised concerns around the ability of health and social care organisations to mainstream service transformation activity, given the demand and cost pressures on them and the continuing failure of the majority of health boards to break even.

The position this year isn't much better and, as such, we remain concerned about capacity in all areas of the system to drive transformation at the scale and pace needed.

In relation to prevention, and given the increasing focus in this area, it is disappointing that the Future Generations Commissioner for Wales describes having seen

'limited evidence that Government have tried to apply the prevention definition across spend in a systematic and robust manner.' 

We note that work is being undertaken by Public Health Wales to improve measurement of spend on prevention. Nevertheless, we are concerned that this budget fails to evidence a demonstrable shift towards mainstreaming prevention and service transformation. We have therefore recommended that, in future budget rounds, the Welsh Government demonstrates how its funding allocations will support long-term, sustainable change in the delivery of integrated health and social care services. And as part of this, we expect to see a greater strategic focus on transformation and prevention in the budget, and a clearer presentation of the funding allocated for prevention and transformation purposes.

The continued inability of a number of health boards to manage their finances remains a cause for concern. Only three health boards are meeting their statutory financial duties of achieving financial balance and having an approved three-year integrated medium-term plan. This raises serious questions about how all health boards will be able to invest in and secure service transformation, given that specific transformation funding will end in 2021.

We know that £83 million has been provided to Betsi Cadwaladr over a three-year period for intervention and improvement support. However, it is not clear how much money is being provided to support the remaining three health boards in targeted intervention, or what this money is being used for. As such, we have recommended that the Welsh Government makes these details available, along with details of how this money is being spent, how that spend is monitored, and how it is achieving value for money.

In our scrutiny of last year’s draft budget, a significant concern for us was that the proportion of health board spending that goes on primary care has remained broadly consistent over the last few years. This suggested that the shift in resources towards primary care was not being realised. We therefore recommend that the Welsh Government provides clarity in future budget rounds, to enable us to see more clearly how funding is supporting the shift in resources to the community.

As regards mental health, we remain concerned that there is still a lack of parity between mental and physical health, and the way in which they are supported. In our report into suicide prevention in Wales, 'Everybody’s Business', we noted that it's unacceptable that mental health services are not prioritised in the same way as physical health. While we welcome the commitment of a further £13 million investment in mental health services—bringing the ring-fenced allocation to more than £700 million—we are concerned about our ability to effectively scrutinise spend on mental health, given the lack of a detailed breakdown of the ring-fenced allocation and the inconsistency in the way health boards collect and provide information. We therefore recommend that the Welsh Government provides us with a breakdown of this £700 million.

Turning to social care, we remain concerned about the social care workforce and the fragility of services. The disparity between the health and social care workforce in respect of terms and conditions of employment and esteem was a key concern. And, obviously, we addressed a number of these issues in the earlier statement. We would say, funding for social care should be directed to services to stop people getting ill in the first place and needing health and social care services—a truly transformational fund,

To close, which brings me to third sector funding, finally. A recurring theme throughout our inquiries in this Assembly has been the need for a long-term, sustainable and streamlined funding arrangement for third sector organisations to enable more effective planning, resulting in sustained and consistently delivered services. We have advocated that funding be provided on a three-yearly basis as a minimum, and have urged the Welsh Government to move towards this as a matter of priority. It is therefore extremely disappointing to hear from a number of organisations, which are providing vital services to some of our most vulnerable groups, that their funding will not be renewed from April 2020. Diolch yn fawr.

Can I welcome the fact that we have the opportunity to progress the Welsh budget for 2020-21 in spite of the difficulties and the circumstances around this year's process? Those difficulties have included, as we've already heard, the timeline for setting this year's budget, making it much more challenging than usual for backbench AMs in particular to provide effective scrutiny. Not of this Government's making, I know, but worth noting nonetheless. What I would say is there is much to be welcomed in this year's budget, not least the continued investment in the Welsh NHS, and a significant uplift in funding for local government this year, and there's much that I could comment on.

However, I just want to add my voice to the one issue that arises from the scrutiny undertaken by the Equality, Local Government and Communities Committee, set out by the Chair, John Griffiths, and which has also been raised by Jenny Rathbone and Mark Isherwood, but I think needs reinforcing, and that is the budget allocation for the housing support grant and homelessness prevention line, both of which are static this year. 

