Questions now from party spokespeople. The Conservative spokesperson, Sam Rowlands.

Diolch, Llywydd. Good afternoon, Minister. As you'll be well aware, I'm sure, from your ongoing discussions with council leaders, one of the most important things for a successful council is the ability to plan ahead financially. Of course, last year's announcement that we're on a three-year indicative settlement is certainly welcomed by myself and councils as a whole. So, in light of this, Minister, what assessment have you made of how adequate next year's local government initial indicative settlement will be for councils?

Thank you for the question. As you say, we have a three-year spending outlook now as a result of the UK Government's three-year spending review, which in itself was welcome. But, one of the challenges that we've all recognised is that it was very much frontloaded into year one of the settlement. So, we had an uplift in this financial year, which we were able to pass on very well, I think, to local government, who described the settlement—at the time, at least—as exceptionally good. But, of course, we're facing inflationary pressures now, which are causing concern right across local government. So, what I can say is that we would look to the UK Government to provide a general uplift to departments—as they call all of us regardless of if we're devolved Governments—to look across all departments to provide an uplift to reflect the impact that inflation is having. And, of course, we would look to see what we can do then to support local government further. But, as it stands, I think the UK Government—. The messages that I'm increasingly hearing quite clearly, I think, from Treasury Ministers is that we will all be expected to live within the funding envelopes that we have, which means that there won't be any further funding, I'm afraid, at this point to pass on.

Thank you, Minister, and also thank you for acknowledging the pressure that local authorities are likely to be in in the next financial year with the indicative settlements that they are likely to receive. As we know, local government settlements do provide around 70 per cent of a local authority's spend in their area, which, of course, delivers those vital services that councils and councillors want to provide for their local communities. We also know councils are still feeling the effects of the COVID-19 pandemic in terms of their lost income and extra expenditure, and, of course, they continue to receive further responsibilities, which I will continue to support. But, it is clear that next financial year is going to be very difficult for local authorities and I would expect that there's going to be a detrimental effect on some of the services they have to provide. So, to be able to balance the books, I wonder what you expect our councils to do less of to ensure that those essential services and that support does continue.

I would absolutely recognise that local government did experience real difficulties during the pandemic, both in terms of lost income and those opportunities lost in terms of making up income, and, of course, the additional pressures that they had on a range of services, which is why I think it's been well recognised that Welsh Government worked very carefully to provide support in terms of lost income and other support for local government at that point. But, as Sam Rowlands says, years two and three of the spending review are much more difficult because of the way in which the increase was very much frontloaded, and it does mean that local government will have to make difficult decisions, just as we will in Welsh Government, where our budget over the three-year spending review will be worth £600 million less than we understood it to be at the time of the spending review, as a result of inflation. So, local government will be facing difficult decisions just as we are in terms of what we're able to deliver and how quickly we're able to deliver it. How local government decides to deal with those pressures, I think, is a matter for each of them individually. But, obviously, we would look to support them and engage closely with them as they take those difficult decisions. 

Again, thank you, Minister. It would be interesting to hear, perhaps in a further response, of any particular areas you think councils may do less on. I absolutely agree it's up to those local democratic members to make that decision, but I'm sure an indication as to where some of those expectations might be would be useful. Of course, fundamental to delivering those services is the fair funding formula for local authorities. I'm sure, Minister, you were as excited as I was this week to see some of the headline figures from the census being announced. And some of those latest statistics are quite stark, actually. They're showing an ageing population, which we did know about already, but the census continues to point to that, with around 21 per cent of our population in Wales now being over the age of 65, 1 per cent being aged over 90 years old, and, in places like Conwy county, the figure for over 90-year-olds is actually the highest in Wales, at 1.5 per cent; around 2,000 people over the age of 90 years old in that one county alone. And as I've mentioned time and time again, the current funding formula, in my view, does not properly take into account and support older people at the level that they need support. And we also saw just last week the now Labour-run Monmouthshire County Council vote for a motion—a cross-party motion, supported by all, I understand—calling for a review of the funding formula. So, it's not just Conservative councils now looking at this; Labour councils also seem to be dissatisfied with the funding formula. So, in light of this, can you provide us here today, Minister, with an initial assessment of the information coming out of the census and how that may affect the funding formula in future, and also what your thoughts are on the Labour-run council for their calls for a funding formula review?

Thank you for raising these issues. I'll begin with your question in relation to where might local government feel particular pressure. I've already had opportunities to meet collectively with all of the leaders of local government, including our new cohort of leaders, and I think they're very keen to stress the importance of looking at their capital settlement, because of course our capital budget across the three years is particularly poor, being worth less in every single year in cash terms across the three-year period. And of course the implications are there for local government and particularly so in respect of inflation. So, obviously there'll be choices for them in terms of which projects they decide to invest in and how they profile that spend and how slowly they end up delivering projects, really, as a result of that. So, those will be some of the potential areas of difficulty. 

