The following amendments have been selected: amendment 1 in the name of Mark Isherwood, and amendment 4 in the name of Siân Gwenllian. In accordance with Standing Order 12.23(iii), amendments 2 and 3 tabled to the motion have not been selected.

Item 10 on our agenda this afternoon is a debate on the draft budget of 2021-2022, and I call on the Minister for Finance and Trefnydd to move the motion. Rebecca Evans. 

Motion NDM7586 Rebecca Evans

To propose that the Senedd, in accordance with Standing Order 20.12:

Notes the Draft Budget for the financial year 2021-22 laid in the Table Office by the Minister for Finance and Trefnydd on 21 December 2020. 

Motion moved.

I am pleased to open this debate this afternoon on the Welsh Government's draft budget for 2021-22. Since we first had the opportunity to debate the draft budget in the Senedd, the Finance Committee and other Senedd committees have scrutinised our spending plans. Given the unprecedented circumstances we have faced, I would like to place on record my gratitude to the Finance Committee and the other committees for their co-operation in conducting scrutiny in a truncated period. 

Before I provide early reflections on the key themes arising from scrutiny, I want to outline the latest assessment of the context shaping our budget preparations. While a 'no deal' outcome has been avoided, the agreement with the EU creates new trade barriers for Welsh businesses, a loss of rights for Welsh citizens and a smaller Welsh economy by up to 6 per cent over 10 to 15 years, according to independent experts. Alongside the pandemic, this results in a weaker economy and worsened fiscal prospects for Wales. We agree with both the Organisation for Economic Co-operation and Development and the International Monetary Fund that it is not appropriate to tighten fiscal policy in the short term, but the UK Government's approach on this and rebuilding public finances remains unclear. The climate emergency also continues to pose a significant challenge. While the Committee on Climate Change has noted significant costs will fall to the private sector, it is inevitable that there will be public spending implications.

The disappointing budget settlement from the UK Government's single-year spending round and broken promises on post-EU funding have also left us worse off next year, with the risk of eleventh-hour UK Government decisions continuing. I welcome the Finance Committee's recognition of the ongoing issues of the UK Government's chaotic approach to its budget timetable and the significant and unreasonable impacts that this has had on our own budget preparations. I also welcome the calls from the committee to the UK Government to grant us the necessary flexibilities to allow us to manage our budget in the most effective way for Wales. 

It is hard to see a time when the need for these additional flexibilities would be greater, which has also been supported by independent calls for these flexibilities by the Institute for Fiscal Studies and the Wales Governance Centre. I will continue to press the UK Government to provide Wales with the fairness, flexibility and clarity we need, including on post-EU farm funding, the shared prosperity fund, flooding and coal-tip remediation. I will also not let this difficult context distract from our steadfast commitment to provide transparency to support meaningful scrutiny of our spending proposals. We will look to build on the additional steps we have taken this year to provide full transparency and to continue these measures into the year ahead. This includes providing an update at the earliest opportunity, following the UK Government's 3 March budget, which is the day after we publish our final budget. In this context, we're focused on where we can have the greatest impact, balancing the need to retain flexibility into next year. I am proud that we have maximised our available funding to protect what matters most, and pursue the change that is not just possible, but essential.

Our preparations have been guided by our eight reconstruction priorities, shaped by more than 2,000 public responses and leading Welsh and international experts. This ambitious plan focuses on our short-term priorities, alongside providing the foundations for our longer term recovery.

We are investing in employment and the labour market, including a £5.4 million boost for personal learning accounts to help workers on low incomes upskill and retrain. We're investing in our young people, disadvantaged groups, and in education, including the £176 million we are providing to local authorities, £8.3 million for curriculum reform, and £21.7 million for HE and FE demographic pressures. We're investing in housing with £40 million for the housing support grant to achieve our ambition of ending homelessness and £37 million of capital funding to support the building of affordable and sustainable homes. We're investing in town centres, including an additional £3 million to support our high streets and town and city centres, and £5 million to support our wider regeneration activities through our town centre loans programme. And we're investing in our climate, land and natural resources, building on the significant £140 million capital package we provided in 2020-21, including an additional £5 million for biodiversity and the national forest, and an extra £26.6 million for the circular economy to improve recycling in Wales and address social inequities. We're investing in working and travel, including an additional £20 million for active travel projects, and a total of £275 million in our rail and metro. We're investing in our foundational economy and Welsh businesses, including a further £3 million to provide a foundational economy fund to support the rapid spreading and scaling of good practice, and to provide jobs at the heart of our local communities. We're investing in our NHS, providing an additional £420 million for health and social services to support the NHS's growth and post-pandemic recovery.

I also welcome the Finance Committee's recognition of the positive steps we have taken on climate change and reforms to our budget and tax processes. Through our budget improvement plan, we have already outlined how we intend to take forward these reforms over the next five years, and I welcome the ongoing engagement on this important agenda. I was also pleased that the Future Generations Commissioner for Wales in her scrutiny has welcomed our continued commitment to combating climate change, our investment in town and city centre regeneration, and our investment in housing and homelessness. I look forward to continuing to work with the commissioner as we take forward our ambitious plans.

I welcome the committee's recognition of the importance of funding health and local government; as I've previously outlined, these are areas at the forefront of my considerations for COVID-19 funding at the final budget on 2 March. I am also considering the other areas raised by the committee; I and my Cabinet colleagues will respond formally to the recommendations of the Finance Committee report and other Senedd committee reports in advance of the vote on the final budget on 9 March.

So, to conclude: confronted with the most challenging circumstances we have faced since devolution, I am proud that this draft budget not only provides a solid foundation for the next administration, but protects, builds, and changes to deliver a more prosperous, more equal and greener Wales. Diolch.

The Llywydd (Elin Jones) took the Chair.

I do apologise; I was on mute. A year on, you would have thought I would have learnt that lesson. May I now call on Siân Gwenllian to speak on behalf of the Finance Committee? Siân Gwenllian.

Thank you very much, Llywydd. It's a pleasure to contribute to this important debate on behalf of the Finance Committee. It is of course the debate on the draft budget for 2021-22, and, of course, this will be the final draft budget of this Senedd, and, for the third consecutive year, it's been produced and scrutinised under exceptional circumstances. This year, the pandemic has led to delayed UK fiscal events, and that's resulted in delays to the Welsh Government's draft budget. In turn, this has reduced committee's time for scrutiny, and that's particularly concerning given that COVID-19 will have an impact on public spending for years to come.

This certainly is very much a draft budget. A lack of forward funding figures, with only a one-year revenue funding settlement, has made budget-setting work even more challenging. Additionally, the Welsh Government is holding significant unallocated reserves of around £800 million. The UK Government’s budget is set for 3 March 2021, meaning that the Welsh Government’s final budget will not be able to reflect its content, so we can be sure of significant changes to allocations during the year. Therefore, we recommend that the Minister outlines the implications of the UK budget as soon as practicable.

For some time, the committee has been concerned about the mechanism and transparency used by the UK Government to make funding decisions, with the Minister saying that the level of engagement at a ministerial level between the Treasury and the Welsh Government has been 'poor'. During 2020-21, large funding consequentials were made in-year. There have also been problems with the transparency of these consequentials and how they are calculated. This has resulted in the committee having limited information regarding additional funding and conflicting statements from the UK and Welsh Governments. We recommend the Welsh Government continues to seek commitments from the UK Government that UK fiscal events will normally take place by a specified date and that multi-year funding settlements will be reinstated in time for next year’s budget process.