Given the importance that we place on tackling housing issues, I do find this aspect of the budget before us today unfortunate, to say the least. Like others, I'm sure, I've seen in my own constituency the benefit of this grant and the general policy direction of dealing with homelessness and support in cases of domestic abuse, for example. But I also see, from the casework that comes through my office, that we are only scratching the surface and, for agencies seeking to deliver housing support to the most vulnerable in our communities, it becomes more challenging year on year. And as has already been referenced, this appears to be confirmed by the Minister for Housing and Local Government's statement today on the rough-sleeping count, which shows a rise of some 17 per cent in the last year. 

Only last week I was asked to speak at an event celebrating the work of the Housing First project in Merthyr Tydfil, an innovative scheme being delivered by the Salvation Army for Merthyr Tydfil County Borough Council. The type of support required in Housing First projects is intense and it's expensive. The project in Merthyr is only able to support four or five people, despite us knowing that the need is much greater. The project is, as all such projects are, time-limited and dependent on grant funding. In my view, such vital housing support, whether Housing First projects, women's refuges or support for early intervention to prevent homelessness, need to have certainty of funding and certainty of an annual uplift to keep pace with the costs of delivering these services. 

The Equality, Local Government and Communities Committee's report details those concerns and how the static budget line could impact upon objectives set by Welsh Government itself. So, to quote from the committee's report, 

'the Welsh Government should consider increasing the money available to fund homelessness and housing support.' 

I know that the issue of housing and homelessness prevention is a priority for this Welsh Government and our policies have always been innovative in so many ways, but I'm looking to the Minister to assure me of two things: first, that the invaluable work undertaken through this budget line, which I've outlined briefly in my contribution, is recognised by Welsh Government; and secondly, should the opportunity arise, then extra money will be diverted to meet the needs of organisations in this sector, because against a backdrop of reduced funding, down from £139 million in 2011-12 to £124 million this year, 2019-20, it's difficult to see how we can build and develop these services that many organisations are working so hard to deliver in such difficult circumstances and which I have no doubt will be confirmed when the homelessness action group reports in the coming weeks.

I speak today as Chair of the Assembly's Children, Young People and Education Committee. Each year, we consider how the Welsh Government's draft budget provides for the children and young people of Wales. This work is informed by the financial scrutiny we mainstream into all our work and is undertaken with a children's rights approach at its heart. Throughout this Assembly, we have called on the Welsh Government to provide clear information about how it has assessed the impact of its financial decisions on children and young people. This is not just because we think Ministers should do this, it's because the duty of due regard to the United Nations Convention on the Rights of the Child under the Rights of Children and Young Persons (Wales) Measure 2011 requires them to assess the impact of their decisions on children's rights.

Last year, we worked closely with the finance and equality committees to call for improvements in how the Welsh Government assesses the impact of budget decisions on different population groups. While we recognise that the Welsh Government is still working on implementing our recommendations, the information accompanying this year's draft budget has done nothing to allay our long-held concerns about how the rights of the child shape such important financial decisions. For that reason, we have recommended that the Welsh Government should return to publishing an individual child rights impact assessment on its draft budget. We think this is necessary until we can be assured that the strategic integrated impact assessment demonstrates that the duty of due regard to the UNCRC has been clearly taken into account. 

Turning now to specific matters in our report, I don't have time to cover everything, so I will focus on the areas that have been underpinned by the detailed policy inquiries we've undertaken in this Assembly. I'd like to start with school funding. We have looked at this again this year in detail. We welcome the increase in local authorities' funding in the 2020-21 settlement, and the commitment given by local government to use it to prioritise school and social care funding. Nevertheless, we know from our focused work in this area that there are serious concerns, both within the sector and among the public, about school funding. As a result, we are calling on the Welsh Government to robustly monitor this funding and to demonstrate to the Assembly that this money is, indeed, reaching our schools.

Turning now to the new curriculum, given the Welsh Government's ambitious reform plans, we welcome the allocations made to provide teachers with the necessary professional learning to adequately prepare. We have stated consistently that our workforce has to be our strongest asset if we are to deliver this once-in-a-generation opportunity. As such, we are recommending that the Welsh Government keeps all funding to support curriculum reform under close review. We believe this is vital to ensuring that the new curriculum is effectively implemented.

It will not surprise this Chamber to hear that allocations relating to the implementation of our 'Mind over matter' report were a key focus for us this year. Following the money as it relates to children and young people's mental health is a significant challenge for Members and stakeholders alike, so we looked at it in as much detail as we could. We welcome the significant funding the Welsh Government has made available to support services for children and young people's mental health and emotional well-being. However, given the amounts invested, we found the information available about how its outcomes are to be measured to be very lacking. We are, therefore, recommending that the Welsh Government should reconsider fundamentally how it monitors funding in this area.

