Item 4 is the debate on a statement: the draft budget for 2023-24, and I call on the Minister for Finance and Local Government, Rebecca Evans.

I'm pleased to make a statement on the Welsh Government's draft budget for 2023-24, which has been laid this afternoon. This is a draft budget unlike any other that we've laid since the start of devolution. It's been one of the toughest that we've ever made, reflecting the perfect storm of economic and budgetary pressures faced in Wales, none of which are of our making.

A decade of austerity has been compounded by the ongoing and long-term impacts of Brexit, the pandemic and our recovery from it, the economic and humanitarian consequences of the war in Ukraine, and now an unprecedented cost-of-living crisis, which affects every aspect of daily life and business. The UK is in recession, inflation is at a 40-year high, and energy prices are soaring at the same time as standards of living are falling. Our economy and public services are very fragile and are not able to withstand further shocks. People and communities across Wales are grappling every day with the challenge of just getting by.

Our funding settlement is not sufficient to meet all of these extraordinary pressures, let alone our priorities in 2023-24. Even after the additional funding that we received in the autumn statement—£1.2 billion over two years—our settlement is still worth up to £3 billion less in real terms, and up to £1 billion less in 2023-24. And just as the UK was falling into recession, the UK Government took the incredible decision not to make any more capital funding available to stimulate our economy. The UK enters recession in the worst shape of any of the G7 economies, and our capital budget will be 8.1 per cent lower in real terms, falling far short of what we need to meet our ambitious plans.

Llywydd, in this budget process, Welsh Ministers have made some very difficult decisions to ensure every pound that we have invested makes the greatest positive impact. The 2023-24 draft budget builds on the indicative spending plans that we set out in last year's three-year Welsh spending review. In this budget process, all Ministers have worked hard to refocus funding from within existing plans to reprioritise it towards where it will have the greatest impact. Together with additional revenue funding provided through the autumn statement, we have made some additional allocations, focused on three main priorities: protecting front-line public services and our ambitions for the future as far as we possibly can; continuing to provide help to those most affected by the cost-of-living crisis; and supporting our economy through recessionary times.

Recognising our commitment to protecting front-line public services, this includes an extra £165 million for NHS Wales to help protect front-line services. An additional £227 million is being provided to local government through the settlement to help local authorities safeguard the important and wide range of services that they provide, including directly funding schools. As a result of the spending decisions made in relation to education in England, Wales received a consequential of £117 million a year in the autumn statement. Through the choices we have taken, this is being provided in full to local government. We will also provide funding, through the local government settlement and the health budget, to continue to deliver the real living wage in social care—an important investment in the people who work in social care and the wider health and care system. More detail about the provisional local government settlement will be available tomorrow.

Wales is proud to be a nation of sanctuary and has welcomed thousands of people fleeing the conflict in Ukraine. Over the last year, we have created and funded our own supersponsor route, which has helped almost 3,000 people come to Wales. In the absence of any firm funding from the UK Government for the second year of its Homes for Ukraine scheme, we will continue to provide funding to support our humanitarian response, making sure people from Ukraine in Wales receive a warm welcome and the support that they need while they're here. The draft budget includes an allocation of £40 million in 2023-24 and a further £20 million in 2024-25.

Of all the challenges facing Wales today, the cost-of-living crisis is the one that bites hardest for most people. The draft budget provides an additional £18.8 million for the discretionary assistance fund, which provides a lifeline for many tens of thousands of people facing financial hardship. An extra £10 million is invested in homelessness prevention and relief interventions across Wales.

The crisis facing our economy is also at the forefront of our minds. This draft budget contains £319 million for a package of non-domestic rates support for businesses in 2023-24, and a further £145 million for 2024-25. We're also investing £18 million for employability programmes to support people in work and help those who are without employment with the skills that they need to enter and to remain in work.

This is a budget that seeks to balance the short-term need to protect people in the face of the immediate cost-of-living crisis whilst also ensuring our public services remain sustainable in the longer term. We're today making an extra £40 million available to support public transport, helping create a sustainable and greener transport system. A £20 million capital grant will help local authorities decarbonise their buildings, building on the success of similar public sector schemes, such as the solar farm at Morriston Hospital in Swansea, which is now supplying a quarter of the hospital's power needs.

In addition to our funding allocations, details of the proposed rates for Welsh taxes for 2023-24 are published as part of this draft budget. There will be no change to any of the current rates for Welsh rates of income tax for 2023-24. This means that the three rates—the basic, higher and additional—will remain at 10p in the pound. Landfill disposal tax rates will be increased in line with retail price index forecast inflation, with effect from 1 April 2023. There will be no further changes to the rates and bands for main residential land transaction tax rates following those changes that were introduced on 10 October. Similarly, no changes are proposed to the higher residential or non-residential land transaction tax rates introduced on 22 December 2020. I am issuing a separate written statement today setting out further details about our tax plans.

We continue to publish an extensive suite of documentation as part of our draft budget package, enabling a high level of transparency for Senedd members, our public service partners, social partners, the third sector, and indeed the people of Wales. Our chief economist's report and the Wales infrastructure investment strategy project pipeline are part of this package, all of which are published today on the Welsh Government's website and shared with the Senedd. I am particularly proud that our budget improvement plan, created with the budget impact and improvement advisory group, maintains our commitment to provide transparency around improving budget and tax processes.

I'm very grateful to my Cabinet colleagues for their commitment and hard work during this process, and I also want to thank Siân Gwenllian, lead designated Member for the co-operation agreement, for the ongoing engagement and close working relationship during this process.

Llywydd, this is a draft budget made in hard times for hard times. It reflects the constraints of our funding settlement but not a lack of ambition. It maintains our commitment to prioritise the most vulnerable, and public services, whilst continuing to create a stronger, fairer and greener Wales for all.

The Llywydd took the Chair.

Can I thank you, Minister, for your statement, as well as thanking you and your officials for meeting with me earlier to discuss the budget proposals? I thought it was very helpful, and I hope that the Minister and I can continue to work together through the budget process, particularly to consider some of the additional things that we on this side may wish to see included in the final budget next year.

Presiding Officer, I don't doubt that this is a difficult time for the Welsh Government as it seeks to plan its budget, and this is something that was referred to by the Minister in her statement. I know that these challenges will have budgetary impacts in the medium term at the very least, and that this means that there are difficult decisions ahead.

But what we need to see from the Welsh Government is a budget of delivery, because the current difficulties cannot be used as an excuse for not addressing the structural issues that we face here in Wales. What people's priorities are, and what my priorities are, include unblocking the social care system, tackling waiting times within the Welsh NHS, investing in councils and public services and boosting our economy, supporting our schools and young people, and, importantly, helping families with the cost-of-living crisis. I'm not for a moment suggesting that any of these challenges are easy; they are all things that we need to tackle over the longer term. But many of them existed before the current economic issues, and prior to the pandemic as well. They've just been exacerbated by the challenges that we've faced in recent years. 

Presiding Officer, I would now like to turn my attention to some of those priorities that I mentioned earlier. The package of support for businesses announced in the budget is much needed, and comes at a time of significant pressure as a result of things like inflation and energy costs. I particularly welcome the increase in the relief scheme for eligible businesses in the retail, leisure and hospitality sectors to 75 per cent. This now matches the support offered to such businesses in England, which was announced in the recent autumn statement. But whilst I welcome these announcements, they must also not detract from the debate that we need to be having, and that is how we more effectively balance the need for business taxation to help fund public services whilst providing an environment that encourages growth.  

Minister, are you confident that your planned reform of non-domestic rates, as previously announced, will actually encourage business creation and growth, or is there a risk of it just tinkering with the edges? And should we not be looking at more fundamental reforms whilst the NDR freeze is in place, such as reducing the multiplier for small businesses in the longer term, or taking a tapered approach to NDR for start-ups, so that we can encourage innovation and entrepreneurship as a way to stimulate the Welsh economy further?

