4. Will the Minister make a statement on the local government budget in light of COVID-19? OQ55496

Diolch, Llyr. Budget provision for local government has been increased significantly in 2020-21 to support local authorities to respond to the impacts of COVID-19. I announced the extension of the local authority hardship fund to £497 million over the recess. 

Thank you very much for that response. The assurance has been given with regard to the first quarter. I just want clarity that that will follow in the second quarter of this financial year. But, of course, a number of local authorities are planning their budgets for next year and some of them are considering departmental cuts. So, I ask you whether there is any guidance or message that you can give this afternoon to those authorities in planning their budgets to ensure that they won't be cutting a great many of the key services that are currently available and at a time when they will be needed most.

So, on the second quarter point, I can absolutely tell you that we will be paying—the hardship fund runs right through the second quarter, and we've made that clear to local authority treasurers, chief executives and leaders in our weekly contact, which is still going on.

In terms of the planning assumptions, we have started—we're all way behind on where we should be normally in terms of budget planning, which may not be a surprise. We've been a bit distracted by the pandemic, obviously, and just keeping services going. I would just take this opportunity to pay tribute to our local authority partners, who have absolutely pulled out the stops and been quite tremendous in staffing our community hubs, helping with our shielding programme and now our public sector-based TTP programme. We really could not have done this unless they had stepped up to that plate. And so, we wanted to make sure that they didn't have additional money worries while they were doing that and that they could keep carrying on with essential services. So, the homelessness example is a good one there. So, we could have put a lot of money into homelessness, but if we'd cut the housing budget or not kept it where it was, then it would just have been dissipated. But we didn't do that; we kept the funding up and we've given them the additional funding.

So, on the planning assumptions, we've just started to talk to them about what we're expecting by way of a reasonable worst-case scenario, a break-even and so on, and that's tied up, of course, with the UK Government's comprehensive spending review, which they're now talking about.

And so, we hope—and I understand the Llywydd has had some discussion with my colleague, Rebecca Evans, on this—that we'll be able to halt the normal budget timescale for the Senedd, but it does depend on the comprehensive spending review going ahead as planned and us understanding what comes out of that before we can pass it on to our partners. But we will be working with them in a co-production way to understand what the base assumptions look like and what are the various types of planning. So, if we all plan for 1 per cent cut, what would that mean for services, or if we all plan for break even, and so on, as we do? It is, though, more compressed this year than we would normally expect.

Thank you, Minister. I'd just like to start by saying that the latest announcement of money for local government, of course, is very welcome. Credit where credit is due—I think the fact that it's going to be given out on a claims basis is a great idea. I just wanted to know if the Minister can just give us confidence today that claims will be fairly assessed, given that some smaller councils, like Monmouthshire, have been disproportionately hit because of the unfair funding formula, which has, over the years, reduced their reserves to low levels, while other, better-funded councils have built up massive reserves of over £100 million, for example.

So, I don't recognise that description of the funding formula at all. Actually, the treasurer of Monmouth—[Interruption.] I can't hear what the Member on the screen is saying, Llywydd.

Could we have some silence for the Minister to be heard by everybody, please?

I had a very good meeting with the chief executive and the chief treasurer of Monmouth, alongside the leader, very recently to discuss the prospects for Monmouthshire. We are very aware that the pandemic has hit councils in a different way, and, absolutely, we are working with those councils to understand what that looks like. So, in the case of Monmouthshire, for example, it has a much heavier reliance on the collection of council tax than other councils elsewhere, and a heavier reliance on fees and income charges. So, in some ways, they do better out of the hardship fund than other authorities. So, we are very much doing that, and that's why it is a claims basis, so that we can work with individual authorities to understand the impact in that authority.

Obviously, the distribution formula is done via the mechanism that involves all councils, and, actually, the treasurer of Monmouth is a very active member of that group.