Financial Support for Local Authorities

Part of 1. Questions to the First Minister – in the Senedd at 1:42 pm on 26 April 2022.

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Photo of Mark Drakeford Mark Drakeford Labour 1:42, 26 April 2022

Well, Llywydd, there are a series of reasons why councils hold cash in reserve. A great deal of that money will be earmarked reserves. In other words, it's not money available to the council just to spend. It's there because they have a twenty-first century schools programme, for example, and that money is allocated already to make sure that that programme can go ahead. There is money that, because the UK Government provides settlements to us so late in the year, we end up having to pass to local authorities later in the year as well, and, rather than using it in an ineffective way along the lines of the shared prosperity fund, they hold it so that they can plan to make the best use of that expenditure. So, there are reasons why local authorities hold money in reserve, and that is true of local authorities of all political persuasions in many different parts of Wales.

I see that the Finance Committee, of which the Member is, of course, the Chair, is looking for a review of reserves held by local government, and, of course, we're happy to make sure that local government only holds the reserves it needs for the proper sorts of purposes. What I don't think is sensible, Llywydd, and I've looked at the Plaid Cymru manifesto for the Caerphilly area, and was lucky enough to be in Caerphilly yesterday—. I see that the manifesto commits a Plaid Cymru-run Caerphilly council to freezing the council tax next year—a really irresponsible course of action as it seems to me—and then to dip into reserves for recurrent expenditure on youth services. Again, not a course of action that I thought any Chair of a Finance Committee would be willing to recommend to his colleagues. 

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