Turning to local government and public services, the increased funding for councils over the next two years is much needed, but what is important is that we don't see additional moneys finding their way into council reserves, but that they use them to support services and residents, as well as unlocking the useable reserves they currently do have to help those most in need. We know that councils are facing cost pressures. Now is the time for them to use all of the levers at their disposal, because what is clear is that taxpayers do not have the capacity to pay more in council tax than they currently do. Yet, you already have, for example, Newport City Council suggesting that they may increase council tax by 9.5 per cent next year. And I'm sure others are looking at similar figures, which is completely unfair given the current financial climate. 

Minister, what assessment have you made of the adequacy of the funding in meeting the pressures faced by councils? And what discussions have you had with our local government colleagues about the importance of supporting families by keeping council tax as low as possible? Also, your statement made no reference to budgetary pressures as a result of public sector pay increases. So, could you outline whether councils will be expected to pay for this through the money that you have announced today, meaning less support will be available for public services?

Turning to social care, I think we all welcome the uplifting of funding to ensure that social care workers continue to receive the increased real living wage, but I note that workers will not receive this until June 2023. So, in light of the current cost-of-living pressures, as well as recruitment and retention issues within the sector, I wonder whether this could be brought forward to fill vacancies more quickly, as well as ensuring that social care staff and members receive the support that they deserve.

However, despite welcoming this announcement, it does seem as if it will be funded through the local government settlement and existing health and social care budgets. So, it's all still a little bit of smoke and mirrors. Despite the headline £70 million figure, it's not actually new money, meaning less will be available for front-line services. And, so, I would be interested to know how this will actually be funded. Will the local government and health portfolios share the burden equally, or will one portfolio fund a larger proportion?

On the subject of healthcare, the NHS in Wales is clearly facing a number of challenges at the current time. It is imperative that it receives the support that it needs. So, whilst the additional £165 million for front-line services is a positive step, there is a disappointing level of detail about how this will be allocated. For example, what transformational changes would you expect to see so that more people can be moved from much-needed hospital beds and into more appropriate care facilities, and how will staff shortages in our hospitals be met to ensure that hospitals meet safe staffing levels, so that we can better spend the millions of pounds that are currently spent on agency staff? And so, Minister, I think we would all appreciate more information in your response about the Welsh Government plans for the NHS and social care sectors.

The Welsh Government also allocates £3 million to the UK COVID-19 inquiry. Does the Minister not think that this funding would have been better spent on a Wales-specific inquiry instead, so that we can learn more about what we did well here in Wales, and what we could do better?

Finally, Presiding Officer, I would like to mention the cost-of-living crisis. I appreciate that more money has been allocated to the discretionary assistance fund, but I would like to ask whether this means that the eligibility criteria will be expanded, so that more people can access the scheme, particularly those who are not in receipt of benefits but find themselves in difficulties. And in these difficult times, many people across Wales will wonder whether the £800,000 allocated to Senedd reform could be better spent on providing additional cost-of-living help. And around that point, there needs to be some clarity, because there seems to be a commitment in the budget expenditure line table of £2.2 million, which is different to what's said in this narrative of £800,000.

In summary, I welcome the opportunity to debate the budget statement today, and I reaffirm what I said earlier: this has to be and it needs to be a budget of delivery. The Welsh Government needs to show that it has a plan to spend the money in a way that financially tackles the long-standing issues that we face in Wales, as well as responding to the issues we currently face. Thank you.

There can be few more difficult jobs at the moment in politics than being a finance Minister, in any Government in the world, so I do think that Rebecca Evans deserves our understanding in that regard. Because she, like every finance Minister, is facing complex, difficult challenges, trade-offs, which are really at the heart of any budget-setting process, made more difficult of course at the current time because of the global context. We face the horrendous trinity, don't we, of the war in Ukraine and its impact, the energy crisis, and, of course, the aftermath of the pandemic. And that comes, in the UK and in the Welsh context, of course, on the back of the lost decade, and more, of austerity. And as a result of that, our society, our public services, every part of our nation, really, are dealing with a situation where we have the opposite of resilience—we have fragility, we have brittleness. There's a sense in which things are breaking apart—systems, services, et cetera—because of the sustained and cumulative pressure on people who work in those services and on the people who rely on them.

And of course, there is a global context there as well, but politicians can make difficult situations better by the choices that they make, or they can make difficult situations even worse, and, unfortunately, we've had the latter time after time after time from the Conservative Government—most graphically of all recently in the mini-budget from hell, which drove an already parlous situation in terms of public finances almost through the floor, or literally through the floor at one point. There is the legacy that we have and that we have to deal with, and the crisis that we're facing, in many ways, is a crisis of Westminster's making—it is a Westminster crisis. I think that is absolutely true, and we should hold them to account for that.

We are to a great extent, of course, boxed in, aren't we, in this financial and political straightjacket that we are as a devolved institution within this very unequal state. It's almost ironically called the 'United Kingdom' because it's certainly not united or equal in any political or economic sense. And we face an inability—constraints—in terms of our sphere of autonomy in the financial realm as well: the ability to borrow flexibly. We don't even have the same powers as Scotland, do we, in terms of the ability to set bands and thresholds in terms of the income tax powers. So, there are many, many reasons why we should hold Westminster to account for the terrible situation that we find ourselves in, but the fact that we are limited in our power doesn't mean that we are completely powerless, of course. We do now have this institution—the Senedd, as our elected parliament—and we have a Government of our own, and we have to be as creative and agile as we can be within the constraints I've referred to.

In terms of the position that we are facing, of course, many of the pressures that the Welsh Government faces are also the same pressures that local government themselves are going to be facing, as has already been referred to. And it would be useful, I think, if we had a sense from the Government as to what you believe now—. We will obviously see the local government settlement detail in due course. What is the quantum of the funding gap that local government is facing following the publication of the draft budget? We've seen different local authorities quoting different figures, haven't we, in the last few days. Rhondda Cynon Taf—. The head of the WLGA—the leader of the WLGA—referring, I think, only this morning to a £47 million budget gap, and that's repeated authority by authority across Wales, and you tot up the sums and you come up to a very, very considerable figure indeed. So, it would be useful to get, certainly, acknowledgement from the Welsh Government that there will remain a funding gap. And those local authorities are going to face a very difficult financial decision-making challenge themselves, aren't they, between cutting services or hiking council tax, possibly by double figures, as Peter Fox referred to in some cases, or probably doing both in many cases as well.

To what extent has the Government, in that context, looked at things it can do to help local government, for example, lifting some of the expenditure pressures that they might be facing? Some local authorities have raised with me, for example, the money that they have to pass on to the new corporate joint committees. Obviously, we're not massive fans of the corporate joint committees on this side, but it's not the reason that I'm raising it in this context. Postponing some of these necessary financial commitments in order to give greater flexibility—. A constant theme from local government is, if only they could be given greater flexibility in some of the grants that they're offered. Even to the extent that you could bundle them all together in a global grant and allow them greater flexibility over time to deliver the same commitments, in terms of the national policy goals, but allow local government to flex a little bit while they're under the financial pressure that they are facing.

We have made the case that we believe that the Welsh Government itself needs to look at using the income tax powers that it has available to it. We realise this isn't a cost-free or a pain-free option; it has its own difficulties. But we are in a time of crisis, and we campaigned for those income tax powers for a reason, didn't we, so that we could avail ourselves of them at times precisely like these. And it strikes me, when we're talking about council tax, for example, it is certainly the case that the income tax powers, even given the constraints that we're under—we're not allowed to create new bands and change the thresholds—even then they are much more progressive than the council tax, which is the most regressive tax of all. We're obviously working together through the co-operation agreement to reform council tax, in order to make it fairer and to replace it possibly with a much fairer system of taxation overall, but, while we're here, isn't there an argument that rather than using council tax as one of the main mechanisms whereby new additional revenue is going to be raised in Wales, we should actually be looking at a progressive use of the income tax power?

