Y Pwyllgor Cyllid

Finance Committee


Aelodau'r Pwyllgor a oedd yn bresennol

Committee Members in Attendance

Alun Davies MS
Peredur Owen Griffiths MS Cadeirydd y Pwyllgor
Committee Chair
Peter Fox MS
Rhianon Passmore MS

Y rhai eraill a oedd yn bresennol

Others in Attendance

Andrew Jeffreys Cyfarwyddwr, Trysorlys Cymru, Llywodraeth Cymru
Director, Welsh Treasury, Welsh Government
Matthew Denham-Jones Dirprwy Gyfarwyddwr, Rheolaeth Ariannol, Llywodraeth Cymru
Deputy Director Financial Controls, Welsh Government
Rebecca Evans AM Y Gweinidog Cyllid a Llywodraeth Leol
Minister for Finance and Local Government

Swyddogion y Senedd a oedd yn bresennol

Senedd Officials in Attendance

Ben Harris Cynghorydd Cyfreithiol
Legal Adviser
Bethan Davies Clerc
Christian Tipples Ymchwilydd
Georgina Owen Ail Glerc
Second Clerk
Joanne McCarthy Ymchwilydd
Leanne Hatcher Ail Glerc
Second Clerk
Martin Jennings Ymchwilydd
Mike Lewis Dirprwy Glerc
Deputy Clerk
Owen Holzinger Ymchwilydd

Cofnodir y trafodion yn yr iaith y llefarwyd hwy ynddi yn y pwyllgor. Yn ogystal, cynhwysir trawsgrifiad o’r cyfieithu ar y pryd. Lle mae cyfranwyr wedi darparu cywiriadau i’w tystiolaeth, nodir y rheini yn y trawsgrifiad.

The proceedings are reported in the language in which they were spoken in the committee. In addition, a transcription of the simultaneous interpretation is included. Where contributors have supplied corrections to their evidence, these are noted in the transcript.

Cyfarfu'r pwyllgor drwy gynhadledd fideo.

Dechreuodd y cyfarfod am 09:31.

The committee met by video-conference.

The meeting began at 09:31. 

1. Cyflwyniad, ymddiheuriadau, dirprwyon a datgan buddiannau
1. Introductions, apologies, substitutions and declarations of interest

Croeso cynnes i chi gyd. Rwy'n falch o'ch gweld chi i gyd y bore yma ar fore dydd Gwener fel hyn. Yn unol â Rheol Sefydlog 34.19, rwyf wedi penderfynu gwahardd y cyhoedd o gyfarfod y pwyllgor er mwyn diogelu iechyd y cyhoedd. Yn unol â Rheol Sefydlog 34.21, cafodd hysbysiad o'r penderfyniad hwn ei gynnwys yn agenda'r cyfarfod hwn. Mae'r cyfarfod hwn yn cael ei ddarlledu'n fyw ar Senedd.tv a bydd cofnod o'r trafodion yn cael ei gyhoeddi yn y ffordd arferol. Ar wahân i'r addasiad gweithdrefnol sy'n ymwneud â chynnal trafodion o bell, mae holl ofynion eraill y Rheolau Sefydlog ar gyfer y pwyllgorau yn parhau.

Does gennym ni ddim ymddiheuriadau y bore yma a dwi'n cymryd bod dim buddiannau angen eu nodi.

A very warm welcome to you all. I'm pleased to see you on this Friday morning. In accordance with Standing Order 34.19, I have determined that the public are excluded from the committee's meeting in order to protect public health. In accordance with Standing Order 34.21, notice of this decision was included in the agenda for this meeting. This meeting is being broadcast live on Senedd.tv and a record of proceedings will be published as usual. Now, aside from the procedural adaptation relating to conducting proceedings remotely, all other Standing Order requirements for committees remain in place. 

We've not received any apologies this morning and I assume that there are no declarations of interest.

2. Papurau i'w nodi
2. Papers to note

Okay. Thank you very much for joining us this morning and thank you, Minister, for joining us as well. I'm just going to invite you to note that we have two letters: a letter from the Chief Executive and Clerk of the Senedd—that is PTN1; and PTN2 relates to the Finance Committee remit as agreed by Plenary. I propose to note those for the Record.