The Minister told the committee how budgetary decision making has changed during the pandemic, with Ministers meeting frequently to address key issues as they arose. The committee welcomes the efforts that the Minister has made to manage the prioritisation process more centrally this year. However, we believe that the Welsh Government needs to have systems in place to ensure that when consequentials are received, it can prioritise and deliver funding quickly and effectively.

We welcome the approach taken this year, where changes to Welsh taxes have been made as part of the draft budget, given that tax changes are linked to spending commitments. This Senedd voted on three sets of tax regulations on 2 February. However, we believe it would be more prudent for the budget and tax resolutions to be considered at the same time.

There have been a number of challenges as a result of COVID-19 and the financial impact on health and social services has been significant. We welcome the uplift for health, which reflects the important role that the NHS plays in responding to the pandemic. The Minister has confirmed that nearly £700 million of the unallocated reserve is in relation to COVID-19 and that she does intend to make additional allocations between the draft and final budgets.

It is not clear how much resource has been identified for the pay rise for NHS staff and, as a result, what additional funding will be available to respond to the pandemic, as well as non-COVID services. We have recommended that the Welsh Government provides further information about how the additional £385 million funding for core NHS services will be used, including a breakdown to show how much has been set aside for the pay award for staff and other services.

We heard that there were significant workforce capacity issues before the pandemic and that the pandemic had exacerbated those problems. We are also concerned about the long-term impacts of the pandemic on non-COVID care. Whilst we expect that there will be an increase in non-COVID care over the next year, there will be sustained pressure on the NHS and healthcare workers because of the need to socially distance, and the fact that there will be reduced numbers of staff on wards, and this could be as big a challenge as COVID itself. We are also deeply concerned about the impact on NHS staff across Wales. We as a committee have recommended that the draft budget clarifies how allocations address the current issues faced by the NHS in terms of its staff numbers and capacity, as well as those issues that it is likely to face given the ongoing impact of the pandemic on the workforce.

We also recommend that more investment is needed in staff and training to support NHS workers. It's essential that the vaccine roll-out continues at pace, and the committee welcomes the certainty of funding provided for the vaccination programme and for test, trace and protect. Given that funding for the vaccination programme is made up of a combination of Welsh and UK Government funding, the Welsh Government should provide further information that differentiates between the costs met by the UK Government and those provided for in the Welsh Government’s budget that provide for those programmes.

The impact of the pandemic on mental health will be considerable over the next year and beyond. We welcome the Minister’s view that mental health services will be a priority going forward. However, in tackling increased levels of mental health problems linked to the pandemic, we do believe that the Welsh Government must ensure that investment is made in preventative measures that consider the wider determinants of mental health, such as skills and employability, education, housing, access to green spaces and physical activity.

Local authorities are also under increased pressures and there will be difficult decisions that will have to be made. It is concerning to hear that the increased funding in the local government settlement will not cover all costs pressures, such as those on social care, childcare and education. It is also concerning to hear that providers of social care have said that the local authority hardship fund for 2020-21 was essential just to survive. The Welsh Local Government Association has welcomed the additional funding provided in the draft budget, which is £172 million, or an additional 3.8 per cent in overall core funding compared with last year. However, we are aware that WLGA leaders have written to the Minister for Housing and Local Government asking for a funding floor.

The committee is deeply concerned about the risks facing our children and young people, particularly those from disadvantaged backgrounds and those in the early years, of falling behind in their education as a result of the pandemic. The committee has recommended that the Welsh Government should clarify how funding for local government and education supports the current ways of learning, and how it provides sufficient resources to address the negative impact of the pandemic on education.

The economic disruption caused by the pandemic has been devastating. Given the path of the pandemic is still unknown, and with many businesses still not able to trade and uncertainty over how quickly business confidence will return, it seems sensible to allow some degree of flexibility within the draft budget. However, the committee believes that we could see more ambition from the Welsh Government in its reconstruction plan, and better support packages for businesses.

As well as the forecast employment impacts, the crisis could permanently alter the economy, with fundamental shifts in working patterns, behaviours and the labour market. The committee recommends that the Welsh Government considers whether existing regeneration programmes still represent best value, and considers the need to be more focused on supporting growth and investment in skills and employability, particularly in terms of encouraging a sustainable, green economy. Whilst it is likely that 2021-22 will still be dominated by responding to the pandemic, and clearly there will be much work for the next Welsh Government and the next Finance Committee to do, we are hopeful that we can shift the focus to recovery during the year.

To conclude, therefore, I would like to thank everyone who has contributed at all stages to the scrutiny process, through our consultations, surveys and polls. Every one of these has helped shape our findings. I look forward to the Welsh Government's response to our report. Thank you, Llywydd.

I have selected two amendments to the motion, but, in accordance with Standing Order 12.23(iii), amendments 2 and 3 were not selected. I therefore call on Mark Isherwood to move amendment 1, tabled in his name. Mark Isherwood.

Amendment 1—Mark Isherwood

Delete all and replace with:

To propose that the Senedd:

Believes that the Welsh Government's Draft Budget 2021-22 does not enable Wales to build back better and recover from the COVID-19 pandemic.

Amendment 1 moved.

Diolch, Llywydd. Our amendment calls for this Senedd to acknowledge that the Welsh Government's draft budget for 2021-22 does not enable Wales to build back better and recover from the COVID-19 pandemic. The term 'build back better' recognises the need for a growth strategy in the wake of coronavirus that delivers jobs, skills and infrastructure in every corner of Wales and tackles the great unresolved challenges of the last three decades, including 22 years of devolved Labour Welsh Governments. As the Prime Minister stated, when he also announced the UK Government's intention to bring forward funding to accelerate infrastructure projects in Wales, Scotland and Northern Ireland, the UK Government will work with the devolved Governments to identify where we can get spades in the ground, build our communities and create jobs faster for citizens across the United Kingdom. It is therefore regrettable that the public rhetoric of this Labour Welsh Government has instead focused entirely negatively on reactionary buck-passing, attempting to demonise UK Government and blame it for all their own failings. 

The pandemic has shone a spotlight on the failings of successive Labour Welsh Governments in managing our vital public services. In the year before the pandemic, NHS waiting times doubled in Wales, and Wales has retained the highest poverty rates and lowest pay of all the UK nations throughout devolution since 1999. Welsh Government spending has increased by 4.2 per cent to £22.3 billion, 83 per cent provided by the UK Government. Despite Welsh Government claims to the contrary, this month's Wales fiscal analysis by Cardiff University identified £655 million of COVID-19 funding, which the Welsh Government is yet to commit, rising to £760 million, including the pre-existing unallocated spending in its final budget plans.

As for local government, despite the impact of COVID-19, local authorities will receive a smaller increase in their settlements than this financial year. North Wales councils are again receiving a lower average increase than south Wales, and this Labour Government is once again refusing a funding floor to protect councils like Wrexham and Ceredigion, expected to cope with increases of just 2.3 per cent and 1.96 per cent respectively. As the leader of Monmouthshire council highlighted, it's important that the real pressures in local government are addressed and that the Welsh Government makes use of the

'significant consequentials from UK Government funding announcements, some of which remains to be allocated within the Welsh Government's budget.'

As the leader of Denbighshire council highlighted,

'there remain significant public service and financial challenges, particularly for those authorities who will receive a lower-than-average increase.'