In the field of perinatal mental health, it is approaching three years since we called for urgent action to provide specialist mother-and-baby-unit provision in Wales. We are deeply concerned that there is still no figure identified in the draft budget for permanent MBU provision in Wales, let alone a unit in place. We acknowledge that an interim service is being developed, but even this is not yet functioning. This has to change, and we'll be following up rigorously on this over the month ahead.

Finally, and very importantly, I'll turn to support for looked-after children. I said it in this debate last year and I'll say it again: looked-after children are some of our most vulnerable young people. Over the last few months, the Welsh Government has been working with local authorities on plans to reduce the numbers of looked-after children. During our scrutiny of the budget, we heard that local authorities have not been asked to cost these plans. Given the pressures on children's services, we think it is essential to have a sense of the costs involved. This is to ensure that they can be achieved safely and affordably. We are unanimous in our view that the safety of children and young people must be paramount in any plans to reduce the numbers of looked-after children.

Our report touches on a number of other very important areas, and I look forward to receiving the Welsh Government's written response to all our recommendations in advance of our debate on the final draft budget later this term. Thank you.

I smiled listening to Mike Hedges's contribution earlier in this debate, saying how he'd participated in debates where very few Members had been present and very few Members had actually contributed. My notes here say 'thinly attended'. I think we need to think hard about how we manage our budget process in this place. The Finance Committee, I think, has produced some very good work on how we would move to a legislative process, and I certainly think there needs to be far greater engagement from all sides of the Chamber in the process of making these absolutely fundamental decisions.

Will the Member give way?

Yes.

Could I ask him, with his long experience, why he thinks things have changed such that we now have good attendance and participation in debates such as this, whereas in the past they were thinly attended?

I don't think we do have—that's precisely my point. I believe that we do need to ensure that we have greater participation from all sides of the Chamber in these matters, and I believe that we need to ensure that we're able to scrutinise the Government in a more profound way, not simply a line-by-line analysis of the budget, but overall priorities.

In my contribution this afternoon, I don't want to focus on individual spending decisions but to look at some of those wider themes, because we started this process this year with a debate held last September where members of the Finance Committee sought to establish what the priorities of this place were, of Parliament were, before we heard from the Government. Because in the past, of course, we've always responded to Government decisions rather than making it clear at the beginning of the process what we believe the Government's priorities should be. I hope that we can move forward with that: establish a legislative process to make this a more profound part of our proceedings here.

But in terms of where we are here, the themes I would want to address are those of climate, of the balance between revenue and expenditure, and then where we are in terms of the future. The evidence that we received as a Finance Committee was: is this a budget that reflects the importance that the Government is placing on a climate emergency? The answer to that is clearly 'no', and I think we've had similar responses from other committees and on different sides of the Chamber. It's clearly not a budget that will fundamentally transform the way that Government does its business. I think that's a fair criticism to make.

But a different way of looking at this would be: what would that budget actually look like? If I think hard about this, I'm not convinced that the Government has within its powers today the availability of resource to actually deliver that sort of climate budget. What I believe we need to do is to look more fundamentally at the use of the powers available to this place. There's been much conversation here this afternoon and on other occasions about the Government's attacks on the United Kingdom Government and their process of austerity. Well, I'm certainly not going to defend the United Kingdom Government for one moment, but what I would say to the Welsh Government is that those attacks would have far greater strength if this Government had used all its powers in a more profound way to ameliorate the impact of austerity than has been done so. I think that's an ongoing disappointment for many of us.

We heard in an earlier debate this afternoon that the health Minister is considering looking at powers to raise taxation to deal with social care. It's an argument I've been making for many years. We cannot fund our ambitions across all the areas of Government within the resources we have available to us, and we have to look harder at the tax base. We have to have far more profound conversations about taxation than dressing up a budget conversation in terms of simply a debate on public spending, which is largely what our debates have been.

So, I think we need to look far harder at how we use the powers available to us. I want to see more radicalism from the Government, I want to see more radical thinking from the Government, I want to see the Government using the opportunity to move with greater pace about the form of taxation that we use. We have the powers over income tax; I know the Government are looking towards other forms of taxation at the moment, but I want that to happen with more impetus.