Could I ask everybody—the witnesses—to state their names and roles for the Record, please?

Yes. I'm Rebecca Evans, Minister for Finance and Local Government.

I'm Andrew Jeffreys, director of the Welsh Treasury. 

I'm Matthew Denham-Jones, and I'm deputy director, financial controls.

3. Cyllideb Atodol Gyntaf Llywodraeth Cymru 2021-22: Sesiwn dystiolaeth
3. Welsh Government First Supplementary Budget 2021-22: Evidence session

Lovely. Thank you very much. Well, we'll move on to item 3. So, this is where we get to speak to the Minister and yourselves about the first supplementary budget, so a warm welcome to you all. We're going to invite some questions and we've all had a chance to look at the paperwork and the supplementary budget. So, we're going to step through some questions and I'm going to start with one question, Minister, if I can: how have you made decisions and identified priorities for this budget? Has that approach changed in the new Welsh Government administration, and if so, how?

Well, bore da; good morning, Chair. Congratulations on your election to your post and good morning to the rest of committee.

As you'll see in our supplementary budget documentation, the budget here really does focus, once more, on our response to the pandemic. So, the allocations within it have been mainly shaped by that. It's also an opportunity to perform a technical exercise that restates the budgets of the Welsh Government in line with the new ministerial portfolios, which I think is helpful for scrutiny. And just to confirm really that the process has been as set out previously. The allocations were made in the way that I've described to the previous committee, which involved setting up a group whereby I take a view, across Government, at the allocations that are sought by colleagues, and then make determinations and allocations as a result of those representations and bids that I receive from colleagues. But, as I say, it's fairly technical, the first supplementary budget, moving, I think, back to being more in step with the previous ways in which we did supplementary budgets, before what was an extraordinary year last year.


So, what changes will we now see about the decisions being made and the prioritisations, in line with the new programme for government?

Well, you would have seen the programme for government, published by the First Minister. I think it will be the case that the programme for government will be reflected more so in the discussions that we're having, as we prepare the budget for the next financial year. So, although it's not related to the first supplementary budget, I'll share with colleagues that I'm already having the first round of budget bilaterals with my colleagues, exploring what's required by them, both in terms of the response to the pandemic and the recovery work but also those important programme for government commitments. So, that work is already beginning. Looking forward, of course, to our debate on the very last day of term, where it'll be an opportunity for colleagues across the Chamber to set out their priorities at a very early stage to influence the budget for the next financial year. So, the programme for government really is within that context, and the in-year allocations, although we would hope to make some early progress on some of those items, the in-year allocations, at the moment, are focused on the recovery work.

Okay, thank you very much. Obviously, the First Minister has said that it's going to be a radical programme for government, and we see that there's about £1.2 billion unallocated funding there. My question is twofold: how are we going to see that £1.2 billion being allocated, and then, how are you going to balance your portfolio from the local government side of things? Is it a chance for you to be very radical in that reallocation and really radical in the way that local government is being funded, possibly by doing something about council tax?

Wow, lots of interesting questions there, Chair. So, I'll take the end of your question first, and that's about the reforming or reconsidering the way in which we raise local taxation. So, one of the items within our programme for government is a commitment to do just that—to look at the way in which we raise local taxes, with a view to making the system fairer. Back in February, I published a report called 'Reforming Local Government Finance in Wales: Summary of Findings', which looked back at all of the work that we commissioned over the last Senedd term, looking at different ways to be more progressive in the way in which we deal with local taxation. And ideas were tested by the Institute for Fiscal Studies, Bangor University, Cardiff University, and they included very radical change, such as moving towards a land value tax or changes to the existing system, which might be a more regular look at the value of properties, or something potentially slightly more simple, such as the increase in the number of bands at either end of the system. So, lots of choices there, and it's my intention to continue to consider that report, to have some further discussions, to listen to the views of colleagues, and then, ideally, to come to a determination on the way forward in terms of the future of local taxation fairly shortly, so we can start making some progress on that important agenda.

