Y Pwyllgor Llywodraeth Leol a Thai
Local Government and Housing Committee12/01/2023
Aelodau'r Pwyllgor a oedd yn bresennol
Committee Members in Attendance
|Carolyn Thomas AS|
|Jayne Bryant AS|
|Joel James AS|
|John Griffiths AS|
|Mabon ap Gwynfor AS|
|Sam Rowlands AS|
Y rhai eraill a oedd yn bresennol
Others in Attendance
|Andrew Morgan||Cyngor Bwrdeistref Sirol Rhondda Cynon Taf|
|Rhondda Cynon Taf County Borough Council|
|Anthony Hunt||Torfaen Council|
|Christina Harrhy||Cyngor Bwrdeistref Sirol Caerffili|
|Caerphilly County Borough Council|
|Dr Chris Llewelyn||Cymdeithas Llywodraeth Leol Cymru|
|Welsh Local Government Association|
|Emma Smith||Llywodraeth Cymru|
|Llinos Medi||Cyngor Sir Ynys Môn|
|Isle of Anglesey County Council|
|Rebecca Evans AS||Gweinidog|
|Reg Kilpatrick||Llywodraeth Cymru|
Swyddogion y Senedd a oedd yn bresennol
Senedd Officials in Attendance
|Catherine Hunt||Ail Glerc|
|Chloe Davies||Dirprwy Glerc|
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 yn y Senedd a thrwy gynhadledd fideo.
Dechreuodd y cyfarfod am 9:02.
The committee met in the Senedd and by video-conference.
The meeting began at 9:02.
Welcome, everyone, to this meeting of the Local Government and Housing Committee. This meeting is being held in hybrid format, but aside from the adaptations relating to conducting proceedings in that hybrid format, all other Standing Order requirements remain in place. The public items of this meeting are being broadcast live. The meeting is bilingual and simultaneous translation is available. Are there any declarations of interest from committee members? No.
We will move on to item 2 on our agenda today, which is scrutiny of the Welsh Government's draft budget for 2023-24, and our first evidence session with the Welsh Local Government Association. So, let me welcome our witnesses, then: Councillor Andrew Morgan, leader of Rhondda Cynon Taf County Borough Council and leader of the Welsh Local Government Association; Anthony Hunt, leader of Torfaen County Borough Council; Councillor Llinos Medi, leader of Anglesey county council; Christina Harrhy, chief executive of Caerphilly County Borough Council; and Chris Llewelyn, chief executive of the Welsh Local Government Association. So, croeso, welcome to you all.
Perhaps I might begin, then, with some general questions by way of an overview, and firstly, then, for the Welsh Local Government Association to provide a brief overview of the current financial situation facing local authorities in Wales. Andrew, I guess that's you.
Thank you, Chair. If I can just start, and perhaps I'll hand over to my colleagues. I think it's fair to say that the pressure this financial year and going into the next financial year is on a scale that, certainly in my time of being a councillor, which is since 2004, we've not faced. In terms of double-digit inflation, it's bad enough, but there obviously is the pressure on the pay award, which is agreed across England and Wales, which is considerable this year, but not least as well in terms of energy costs and supply chain costs. If you consider food costs for things like school meals, our care home services and meals on wheels, food costs have gone up anything between 14 and 25 per cent. Our gas and energy costs are predicted for this financial year for local authorities in Wales to go up around 355 per cent for gas, and well over 100 per cent for electric. So, there are some real pressures on local authorities. I know every year we talk about the pressures on local government, whether it's service demand such as social services in particular, but this year I think it is quite exceptional.
Local government is facing a significant overspend this year—in excess of £200 million is the figure that we have collated between the 22 authorities. I think it's fair to say that since devolution, local government has never overspent £200 million in a single financial year. My own authority is set to overspend by around £20 million this year, so we'll be using reserves, and most local authorities are looking to use reserves. And next year, even though we are having a very good settlement from the Welsh Government, and we are grateful for the additional funding that's been passported on, there is going to be significant pressure on local authorities to set a balanced budget. Thank you.
Thank you very much, Andrew. Any other of our witnesses? Anthony.
Thank you, Chair. The pressures are substantial. We estimate £784 million cumulatively to the end of the next financial year. Just in social care, for example, it's £95.2 million of pressures, £32 million from children's residential placements, adult residential placements £12 million, adult domiciliary care £7.5 million. Just to use my own authority as an example, our energy costs are estimated to rise by £4 million, our social care costs by £4 million, and our pay bill by just over £7 million. Those are real pressures that can't just be managed away easily.