Yes, I had the same level of excitement as you when the census data came out, and that will continue, actually, because data will be provided, probably on a monthly basis, now, right through to November. So, there'll be lots more for us to get our teeth into as the various pieces of information come forward from the census. But, yes, clearly it will have an implication in terms of local government funding. The population projections, which are probably of the most interest, or one of the aspects of most interest, to local government, are used as part of the funding formula, and today's results, or the results of the census, will feed into future updates to local authority population projections.

The Welsh Government's local authority population projections are planned to be updated from 2024, and that's subject to the confirmation of the Office for National Statistics's plans for 2021-based national population projections and revised mid-year estimates of the population for 2012 to 2020. So, that data will be important. But I know the point you're really trying to make is around the funding formula for local government, which is under constant review. I'm seeing the Presiding Officer looking wearily at me at the moment, so I'll draw this to a close. But the funding formula is under constant review, as we've discussed, in terms of new data coming forward, but we will be meeting with the finance sub-group the week after next, where we'll be discussing the funding formula, and particularly the timeliness and the accuracy and the importance of data, and that point that you've made previously about age cohorts is very much still part of that discussion. 

I was looking with interest at you. [Laughter.] I'm always interested in the subject of the funding formula for local government. 

I thought I might have been going on too long. 

I need to work on my poker face, obviously. [Laughter.]

Plaid Cymru spokesperson, Llyr Gruffydd. 

Diolch, Llywydd. The legislative consent memorandum for the UK Infrastructure Bank Bill is due to come before this Senedd quite soon. Now, the legislation states that the bank's activities will, and I quote, provide

'financial assistance to projects wholly or mainly relating to infrastructure' and provide

'loans to relevant public authorities for such projects'.

It goes on to explain that its work is being supported by a new national infrastructure strategy that has three central objectives, namely economic recovery, levelling up and unlocking the union's potential. To what extent do you think that those three objectives reflect the investment objectives and priorities of the Welsh Government? And what are you doing to ensure that any investment that might come to Wales through the proposed investment bank actually complements this Senedd's broader objectives, as reflected in Welsh legislation around promoting sustainable development, equality, tackling the climate crisis and so on? 

This is a really important issue, and, of course, the UK Infrastructure Bank is supposed to be the successor to the European Investment Bank, but I think that, if you look at the sums available to it to invest, it really just pales compared to what we would have been able to access through the EIB. So, I would encourage the UK Government to reflect on the amount of support that's available to it. 

But the point made in terms of our Welsh Government approach to this is really important, because I'm not in a position yet to take a view on whether or not I would be able to recommend to this Senedd agreeing to the legislative consent memorandum. I think that there is certainly something to commend the bank for, absolutely—their focus, I think, on decarbonisation investment would be positive and something that we would support, and something that is in line with our own concerns here in Wales. But, in order to be able to recommend consent, I think I would have to know from the UK Government, and have that clear agreement through amendments to the Bill, that we would have a say in the governance of that bank, and also in the setting of the bank's remit. So, those are two conditions I think that are really important in being able to recommend consent. 

But my understanding is that none of those conditions are in place at the moment, and, if truth to be told, there's a real risk here that this Westminster Bill is just another example of the UK Government straying into devolved matters intentionally, riding roughshod over decisions made here, undermining devolution and the integrity of the Senedd and the Welsh Government in an effort to impose their Conservative agenda on Wales—coming hot on the heels, of course, of the revelation on Monday that Westminster is to effectively rescind the Trade Union (Wales) Act 2017 that was passed here to protect workers' rights just a few years ago. The days of subtly taking back powers to Westminster have now clearly been overtaken by a blatant and outright attack on devolution, on our Parliament and on democracy here in Wales. 

So, given that the First Minister, in response to Plaid Cymru leader Adam Price yesterday, said that he would resist—his word, 'resist'—these actions by the UK Government, that he would seek to protect the legislative integrity of this Senedd, although he couldn't tell us exactly how he'd do that, by the way, similarly, can I ask what are you going to do as finance Minister to protect the integrity of the Welsh Government and of the Welsh Parliament in a fiscal sense, when the UK Infrastructure Bank would actually be making decisions that proactively undermine policy and spending decisions set here in the Senedd? 

Well, I think that your question sets out why it is so important that we have these amendments to the UK Government's Bill, both in terms of the governance of the bank—so, at the moment, it's only UK Treasury Ministers who are allowed to nominate people to those positions on the board; obviously, we would see a role for devolved Governments in this space, and I made that case clearly to the Chief Secretary to the Treasury when I met with him a couple of weeks ago—and then also setting the remit of the bank is really important as well. It will be operating in devolved spaces in terms of economic development and supporting our Welsh businesses, so we would want that investment to be done in a way that complements and works with the grain of what Welsh Government is seeking to achieve. 

I did have the opportunity to meet with the chair of the UKIB, and I was able to set out what our priorities are to the chair of the bank. But I think that it has to come down to amendments to the Bill, and, if those amendments are made, then I could recommend consent to the Senedd, but we have yet to get to that point. So, obviously, I'll be keen to keep colleagues updated on this.