In terms of managing the two separate sides of my portfolio, I've had to deal with that in the past, although not to such a great extent. In the previous Senedd, my responsibilities included the budget, as they do now, for the Welsh Revenue Authority, for digital, for statistics and so on, so I have had budget responsibilities within my own personal portfolio previously. I do intend to keep the two roles separate, and the organisation is quite used to dealing with things in that way as well, because I'm not the first finance Minister to have also held the local government portfolio. So, there is some institutional knowledge about how to keep those two roles appropriately separate. And I think it does mean that it is really incumbent on me to be absolutely straight with local government, because I can't promise them something that I can't deliver, which is really important. So, I've set out and been clear with them already about the real challenges that we face in terms of our budgets for future years. 

And then the first part of your question was about the unallocated resource that we are holding. We are holding significant unallocated resource at the moment. That's not unusual; the Chancellor in Westminster is also holding significant funding, as are finance Ministers across the world in terms of responding to the pandemic and the issues as they arise. So, it's important that we have that element of flexibility, but that said, I have been undertaking a piece of work with colleagues, as I've mentioned, looking at their requirements to continue to respond to the pandemic, but also to deliver on that recovery work. And it will be my intention to make some significant allocations very shortly as we get all of those returns in—take that chance to look right across the piece to see what is needed across Government to respond to the needs across Welsh life, and then to make allocations as a result of that.


Thank you very much. And then, last year, you raised significant concerns regarding how the UK Government communicated policies that resulted in positive or negative funding consequentials for Wales. What are the issues that are likely to persist into this financial year, and how are you responding and how is the uncertainty impacting on your in-year budget planning?

Yes, unfortunately, these uncertainties remain. The COVID guarantee was really helpful in terms of being an innovative way in which to provide at least some certainty for devolved administrations in terms of helping us with our planning. So, that was a step forward. But, that said, we already find ourselves, this early on in the financial year, without a clear picture. So, you'll be aware of UK Government's announcements in respect of education recently. Now, we haven't been able to determine whether that's new money, whether it's repurposed funding, whether it's reannouncing previously-announced funding, and as such, we're unable to get a clear picture as to what our, if anything, Barnett consequential would be as a result of that announcement, and that's just one example. I know officials are trying to get to the bottom of that, but it shouldn't be this difficult; it should just be very simple and clear that, as and when announcements are made, we should have clarity, so that we're able to factor that in, then, to the overall quantum that we are able to allocate. So, unfortunately, things are still difficult in that area.

Yes, thank you very much, Chair. Thank you for that, Minister. That's quite an extraordinary statement to make, because I've been a member of this committee off and on since 2007, and I can't remember a Minister ever being in that position before. I presume that you're in correspondence with the United Kingdom Government on these matters, and it might be useful for the committee if you were able to write to us, Minister, and outline the position that you find yourself in in terms of the example you've just quoted, and whether there are other examples as well—that would be useful for the committee to understand—and then the way in which I presume officials are speaking to UK officials about the structure of decision making in the UK Government. You'll remember, Minister, from previous conversations, this committee's been very concerned about the chaotic nature of UK decision making over the last 12 or 15 months, and it's something, Chair, I think this new committee should continue to address.

Yes, the committee's previous interventions have been really helpful in this regard, because it does show that it is actually a cross-party committee of the Senedd, sharing the concerns that the Welsh Government has identified in terms of that lack of clarity and transparency. So, I'd be more than happy to provide a written update on this particular situation to the committee. But I also want to let you know that, alongside the finance Ministers of Scotland and Northern Ireland, we've requested a meeting with the Chancellor to discuss this issue and then also other issues, including the future of support for working people as we see the tapering off of the furlough scheme, for example. So, there are a number of issues there that we have asked to have a discussion with them about. We also the finance Ministers' quadrilateral in July, which will be another opportunity to talk about these issues, and we're putting clarity and transparency on the agenda there. So, again, I'd be happy to update committee after that particular meeting.