Would any other of our witnesses like to add anything to what Andrew or Anthony have said? Llinos.
I think in addition to the cost pressures and inflation is the service demand as well that we're seeing a massive increase in, due to the cost-of-living crisis. So, it's a perfect storm of the demand on services and the cost of delivering the services at the same time.
Yes. Diolch yn fawr. In terms of the experience during the pandemic, where, obviously, local authorities again were under tremendous pressure, how would you compare the current situation with the situation at that time? Who would like to offer a view on that? Christina.
I think that the big difference here is that throughout COVID the Welsh Government helpfully provided us with some short-term funding. And as Llinos has already mentioned, as we're coming out of COVID, there's increased demand, but it's not only increased demand, it's increased complexity of demand. And then when you couple that with the depleted workforce—. Because one of the things that has happened post COVID is that, for a number of reasons, a lot of public servants have decided to leave public service. Coupled with the reduced funding that we are facing, the increased demand and complexity, and a depleted workforce and difficulty in recruiting and retention, I think it's essentially a perfect storm. Thank you.
Thank you very much, Christina. Llinos.
Dwi'n mynd i siarad yn Gymraeg; wnes i ddim defnyddio'r cyfieithu gynnau. Mae'n bwysig hefyd ein bod ni'n nodi yn y fan yma bod, yn ystod COVID, gwasanaethau arferol wedi cael cyfnod o beidio â pharhau, felly mi oeddem ni'n canolbwyntio ar yr argyfwng COVID. Rŵan, mae gennym ni argyfwng costau byw ar ben yr argyfyngau eraill sydd yn digwydd mewn cymdeithas, a'r argyfwng ariannol rydyn ni'n ei wynebu fel awdurdod. Ond mae ein disgwyliadau cynllunio yn parhau, disgwyliadau gwarchod y cyhoedd yn parhau, a'r holl ddisgwyliadau eraill sydd arnom ni fel awdurdod. Felly, dydyn ni ddim yn gallu ymdopi â'r holl argyfyngau a pharhad busnes arferol, a disgwyliadau'r cyhoedd ar yr awdurdodau. Mae nifer o'r amserlenni hynny yn statudol, megis cais cynllunio, ac yn y blaen. Felly, mae'r pwysau rŵan yn fwy intense oherwydd hynny.
I will be speaking in Welsh; I didn't use the interpretation earlier. It's also important that we note that during COVID, normal services had a period where they weren't necessarily being provided, so we were focused on the COVID crisis. Now, we have a cost-of-living crisis on top of all the other crises hitting society, as well as the financial crisis that we as an authority are facing. But planning expectations continue, and public protection and all the other requirements placed upon us as an authority remain, and we can't cope with all of these crises as well as business as usual and public expectation on local authorities. And much of that, of course, is statutory, for example planning and so on. So, the pressure now is more intense because of that.
Diolch yn fawr, Llinos. Andrew, did you want to come in as well?
Yes, just to add to and support what Christina Harrhy said. Obviously, during the pandemic, we did receive extraordinary amounts of funding, both to support communities and to support services, and certainly end-of-year funding as well, which has obviously helped our balances, carrying forward to this year, which has now helped us in terms of overspends. But the difficulty is of course that that was an exceptional amount of funding, and one-off funding, to deal with the short-term problem. In effect, the pandemic was a short-term hit for things like income, which has largely recovered in lots of areas, though there are some legacy issues there. But going forward now, general revenue, in terms of our revenue budget, is under massive pressure from four key drivers—the inflation, the energy costs, the service demand, and pay pressures. All of them are almost like a perfect storm for public services across the board, and local authorities are no different.
Thank you very much for that. Obviously, the potential impact on services is something that all of us will be very concerned about. Is there anything in particular you would like to say in terms of that potential impact? Is there anything that you'd like to highlight? Andrew.
Every local authority will have to address this, obviously, as part of their budget-setting round and the various consultations they're doing. But even though we've had a relatively good settlement, it has to be said—the average figure is much more positive than was anticipated, with consequentials being passed on—there is a range from the low end, such as authorities like myself and Merthyr, to, I think, Monmouthshire, which is at the higher end this year, and Cardiff. So, there is obviously fluctuation in the formula, but the formula is there because it is driven by demand, such as population, school numbers, and various other drivers, which impact on that.