Business rates: obviously huge pressure as well on small and medium-sized enterprises right throughout Wales, and it's absolutely the right thing to do, to provide additional support there. I just raise the question that the Wales Governance Centre has raised, which is: is this the only way or the best way that that help could be provided? Could it be provided in a more flexible, targeted way, rather than simply using a business rate subsidy?

In terms of your draft budget for next year, it would be very useful, going back to the theme of First Minister's questions today, if you could let us know what the assumption is that you've made in terms of public sector pay. The UK Government has made an assumption of 3 per cent, I believe, for the next financial year. What is the Welsh Government's assumption in terms of public sector pay? Because if it is as low as that, that will lead to a situation where we will almost inevitably be facing disputes next year again because it'll be below the projected inflation level.

I notice the additional money for public transport, which is very welcome. I'm wondering if you are able to share with us at this stage—and apologies if I've missed this already—what is the decision in terms of rail fare increases next year and whether part of that additional money is going to be used in order to limit the increase in rail fare below the current level of CPI, which is I think what it would normally rise by. 

In the context of the co-operation agreement, we're glad to see that the commitments have been protected as part of that. We look forward now, between the draft budget and the final budget, as set out in the co-operation agreement, to bringing wider influence to bear on the Welsh budget, and we will seek to be continuing the conversation in relation to the many themes that I've raised in my speech this afternoon.

It's obvious that the UK Government has not provided Wales with adequate funding to meet the current pressures. I appreciate that Welsh Ministers have had to make some very difficult decisions during the budgetary process. There was initial funding for Wales of £1.2 billion over two years in the autumn statement. Over half of this came from a decision made about a non-domestic rates policy in England, which has been replicated in Wales. Even after the additional funding in the autumn statement, our settlement is still worth up to £1 billion less next year in real terms. I agree with the Minister; the key priorities must be protecting front-line public services, continuing to provide help to those most affected by the cost-of-living crisis, and supporting our economy through recessionary times.

I welcome the commitment made previously by Peter Fox to produce a Conservative budget. Just a reminder, Peter, that the reduction in tax that your party has suggested needs to be shown on the expenditure line. I normally ask Plaid Cymru at this stage to produce an indicative independent Wales budget. Whilst we have not had that, we have had two suggestions from Plaid Cymru. One is to stop funding the state retirement pension, and the other is to not pay Wales's share of national debt. If breaking away absolved countries of their share of a national debt, we would have a world of microcountries.

Looking at the budget, on taxation, I ideologically would like to see an increase from 45 per cent to 50 per cent for higher income individuals. Those who have got the most money ought to be paying the most—45 per cent is very low for very rich people. But it would only take just over 11 per cent to become taxpayers in England rather than Wales for the increase to raise no money at all. If that went up to 15 per cent, we'd actually take less money. The problem we've got is our border with England. Lots of people who are very rich have houses both sides of the border, and sometimes they make a decision as to where their main residence will be. If we add 5 per cent, not many of them are going to choose their main residence in Wales.

I welcome the additional money for local government. Important as education and social services are, local government is an awful lot more than that. Education is a key economic driver. The more educated the workforce, the better paid they are. If you look at successful economies around the world, they do not pay subsidies; what they do is provide good-quality education, meaning there's a highly educated and skilled workforce. Social care is usually discussed in terms of delayed transfers out of hospital. Good-quality social care can also prevent people needing to go into hospital. I welcome the Welsh Government's commitment to paying social care workers the real living wage. I would go further and bring social care back to being staffed by directly employed local authority staff. 

We have, of course, the Brexit dividend. We no longer have to make farm basic payments. The basic payment scheme, which was a European Union scheme, no longer has to be followed. They were being paid per hectare of eligible land used for farming. The Welsh Government no longer needs to pay it, and that will release money to fund pay increases for those in the health service. Whilst I would abolish it, I am asking the Welsh Government to cap it. While I would cap it at the level of universal credit, because that's what the Government at Westminster and the Conservatives are saying is enough for people to live on, I do not expect the Government to go that far, but I am asking for a cap. For those people who have very large farms, we should stop stuffing their pockets with gold. 

These debates normally revolve around increasing and decreasing expenditure and are not about outcomes. We've got structural problems in Wales, and they need addressing. There is a belief held right the way across the Chamber that bigger organisations provide better services, despite the examples of the Welsh ambulance service, Natural Resources Wales, Digital Health and Care Wales and Betsi Cadwaladr health board. Instead of producing bigger and bigger organisations, we need to restructure organisations to the right size. An area that could be cut to provide the money is Help to Buy; effectively, all it does is help to inflate house prices. I don't believe enterprise zones are cost-effective and they should be reconsidered. Using money to bring branch factories into Wales has not worked. We've seen a number of them come, and we've seen most of them go. If we are using money for economic development, then a better use would be to support start-up companies.

Governments like to legislate, and the opposition would like to legislate. I am asking that priority is given to areas such as animal welfare, action on greyhound racing—legislation that costs little money.  

Finally, on capital expenditure, unused land could be sold off to generate capital receipts, as councils across Wales do. Every person who has led a council in this room will know that they've got land they didn't need, didn't use, and they then sold it on and used that money for the betterment of where they lived. What we have is land banking by the Welsh Government, and by the health service especially, in areas where selling that land could certainly do the Welsh economy a lot of good. Finally, I think the Government are moving in the right direction, but I'd like to see more things done. 

The Welsh budget should, of course, be about how the Welsh Government cuts its cloth, about its spending priorities, but listening to the exchange between the First Minister and the leader of the opposition this morning, I have to wonder why we're having this debate. Too often, I wonder why constantly the Welsh Government points its finger at Westminster rather than making this about the Welsh Government's priorities. This should be about the Welsh Government's priorities, and that's what this budget debate should be about. I couldn't follow the First Minister's logic earlier toda. He seems to want the UK Government to raise taxes so Wales can have more funding, but then makes the argument that he won't raise taxes in Wales because they're too high. We can't have it both ways, and it seems to me that what the First Minister is effectively saying is that he's not prepared to make decisions within his competence. 

The subject of the exchange this morning between Andrew R.T. Davies and the First Minister was about nurses' pay. Well, £133 million was spent on agency nurses in the 2021-22 financial year. If successive Labour-led Welsh Governments managed the workforce better, that funding could, if the Welsh Government chose, be spent on raising nurses' pay. Andrew R.T. Davies was making the point this morning about the tools that the Welsh Government has got to raise nurses' pay, the ability it's got to do that, but I would also point to the past 20 years as well. There are decisions that have been made here, due to the poor workforce within the Welsh NHS, that mean that the Welsh health budget does not have the capacity that it could have to raise nurses' pay, had it made decisions better. You can't possibly point the finger to Westminster when it comes to the management of the Welsh NHS workforce.

The health Minister also often makes the point about capital funding—a lack of capital funding for hospitals or regional surgical hubs. It's a lack of capital funding, when I've raised those questions previously. But we have to address the backlog within the Welsh NHS with some urgency. This has got to be a priority for the Welsh Government in its budget this year. We've got tens of thousands of people suffering in pain across Wales, waiting for more than two years for treatment, and that figure has virtually been wiped out in England. When it comes to capital spending, I'd ask the Minister for finance: are other Cabinet Ministers making better cases than the health Minister for capital spending within their portfolio? Surely health has to be priority for the Welsh Government, to reduce the backlog times. Tell us what's in the budget to deliver regional surgical hubs. And again, no finger-pointing to the Westminster Government here: we know that, for every £1 spent in England on health, there's a Barnett consequential of £1.20. England have 91 surgical hubs with more en route, and you have none.