Thank you very much, Chair. That is very disappointing, that we are still in that same position of not having that clarity in terms of Barnett consequentials. So, that would be very welcome to be sent to this committee.

In regard to the final budget 2021-22, which included a £224.5 million stimulus package, this wasn't included in the draft budget that was scrutinised by the last Finance Committee. So, can you, briefly, outline the scope and objectives of that particular stimulus package?

Yes, I'd be happy to do that. That stimulus package built on the £320 million package that we announced within the financial year last year, but the additional funding to which you've referred, the £224.5 million, is a mixture of £188.5 million general capital and £36 million financial transactions capital. I'll just run through very, very quickly the kind of inventions that it is supporting. So, £147 million for our housing-related investments—that includes additional funding for the social housing grant, funding for the optimised retrofit programme, building on the £200 million already in the draft budget—£20 million for active travel—again, that builds on the £20 million that we put into the draft budget—£30 million for our twenty-first century schools and colleges programme—again, building on the £40 million in the draft budget. So, some of these interventions are adding funding to things that we know already work and that we wanted to bring forward more quickly. Eight million pounds was in there for the local authorities that were affected badly by flooding; £4.5 million for community facilities; £3 million for investment in the cultural estate—and, again, part of that was about ensuring that we have a cultural estate that is dealing with the longer term resilience needs that that sector particularly has. And then there was £2 million for investment in sport through building and improving facilities, boosting local construction business and all the benefit that has in the local supply chain; and then also £10 million for the strategic road network, and that's supporting four mid-Wales pinchpoint schemes relating to the A470 and the A487 to reduce congestion in those areas and improve air quality. So, a wide range of interventions that sought to kick start our recovery through the capital interventions that we were—

Okay, thank you, Minister. One of—or the largest single allocation within this budget is to extend the retail, leisure, hospitality rate relief for this year. This was not included when the draft and final budgets were put before the last Senedd, so is there any particular reason for that?

Yes, this was all about timing. So, you'll remember that we had our final budget published on 2 March and then the UK Government, of course, had its March budget on the third, so that is the reason; although, ahead of that budget, we were calling on the UK Government to put that intervention in place. It won't have escaped colleagues' notice that yesterday the full rate relief for businesses in England came to an end, whereas in Wales we have that full rate relief for the whole year, because of the decisions that we took here in Wales to support businesses to that additional extent.

Thank you for that, and that last point as well, Minister. The £55 million funding that is available for businesses now covers May and June. The Welsh Government has outlined it's part of a £200 million package of support, so how much of that £55 million was allocated, how many businesses applied—and you may need to write with this information—how many businesses were unsuccessful in their application, and, overall, are those figures in line with Welsh Government expectations? And, obviously, you've mentioned this is an extraordinary time, as well as the comments that you made earlier about last year. So, I'd be interested to find out that information, Minister.

So, that particular package was delivered both through Welsh Government and through local authorities, depending on the size of the ask and the nature of the challenge that the business was facing. So, the original May-to-June package only closed on Wednesday for those smaller businesses, and that's the part that is delivered through local authorities. So, the final position there is yet to be concluded. But, from the Welsh Government's side, the larger grants, those were for businesses with turnovers of more than £85,000. We had 4,420 applications across all categories; 76 per cent of those were approved. That's 3,300, at a value of £16.5 million. And we expect up to another £8 million to be approved under the local government scheme. 

So, in terms of expectation, the number of applications that we had was in line with what we had expected, but actually the level of grant requested by those businesses was less than we'd expected. So, the balance has now been reapplied to the new round of funding, which the economy Minister announced earlier on this week, to support businesses that continue to be affected through to the end of August.


Okay. So, just to be clear, the remainder has already been reallocated as announced recently, this week—is that correct?

Yes, that's part of the announcement that the economy Minister made, but we still have funding within that £200 million that was earmarked, and the economy Minister is currently working with his officials to determine what kind of schemes and support businesses will need as we move forward, hopefully, into more of a space of recovery, rather than the kind of interventions we've had to do through lockdowns and so on. 