But turning back to individual councils setting their budgets, there's no getting away from the fact that there will be some tough decisions. There is a balance to be struck between council tax increases at a significant rate, making savings where possible without impacting on services, but, undoubtedly, there will be other cuts to services, or service changes that, I think I'm fair in saying, all 22 local authorities will have to consider to a certain extent. That may be changing things like bin services, it could be cutting or closing some sports facilities; there is a whole raft of things that local authorities are considering, but it is obviously down to those individual authorities to make those tough decisions.
Yes. Okay. Llinos.
Dwi'n gwybod eich bod chi'n ymwybodol yn barod, felly dydw i ddim eisiau bod yn—. Ond mae hyn yn golygu gwneud toriadau ar wasanaethau sydd wedi cael eu torri'n barod, felly mae'r opsiynau yn brin iawn. A phan rydyn ni wedi medru cadw rhyw fymryn o wasanaeth i fynd, efallai y bydd o'n golygu na fydd unrhyw fath o wasanaeth mewn rhai meysydd, sydd yn amlwg yn creu pryder pellach. So, mae'n bwysig nodi nad oeddem ni yn y lle delfrydol i gychwyn. Dwi'n ofni weithiau ein bod ni'n anghofio am y degawdau o doriadau rydyn ni wedi eu gwneud yn barod.
I know that you're already aware of this, so I don't want to be—. But this is us making cuts to services that have previously been cut, so the options are very few and far between. And when we've been able to maintain some semblance of service in some areas, it may mean that may have to disappear, and clearly that's a real cause of concern. So it's important to note that we weren't in an ideal starting point. I sometimes fear that we forget about the decades of cuts that we've undertaken already.
I just wanted to come back to the point that Christina made about workforce—that's a very important one, looking to the medium term. This isn't just a cash issue, this is an issue with more and more people deciding to walk away from public services. They've seen their pay depleted by 20 per cent over the past decade, they're expected to continually do more with less, with fewer staff, and I really feel that we're staring in the face of a recruitment crisis within some key public services. We're seeing it in social care, in domiciliary care, and we're seeing it actually in more areas than I've ever seen before, where we're really struggling to recruit to key posts. And after all, public services are the sum total of the people who work in them, so I think that's an issue that we have to look into as well.
Thanks for that. We will come on to these matters in a little more detail later on. Before I bring in other committee members, could I just ask one further question? I think it was Llinos who mentioned that demand is obviously significant, and so have others of you. We hear reports that Welsh Government, in response to the pressures that hospitals face, and emergency services face, will be encouraging discharges from hospital perhaps without care packages being fully in place at that stage. Is there anything that you'd like to say about that in terms of the potential pressure on local authority services? Andrew.
Yes. I think we've got to put into context that, first of all, we certainly wouldn't support anybody being discharged from hospital into our care, or home, without a care package, if we felt that they were at risk. And I have to say, in fairness, the local authorities and the health boards work together all the time on discharged patients, and we have to risk assess all the time around that—whether somebody can come home, for example, before adaptations are put in, before handrails, et cetera, where they may not need a care package, they may just simply need some additional adaptations to their home. So, it is all about the risk assessing, but I think I'm right in saying, as all council leaders, we certainly would not support any discharge of patients who we thought would be at risk of harm if they did need a care package.
But just to say, local authorities, I have to say, are really bending over backwards to support the health service. Our staff are under more pressure now, I would suggest, than at any time, even during the pandemic. We've got staff who are working back-to-back shifts, who are working overtime, because there is a real crisis in social care. And I have to say that, while we do hear health boards across England and Wales declare critical incidents and stand up their emergency plans, I would have to say that, probably all 22 local authorities, if we declared a critical incident every time our social services were under pressure, we wouldn't have been out of a critical incident for the last three years. So, I do think that, as local authorities, we are under intense pressure, and I welcome the fact that the Welsh Government has recognised that social services have to be funded alongside the health service. There is no point funding the health service unless social services get funding, because they have to work hand in hand. And I have to say, the pandemic has probably driven social care and NHS closer now than at any time previously, but we can carry on improving that relationship. And it is about working smarter and doing things better, but unfortunately, a lot of it does come down to funding. If we are to recruit and retain staff in social care, that means that it has to be funded.