But let me finish with this. Is this a budget for the future? We know that over the medium term, despite Mark Reckless's earlier enthusiasm and optimism about the impact of Brexit on the car industry—which is to his credit, to be fair—we know from reading the paperwork behind this budget that both the Office for Budget Responsibility and the Government's own chief economist see uncertainty in the medium term. We also know, and it was referred to earlier in this debate, that Wales is a profoundly over-governed country, that we prefer all too often to put sparse and scarce resources into establishing committee after committee after committee, rather than putting that money on the front line. We all know this is true and certainly as the local government Minister, I had conversations on all sides of the Chamber and rarely found much disagreement in private—much in public, but not in private—and I think it's time that we looked hard at how we govern this country. My profound disappointment with this budget is that it's a budget for the short term and not the medium or long term. What we are not doing is looking at how we can maximise impact on the front line of public services, protecting public service workers, protecting the quality and availability of public services—rather, 'We'll create a committee' because that's the easiest, insider answer to our problems.

I believe we do need far, far more radicalism, and the budget is where we state our values as a Government and as a Parliament. And I believe that, quite often, our budget, whilst having radical edges to it, is, at its heart, too conservative to face the challenges that face this country.

I call on the Minister for Finance to reply to the debate.

Diolch, Llywydd. At the opportunity we had to debate the draft budget in the debate on the statement on the draft budget just a couple of weeks ago, I responded in some depth to the issues that were raised regarding poverty, the NHS, the Welsh language, and the local government settlement, so I propose to use my time responding to the debate this afternoon to look at some of the other areas that colleagues have mentioned in the debate today and previously, which I didn't have the opportunity to look at last time.

I think the theme of decarbonisation has come through extremely strongly in the contributions this afternoon, and I think that it's really important to recognise that the additional funding of £96 million for decarbonisation measures as part of that wider £140 million that looks at decarbonisation and biodiversity is only one part of the picture. You can look right throughout the work that the Welsh Government is doing and throughout the budget to see where we are making inroads in terms of addressing decarbonisation. So, an example would be the additional £48 million that is being used to increase the level of the social housing grant available. So, now, all new housing in Wales is built to the Welsh housing quality standard, and that, of course, improves energy efficiency and reduces the emissions from domestic heating.

We're also investing nearly £21 million through our economic action plan in 2020-21, and that's about just driving sustainable growth and combating climate change through the calls to action for private businesses, which they need to deliver if they are to access the economy futures fund. And, obviously, that also plays a really prominent role in the economic contract as well. So, you can see decarbonisation running through all of those things.

And, of course, we've published our low-carbon delivery plan, which sets out a wide range of actions and priorities for Government. For three years now, we've been providing additional funding to implement the active travel Act, which places that legal duty on local authorities to improve their active travel routes— again, very important for decarbonisation. And our Welsh Government energy service has been investing in zero-interest loans across the public sector in Wales to deliver energy and energy efficiency projects. And, for 2020-21, we are putting a further £4 million of capital into that.

Of course, when we look at the farming industry, we know the important role that that can play in terms of helping us with our decarbonisation aspirations. So, £40 million has been made available through the farm business grant towards capital investment in equipment and machinery that's been pre-identified as offering clear and quantifiable benefits to farm enterprises, and there's an additional £1.5 million in 2020-21 in that regard. So, it's not just about the additional £96 million—actually, it's about doing things right through the Welsh Government budget.

We are taking our advice from the UK CCC in terms of the areas where we can have the best and the most deep impact, and they tell us that decarbonising the road transport sector is crucial to delivering a net-zero target. And that's why over £60 million of the additional targeted investment in decarbonisation is aimed directly at the transport sector. And, of course, we look forward to the UK CCC providing Wales with further advice during this year as to how we can best make that journey towards zero carbon. Of course, I understand the desire of colleagues to have those carbon impact assessments to better understand the impact of our spend. It is tremendously difficult to do; we're looking to see whether this is being done successfully internationally. We haven't come across an example yet. We'll look perhaps to the future generations commissioner to demonstrate, through the work that she does in her budget, to perhaps give us some guiding route to developing a carbon impact assessment. But we are really clear that, where it can be done, then we should certainly make efforts to do that.

One example where we can demonstrate the impact of our spend on carbon, for example, is the additional £7.9 million to support a range of air-quality measures, including incentivising hackney carriages and private hire drivers in Cardiff to upgrade to ultra low emissions vehicles. Now, based on our current assumptions, estimated carbon dioxide savings of approximately 3,300 tonnes per year can be achieved. So, that's one area where we can demonstrate it, and I'm really keen that colleagues across Government are exploring ways in which we can demonstrate this further in future years, because I recognise and understand and agree with the desire to do more in that area.