And finally, before I move on to the last question, why do you feel, at this very early stage, that this was, in a sense, underspent?

I think it was because the request from business was less than we'd anticipated, and I know that businesses had to put in a request that was in line with the kind of loss that they were experiencing. So, perhaps some businesses have been more resilient than we had expected them to be. 

And in regard to an analysis around this, I'm sure that that will be coming back to us as a committee, in terms of where these allocations have been spent and then evaluated. That would be useful. 

I'd be more than happy to ask the economy Minister to provide a more detailed breakdown and update on this.

I think that would be very useful. Thank you. And finally, as you referred to, the budget outlines a potential £30 million for the culture recovery fund area, with £10 million of that potentially being available—so, going back to the £20 million, and of course there's much demand. How much of that funding was allocated to applicants? Has the £10 million been used, and, if so, how?

So, the original plan was to earmark up to £30 million, and £20 million of that has already been released. But it's clear that there is quite a significant degree of demand in that sector, so we've released the further up to £10 million to meet that demand. 

The Arts Council of Wales is delivering part of that through their freelancer fund. So, I think that's about £8.8 million, and then further funding has been provided to organisations across the events, heritage, culture, creative and supplier sectors. So, examples would be: in events, the Llangollen International Musical Eisteddfod; in heritage, you've got the Talyllyn Railway Company; in culture, the Nantgarw China Works Trust; in creative, you've got Clwb Ifor Bach; and then supplier, PYST Cyfyngedig. So, that just shows the range of organisations that we are supporting through that fund. But, as I say, demand is there, so we've released the additional funding to try and meet it.  

Thank you, and, obviously, I just wanted to underscore, if the Chair will allow me, that the demand is there for this particular sector, and the record of it being outspent very quickly is also part of the experience of this financial year. Thank you, Chair. 

No problem. Thank you. Just briefly, before I move on to ask Peter Fox to ask questions, you said that 76 per cent of applications were approved. Do you have any indication of why the 24 per cent were not approved?

I can ask the economy Minister to provide that detail when he provides you with more information, but I assume it's because they didn't meet the criteria of that particular grant. But he'll be able to confirm that to you.

And whether or not those criteria possibly might need re-looking at if we wanted to help more businesses. But let me bring in Peter Fox. Peter, over to you.


Thank you, Chair. Good morning, Minister. Good to have you with us. I'm changing the focus a little bit. I'm going to move into more transport-based issues. Could you—? Well, the Minister for Climate Change suggested a need to shift away from spending money on projects that encourage more people to drive, so, as a result of that, how are the Welsh Government allocations for 2021-22 likely to change following that roads review?

Thank you for raising this. Colleagues will have seen the statement by Lee Waters recently. The current situation is that officials are in the final stages of establishing the roads review panel, and then that will include some of the UK's leading experts on transport and on climate change, which will then provide advice as to how we can shift that spending towards better maintaining existing roads, rather than building new ones. But the Minister in his statement was clear that it wouldn't extend to road schemes that are already under way. So, we don't expect it to have a big impact on this financial year, because, obviously, these things take some time in the planning, and, once they're under way, then the funding is committed. So, we don't expect much change this year. However, recommendations for future years from the panel might—you might see a clear shift in that kind of spend towards the maintenance side of things.

We hope that not all schemes are put paid to them. Hopefully, those decisions won't be made too quickly, so that we can have a proper assessment of things. But thank you for that. And moving over to a different type of transport, perhaps: with the continued uncertainty about international travel, what is your assessment of the risk that Cardiff Airport will require greater financial support than set out in the last financial package agreed by the Welsh Government?

We don't have immediate concern about further funding being required at present, because the funding that was announced by Ken Skates back in March is, we believe, sufficient, certainly for this year. That said, there are big challenges for airports across the globe at the moment, but our funding for Cardiff Airport, importantly, was tied to its recovery plan, and that recovery plan has been scrutinised by Welsh Government, by Holdco, by two independent consultancy firms, and there'll be reports provided that show the progress against the plan for recovery that has been put in place, and that plan's also been benchmarked against global, EU and UK passenger predictions, alongside third-party advice from the consultancy firms. So, we think we have a robust system in place to support the recovery plan for the airport.