I would ask the Welsh Government and the finance Minister to set out in this budget: what are you going to do to support reducing the waiting times in Wales, in terms of those who are waiting in pain for more than two years? What are you doing to reduce the backlog and support our Welsh NHS in this budget?

Rhun ap Iorwerth.

Thank you very much, Llywydd. I'm losing my voice, I think. I can't overemphasise the significance of this statement. Announcing the budget is one of the highlights of the year in parliamentary terms every year, but the significance is even greater this year, as the Welsh Government has to budget in a difficult economic situation. I agree with the Minister about the economic mess that has been such a characteristic of the UK Conservative Government. It's left us poorer, hasn't it, in so many ways, with the poorest shouldering the greatest burden, and it’s left public coffers far emptier than they should be.

But despite that clear responsibility on Whitehall, the Welsh Government can't hide behind that entirely, either. This is the situation that we are facing; the cards have been dealt in this way, and it's the work of a Government that doesn't have its own sovereign Treasury, unfortunately, to prioritise within the spending envelope that it has. When that envelope has been set out so tightly, the work of setting the budget gets harder, and I acknowledge that, because, but that is the challenge.

I could spend some time painting another scenario where an independent Wales would have its own fiscal abilities, but that's for another day. What we do have to depend on now is innovation, fresh thinking, doing things differently. When we do face a strike from nurses, a strike by ambulance workers, both having reached their limit—not just now, but after years of a lack of financial support and otherwise—we do need to push the boundaries in terms of what's possible. We have to look at that bill of £133 million for agency nurses and think how can we bring that down, so that the budget today only has to find a few tens of millions to make a better wage offer to nurses, yes, to avoid a strike, something that we all and every nurse wants to avoid, but more than that, to show the appreciation that needs to be shown to nurses and that invests in the morale of the workforce.

That lack of morale, the numbers leaving nursing far too early, is a major part of what makes the NHS unsustainable, and it will be unsustainable if we continue to see the levels of sickness and sickness inequalities that we see in Wales year after year, decade after decade. Yes, the context of this budget is very, very difficult, but it hasn't always been so. The Minister paints a picture that specifically this year is an unprecedented budget, a crisis budget, where safeguarding front-line services is the priority. Of course, there is an inevitable element of that, but time and time again, the Labour Welsh Government has failed to change direction, has failed to innovate, specifically on something that means a great deal to me—it’s failed to invest in the transformation of services, genuine investment—genuine investment—in the preventative agenda, keeping us well, tackling inequalities genuinely. Without doing that, we will be in this situation again. We'll be facing this situation time and time again. And when the financial situation is tight, as it currently is, that cost of failing to transform the health of the nation is going to become an increasing burden, as it currently is. 

Of course hospitals are full, of course there are long queues of ambulances outside those hospitals. Of course social services are struggling. Perhaps one day we will have a budget that does try to cut that vicious cycle, rather than having to deal with the acute cases. This isn't that budget, I'm afraid. Yes, there is an economic mess, and yes, that mess, made by the Conservatives, is the basis for this difficult context, and the wider global context too, but that's why innovation by the Welsh Government is more important than ever before.

I do concur with Adam Price's assessment of your job, Minister. It is certainly the last job in the world that I would want to do, and I do thank you so much for your work and the engagement by you and your officials as well, certainly with me: thank you so much.

It feels like in these debates, it's always tempting to make a long list of things that we want, and I do also think it's important to look back on what has been funded—in my view, very progressive policies: universal basic income for care leavers, and an ongoing commitment to a UBI for transition; a publicly owned energy company; a review of our roads, with a focus possibly on that moving to increasing our public transport; a ban on single-use plastics. These are really important, progressive policies that do need to be funded, and there are others, I know. And I'll just slip in that I'm also hoping for a ban on greyhound racing, which, hopefully, won't cost us much.

But I think it's so important that we also use this time to think how we can look at the future in this time of crisis, as we've heard. These are absolutely exceptional times, and we need to think how we can focus in on the most needy in our society. I'm interested to hear from Mike Hedges that he knows of farmers with pockets full of gold. I'd love to be introduced to them, please. [Laughter.] In all seriousness, I would like to make a point that, actually, most of the farmers I know are struggling—they are really struggling—and it's really important that we make sure that we continue to support them.

The budget that I've seen so far, and I know there's more detail to come, for me—and I disagree here totally with Peter Fox—does focus on delivery. We've got funding for homelessness services increased; we've got a welcome funding for Ukrainian refugees, which should be funded by the UK Government; business rates support; an increase in the discretionary assistance fund for our poorest; and funding for our local authorities—they do need more, they are really facing severe cuts and really difficult choices—and there's the increase in funding for our care workers.

But you won't be surprised to know that I'm just going to finish with the absolute challenge in our health services. We've heard a lot about the strike that nurses will be undertaking. I understand that midwives have now made a decision to strike as well. These are really, really difficult times, and so, I would join with Plaid Cymru here in urging you to look at our tax-raising powers. I would like to see, for example, some modelling on how we can look at the upper bands of tax and what that could deliver to your budget in Wales. It's very easy for us to say, 'Spend the money,' but we need to be sure that that is funded. So, going ahead, I look forward to continuing to meet with you, Minister. I do hope that we're able to continue the really healthy discussions, and I look forward to the detail that I know will be coming soon in relation to some of those key areas. Thank you. Diolch yn fawr iawn.

Interesting contributions across the Chamber. I agree with Jane Dodds that we also need to look back at some of the achievements we've made, and I'd like to inform Lee Waters that the well-being of future generations commissioner was particularly praiseworthy of the radical roads review in the session we had yesterday in the Equality and Social Justice Committee. We absolutely do need to be thinking outside the box if we're going to deliver on the challenges that we have with less money.

I just wanted to pick up on what Rebecca Evans said—that we've got £3 billion less overall, and that's £1 billion less for the upcoming year in 2023-24. Does that mean that we'll have £2 billion less in our budget for 2024-25, under the current circumstances as known, because, obviously, that makes it even more challenging to look forward to the following year? And it's certainly the way in which Cardiff Council is approaching its challenges in that this year is very difficult, but I'm sure they'll be mightily relieved to hear about the additional millions that are going to be put into the local government settlement. But what they're saying is that the situation financially next year, the following year, 2024-25, is really, really frightening. So, we all need to think about how we're going to get through the next couple of years and, hopefully, have a change of tack after that. 

I agree with some of what Mike Hedges says, and not about the not-really very many millionaire farmers. I'm hoping that the sustainable farming scheme is going to deal with farmers who pollute the landscape—we can't have that; we can't be paying people to pollute our rivers. But I'm confident the sustainable farming scheme will deliver on our food security, which is absolutely essential.

I want to pick up on this point about 'no to land banking' by health boards—absolutely right—or by any other public bodies, except that we have to be precautionary that we're not going to need to buy that land back at a much higher price because of some future needs. So, I think what we need to do is, in line with 'Future Wales', we really do need to think very, very hard about what we're going to need, certainly over the next five years, in terms of future development of services, to ensure that the land that we currently control is not being given away when we may need it, for example, for affordable housing. 