The third sector and charities in Wales, at the forefront of Wales's response to the pandemic, saving millions for the public sector, have experienced a dramatic decline in income supporting vital services. As the Wales Council for Voluntary Action response to the Welsh Government's draft budget proposals states:

'The voluntary sector continues to require greater resource to respond to increasing demand on its services.... A thriving third sector has a vital role to play in the prevention agenda', saving money, as well as improving lives,

'and coproduction of services must play a key part in this.'

Responding to this draft budget, the Federation of Small Businesses Wales identified uncertainty about where funding support for business would come from, described the roll-out of business support packages as 'patchy' and expressed concern that this draft budget does not provide enough support for self-employed people.

After I led the debate on palliative and end-of-life care last week, this health Minister announced £3 million extra to support hospices this financial year—welcome, but where is the rest of the extra funding received from the UK Government in consequence of increased funding for hospices in England? And what about next year?

The Welsh Government announced a belated £2.25 million for the National Library of Wales. But this is just a sticking plaster and will not prevent redundancies.

The Welsh Government mischievously claims that the UK Government reneged on promises about agriculture and rural development funding in Wales. The UK Government guaranteed the current annual budget to farmers in every year of this UK Parliament. When this commitment was made, total farm support provided for Welsh farmers was £337 million. For 2021-22, the UK Government has provided new funding on top of the remaining £97 million of EU funding, ensuring the Welsh Government can continue to provide Welsh farmers with £337 million of support next year, if they choose to.

Welsh Conservatives have called on the Welsh Labour-led Government to implement a recovery plan for Wales. It is, therefore, deeply concerning that this draft budget fails to provide the much-needed financial revolution required to deliver this.

I call on Rhun ap Iorwerth to move amendment 4, tabled in the name of Siân Gwenllian. 

Amendment 4—Siân Gwenllian

Add as new point at end of motion:

Calls on the Welsh Government to ensure that the unallocated fiscal resource in the draft 2021-22 budget is used in the final budget for 2021-22 to expand free school meal eligibility criteria to include all children in families in receipt of universal credit or equivalent benefit and any child in a family with no recourse to public funds.

Amendment 4 moved.

Thank you, Llywydd. These are very exceptional circumstances. The COVID pandemic has placed unprecedented pressure on public expenditure in Wales and, to add to the complexity in terms of dealing with that, the timing of UK Government announcements on allocations and on fiscal decisions makes it very difficult for the Welsh Government and ourselves as a Senedd to plan for the future, even for the next 12 months, never mind our aspiration to plan for the longer term. 

We have a draft before us today. The final act of budgeting has become almost impossible. Add to that the lack of fiscal flexibility that we have, the ridiculous restrictions on the spending and borrowing powers, the lack of flexibility on the use of reserves. And in this regard, myself and the Minister do see eye to eye, as we have said in the Chamber and the virtual Chamber many times. But let's call this lack of flexibility for what it is: this is a clear example of the UK not working for Wales and working in a way that considers the needs of Wales. 

This isn't a Plaid Cymru budget. It's the Labour Government budget. We believe that there are many priorities that have been left out and that's why we are unable to support it. There is a failure to support local government certainly. Yes, there is an uplift in the allocation, but not the kind of uplift that would take pressure off councils that have performed heroically over the past 12 months and have faced unprecedented pressures, and continue to do so. The reality is that the additional funding has already been subsumed before arriving at the councils. And put a floor in place for those councils who are seeing the least increase. There's been a missed opportunity here, without a doubt. There's a missed opportunity to take the pressure off local taxpayers too under these circumstances, and I do think that the case is strong for considering freezing council tax. The Scottish Government has done just that. It's not something that could be done lightly, of course—there's a cost to it. But we believe that the funding is in place to allow that, and these are the circumstances under which you should consider that. Of course, we need to think about much fairer ways of funding local government in the longer term. It's the poorest who pay the greatest proportion of their income on council tax.

And may I turn to our amendment specifically at this point? Again, it's targeted at helping the poorest in society. The pandemic has highlighted the inequalities within our society very clearly indeed. So, fund free school meals for all children in homes eligible for universal credit. There are substantial reserves remaining provided for dealing with this pandemic—that is unallocated funding. The Government's own action group on child poverty did emphasise that expanding free school meals would be one of the most effective actions that the Government could take in order to mitigate the impact of child poverty here in Wales. So, do take action.

The Conservatives, of course, say, 'Spend every penny of the unallocated funds, and do so tomorrow—do so immediately.' Now, I have no doubt that spending the money well is the priority, not spending it quickly. But, having said that, we do need to see that money flowing in order to help those businesses who truly need it, to help with the pressures on health and care services, and also to help the most vulnerable in our society.

I look forward to the post-election period, where I hope Plaid Cymru can commence a programme of investment of billions of pounds in rebuilding Wales, socially and economically, and not back to where we were prior to the pandemic, but to a level where we can be far more ambitious in what we try to achieve as a nation. But for you, now, given the restrictions on your ambition, Welsh Government, at least take that step that I've mentioned in targeting particularly the most vulnerable and particularly the most vulnerable children in society.

Mike Hedges.

Diolch, Llywydd—that came faster than I expected.

I would like to cover two areas: firstly, a general budget alternative; secondly, funding for the environment. Where I agree with the opposition: with the Conservatives, if we reduce the cost of the Senedd's Commission, then we'd have more money to spend on services; with Plaid Cymru, I support free school meals to those on benefits. I'm glad they've changed their policy away from free school meals for all pupils, which included those in private schools. Now all I need is a commitment to providing free meals for 52 weeks of the year, as the Welsh Government has done, not just term-time provision. I am looking for a positive response from the Welsh Government to look at the funding of free school meals for those people who are on benefits. I think it's something that needs to be looked at. Passing a resolution today may not be a positive way forward, but we need the Government to commit to looking at that and looking at how much it's going to cost and where the money is going to come from.

In three months' time, the Conservatives and Plaid Cymru, either individually or together, will be hoping to form a Government and set the first supplementary budget. Whilst they have both said how they want to spend money in different areas, where the money is going to come from and which areas are to be cut and which taxes raised remains a mystery. Please, can you publish your budgets, so that people can compare you with the Labour Government, not, 'We'll promise everybody everything because we hope that something will happen'? To help Plaid Cymru, local authorities can borrow prudentially using the prudential borrowing ability, which replaced supplementary credit approval. The key word is 'prudential', not 'borrowing'. Local authorities can borrow if they have the projected forward capacity to service their debts. Using local authorities' ability to borrow, there would need to be a long-term commitment to funding such borrowing, and that is judged by the chief financial officer, and that person alone, as prudential. Also, there's a cap on borrowing for all local authorities combined, except for the Treasury.

Can I just say—the environment is very important to everyone until it comes to budget time? A quick, simple and low-cost proposal is to support small-scale and community renewable energy projects. As part of the budget, we need, as requested by the climate change committee, the second low-carbon delivery plan to be accompanied by an assessment of its financial implications, including costs and benefits and an assessment of the carbon impact of each policy or intervention—also how the additional allocations to the Welsh Government energy service would be used, and if it is adequate and how it will contribute to a net-zero carbon public sector and increase locally owned renewable energy to 1 GW by 2020. Is there sufficient funding to deal with fuel poverty, both that which meets the definition and that which does not, because people are living in cold homes, unable to pay the cost of keeping even one room warm? There's a need for clarification of how much funding has been allocated in 2021-22 to deliver the actions set out in the clean air plan and is that sufficient.