And shall I just say on infrastructure, just so that colleagues are aware, I'm currently revising the Wales infrastructure investment plan, which will be the Wales infrastructure investment strategy moving forward, and I'll be publishing that—it's my aim to publish that—alongside the budget later on this year. So, that will look at our infrastructure plans for the years ahead in a strategic way, now that we've come to the end of the previous WIIP.

I noticed in the supplementary plan that obviously the Welsh Government has been putting in some more money in as part of the plan laid out by the Minister last year to the airport, and I noted that there was a significant over £40 million written off, leaving about £20 million-worth of a stake there. Do you envisage any more write-off needed?

This would be a matter for the economy Minister, but it's not something that he has discussed with me as being one of his key concerns at the moment, and the statement from Ken Skates showed that the write-off was the most cost-effective, if you like, way of supporting the airport at that point. But we're not alone in needing to support airports; it's something that is happening across the globe, and we feel that the support set out in the statement in March is a robust package of support, but also that the monitoring arrangements are appropriate as well.

So, Minister, the Minister for Health and Social Services told Plenary on the twenty-first of last month that we were at the beginning of a third wave of COVID-19. How has this been reflected in the allocations for health and social services?


In the final budget in March, I announced an additional £380 million to support the NHS's ongoing response to the COVID pandemic, and in addition to this, we confirmed an additional £60 million to support the contact tracing. As we move into this new phase of the pandemic, with the success of the vaccine roll-out, for example, the contact tracing is going to become even more important, and especially so over the summer period. So, I'm pleased that we've had that support in place. The supplementary budget identifies the £100 million that was also put in place to support the recovery of the NHS. So, we feel that there is good support there, both in terms of being able to respond to a third wave, and also to start that recovery work that is so important. But that said, I would expect to be making further health allocations very shortly.

Thank you for that. How will the additional allocations to health boards and NHS trusts kick start the recovery of health services, and how will they enable staff to recover?

The £100 million was specifically looking at supporting the recovery rather than the response, if you like. Local plans have been put in place by the NHS organisations in order to deliver on that, and to use that £100 million. Ways in which they are approaching that are through identifying additional resources from external providers, either to provide services within the health board or in other facilities to increase the treatment capacity, because we want to start making some progress on those waiting lists, which I know we share concerns about. We're also exploring currently with the NHS what additional requirements might be needed to support planned care delivery for the future. So, this is more about considering whether we should have shared centres for diagnostics or treatment that are separate from the current hospital sites. So, that kind of work is also under way at the moment.

Do you anticipate making additional funding available, and if you do, what may trigger those further allocations?

Yes, I definitely envisage making further allocations to health. This is part of the work I described earlier, where colleagues are looking at their portfolio in the round to determine what further funding is needed for recovery, but also for ongoing response, and then those early actions that we can take in support of the programme for government. Health, I know, is undertaking a piece of work both within health and social services in Welsh Government, but also through each of the NHS organisations. I know that their ask is going to be significant, because they have big ambitions for recovery, as they should. So, I'm sure there'll be a significant announcement before too long, once we've got down into the detail of those funding requests.

Thank you. In terms of where we are at the moment, you've been allocating money to different departments and the rest of it, and we've seen all that, but I'm interested in what you anticipate the departments do with that money. Because clearly health has had the lion's share of all of this, as you'd expect and anticipate, but I'm interested in social care, for example, and interested in mental health. You've said in the past that there's flexibility within departments, which is self-evidently the case, but what is happening with social care? Because social care, it appears to me, has been left completely out on a limb over the last 15 months, and there have been terrible consequences in Wales, as there have been in England. I'm interested in understanding what funding you see going to social care to help social care recovery, and how you expect this flexibility to manifest itself in terms of support for mental health.