I really welcome the nearly £19 million increase in the discretionary assistance fund, because that is absolutely crucial for anybody who has their washing machine break down. If they haven't got any resources, if they're struggling to even buy the food and pay their bills, they're never going to have the money to buy a new washing machine, and, without it, if you've got young children, it's a total disaster. But it could be something just as basic as having a bed for a child to sleep on as opposed to sleeping on the floor, or an electric blanket to keep an elderly person warm. These are really, really important things. I also applaud the £10 million more for the homeless. The First Minister had already told us about the rise and rise every single month in the numbers who are finding themselves chucked out of their homes. I visited Cardiff Council's self-contained bedsit accommodation, which is being developed in Adamstown to provide over 100 units for people who've previously been homeless. And, in this weather, it is completely terrifying to think of anybody sleeping outside. But, sadly, this is an increasing problem, and therefore we need to build more council housing, frankly, because otherwise, we're never going to deal with the numbers who desperately need new homes.

I welcome the £20 million capital grant for local authorities to decarbonise, because they're supposed to be—our aim is that they're all decarbonising their buildings by 2030. So, more projects like the solar farms at Morriston Hospital need to be headlined so that others are working out how they're going to invest in order to save on their energy bills. What resources, therefore, will be deployed to spread that word, and what reward can we also offer to home owners? Forty per cent of houses are owned by people who own them outright. What consideration has the Minister given to varying the amount of the land value transaction tax to reward those who decarbonise their homes, which will benefit future generations when they move on? 

Thank you for your draft budget statement, Minister. My focus, given my shadow portfolio, of course, will be on education, and I can only go on what’s in front of me.

Last month, we saw the UK Government’s autumn statement put young people at the forefront of their agenda, with an increase in funding for education. I called for this to be matched in Wales the week after the autumn statement was announced, so, initially, I was delighted to hear that, apparently, it would be matched in Wales. However, upon further reading, it wasn’t clear to me, Minister, if the £117 million figure that you received from the UK Government as a consequential of the English education budget increase, has been lumped in with the local government budget and is part of the £227 million figure in your statement, or, if the £117 million was a stand-alone figure, which is actually in addition to the £227 million announced for local government. So, some clarity on that would be greatly appreciated.

If the £117 million figure in the budget is falling in with the £227 million for local government, and the extra £117 million isn’t being ring-fenced specifically for education, then obviously, this raises some concerns. The money—the £117 million—intended for education won’t necessarily go into education, given all the extra pressures on our local authorities. As moneys potentially could be spent elsewhere, of course, and not go to where they are desperately needed in front-line education, and at a time when school budgets are stretched to the max and there are a lot of extra pressures on education in Wales, you have only announced, actually, £20 million to directly go to education in your draft budget statement. Also, does the £227 million or the £117 million announced today include money for the teachers’ pay increases, or will that come out of another pot of money?

Finally, Minister, would you be able to give a breakdown of those £227 million and £117 million figures, announced today, because I’m hoping that that will go some way to alleviating the concerns that are obviously raised by this statement today? But it is crucially important that the funding in education gets to where it’s most needed on the front line, so that it can help to relieve those severe pressures that schools are facing at the moment, and, of course, to fund the many directives put upon them by the Welsh Government.

The UK Government managed to react to the current pressures and announced extra money for education, which is going directly to education. In Wales, you have only managed to announce, as I have said, £20 million to directly go into education. The rest is not guaranteed to go into education. It seems that, once again, this draft budget statement is failing Welsh education in Wales.       

I want to start my contribution by mentioning housing. Saturday was world Human Rights Day, and we must ensure that everyone in Wales has a roof above their heads. I was pleased, therefore, to hear the Minister for Climate Change, in response to a question from me some weeks ago, saying unambiguously:

‘I would like the right to adequate housing to be more than just an idea, but to be an enforceable individual right’.

This is recognition that we need an increase in the housing stock. So, we must see real investment in public housing.

Research commissioned by Tai Pawb, Shelter Cymru and the Chartered Institute of Housing Cymru found that introducing the right to adequate housing would generate significant savings for the public purse. Indeed, the independent analysis identified benefits to the public purse worth £11.5 billion, against overall costs of £5 billion over a 30-year period. It's projected that those benefits could start to outweigh costs after just six years. It would save £5.5 billion in improving well-being, £2 billion from local council budgets, £1 billion for the NHS, £1 billion for the criminal justice system, and it would generate £1 billion in additional economic activity.

By investing in adequate housing for all, through spending on social and affordable housing in Wales, you could make vital and significant savings in the long run. So, today, I'd like to urge the Welsh Government to think differently about spending decisions. A slight increase in the social housing grant is welcomed, but we need to see much more going into this pot if we're to achieve our ambitions. It's also disappointing to see funding to achieve quality housing decrease by some 7.5 per cent from the original February indicative budget, on top of the squeeze brought about by huge inflation in the housing sector. How can you hope to achieve your ambitions across the board if you don't properly fund the most basic of essentials, housing? In the short term, it's also disappointing that we've seen no increase in the housing support grant. We've heard this Government rightly make a lot of noise about the UK Government's failure to increase the local housing allowance, but these complaints ring very hollow when we see that this Government is giving a flat settlement, a real-terms cut, for the housing support grant here. This is something we can do here in Wales, and we should be doing.

I note that the budget for building safety has been slashed by a third, from £9.5 million to £6 million, and I question whether that's a wise decision, and whether it's worth the risk and reputational damage for what is, in the grand scheme of things, a small amount.

I also want to make a plea in terms of our sea fishers and the industry in general. There was a presentation to the cross-party group on fisheries and aquaculture that gave us a disastrous picture of the sector, with the number of fish landed falling, income falling and jobs reducing. There is huge potential in the sector, but it’s about to be destroyed without significant support from our Government, and I urge you to make real investment in order to secure the survival of industries in this sector.

Finally, if I could talk about agriculture, I note that almost £9 million less will spent on the sustainable economic programme. In a period of uncertainty, as farmers have to adapt to the new agriculture Act, what they need is assurance and support in order to adapt successfully. So, can we have that assurance that there will be investment in the sector to enable Welsh farmers to adapt in good time? Thank you very much.

Huw Irranca-Davies.

No thanks.

It’s unlike you to turn down an opportunity like this.

I’m speaking this afternoon, but later on.

Okay. Apologies. Gareth Davies.

Diolch yn fawr iawn, Llywydd. I’d like to thank the Welsh Government, firstly, for listening to Welsh Conservative calls to increase pay for our hard-working social carers throughout Wales. It’s been a long time coming, but we’ve finally got there, so da iawn ti. And it’s high time they are rewarded for their commitment and dedication to supporting others. However, the industry is struggling from a series of problems that an increase in pay is unable to solve, unfortunately. Although further support to social care workers is a right move forward, the Government must focus on the retention of care workers.

A care home owner contacted me recently to express her frustration with how staff who have given dedicated service to residents over a sustained period of time are leaving to seek new employment due to no longer wanting to work in the care sector—and working conditions, hours required to work, and pay have all been factors in why they are leaving. Equally, the continued use of agency staff, as mentioned earlier in the debate, has left the industry unable to function as professionally as it should, and, as we have seen recently, has proven to show significant flaws in the care provided. Increased pay will begin to soften some of the problems, but it falls on the Welsh Government to encourage carers not to work for an agency, but to seek care as a fulfilling and rewarding career.

I firmly believe that not enough is being done to encourage young people that care is a vocation for life, and not just a job that follows on from A-level or BTEC qualifications at school. Therefore, this budget shows that one problem has been addressed, but the roots of the issue start at schools, and I call on the Welsh Government to ensure that care is not just seen as a job. Equally, it should be pushed that it is a career that has multiple routes for progression and further training opportunities if staff so wish to pursue those options. You hear me a lot banging on about the fact that I worked in the NHS for 11 years, and that’s true; prior to that I worked in social care, and that was a big concern among a lot of staff, particularly ones who aspired to have promotion in their field of work, and career progression, and they felt that they were hitting a glass ceiling because the training opportunities weren’t available on an internal basis. So, I'd like the Minister please to address that in responding to the debate: what aspect of this budget in regard to social care will incorporate some of those training needs that are needed in the sector, so that we're indeed giving the most vulnerable people in our society the best care and treatment they deserve by people who feel rewarded in those careers? Thank you very much. 