An issue that concerns many of us is animal welfare. Is the level of funding provided for pilot projects to enhance capacity across local authorities' animal welfare inspections and enforcement services sufficient? Is it in the budget, or will local authorities be told it has already been provided as part of the aggregate external finance?

Turning to NRW, my view on the merger that created it is well known, and I will not repeat it. Is it adequately funded to carry out what I and many of my constituents feel are its most important environmental protection duties? We've got problems with the environmental agency dealing with pollution incidents, and, as a constituency Member, I deal with two things: sewage seeping in from a treatment plant into the River Tawe, which is, I'm told by the local angling club, fairly regularly, and also the burning of plastic off wire in the area, which—it seems to have no interest in it, Natural Resources Wales, whatsoever, whereas the old environment agency used to enforce it, and I think that things have gone massively backward. And if more sewage in the river and burning of plastic off wire and the resulting pollution has a low classification in the classification system in NRW, I'm not sure what has a high classification.

Can I just finish by saying something about local government? I think that one of the problems is we keep on talking about the percentage increase. We've got to look at how much local authorities have to spend, and some of that is the money they raise themselves from council tax; some of it is the money that they get from rents and other services that they provide. Now, councils like Swansea and Cardiff actually get quite a lot in in money they get from car parking in normal times—other authorities get a lot less. So, you need to look at the total funding of local authorities and a percentage increase—. Can I just say about Ceredigion, it might have had a very low increase, but it still gets above the top half of local authorities in aggregate external funding? So, if you're going to look at local government, you need to look at it as a whole, about local authorities' ability to raise money as well as what they get from the Welsh Government. So, I think that there's a big debate and a lot of discussion needed for this, and I hope we can do that at a future date.

Thank you—I thank the Government, for bringing, obviously, this debate forward, but I'm happy to speak myself in terms of me as Chair of the Economy, Infrastructure and Skills Committee. First of all, I would say—. I'm scrabbling to find my notes, as it happens. Apologies for that. There we are. Sorry, Presiding Officer. In terms of the work of the committee, we've obviously looked at the draft budget in detail, perhaps not in as much detail as we have in previous years, due to the other demands of the committee's work, but I'll comment, I think, largely in my contribution on issues around business support during the pandemic.

I'd say, from my perspective and the committee's perspective, generally, of course, we welcome the Welsh Government's commitment to ensure that those who are most likely to be adversely affected and impacted by the pandemic are given the greatest level of support. That's what the Welsh Government claims, and, of course, we as a committee would welcome that commitment, but what I would say and what the committee would say is that that needs to be maintained throughout any new support and through the recovery planning as well.

I think the big concern for the committee and myself is the fact that all available budget for the pandemic in terms of business relief has not been drawn down, so it would seem—if I'm incorrect, the finance Minister can outline that. So, I would be interested to know and understand, if the Welsh Government is not drawing down all the money that's available to it in terms of business support, if that is correct, why that is the case. Because, clearly, I think the Government need to explain their approach in that regard. In terms of planning and drawing down funds as well, which could be used for further rounds of the economic resilience fund, or further rounds of that fund, I think it would also be helpful if the Government provided an explanation setting out how the Welsh Government will use this money, and ensuring that none of this money will be lost to Wales. 

One of the recommendations we made was we asked that the Welsh Government should provide further details on the uptake of the sector-specific business support funding, which was launched the middle of last month, including details on the uptake, because we're interested in what the Government's expectations were and the action by Welsh Government to ensure that everyone who was eligible—every business that was eligible—to receive funding was aware of the scheme.

There's also a concern, I think, about maximising the take-up of business support as well, and certainly as a committee we thought that the Welsh Government should set out what robust evaluations there have been of the effectiveness of the Business Wales website and support services, to identify if there are any other further measures that are needed to help businesses understand the entire suite of business support on offer.

I think what was important is also to understand this point: the Welsh Government often states and repeats that they offer the best business support package across the UK. So, we have been offered by the Minister on a number of occasions to get some comparison information in terms of Welsh Government support versus support in other parts of the UK; we haven't received that to date, despite a couple of offers being made. Now, it would be useful to see that comparison. I do appreciate that there are going to be some elements of difficulty with that, because sometimes it's difficult to get like-for-like information, especially when support schemes start and finish at different times, but I think if it would give the businesses confidence that that's correct, I think that comparison needs to come forward. And certainly, from my own inbox, I hear of retail shops on the high street, cafes on the high street, hair and beauty salons, believing that if their business was situated somewhere else in the UK, they would have a higher level of support, because they'd be able to access additional funding. The Welsh Government only says, 'No, we've got discretionary funding, we've got the sector-specific funding', but often these types of businesses are not eligible because they're not on PAYE, they haven't got employees on PAYE, they're not VAT registered. So, there are a number of barriers that prevent businesses from obtaining some of these additional funds that the Welsh Government point to. And I certainly think—or we as a committee think—that the Government's got to look at that eligibility criteria again.

And when it comes to the discretionary fund that local authorities have ability to access, there's a question of how discretionary that actually is. Because local authorities seem to report back that, 'Well, actually, no, we haven't got the same level of discretion that—' or, 'We're concerned about using that because we're not sure whether we can claim back all those funds from Welsh Government.' So, is it truly a discretionary fund? Are there some better criteria that can be given to local authorities to allow them to be more discretionary as well?

And the final point I would make is that I would be particularly interested in having that data from the Welsh Government in terms of business breakdown support, but also looking at the breakdown of the uptake by characteristic groups of people, if you like, in terms of uptake, whether they are small or large businesses, or women in business, because I think it's also important to have that data and compare that as well, and contrast that against other parts of the UK nations as well. Thank you, Presiding Officer.

Each year, our committee considers how the Welsh Government's draft budget provides for the children and young people of Wales. Throughout this Senedd, we've 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 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.

This year, our calls for children to be clearly visible in budget decisions are more essential than ever. The COVID pandemic has hit everyone hard, but there's no doubt that our children and young people have been particularly hard hit. Our children and young people are having to learn from home, they're not able to see their friends, they're facing disruption to their exams and assessments. We know this is nobody's fault, and we know that all of these things are happening to try and minimise the spread of COVID in Wales and to save lives, but we know too that this has taken its toll on them and we need to do all we can to minimise that. How we spend our money has a key role to play, and it is on that basis that a number of our recommendations this year relate to the financial decisions we think must be taken in light of the impact of COVID-19.

Firstly, we note that over £800 million remains unallocated in the draft budget. We know that much of this is likely to be used to mitigate the impact of COVID. Our report is clear that children and young people's rights and needs must be a key consideration for all Welsh Government Ministers when decisions are made about how this money is allocated. As a committee, we expect to see this consideration demonstrated clearly and transparently when these decisions are made. Furthermore, given the unprecedented circumstances in which we find ourselves, we have recommended that Welsh Government should provide regular and detailed updates to the Senedd and relevant committees on in-year allocations during the financial year 2021-22. We think this is essential in order to ensure that our children and young people are prioritised in the way they should be.

Turning now to money that has already been allocated to support children and young people, we welcome the spend to date on the recruit, recover and raising standards programme, and the allocations for it in the next financial year. This funding is crucial and we must ensure it delivers its intended impact. Given its importance, we have asked for more detail on how the recruit, recover and raising standards money has been used so far. We've also called for such data to be published on an ongoing basis. This is to ensure that our children's return to education remains a priority for Government investment over the years ahead. It is vital that we make sure that the money going in delivers the intended outcomes for children and young people.