A few things have happened in the previous budget, and that was in support of the NHS and health in particular. You'll remember that there was an allocation of £800 million for health, and that figure was determined when health provided a very long list of the things that they wanted to achieve. But we thought that rather than making individual allocations against each of those, we would give health the block of funding so that they could deliver on each of those things. It's often the case that when bids come forward, I ask for monthly reports on progress, monthly reports on spend, and so on, to have that monitoring in place. But that then gives that flexibility that you've described.

But specifically in regard to social services, since the start of the pandemic, we've provided funding support of over £140 million, and that's gone through the local government hardship fund and local health boards, specifically to support adult social care providers' continued delivery of care. The kinds of interventions that that has delivered has been a general uplift per person in the payment that providers have received. It's given support for voids—so, in care homes where they haven't been able to bring in new residents because of the situation of the home being affected by COVID, then we've paid for those empty spaces. We've also provided additional funding to address some of the staffing issues that social care providers have experienced, and, obviously, provided the personal protective equipment. So, there have been a range of interventions through that £140 million to support social care.

You'll see in the supplementary budget further funding for the local government hardship fund for the first six months of the year, but just in recent days I've agreed an additional £26 million to extend funding through the local government hardship fund for social care in particular. So, there'll be further information coming shortly on that, but that just reflects, I think, the ongoing concern about the sector, which, even before the pandemic, was in a very fragile state. 


It's a fascinating reply, Minister. I think, Chair, this is something we as a committee will need to return to, because it seems to me that we're nationalising a large part of social care without nationalising the whole of social care, if you see what I mean. And whilst decisions need to be taken and funding provided in order to provide care and safety for people at a critical time, there's also a real issue about the sustainability of the businesses that we are supporting at the moment, and I'm not convinced that those businesses are in any way either stable or sustainable. I think that's something we need to return to. 

In terms of moving forward, I'm interested in the over £200 million that has been provided in addition to existing budgets to local government, and what the objectives are for that. What is it that you hope that you are delivering with that in terms of what's local government going to do with it? What do you expect local government to do with it? And alongside that, I notice the education Minister is saying that we will, as a Welsh Government and local government, meet the demands of teachers' pay. Will Welsh Government be underwriting those additional costs for local government, or is that Welsh Government writing a cheque that local government will be expected to cash? 

In relation to the first question, which is about the local government hardship fund and what we expect to be delivered through that, there are two particular elements to it, the first providing local authorities with funding for the extra costs that they've incurred as a result of the pandemic, and for the things that we have been asking them to do. Adult social care is obviously one big part of that. Homelessness provision is another; the additional funding that has provided the rooms for people to be taken out of rough-sleeping has been particularly important and successful through that part of the scheme.

Our additional support for free school meals has gone through the local government hardship fund, and they've supported families through the pandemic. Self-isolation payments and the projects there to give people the payment so that they can afford to stay home and self-isolate, and that they don't have that difficult decision between self-isolating and going to work—that's been provided though that, as has the enhancement for social care workers' sick pay to ensure that they are able to stay home and self-isolate as well. It has also funded testing in care homes, the visitor pods for care homes and other interventions as well. 

So, there's a lot there in terms of costs incurred, but then, on the other side of it, we also have support through the hardship fund for loss of income, because local authorities haven't been able to have that certainty of the income that they would have had through the theatres that they run, through car parking charges, through catering provision and so on. So, we've provided funding through the hardship fund for that. Based on last year, it's about two thirds that goes towards the costs incurred and about a third towards the money that they've lost—the loss of income. So, we probably might expect it to be similar this time, although some services are opening up again.

And then on the question of teachers' pay, when Julie James wrote to local authorities with their settlement last year, she set out that it was a good settlement and that they would be expected to include pay in that, and that is what Jeremy Miles has repeated. I know local authorities themselves had been expecting a cost-of-living increase to teachers, which is around where we find ourselves with the 1.75 per cent. That said, they've been making strong representations to the Welsh Government about seeking additional support to help them with that cost after what's been a really difficult year for them. I've received a letter from the leader of the WLGA seeking a meeting to discuss it further and I'm happy to have that conversation.

