5. Debate: The Local Government Settlement 2023-24

Part of the debate – in the Senedd at 4:39 pm on 7 March 2023.

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Photo of Rebecca Evans Rebecca Evans Labour 4:39, 7 March 2023

Diolch. Today I'm presenting to the Senedd for its approval the 2023-24 local government settlement for the 22 unitary authorities in Wales. First, I'd like to record my thanks to local government, both elected members and staff across local government services, for the critical work that they do for communities, people and businesses across Wales. It's been an incredibly busy number of years now for local government, from floods to the pandemic to the way in which they're responding to the cost-of-living crisis, and of course meeting the needs of those people who are fleeing the war in Ukraine. And I know that you'll all want to join me in thanking them for their hard work and dedication.

In preparing for the Welsh budget and this settlement, we've engaged closely with local government throughout, and I'm grateful to local government for the way in which those discussions have been held. This year, I'm pleased to propose to the Senedd a settlement for 2023-24 that is 7.9 per cent higher than in the current financial year on a like-for-like basis. This equates to an increase of £403 million over 2022-23, with the smallest local authority increase, of 6.5 per cent, being higher than the vast majority of increases for authorities in prior settlements for a number of years. In 2023-24, local authorities in Wales will receive £5.5 billion in general revenue allocations from core funding and non-domestic rates. For 2024-25, the indicative Wales-level, core-revenue funding allocation is £5.69 billion, an uplift of £169 million or 3.1 per cent. This figure is dependent on both our current estimates of NDR income and any 2024-25 UK budgets. This settlement, therefore, provides local authorities with a stable platform on which to plan their budgets for both this coming financial year and next year. In setting the level of the core funding for local government, I responded as far as I can to the impacts of inflation, including on pay for hard-working staff. In particular, I've included funding to enable local authorities to meet our real living wage for social care commitment as well as the increased costs of teachers' pay. In any other year, I would be stressing that this is a good settlement for local government, building as it does on the increase of 9.4 per cent for 2022-23. But we cannot ignore the impact of the continuing high rates of inflation, and those are, of course, continuing to have a big impact on local authority costs.

In addition to the core unhypothecated funding delivered through this settlement, I've provided indicative information on revenue and capital grants planned for 2023-24. These currently amount to over £1.4 billion for revenue and nearly £1 billion for capital for our shared priorities with local government. General capital funding for local government for 2023-24 will be set at £200 million and will be unchanged for the following year, including £200 million in each year to enable authorities to respond to our joint priority of decarbonisation, and I ask the Members to support the motion.