The example of the New Zealand well-being budget was given as a way that we can further look to improve what we're doing, and we are engaged with New Zealand as part of that network of well-being budgeting nations—so, sharing information—because they're very keen to know what we're doing here as well. But I can provide that reassurance that the future generations commissioner has been involved with us in the development of the budget throughout, and you particularly see that, I think, in the budget improvement plan, which we published for the first time ever this year. That takes a five-year horizon, looking at how we can seek to better embed the well-being of future generations Act, and, particularly, I think, prevention, in the work that we're doing right across Government.

In terms of prevention, I think the example that Mike Hedges gave in terms of the investment that we must make in housing is a really good example, because, as he described, the impact of poor housing on an individual can be quite devastating in so many ways.

Thanks for taking an intervention, Minister. On that issue of the future generations commissioner, I'm glad to hear that you've said that she has been involved throughout, but there was a slightly wider point than that, and that is, of course, a budget having a strategy devised with the future generations commissioner that underpins it and looks down the line two, three, four, five years. I know you've mentioned this to us as a committee before, but perhaps you can give us an assurance as well that there is that sort of longer term, sustainable strategy underpinning this budget and future budgets.

If you look particularly at the budget improvement plan, you'll see a look back as to what we've been doing in recent years to try and ensure that the Act informs the preparation of the budget, but, again, it looks forward up to a further five years as to how we can seek to better embed the Act in our ways of working right across Government. I commend that document to colleagues.

Prevention, of course, is about so many things, but, as I was saying, housing is a particularly important element. So, in the budget, you'll see £108 million continued investment to support social landlords to ensure that the housing quality standard is achieved in our 225,000 social homes. That's no mean feat at all. You'll see £50 million of financial transactions capital in our housing loans programme, and that's about assisting registered social landlords with funding development plans for new social housing and helping to, crucially, start to decarbonise those existing homes, and £400,000 to provide advice on home energy and on tackling fuel poverty for low-income homes.

Another area that we didn't have the opportunity to speak too much about in the previous debate was the importance of education and early years in the preventative agenda, because education is clearly one of the most important investments that we can make to improve the life chances of children, particularly those from deprived communities and those with protected characteristics. So, some specific examples would be the £10 million to support the delivery of the new curriculum for Wales, which is at the heart of our action plan to raise school standards. That's supplemented by an additional £3 million for the development of national networks, and a further £15 million for the professional learning to ensure our teaching profession receives the support that it needs. I'm particularly pleased with the £8 million additional investment to support children and young people with additional learning needs to receive a high-quality education and to reach their potential.

Cardiff Airport was mentioned a few times, and, on 21 October, my colleague the Minister for Economy and Transport announced an extended commercial loan facility to the airport. But I think it's important to recognise that, of the £21.2 million, £4.8 million falls in 2020-21 and it's reflected in this budget. So, that is in no way new money—it's previously announced—and refinancing is a normal and appropriate activity.

I think it's also important to recognise that airports are valued by the earnings before interest, tax, depreciation and amortisation, and that's a primary measure of how airports are valued globally. Cardiff Airport's valuation there has increased from £7,000 to £77,000, so that's clearly a big increase, and that reflects the strong growth in the airport's revenues, which were up 34 per cent on the previous financial year. So, that's just in response to some of the issues that were raised about Cardiff Airport at the start of the debate. But, just to remind colleagues as well, of the global airports that service scheduled flights, only 14 per cent of them aren't in public ownership, so airports such as Charles de Gaulle in Paris, Schiphol in Amsterdam, and JFK in New York are all publicly owned, and our concern should be really with the squeeze that the UK Government is putting on smaller and regional airports.

I've just a few moments left to reflect on the issue of the future of business rates, which was also mentioned by the opposition spokesperson. Welsh Government is undertaking a large suite of research to help inform us about the potential changes that we might wish to make to local taxes—so, non-domestic rates and council tax—and we're publishing a series of research reports over the coming weeks that will help us and others, I hope, start to formulate their ideas as to creating a vision as to where those taxes might go in future.

So, just to conclude, we will have the UK Government's budget on 11 March, and that could have some quite big implications for our spending plans. It will also be accompanied by a new economic and fiscal outlook from the OBR, which might impact on the prospects for the devolved tax revenues and also the associated block grant adjustments. The UK Government could also make changes to tax policy that might affect decisions about devolved taxes in Wales, so I do commit to keeping colleagues updated and updating the Assembly on those impacts as soon as possible, and very much look forward to engaging with the Finance Committee on the work that it's doing when it considers the process of budget setting, and I'm particularly keen to set on record now my keenness to accept your recommendation regarding an early debate within the financial year, because I found that particularly interesting and helpful at the start of this process.

The proposal is to agree the motion. Does any Member object? [Objection.] I will defer voting until this item until voting time.

Voting deferred until voting time.