We know that it's not only school-age children who are suffering because of COVID. Our young people in further and higher education and training have also been at the sharp end of this pandemic. We welcome the recent announcement of £40 million to provide for students who are in hardship, and we've asked for more information on how it will be used.

Our report touches on a number of other very important areas, not least the allocations in place for funding health and social care support for children and young people. Mental health and well-being have been a top priority for our committee during this Senedd. I'm pleased to see that our sustained calls for improvement are bearing fruit in terms of financial allocations. However, we remain concerned that following the money as it relates to children and young people's health is an enormous challenge. This is a particular worry for us in the context of COVID.

Our concerns about the impact of the pandemic on routine healthcare for children is documented clearly in our report. The Minister for health described a big backlog in routine NHS services and recognised the impact this is likely to have on children and young people. On that basis, we call on Welsh Government to ensure that children and young people's routine health needs are fully considered alongside those of adults. The Government must make sure that children and young people get their fair share of funding when spending plans to address backlogs are revealed. We are clear that a children's rights impact assessment should be published alongside this plan and that transparent information about what has been allocated to services for children and young people specifically must be provided.

In closing, Llywydd, I'd like to refer to the children and communities grant. Two years ago, our committee expressed concern about the amalgamation of a range of grants directly relating to children. Two years on, we remain disappointed and concerned by the lack of transparency about spending on children since this change was made. At over £138 million, it is not an insignificant sum of money. We remain unclear about how value for money and outcomes for some of our most disadvantaged children are monitored, and have asked for additional information to reassure the committee about this important area. Thank you very much. 

It's inevitable that the draft budget and our scrutiny of it have been shaped by the pandemic, as others have already mentioned, and this is a pandemic that changes very rapidly. We need to realise the magnitude of the public health emergency facing Wales, either in terms of responding to the immediate challenges or the need to do what we can do to maintain and restore those vital services that people depend on. And in that respect, I'm talking about non-COVID services. We believe that the true scale of the implications for the health, social care and sport sectors will not become fully clear for some years. In addition to this, the crisis has also exacerbated some underlying issues, including health inequalities.

We recognise in particular the pressure that local health boards have faced over the last year, and we understand that this is likely to continue. Nevertheless, the ongoing inability of some health boards to meet their statutory financial duties continues to be a concern. In addition to this, we are not yet persuaded that there is sufficient capacity within the system to drive health and social care integration and transformation at the pace and scale required, or that the strategic vision for such transformation is sufficient to achieve and maintain the focus on a shift towards primary care and prevention. 

We also remain concerned about the ongoing fragility of social care services. Such services are not only vital to those in receipt of them, but they're also essential in the way that they complement and partner health services. We are convinced that there is grave need to reform the system and to develop sustainable and long-term funding settlements for social care. 

I would like to take this opportunity to recognise the hard work and commitment of staff across the health and social care sectors. It's important to realise how much pressure they have faced and continue to face, and the trauma that they've experienced over the past few months. We welcome the plans for ongoing mental health support for 60,000 healthcare workers in Wales, and the planned expansion to include social care staff. The impact of the pandemic on individuals and services will need to be taken into account in workforce planning and resource planning as we move towards recovery in Wales.

In addition to the paid health and social care workforce, hundreds of thousands of unpaid carers across Wales have played, and continue to play, a crucial role in providing much needed care and support to their families and friends. We value the support that the third sector provides to carers, but we believe that they must be adequately supported via sustainable core local authority services and funding. Throughout this year, the Welsh Government has rightly invested significant sums in responding to the public health emergency. The course of the pandemic in Wales remains uncertain, but it is clear that health, social care and sports are likely to need additional funding in the next financial year.

To conclude, there will be difficult choices to be made as to how we prioritise limited resources. We expect the Welsh Government to be proactive in its planning and in engaging with its partners to identify any potential additional needs, and to consider how resources may be allocated and prioritised to respond to the pandemic to support the longer term recovery of the health, social care and sports sectors, and to invest in the health and well-being of the people of Wales. 

I'm grateful to the Minister for the contribution in opening this debate. There are three issues that I'd like to cover in this contribution this afternoon: the structure of our finances, and then income and expenditure.

Let's look at the structure first. The Finance Committee is very clear in its report that the way in which the budget is structured and the context within which the budget is taking place this year is unsatisfactory, and I agree with that in that report. This situation is not necessarily the fault of either the Minister or the Government; we recognise that. But 20 years after devolution, all of our Governments across the United Kingdom rely too much on the whims and wants of the UK Treasury. There are many failures that the First Minister has outlined on a number of occasions in recent weeks where the United Kingdom state fails to deal with the realities of devolution. The mess that is public finances across the UK has to be one of the most significant, and I do hope that when we come back to debate these matters in the next Senedd—that is a matter that we will need to be able to address with the UK Government.

The second structural issue was addressed by Siân Gwenllian in her contributions as interim Chair of the Finance Committee, and that is that too much of this budget is unallocated, and that makes scrutiny and proper democratic accountability for expenditure very difficult, and far more difficult than it should be. On this occasion, I think the Government should be forgiven for this situation, because we are in a very fluid situation, we are facing very difficult decisions, and none of us knows what the situation is going to be in six months' time. But what I will say to the Government is that this acceptance of that shouldn't be seen as a precedent, and that in future years, I think it's absolutely right and proper that the Government goes back to a situation where we've got open transparency in making these budgetary proposals.

The second issue is that of income. I laud the Government's ambitions and I share their ambitions. I want to see the Government invest more in our people, I want to see the Government invest in our environment and our places, but I'm concerned that we don't have the firepower to do so. If I'm absolutely frank with you, Minister, it's not good enough to spend day after day attacking the Tories for austerity and then actually delivering it in reality in Wales. And that's the reality we face in real terms. We have got to invest either in our tax base or we have to invest in broadening and deepening that tax base. I'm not sure that this budget does much of any of those three, if I'm absolutely frank with you.

We cannot deliver on the ambitions that we have with the funding that is available to us, and we need to be able to address that. And that's particularly true at the moment, not simply because of the pandemic and the impact of the pandemic—although that is a big driver—but it's also true because of the betrayals that we've seen from the UK Government on agricultural funding and on structural funds. They have told direct lies to the people of Wales, and they have not delivered on the promises that were made. That's a real problem for us, because we've got to pick up the pieces and I'm not convinced that we have the firepower to do it.

My final point is this, Minister, on expenditure. I hope when the Government comes back for later debates on these matters they will address these fundamental issues. I agreed with what Mike Hedges said on free school meals. I think the Plaid Cymru amendment this afternoon is broadly right, and I think that the Government needs to address this. The Government's on the wrong side of this argument. I hope that the Government will recognise that and I hope that the Government will, in returning to the Chamber, recognise that its position is neither sustainable nor credible on that particular matter.

But also, we need to invest in places that are suffering disproportionately at the moment, and that is places like Blaenau Gwent, it's places like the Heads of the Valleys, it's some of our poorest people, wherever they may live, and the budget needs to recognise that. It needs to recognise that we can only achieve our ambitions and our visions, which we all agree with and we all share, if we invest in those places that are furthest away from that vision and that ambition. I represent one of those places, and it simply is not credible to say to those people, and the people that we all seek to represent, 'Do you know what? We can deliver on all these different things, and it's not going to cost you an extra penny.' That is not credible. It's never been credible. It hasn't been credible in the past, it's not credible today, and it won't be credible in the future, and I think we've got to do that.