The draft budget is being set in some of the most challenging of times in recent memory for Welsh Government, and I welcome the way in which Welsh Government has continued to provide support throughout the cost-of-living crisis to those most in need, in spite of too often being handcuffed by Westminster. To be consistent, I'm going to make a plea for highway resilience funding to be put back in place for councils to be able to maintain our network. We cannot continue to fund new designated routes or roads when we need to maintain our existing network of roads, pavements and bridges that are deteriorating rapidly. They're also used for active travel, for walking, cycling, buses, as well as motor vehicles.

We must be honest about the reality the Senedd is facing, the reality our local authorities are facing, and the reality our residents are facing. Twelve years of austerity has withered the fabric of this country, making Wales and the UK poorer, impacting on public services, health, transport, housing, welfare, local authority budgets, arts and culture. All were led like lambs to the slaughter, all to be sacrificed on the altar of austerity. This, we were told by Westminster, was a price worth paying in order to restore economic credibility. The Tory Government waxed lyrical about how their scorched earth policy to the building blocks of our society would succeed in bringing down the debt, except it catastrophically failed, even by their own measures. Debt as a percentage of gross domestic product is now at its highest rate for more than 60 years.

The results of the last 12 years are impossible to escape: the worst fall in living standards since records began; real-term wage cuts for workers, the NHS on the brink, and a demoralised public sector workforce; a housing market completely out of control; and more food banks than branches of McDonalds. It is truly worthy of eternal shame and one only sustained by divide-and-rule tactics, designed to put worker against worker, industry against industry, and person against person. But, in the face of that, we must take hope from the rising unity of workers and unions across this country, forced into strike action to defend their pay and working conditions. 

The UK Government completely and utterly squandered its years of low interest rates. Instead of cutting, they could and should have invested in those building blocks—in a nationalised public transport network, in new social housing, in properly funded public services, and in a green new deal. It is economically illiterate to do otherwise. Many forms of public spending end up returning far more economic value than they initially cost. Metaphorically speaking, the UK Government had the chance to fix the roof while the sun was shining. Instead, they simply ripped up even more tiles. 

We have to be honest here in Wales about too often being unable to have made those investments ourselves. Comparatively speaking, we essentially have no substantial ability to borrow to invest because of Westminster-imposed borrowing restrictions. From refusing to provide Wales with a penny of HS2 funding to threatening to overrule the Welsh Government on trade union legislation, in this Chamber we have first-hand experience of the way in which Wales is shortchanged by a UK Government who seem to have no problem whatsoever with undermining the union.

Unlike the UK Government, who made a choice not to borrow to invest, the Welsh Government is all too often restricted from even having that choice. The fact is that without prudential borrowing powers Wales will continue to fall behind, and we will continue to be hamstrung in our own ability to invest in the future of our nation. So, it's no good us simply hoping for a change of Government in Westminster; we must embrace every opportunity we have here in Wales to lead, but we need the tools to be able to lead properly, and that is why prudential borrowing is so important. 

In that regard, I hope that, moving forward, we can use the budget-setting process as a platform on which to build a cross-party Senedd campaign for Welsh prudential borrowing powers, alongside an updated Welsh Government case for those powers. And I want Wales to maximise its ability to craft our own unique future, led by a Government with the financial power to make transformational change that improves living standards for all, and let's build a greener, fairer Wales that is fit for the challenges of our future. Diolch. 

Diolch, Weinidog. I would like to echo many of the comments. It's not an easy decision, and, in very many ways, it's a very sad budget. You look at it and think of the difficult decisions that are having to be made, but also knowing that, for many people, it's not going to make a huge difference to their lives.

Someone wrote to me this week: 'Nothing is getting better; everything is getting worse day by day. Even some of the handouts that I have received are just not making any difference. What will change for me and what promises can you make?' Well, it's extremely difficult, because, even looking at this budget, the questions that we are being asked are not going to be solved or addressed. There are some things, of course, that will be beneficial, but, overall, our hands are still tied. And I do hope that, whilst we are emphasising the problems because of the UK Government's prioritisations—and the wrong priorities, I would say, in terms of the UK Government—I hope those representations are being made now to the shadow Labour UK Government, because, obviously, they, if they are successful in the next general election, will be that UK Government, and we would need to see that being re-addressed here in Wales, so that we are able to take account here and be properly funded for some of the things that we are not at the moment. All those lies—and they were lies—during the Brexit campaign of how much funding would come to Wales—well, where is that money now, because certainly our communities are not benefiting from those promises that were made?

I would like to echo just some of the comments in terms of teachers' pay. Crucially, we know that teachers' pay is a contentious issue and that they are still not happy and are balloting at present. Well, there is money in the budget in terms of retention, with the recruit, recover and raise standards programme, which is of course welcome. But we know that we are losing teachers in the first five years in the profession. We know, and have been told consistently, that pay is a real issue, so how is this budget going to address that?

I also welcome the announcement around public transport. Is this going to be specifically for young people? We've seen that a barrier to getting to schools or extracurricular activities has been the cost of transport, so will some of this be allocated specifically to support our young people?

I am looking forward to looking in greater detail at the budget, but from glancing at those that have been released now, I see, in terms of culture and sport specifically, that there are some cuts to those budgets. I just wondered—. In terms of looking specifically there, that's quite a small proportion of the budget but makes a huge difference in terms of what those organisations are able to do. And following on from the theme of my colleague Rhun ap Iorwerth in terms of prevention, many of the sports and cultural facilities do have that well-being. So, tackling obesity, for instance, it's really crucial in terms of participation. For mental health, a number of other programmes—we've seen the waiting list for CAMHS and so on—but the benefit of some of the sports and cultural activities are equally felt. And I do worry to see those cuts, especially when we know, looking at the Arts Council of Wales's budget as well, we've been told consistently, as a culture committee, of that increase of costs in terms of maintaining the services that are currently there.

So, I would just like to see how have the decisions been measured against the Well-being of Future Generations (Wales) Act 2015 and the well-being goals, all of those, because it's still very much, in my mind, a budget that is in silos rather than one that actually brings the future generations Act to life in terms of thinking, cross-Government, what impact certain cuts would then have on consequences, for instance, for health.

The other key thing to emphasise is obviously to welcome the free school meals roll-out and the continuation of that as part of our co-operation agreement. I mentioned that the budget is a sad one in many ways, because we are talking about helping people just be able to have their basic needs met—to be able to have a warm meal at least once a day; to be able to have a warm home. So, I think the fact that so much money has to be allocated with the discretionary assistance fund—yes, it's welcome, but, again, it's a very tragic reflection of our society. It shows that difficult decisions will be required, but, in terms of the money that is there, I do hope that we will be able to work together, so that it's not just responding to urgent need, but also investing in the future and prevention, because I believe that a more equal and fairer Wales is possible. I think this budget does have some element of that, but there is so much more that we need to be doing together and not just blame Westminster; there are decisions that can be taken here in Wales that need to be taken.

Because I'm going to be talking about properties, I'll declare my own interest in terms of property ownership.

I think it's probably one of the most difficult budgets for us all that we, as Members here, have faced. I've not heard too much about the awful two years plus that we went through of the pandemic. When everybody's slating the UK Government, we cannot forget that I think it was about £8.5 billion that came into Wales. When people talk about austerity, when you think and consider the number of businesses that were supported by the UK Government with furlough schemes, and then who would have thought, just as we were coming out of that dark period—and, in some ways, the pandemic still affects members of our staff, and, in turn, affects our economy—but, who would have thought that then the war in Ukraine, a war that we thought we'd seen the end of after the second world war, that we wouldn't see war in Europe again? So, put this together with the fact of our energy crisis and the food price pressures and everything, and I don't know how anyone could ever have estimated that this would be an easy budget, either for the UK Government or indeed the Welsh Government, but we have to put this in perspective, and to just keeping knocking the UK Government doesn't really sort it, in my opinion.