Over recent years, we've found ourselves in this position over and over again, where we're providing additional funding to local government because of the way in which the academic year differs from the financial year and the challenges that they face. I want to find a more sustainable way forward for this as well. So, there will be two conversations: what do we do this year, where can we find an agreement with them, but then how can we find a way to avoid this situation becoming something that occurs every single year.


Great. Any further questions for the Minister? I've got just one, really. As you're coming together with your colleagues and working out priority for allocation—going back to the allocation of the £1.2 billion that's there—do you have a set criteria that you work through with your colleagues as to how you allocate that funding and how you do that? Maybe you could outline how that actually works.

I ask colleagues for their broad requests in terms of supporting the recovery and then we define that as ways in which to help Wales move forward out of the pandemic. But there will be specific things that I ask them to consider as well, because this isn't recurring funding—so, can their intervention be delivered just within this financial year without creating pressures for future years. I'll be asking those kinds of questions. I'll be asking are there exit strategies from the intervention that they're proposing should there not be additional funding. We talk about the kind of monitoring arrangements that will need to be put in place. Some of the requests are demand led, so what if the pressures on test and trace, for example, aren't as severe as we expect them to be—we need to be monitoring that through the year to ensure that we don't find ourselves with big underspends or overspends emerging later on in the year. So, those kinds of discussions happen.

Then, in terms of how I make decisions, I convene a team of officials and also a couple of special advisers and we look through each of those bids. We look at the whole picture across Government, just exploring what's affordable, because inevitably I think that we get bids for more funding than is actually available. But then we also look to see if there are ways in which we can be more joined up. So, there might be some interventions that health wants to put in place in terms of mental health, for example, which also is something that education is really keen to do as well. So, we join up those bids so we're not having duplication of work and duplication of requests for funding. That is really, really helpful as well. And we just are able then to take that cross-Government view in terms of what's happening to support the economy, individuals, education, to ensure we get the right balance of support.

Do you then use things like the Well-being of Future Generations (Wales) Act 2015 and the climate emergency? How does that have a bearing, then, on your allocations, and where does that come in the priority list? Is it low down or is it high up on your list, and how do you go about allocating according to looking to the future rather than to the past?

Colleagues are expected to undertake that work fully within the context of the future generations Act, so it shouldn't be an add-on or a tick-box at the end when you decide, 'Oh yes, actually, this does give a globally responsible Wales, it does support the Welsh language'; it has to be integral to the way in which they do these things. And then, moving forward, thinking about the budget next year, I'm asking colleagues to make sure that they develop their proposals in social partnership and are able to demonstrate that they've done that, because this is really important for us in Welsh Government as well—that our proposals and the way in which we do things here in Wales is done in social partnership rather than the Welsh Government sitting there and everybody else outside it.


Thank you very much. I've got no further questions. Unless one of my colleagues has any further questions, I'd like to thank you very much, Minister, for your time this morning, and obviously your officials with you here. There we are. I think we'll move on to our next item. Thank you very much.

4. Cynnig o dan Reol Sefydlog 17.42(ix) i wahardd y cyhoedd o weddill y cyfarfod hwn, ac ar gyfer cyfarfodydd yn y dyfodol hyd nes y clywir yn wahanol
4. Motion under Standing Order 17.42(ix) to exclude the public from the remainder of this meeting, and from future meetings until further notice


bod y pwyllgor yn penderfynu gwahardd y cyhoedd o weddill y cyfarfod, ac ar gyfer cyfarfodydd yn y dyfodol hyd nes y clywir yn wahanol, yn unol â Rheol Sefydlog 17.42(ix).


that the committee resolves to exclude the public from the remainder of the meeting, and from future meetings until further notice, in accordance with Standing Order 17.42(ix).

Cynigiwyd y cynnig.

Motion moved.

I propose, in accordance with Standing Order 17.42, that the committee resolves to exclude the public from the remainder of this meeting and then for further meetings until further notice. Is everybody content with that? Yes. Thank you very much. So, we will now go into private, so we'll wait 10 seconds.

Derbyniwyd y cynnig.

Daeth rhan gyhoeddus y cyfarfod i ben am 10:16.

Motion agreed.

The public part of the meeting ended at 10:16.