My final point is: let's not go into another budget round saying that the structure of the public sector in Wales can deliver on any of these things. It can't. it simply cannot. We don't have the structures in place to do it, so we need a reforming budget as well as a budget that invests in people, places, the environment and the future. I hope that, as we go through this debate over the coming weeks, we will be able to address all of those different things. Thank you very much.

I just have a few comments in relation to the committee scrutiny on behalf of culture and the Welsh language. [Inaudible.]—the funding to support the implementation of some key recommendations highlighted in the tailored review carried out last year, and the Culture, Welsh Language and Communications Committee has been highlighting the need for increased funding for the national library and museum during the—[Inaudible.]

I'm going to stop you there, Bethan. I'll call you later. Let's see if you can get a more stable broadband line. I'll come back to you. We were having a bit of trouble understanding you. I'll ask some of our IT operators to talk to you about how that can be improved. Anyway, we'll hopefully be able to come back to you. Neil Hamilton.

Diolch yn fawr, Llywydd. I fully agree with the indictment that we just heard from Alun Davies of both the Welsh Government and, indeed, the United Kingdom Government for the limitations that we are faced with in this debate. It's a bit like a debate about moving the deckchairs on the Titanic as the Welsh economy hurtles towards the iceberg, and that's for two reasons. First of all, the Government's budget is of course restrained by the restrictions imposed by the UK Government, but also because health and education gobble up by far the lion's share of the total budget in Wales, more than 75 per cent, so there is a limit to the discretionary expenditure that the Government has at its disposal, which we can debate this afternoon.

The fundamental reality after 20 years of Labour Government is that Wales is not only older and sicker than other parts of the United Kingdom, but it is also poorer. We're at the bottom of the income tables of the UK for raising revenue in order to pay for the public services that are delivered—at less than £10,000 per head, compared with nearly £20,000 per head in London. As Adam Price pointed out in First Minister's questions this afternoon, the Welsh Government had a noble ambition to end fuel poverty by 2018 and end child poverty by 2020, and in both of those it has spectacularly failed.

On the one hand the budget is too small to pay for public services that we all want in Wales, and secondly, the Welsh Government lacks the tax and policy levers in so many areas that are required to make a real difference to the size of the economy, as Alun Davies pointed out. It's either that we have to raise more in taxes or we have to grow the economy, and the Welsh Government finds it very, very difficult to do either. Within the last year or so, the Welsh Government has had to write off nearly £500 million of NHS debts that have been run up since 2013, otherwise the health service would have been in an even worse state than it is now.

In other respects also, the Welsh Government does have levers of power that it insists on using in a way that is counterproductive from its own perspective in terms of improving the economy and increasing the well-being of the people of Wales. For example, in respect of environmental policy—green policy on renewable energy, et cetera—the effect of its policy is that it's using its powers to damage businesses and further impoverish the poor whilst pouring cash into the pockets of millionaire developers, who are invariably based in England. And meanwhile, the poorer of Wales in places like Blaenau Gwent have to pay exaggerated electricity bills in order to keep warm in the winter. Now, an average of £200 per household on everybody's electricity bill is accounted for by green taxes and charges.

I think what this debate illustrates is that the halfway house of devolution simply doesn't work, and I believe it can't work because public expenditure being constrained by the UK Treasury is never going to be a workable answer to Wales's problems. On the one hand, Westminster won't give Wales more cash. Why would a Tory Government in Westminster ever want to give a Labour Government in Cardiff more cash? Well, the answer is it won't. When we had a Labour Government in Westminster, that didn't see anything change very much either. The Barnett formula remains as it was in 1978 and Wales is institutionally disadvantaged by that. 

On the other hand, independence is, I believe, a fiscal fantasy. The fiscal gap in Wales—the difference between what Wales raises or can raise in taxes and what the Government actually spends at all levels in Wales—is 25 per cent of Wales's national income, £4,300 per head. If we did have independence, that would immediately see either a collapse of Government spending in Wales or massive increases in taxation, although Rhun ap Iorwerth a moment ago was inveighing against the iniquity of the UK Government imposing borrowing restrictions on the Welsh Government. Well, I know that he has an insatiable appetite for English taxpayers' money, but I don't think the English taxpayer would be prepared to indulge him. So, the reality is that independence of Wales is bound to lead to that kind of squeeze that I've just mentioned. 

On the other hand, the Welsh Government does seem to have plenty of money, in some respects, to waste. We know we spent £114 million on the M4 inquiry around Newport, although the First Minister said he would have vetoed the decision to have the M4 improvements whatever the inquiry had said. And—

You'll need to bring your comments to a close now. You're out of time. 

In so many other areas as well, the Welsh Government has been devoting itself to the destruction of the wealth-producing economy in Wales, just as the UK Government has on the other side of the border as well. The COVID pandemic has just exacerbated the squeeze. But that's as nothing—I'll just finish with this last remark, Llywydd—to the squeeze that is to come, because you ain't seen nothing yet if you look back over the austerity policies that are criticised by the Welsh Government in recent years. We are only at the beginning of a massive squeeze on the economy, which will make all our problems very much worse because of the COVID restrictions. 

I'd like to start by congratulating Rebecca Evans on managing to produce a budget that keeps the wheels turning on the health service and our economy in the middle of a pandemic. That is no small achievement. Just by listening to what everybody else has said, there's no part of Welsh society unaffected by the pandemic. So, the demands on the public purse are assaulting her on all sides, and it's fantastic that despite all that, she still has managed to carve out areas of the budget to ensure that we are moving forward on making for a fairer and greener society here in Wales. But there's an enormous amount to be done.

I welcome very much the commitment that Rebecca has given to ensure that all free-school-meal children, in term time and in the holidays, are getting one meal a day, right up to Easter next year. This is a hugely complex issue, and it's much more than about that one meal a day. The importance, for example, of the Food and Fun programme isn't just the quality meals lovingly produced by the staff, who have a commitment to good food for all. It is the fact that the children are given the tools to know what is good for them, to help them grow strong and fit, and helps to protect them from the blast of the multinational companies who advertise things that encourage children to eat stuff that is going to kill them, or at least reduce their quality of life when they get older.

My long-term aspiration is universal free school meals for all primary school children, delivered to Food for Life accreditation standards, as determined by the Soil Association. Some local authorities in England still manage to do that, despite the hammering that councils and areas of deprivation have had by the deliberate policy of reallocating large slices of their budget to better-off, leafier parts of the country, which, as Neil Hamilton points out, happen to also be Tory-voting areas, or so they think.

I am a realist, however. We need to source a far bigger slice of the ingredients of our school meals before we can afford to deliver on that aspiration, so I welcome the extra £3 million for the foundational economy, which goes some way towards that need, but it's a long way off from where we need to be. We simply cannot afford to see the leakage from public expenditure going to companies outside Wales on the scale that currently happens. We must keep going with mainstreaming the foundational economy pilots that have proved their worth, in order to have the circular economy and the local food networks we need.

Whilst I welcome Plaid's conversion to the importance of food for children, I do not welcome the Plaid attack dogs denouncing me for somehow being responsible for children going hungry. This is way more complicated than ensuring that more children are eating a decent meal once a day. It's a cultural issue as much as an economic one. Italy would never allow the quality of food that some of our children are getting to be delivered to us, and we need to address that.

