8. Debate: The Local Government Settlement 2020-2021

Part of the debate – in the Senedd at 5:38 pm on 3 March 2020.

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Photo of Julie James Julie James Labour 5:38, 3 March 2020

Thank you, Deputy Presiding Officer. I'd like to thank Members for their contributions to the debate today. I do want to respond to the comments on the sufficiency of the settlement.

This Government has recognised the priorities and pressures that we and local government are facing through the settlement and the wider funding available to local government. I would like to start by reminding Members where we are after this budget round. We still do not have a Welsh Government budget beyond 2020-21. We are still waiting for the UK Government to produce its 2020-21 budget with updated fiscal forecasts and its comprehensive spending review, with a fiscal outlook for the forthcoming years. We still don't know what relationship we will have with the European Union in the next year. The only thing we do know is that the level of uncertainty is very high. I understand the challenge of uncertainty for local authorities. I hope a comprehensive spending review will give us the ability to give them that certainty. We will look at the practicalities of the Welsh Local Government Association's request to introduce a multi-year settlement as part of that challenge.

This final settlement is a significant improvement. The Government and I recognise that the settlement, positive though it is in cash terms overall, does not make up for the real-terms cuts that local authorities have seen in the past decade of Conservative-imposed austerity. I hope that despite the difficult choices councils have had to make, they can now look to the future to identify how to make the best use of this funding; to continue to engage their communities and respond to their needs and ambitions; to transform services, to retain them, and respond to changing needs and expectations; or, where necessary, choosing how to reduce them while carrying the public alongside them. And, as well, what level of council tax they will set to reflect those choices.

We all recognise that there will be challenges in some services, but I believe that these are challenges local government in Wales can deliver together. To hear the comments from Mark Isherwood, opposite, you would think that austerity for local government was a homegrown Welsh policy. The Government's priority is, and always has been, to try and protect councils from the worst of the cuts passed on to us by the UK Government. This is reflected in the settlement for 2020-21 I've presented to you today.

Mike Hedges made the point very plainly, I thought, that most on the opposite benches focus on the marginal change, but nobody looks at the actual distribution. The truth is that north Wales is in the middle, as it should be, because of the way that council tax revenues are able to be raised across Wales, as Mike Hedges pointed out very expertly. So, the bottom three councils are in the south and the top three councils are in the south. So, Cardiff is lower than Wrexham and Flintshire. So, Mark, I've got to say to you: never let the facts get in the way of a good argument, because the facts, as you presented them, simply aren't facts.

Here in the Welsh Government, we will continue to maintain full entitlements under our council tax reduction scheme for 2020-21, and are again providing £244 million in the local government settlement in recognition of this. We remain committed to protecting vulnerable and low-income households, despite the shortfall in the funding transferred by the UK Government following its abolition of council tax benefit. The arrangements for 2021-22 onwards will be determined as part of our wider considerations about how to make council tax fairer.

I and my Cabinet colleagues are committed to continue to work with local government to provide flexibility, where possible. I am committed to considering how local government might be more empowered and better strengthened. This means that there must be a commitment from local authorities to regional working; there must be greater collaboration with health boards and the education consortia to secure improved outcomes and increased resilience. We will continue discussions with local government on our shared recognition of the need to invest in the supply of housing.

Investing in social housing should minimise the pressures on local authority budgets and on homelessness services. Investment in housing can also support the Welsh economy and local economies. Delyth Jewell did point that out; I was disappointed to see that she wasn't, nevertheless, going to support the settlement as, actually, the councils across Wales have been very welcoming of the settlement in that area. I do hope the settlement—capital and revenue can—[Interruption.] Yes, certainly.