Part of the debate – in the Senedd at 6:33 pm on 8 March 2022.
Can I declare an interest also, as a councillor of Monmouthshire County Council for a short period longer? And I absolutely share the sentiments regarding our councils and all they do. I've said many times that the greatest resource that a council has is its staff, and their staff have done fantastically, and continue to do so, and I thank them for that.
Members will recall that recently in this Chamber, as Llyr pointed out, we discussed the local government formula, so we'll remember that many from this side of the Chamber, and indeed, colleagues opposite, argued that the distribution formula was out of date, and certainly not fit for purpose, and I'm going to focus on that area again today. Members will also recall how I argued for the formula in that it didn't sufficiently recognise the needs of rural authorities and the issue of sparsity in any meaningful way, and thanks to Sam Rowlands for raising that point again today.
Deputy Llywydd, to prove this point, Members of the Senedd only have to open the link in today's agenda to the local government finance report and scroll to annex 2, identifying indicators and values used to calculate standard spending assessments attributed to councils. My colleague Sam Rowlands raised again today, but previously pointed out, how much of that data was so out of date, especially the dispersion and settlement data that is stated in the report, dated back to 1991. That aside, I want to focus on the key tenets of my concerns on the formula—that it doesn't sufficiently recognise the rurality and the unit costs of delivering services in rural and sparsely populated authorities. If you look through the indicators used to build the formula, there is, it seems, only dispersion indicators, of which there are four, that can be attributed to touching on rurality. They are stated in the report as being
'designed to capture the additional time and distance costs associated with service delivery to dispersed communities.'
But look at their contribution to the building of the final formula—they are miniscule, they are pence. For easy reference, Members, the explanation to the indicator is item 21 on page 18 of annex 2. There are several other very interesting and questionable indicators used to contribute to the formula, but I won't digress.
Deputy Llywydd, there are many other points that can be made on the inappropriateness of the current formula, as I have raised before, such as the clear evidence that it allows some councils to accumulate huge reserves, whilst seeing smaller and rural councils seeing their reserves diminished. Indeed, you only have to look at Welsh councils' statement of accounts report for any given year to look at their movement in reserves statements to see the accumulation of usable reserves and how they're planning to or have used them. All that said, today, Deputy Llywydd, is not about criticising the quantum being made available to local authorities in the budget, but I will continue to argue that the way the cake is cut up isn't fair, with some councils getting huge wedges and the others, especially rural councils, being thrown the crumbs via this current formula. If the Welsh Government really does care about the sustainability of our councils across Wales, and believe in fairness and the appropriateness of how they are funded, they would realise their distribution method is out of date, not fit for purpose and needs to be reviewed. Minister, please don't hide behind the usual rhetoric that you would commission a review if certain council leaders wanted it. You know that won't happen because you also know as well as I do that some of those councils would have to lose a little to make the formula and its distribution fairer. I urge you, Minister, to look seriously, without political lenses, at the funding formula ahead of future settlements. Diolch.