We have to listen to the fact that in the last financial year, 20 per cent—20 per cent, one in five—of our children entitled to free school meals did not take up that entitlement. Just because there's been a big increase in the numbers getting free school meals, it doesn't mean that we have in any way dented that one in five children who do not get what they're entitled to. It's much more complicated than that.

One of the issues is the way in which the benefits system works, and the fact that there's been no increase in the housing allowance means that there's a huge shortfall in what many of my constituents have to pay when they're living in private rented accommodation. And guess where that shortfall in what the housing allowance is prepared to pay and what they actually have to pay to keep a roof over their head—where does that money come from? That money comes from what they should be spending on food. So, I absolutely think that one of the most important things that this Government budget is committing us to is the building of more affordable, fully insulated homes, using the latest timber-framed, pre-constructed technology. That is one of the ways in which people who simply cannot afford to be living in this badly maintained private accommodation are going to be helped out of poverty.

There are other ways in which we can help poor families in the here and now as well: £20 million for active travel. Just imagine the freedom giving a child a bicycle to get to school gives them; they can arrive on time and leave when they've finished having all the enrichment activities, and also not needing to travel by school transport in a time of the pandemic. These are some of the things that we need to be thinking about. We have to have a much more preventative approach to all the aspects of our budget to ensure that we have a fitter, healthier, living longer and to a better standard of living for all our citizens.

And we'll try Bethan Sayed once again. Bethan Sayed.

Sorry about that. I hope it's working now.

I think it would be remiss of me, as Chair of the culture committee, not to put on record some of our thoughts about what has been happening recently with the National Library of Wales. We welcome the announcement of funding to support the implementation of some key recommendations highlighted in the tailored review carried out last year, but our committee has been asking for the last four years for support for the national library and for the museum, at every possible opportunity.

The Deputy Minister came to our meeting on 14 January and we discussed the fact that the tailored review recommended that the Welsh Government should review the national library's funding requirements because the panel did not, and I quote, 'consider the current situation to be sustainable'. So, we were told that the Government would continue to work really closely with the national library to see where efficiencies can be made and where they can try and come in on the budget, but that it is extremely challenging. And we have gone from 'extremely challenging' to announcing £2.25 million to meet immediate operational difficulties and funding shortfalls to protect jobs and ensure the longer term sustainability of our national bodies in fewer than three weeks. Well, the committee has been pressing the Government to release the funding so badly needed and give worried employees at the library the reassurance that they will not face compulsory redundancy. Yet, when funding was announced, we were left out of the picture, and we found out via the press, just as, I think, everybody else did, with regard to that additional funding. The Deputy Minister's statement says,

'We have been in continuous contact with the library and with Amgueddfa Cymru for quite some time'.

What prevented him from discussing with us as a committee to give us some respect prior to that particular announcement? If the money is intended to protect jobs, does that mean that all talk of potential redundancies at the library is over? Can you confirm this as a Government or not?

We know that funding for the arts will come to an end in March. We want to know if that funding, for individuals especially, will continue post March, or is that Treasury dependent? It's vital that not only organisations are supported, but also individuals in the arts who have struggled during this time.

A few comments on the Welsh language. We know that a number of organisations are struggling at the moment—the Eisteddfod, the Urdd and so on—and we asked the Minister with responsibility for the Welsh language if she was going to appeal into the broader COVID pot for funding in this area. She said that it was an option, but we didn't hear if that was actually going to happen. We know that some of the major events such as the Eisteddfod cannot take place, so we would urge the Minister to look at what kind of additional funding could be provided to these organisations.

And to turn to the Coleg Cymraeg Cenedlaethol, they've told us that they want £800,000 in addition this year and then more to follow in ensuing years, because they do want to put strategies in place for Welsh-medium FE. They say that they need more funding in this area in order to take action. Is the Minister for the Welsh language going to ensure that she has those necessary discussions with the education Minister to ensure that this area can prosper and develop for the future?

And a final remark, I think everyone wants to see more teachers teaching through the medium of Welsh, but we have seen the numbers not developing as quickly as we would've wanted to see in terms of recruitment. We have asked the Minister for her strategy in this area to try and help her along the way. But we want to see whether there is a will in this area to ensure that the 2050 project is successful, and we need to recruit more Welsh-medium teachers so that that strategy can succeed. Thank you very much.

Another committee Chair who had broadband problems, I think, has reappeared—John Griffiths.

Diolch yn fawr, Llywydd. I'm speaking today in my capacity as Chair of the Equality, Local Government and Communities Committee, and we published our report on the draft budget last week.

When I spoke last year in the draft budget debate, or rather when I last spoke on this draft budget for this financial year, I focused on the importance of the budget allocations to the housing support grant and the homelessness prevention budget line. And I'm sure Members will not be surprised to hear that I will say much the same today in relation to this debate.

The COVID-19 pandemic has resulted in significant pressures on homelessness and housing services. We applaud the excellent work done at the start of the pandemic to place rough sleepers and others in need of a home into the temporary accommodation that we're all familiar with. But challenges, of course, having arisen as a result of the pandemic, must now be sustained in terms of the responses. And the importance of a secure home, and how quickly improvements can be achieved with dedicated focus and resources, I think, has been demonstrated in the response to rough-sleeping during this pandemic. But we have to sustain that progress and make sure that it is not lost in the future. 

So, we're particularly concerned about the temporary nature of development funding that has been provided and the uncertainty that it brings for the longer term sustainability of services. The Minister for Housing and Local Government told us that the additional funding in the draft budget will enable emergency accommodation and support through to the early part of the next financial year. We do not believe that this will provide the necessary long-term certainty for those delivering and accessing these services.

The improvements that have been achieved in rehousing people into permanent accommodation must continue to be built upon, if homelessness is to be eradicated or as near to eradicated as can be achieved. We have, therefore, recommended that allocating additional resources to tackle homelessness should be a priority for the Welsh Government in the final budget. 

Another aspect that has seen a big increase in demand is the council tax reduction scheme. There has been a significant reduction in the council tax collection rate, as a result of people seeing their income decrease suddenly or cease altogether. Councils have seen other income sources disappear during the pandemic. So, council tax revenue is even more important to fund services. The importance of the reduction scheme to assist people on lower incomes has never been greater, whilst local authorities need to be compensated for the impact of the increased demand for benefit on their revenue collection. 

We welcome the commitment from the Minister for Finance to review the allocation for the council tax reduction scheme ahead of the final budget, and have recommended that this should be a priority area for additional resource. And the work on the impact of the pandemic has demonstrated that those on lower incomes are more adversely affected. Therefore, further action to mitigate these inequalities must be a priority for Welsh Government. Diolch, Llywydd. 

The Minister for Finance to reply to the debate, Rebecca Evans. 

Diolch, Llywydd. Thank you very much to all colleagues for their contributions to the debate this evening. It's been useful to hear from all colleagues, and I will definitely be mindful of those comments as we move towards the final budget, as will my ministerial colleagues, who I know have been listening to the debate as well. 

Quite a significant number of the comments related to in-year spend and our current efforts to tackle the pandemic. I will be publishing the third supplementary budget very shortly, and colleagues will have the opportunity to scrutinise and debate that. So, I'll reserve my comments on in-year spending and in-year allocations until we have that debate, although I did want to just respond to the one comment, which was made in respect of funding for business. And I do want to confirm that Welsh Government has actually spent more on business support here in Wales than we have received in consequentials from the UK Government, and that's how we've been able to provide the most generous possible settlement for businesses anywhere in the UK. 