We've got to also remember that this is taxpayers' money—hard-working taxpayers. This isn't Welsh Government money; it belongs to the taxpayers, and yet, in this time of crisis and this cost-of-living crisis and homelessness like nothing I've ever known before in Wales, we see the Wales state energy company, Ynni Cymru, and we talk about £814,000 on setting up a company and then another—[Interruption.]

Will the Member take an intervention?

Yes, sorry, Jack.

Thank you, Janet. Just referring back to your statement on taxpayers' money, I just wondered if you agree with me that the PPE scandal in Westminster, where they wasted taxpayers' money and just gave it to their friends in the Lords, do you agree with me that that is an actual disgrace, and that that could have been spent better in the UK and in Wales?

At the end of the day, Jack, we had a massive emergency on our hands. We had to protect—[Interruption.] Jack, we had to protect—. It's fair to say that the UK Government just wanted to protect the most vulnerable in dealing with the pandemic. How would you have done it any differently? [Interruption.] Yes, but you didn't—[Interruption.] You did not—[Interruption.]

Allow Janet Finch-Saunders to carry on. Can we allow Janet Finch-Saunders to carry on?

Thank you, Llywydd. I know it's Christmas nearly, and I know it's pantomime season, but this budget is actually a very serious issue.

Now, if we want to be encouraging renewable energy production in Wales, we should be empowering local businesses to achieve it. The Welsh Government could do this by reintroducing the business rate relief that you took away from our privately owned hydro power schemes. That means that private hydro schemes would not have to consider closing down; it would make Wales a far more appealing location for renewable power generation.

We need a marine development plan for Wales, which has already been endorsed by the Senedd through my own legislative proposal. Clearly, more needs to be done here. Again, from the Finance Committee's report, some stakeholders noted the lack of progress in marine recovery, and want to see this implemented and escalated.

We also need to be providing leadership on creating low-carbon homes. Scotland have a hydrogen neighbourhood by 2023, and England a hydrogen village by 2025. We have no such commitment here. Already, Gateshead, in north-east England, has hydrogen homes. We are so behind, and these are the kinds of initiatives we need. We need to see a clear pledge to back hydrogen in this budget, otherwise Wales will fall even further behind Great Britain. 

Now, remaining on the topic of housing, the scale of homelessness in Wales, reflected in the huge number of people in emergency or temporary accommodation, is putting acute pressure on all our services and our staff responsible for delivering them. Now, this was a consistent theme of the Finance Committee's report on the draft budget. They noted that, according to one stakeholder, homelessness has been a huge challenge, identifying a £1 million funding gap. They're also contending with implementation of the Renting Homes (Wales) Act 2016, and trying to engage in the planned transition to rapid rehousing. We've said it so many times on these benches; it's just leading to a major increase in eviction notices and demand for temporary accommodation, resulting in local authority budgets for homelessness, such as those in my own local authority, increasing rapidly.

If housing support providers are unable to maintain their service provision, the negative impact will not be limited to homelessness, but will also be felt by health, social care, and criminal justice services. Community Housing Cymru have said that they need more resources to retrain and recruit more staff, expand provision, and maintain the delivery of these critical services. Research conducted by Cardiff Metropolitan University has demonstrated that homelessness and housing support services deliver significant benefits to other public services, with a net saving of £1.40 for every £1 invested in the housing support grant. However, financial pressures on emergency housing services are being made worse by the Welsh Labour Government's Renting Homes (Wales) Act. It's just making everybody's job more arduous. This Act should be suspended immediately, and this would ultimately reduce the pressure on housing, local authority and health budgets.

Clearly, the Welsh Government needs to assess its priorities. With a need to be fiscally responsible, it would be better for the state to do a few things well than do many things badly. This budget is going to be another test as to whether you do really tackle the housing and climate crisis effectively. I feel that you will fail, but let me just say on behalf of all those people who come to my office for help—and hopefully we try and help them, but we cannot conjure houses up—please, Welsh Government, every single one of you as Cabinet Ministers, you have a duty to the people of Wales to build the houses and bring back the empty houses that are in stock. Stop concentrating on second homes and things like that. You really, really now need to start putting together a plan, and what's more, what is needed here in this Government is a strategic rented social housing plan, because I've never ever in my lifetime witnessed the lack of ambition in providing those much needed homes for those requiring social housing. Thank you.

I thank the Minister for bringing forward today's statement on the draft budget. I gather I'm probably towards the end of this debate today, and there's been quite a range of contributions, and listening to a number of the contributions, you'd think we'd be living in a time and a place that is pretty dire. But I just want to remind us all that we are probably living in one of the greatest times in the human race to be alive, and in one of the greatest countries on earth. At the moment, we're living in a time when people are living longer and healthier lives than ever before. We have a freedom of democracy and rule of law in this country that allow us to have this kind of robust debate, to disagree, but also to get along as well. We live in a country of great opportunity, of enterprise, of business, of near full employment at the moment across the United Kingdom—

Will you take an intervention?

Certainly, I'd love to hear the intervention.

I would ask you which country you're talking about actually—[Interruption.] But do you recognise that life expectancy has been falling for the first time in many, many generations?

We're living in a place and a time where it's better to be alive than ever before, and we've heard contributions today that seem so negative about this country. It's pretty depressing. We have a welfare system that is one of the most supportive in the world, and we're making great strides towards a sustainable and green country across the United Kingdom and here in Wales. And of course, there are parts of this budget statement here today that I completely disagree with, and I would want to see things completely different, but I'm optimistic about the future of the United Kingdom and Wales's place within the United Kingdom as well. I just wanted to make that point, Llywydd, because I was getting pretty depressed listening to contributions from across the Chamber this afternoon.

But, Llywydd, you won't be surprised and the Minister won't be surprised that the meat of my contribution today is going to be in relation to local government and our fantastic councils that are at the forefront of delivering these really important local services that our communities rely on. Minister, I appreciate that it's a budget made during challenging times, as has been expressed, and you've made a welcome announcement of an additional £227 million to be provided to local government through the settlement. You've also stated today that funding will be provided to deliver the real living wage in social care. I just wanted to be clear as to whether that £227 million is the money you're talking about to deliver that real living wage or whether there is additional money to enable local authorities to do that.

There are a couple of other points where I'd like clarity, if you don't mind, as well. Clearly, there's a big proportion of this local government settlement increase that will be used for those staffing cost increases. So, I just wonder, in your mind, what proportion of that £227 million you expect to enable local authorities to survive and deliver business as usual versus what proportion of that money you think councils will be able to use to deliver additional services in our communities.  

Would you take an intervention?

I'd welcome an intervention. Yes, no problem at all. 

Thank you very much. You mentioned £227 million for local government, but of course there is the £31 billion Government loans scheme that was just handed back. They didn't pursue it, they just threw our money away. They're just completely careless with public money. And that's on top of the £200 million PPE scandal. So, that makes a total of £31.2 billion on those two items alone, where you've actually failed as a Tory Government to be custodians of the public purse.

I'm sure that's a very helpful contribution, Llywydd. We're here to scrutinise and talk about the Welsh Government budget and statement made here today. I'm sure the Member would like to get elected to Westminster if she wants to scrutinise the Westminster budget in the future. 

Secondly, Minister, there are some serious questions to ask here about your consideration of council reserves, in terms of the settlement that's going to be announced tomorrow and what part that has played in your decision-making process.