So, just to give some context as to where we are at the moment, the revenue budget for 2021-22 will increase by £694 million, and that's an increase of 4.6 per cent in cash terms, but that also means that our core budget per person is actually 3 per cent lower in real terms than it was in 2010-11. So, I think that does demonstrate the constraints that we're still operating under. In addition, there's the £766 million of additional COVID-related funding, and that is much less than the £5.2 billion of funding that we've been allocated this year. So, I think that also should focus our minds, in terms of how we're able to allocate that funding prudently for next year.

We haven't had much discussion in this debate, but we have had lots of scrutiny on our capital settlement, and it's worth recognising there that we have had an increase of £60 million to our general capital budget, but also a reduction of £191 million of financial transactions capital. So, overall, our capital funding is down in 2021-22 by £131 million. So, I think that that also demonstrates some of the challenges that we will be facing going ahead.

The Conservative spokesperson said that the pandemic has shone a spotlight on devolution. Well, I'd certainly agree with him in that part, and, certainly, it's the first time that many Whitehall Ministers have noticed devolution. And frankly, they don't like it, because they see decisions being taken in Wales in the best interest of the people of Wales, and that includes the financial decisions that we have been making throughout this pandemic. The pandemic has also shone a spotlight, of course, on the UK Government, and many have commented that they've observed a level of cronyism that they're very uncomfortable with, and it's shone a spotlight on waste by the UK Government also. So, I think that it has been instructive in that sense—to have that spotlight shone on both the devolved Governments and also the UK Government.

And it was particularly galling to hear from the Conservative spokesperson about his concerns about the farming community and his suggestion that Wales hasn't been let down by the UK Government, because, of course, we have. Farmers and our rural communities in Wales are left short changed by £137 million as a result of the UK Government's decisions. On 27 November, I wrote to the Chief Secretary to the Treasury to ask him for a review of the pillar transfer, requesting that the farm funding of £42 million is returned to Wales. It's February, and I still haven't had a formal response to that request, which I understand will now be reflected in the UK Government's supplementary estimates. But I do understand that that request for that £42 million to be returned to us has been declined, which is extremely disappointing. If the UK Government had replaced EU funding in full, Wales would have been better placed to invest in our domestic rural development programme. It's a shame that the UK Government hasn't taken the opportunity to deliver on the promises that it made to rural Wales.

There were lots of comments with regard to local government and the local government settlement. Local authorities again this year have received a good settlement. It's the best settlement that we were able to provide—an increase of £176 million. That's an average increase of 3.8 per cent, and we continue to work with local authorities and Audit Wales to monitor the stability of the sector and individual authorities. Whilst the majority of our funding to local government goes through the hypothecated grant, local authorities also benefit from around £1 billion of support for local services through grants, and I think that that's important to recognise. Local authorities and the WLGA have welcomed the settlement, and I think that we need to recognise that. But equally, I always want to recognise the fact that local authorities are still under a great deal of pressure, and there's absolutely no getting away from that. Two years of good settlements I don't think make up for the decade of austerity that has hit local authorities hard.

I do want to address the serious issues that colleagues have, across the Chamber, commented on with regard to free school meals. I do think it's important to recognise that the Welsh Government has demonstrated its commitment to free school meals by becoming the first nation in the UK to guarantee support right throughout the holidays in April 2020, and then we became the first Government to extend this support all the way through to Easter 2022. I hope that those colleagues who have talked on this issue today will be supporting our budget when we come to the final budget, giving colleagues the opportunity to demonstrate their support for that. Building on the £50 million already announced so far this year, the additional £23.3 million is reflected in the budget to continue the support through the school holidays. I will say that it's important that we do continue to explore all of the options available to us and seek to build on the action that we've already taken, but I do recognise also that it has to be within the context of the budgetary constraints that we're under.

I'm always very happy to engage with and continue discussions with anybody who has an interest in aspects of the budget, but I think it's really important that we are clear about what's being asked. Finding additional funding from the COVID-related consequentials might be one option that is talked about, but I do think that we need to reflect on the fact that £766 million was allocated for COVID next year, as compared to £5.2 billion this year. So, what are the trade-offs? Are we talking about less funding for the NHS's response to COVID? Are we considering giving less money to local authorities for their efforts in terms of supporting communities through the pandemic? These are the serious decisions and serious choices that we have to make when we're calling for additional funding for parts of the budget. And, equally, would a suggestion be to look for further funding from the unallocated contingency? We normally go into a financial year with about £100 million of contingency, and that tiny amount of money is there to help us manage pressures that emerge right across the whole financial year. And, when you think of £100 million of contingency to help you manage a £20 billion budget, I think that we can all genuinely reflect on the challenges there. And, of course, other options would be about cutting from the budget, and I think that we need to have serious conversations about where additional calls for funding would be met from.

Over the past weeks and months, I've heard Plaid Cymru in particular call for spending that would result in hundreds of millions, or billions, of pounds of additional funding. So, as to the item that is reflected in the amendment today, and then £100 million for a council-tax freeze next year, free childcare for all children aged from birth to four, the weekly Welsh child payment of £34 a week and social care free at the point of use, we're talking about hundreds of millions or even, potentially, billions of pounds, and I just think it's important that, when we do come forward with ideas—and I think that it's wonderful that we do come forward with ideas—we have to be genuine in doing so by demonstrating how those things would be paid for.

Colleagues have expressed some particular interest in mental health during the debate, and I did want to comment just briefly on that and also on social care, because those are areas where I know there's particular interest. The budget does provide an additional £20 million of additional funding for mental health support across a range of areas, including increased support for front-line non-clinical services, all-age crisis support, memory assessment services, and support for the mental health clinical pathway, through the 111 telephone service. And there's additional funding in the budget to support the roll-out of CAMHS in-reach across Wales, and that builds on the additional funding that is provided in this financial year and £5.4 million additional funding for the NHS child and adolescent mental health services for tier 4 and community intensive teams. Again, really important investment in light of the pandemic. And there's an additional £13 million to the NHS growth funding to support an increase in mental health services. So, all of those things will be really important in our budget next year.

And then, on social care, we're also allocating £15.5 million of support for social care, which includes increasing the social care workforce grant by £10 million to £50 million, and allocating additional funding through the third sector grants and investing through Social Care Wales. So, we've prioritised both mental health services and social care, just bearing in mind how important both of those things will be in terms of supporting people with the recovery.

And then, just a couple of comments on my approach now to the final budget. Obviously, I'll be reflecting on the debate that we've had today. Colleagues will also be considering all of the committee reports and the recommendations that committees have made. I've already indicated that I would be looking to make some additional allocations from that unallocated COVID funding, particularly in respect of the NHS and local authorities, and I'm very interested to see what more we can do in the area of apprenticeships as well, given the fact that, as a number of colleagues have recognised, jobs and skills will be absolutely crucial in terms of our emergence from the pandemic and into the recovery period ahead. So, again, I'm grateful to all colleagues for all their comments, and I look forward to reflecting on them with colleagues in the Cabinet.

The proposal is to agree amendment 1. Does any Member object? [Objection.] Yes, there is an objection. We will therefore defer voting on this item until voting time.

Voting deferred until voting time.