And finally, Minister, in terms of the provision for local government settlement announcement to be made tomorrow, I wonder how discussions with local government colleagues have influenced so far any changes to the funding formula. I know it's something you've looked at with the WLGA and will continue to look at, I'm sure, but I was reminded again earlier this week that, for example, Denbighshire County Council receives on average 17 per cent more per head than a neighbouring local authority in north Wales with a seemingly very similar demographic. How is work progressing in terms of the funding formula? How has that influenced your intended settlement announcement that you're going to make tomorrow? Diolch yn fawr iawn, Llywydd. 

The Minister for finance now to reply to the debate. Rebecca Evans.

Diolch, Llywydd, and thank you to all colleagues for what I think has been a really constructive set of comments and representations this afternoon. And I know that, once colleagues have had the chance to digest the full suite of budget information, there will inevitably be lots more questions and comments, so I'm more than happy to continue that dialogue as we move forward towards the publication of the final budget next year.

So, as I said in my opening statement, this is very much a draft budget that is unlike any other that we've laid since the start of devolution, and I think that colleagues have recognised the difficult choices that we've faced in delivering it. But we haven't shied away from difficult decisions and, despite the difficult times that we are in, we have delivered a budget for Wales that is grounded in our Welsh values of social, economic and environmental justice. And we've also sought to maximise every penny available to support the Wales of today whilst also laying the foundations for the Wales of tomorrow.

There were lots of detailed questions about some of my colleagues' portfolio areas, which I know committees will want to get into in more detail, around housing, energy, social care, transport and health, for example, so I'll just try to respond to as much as I can within the time available to me this afternoon, but there will be lots more opportunities for scrutiny and discussion. 

The overall context was set out, and I know a number of colleagues have referred to it and how difficult it is. And even with the additional funding made available through the autumn statement of £1.2 billion over two years, it still doesn't begin, really, to fill the gap that there is in terms of public services, so there have been some really difficult choices made. Our focus really has been on protecting front-line services and, of course, our ambitions for the future in our programme for government, continuing to provide help to those who are in need most as a result of the crises that we're facing, and also supporting our economy through recessionary times.

One of the things that I am disappointed not to be able to do is make further significant capital allocations. That was a matter of deep regret, that there was no further capital as a result of the autumn statement. Our capital budget will be 8.1 per cent lower in 2024-25 than in the current year. And, of course, the Organisation for Economic Co-operation and Development, the London School of Economics Growth Commission and the UK Government's own National Infrastructure Commission have all said that investment in infrastructure and investment in skills absolutely is the way in which we should be growing the economy and investing at this point. So, that is particularly of concern.

Some interesting points were made about releasing land, so just to confirm that the Welsh Government does release land from time to time. For example, within this financial year, there's been a release of land from within the economy portfolio; you'll see details of that within the supplementary budget, which will be published in February. We do acquire and release land from time to time. In terms of Welsh Government land, though, we are taking a different approach following the setting up of the land division, and that's very much about looking at the land that Welsh Government holds and first and foremost asking ourselves is this land that could be used for housing, is this land that could be used to help develop our social housing in Wales. We are making some progress on that as well.

Turning to the reprioritisation exercise that we undertook, colleagues will have heard me say that that released £87.4 million from our existing plans. That was really about refocusing to those areas where we think the need is greatest. That's been a really painful exercise for all colleagues, and I know that committees will get into that in more detail. But I just thought I'd share with you how we undertook that exercise. Certain areas were given a degree of protection from reprioritisation. They included the revenue support grant for local authorities in the finance and local government main expenditure group, NHS and social care funding under the health and social services MEG, and part of the education MEG as well. That was important to us because those are the areas where you see the front-line service delivery, which is exactly what we're trying to support through the reprioritisation.

Some Ministers have gone to areas that are demand led and had the potential to have surplus funding, and released funding, depending on what they understand uptake to be. Other options have been about reviewing contracts; some could be terminated or relet. Our e-procurement contract, for example, was coming to an end, and we were able to reprocure that at a cheaper cost. Other approaches by Ministers have been about looking to issue a kind of blanket reduction across other parts of the MEG as well. So, there have been different approaches to get us to where we are today. But inevitably, I think that that leads us then to some real difficulties in terms of looking at how we will deliver things.

You will see in the budget, and in our Wales infrastructure investment strategies pipeline, which sits underneath it, that there are areas where we will have to deliver potentially over a longer period, or not deliver as much. Sustainable communities for learning, for example, could be affected by the current economic conditions, including high inflation and, of course, delays in the supply chains affecting the building sector. We do remain committed to investing more than £1.5 billion in the next phase of delivery, but of course, the economic conditions may mean that we end up delivering less for that money. So, those are just to give a little bit of flavour, really, to the difficult choices that we've had to make and what the implications might be.

Thinking ahead now to the final budget, I can't see any scope for allocating further funding based on the way in which we've taken our approach to reserves for next year. What we can do, of course, is to make changes between the draft budget and the final budget, thinking of the recommendations that will come forward from committees and the representations that we will have from colleagues within the Senedd, and, of course, organisations outside it. Because our approach, as colleagues will remember, which we set out at the start of the three-year spending review, was not to hold unallocated DEL in the next financial year, but to manage the pressures within the year from within the Wales reserve. You'll see from the plans published today that plans for next year already draw down £38 million of the potential £125 million annual drawdown, so things are extremely tight, and, of course, we maintain our capital overprogramme. Next year, that will be £98.5 million, so no general capital will be available to allocate. I do intend to make allocations in respect of financial transactions capital between the draft and the final budget, however. So, again, that will be an area for some further discussion.

Thinking about the local government settlement in particular, there were some particular questions there. I just want to make the point that the £227 million for next year is obviously additional funding, but that does include the £117 million that we received in consequential funding in the autumn statement in respect of education. It also includes local government's share of the £70 million in respect of the real living wage for social care workers. Not all of it goes through local government, of course, some goes through the health MEG as well. That said, I think the overall settlement might be a little bit more generous than local government was expecting, or certainly not as bad as local government was fearing, but, of course, the details of that will be published tomorrow.

Local government has been very clear all along that its big pressures are education and social care, so we expect local government to want to put additional funding in those particular areas. One of the reasons why things are different here is because, of course, we continue to fund schools through local government, rather than funding schools directly as they do across the border. But even with that, we have provided additional funding through the education MEG for the work that they're doing on the recruit and raise standards side of things, additional funding for the pupil deprivation grant, recognising how important that is for families who may be struggling, and also additional funding in respect of delivering our additional learning needs work as well, which is really important.

On the health side of things, the £165 million uplift will be targeted to protecting core NHS services. It does mean that there will be some refocusing of spending in other areas, for example, such as establishing the NHS executive. The impact there would be a reduction in scope and capacity over the short to medium term. That's another example of the decisions that have been taken by colleagues, but it's very much about recognising the impact of inflation on the NHS.

I was really pleased to make the announcement in respect of non-domestic rates to support businesses across Wales. Obviously, we've frozen the multiplier, we've provided transitional relief to support businesses across the tax base that have been affected by the revaluation in April 2023. I won't talk too much about that, because I can see my time is running out, and we have the next item of business this afternoon to debate that, but we're also extending and enhancing the existing relief for retail, leisure and hospitality. What I will say there is it cost us more to do the same thing in Wales because of the nature of our tax base, but we were able to provide what is a very, very good package, and that is drawing on some funding that we'd already allocated within the non-domestic rates space.

And then, just finally, I can confirm that the funding that we had in consequentials from the UK Government in respect of social care and education has all been passed on in full and, actually, has gone over and above the funding that we received in consequentials, because I know that's of particular interest to many colleagues. I could go on forever, but my time is up. Thank you.

Thank you, Minister, for your statement on the budget.