Okay, Andrew. Thank you very much. I think Chris Llewelyn has a hand raised. Chris.
Yes. Thanks, Chair. Just to emphasise how closely local authorities work locally with their health boards, but also at a national level as well. There's incredibly close working between local government, the Welsh Government and the NHS. The leaders present this morning meet fortnightly with the Minister for Health and Social Services and the Deputy Minister for Social Services, so these are issues that authorities take very seriously. But, as has been highlighted already, there are massive workforce challenges for local authorities when it comes to social care and domiciliary care. There are workforce challenges across every aspect of local government service. Costs are increasing, demand is increasing, but in social care in particular, the legacy of long-term austerity, of long-term underfunding in social care is being felt at the moment. And in effect what happens is that the private and other sectors are able to respond in terms of pay pressures relatively quickly; local government and the public sector find it far more difficult to respond. As a consequence, the supply of domiciliary care staff and other social care and community care staff is incredibly difficult, and I don't think anybody should underestimate the challenges that local authorities face within the sector.
Okay, Chris. Thanks very much. Christina.
This is also—. Whilst it's about the local authorities in this space, in terms of provision of social care, we are heavily reliant upon the independent sector as well, and that independent sector is fragmented. And again, it's back to affordability. Just within my own local authority at this moment in time, our independent sector are asking for a 20 per cent increase, and we are only able to provide 10 per cent, because of our own financial situation. And the independent sector are not being unreasonable for the reasons that we've already articulated to you; they are facing them as well. But, if we are unable to bridge that gap financially, again that's going to make that sector even more fragmented and delve us deeper into the problems that we are already facing.
I think, just coming back to domiciliary care and the packages of care question that you asked: the focus at the moment is very much on discharging people from hospital. But what is being missed is that 80 per cent of our demand is in the communities, and we are not able to meet the need within our communities at this moment in time, because the focus is on discharge from hospitals. And without us being able to meet that need within the community, there is more demand that is actually going to hit the front door of A&E in our hospitals. So, it's that vicious circle that we are trying to address at this moment in time. And we are working with health colleagues, because what we need to focus on is reducing the demand and the flow that's coming into the front door of our hospitals, as well as dealing with the back end of the system. Thank you.
Thank you very much. Okay, we'll move on, then, to committee members, and firstly, Sam Rowlands. Sam.
Thank you, Chair, and good morning, everybody. I appreciate your time on this Thursday morning, especially this time of year when it's really busy for you. Just in terms of the AEF—the aggregate external finance—we've seen, as mentioned, the increase in the provisional settlement at 7.9 per cent, and, I think, Andrew, you mentioned earlier that it was probably a little bit better than where conversations probably started at, I guess, a few months ago.
I suppose you've probably commented on my initial question, which was around your assessment of the settlement, but I was wondering now how you're able to plan in the medium term, how you're finding that process, because I guess you are having to deal with such difficult challenges right in front of you today. How are you finding the ability to plan beyond even the next financial year, looking three, five years down the line, in light of the provisional settlement and some of the multi-year indications that you've had as well?
I think having the provisional settlement for three years is something that we've lobbied on. So, obviously, last year, we had last year's settlement this year, and, then, next year. The difficulty we have, though, is that, because it's all based on the UK Government's spending review, the Welsh Government will say that they don't know—[Inaudible.]—the spending review, what their budget's going to look like, and, therefore, they can't give us a rolling three-year settlement.
One of the things that would be really helpful, I think, for public services across the board, is if the UK Government was able to do a rolling three-year settlement. So, every year, they would refresh their base for our public services, and that would allow, then, each year when Welsh Government sets its budget, the public sector, then, would get an indicative two-year allocation for the following two years. So, that would allow us, then, to plan on a multi-year basis. The problem is, on year one of the spending review, it's excellent, we get a three-year settlement, or at least indicative figures, but, of course, on the last year, it's only for that one year, and it's a continuous cycle of not knowing where we're going. And that does lead on, sometimes, potentially, to not good decision making, because we could end up reducing services, or sometimes even consulting on cutting services that we don't then go through with because, lo and behold, then, we get additional funding. So it doesn't make for good spending, and for good public services, to keep working on this cycle. So, I do think a longer term solution is needed.
But, again, we've got other pressures that come out of the blue. I have to say, this morning, I'm fielding lots of calls, unfortunately; we're facing some flooding again because of the severe weather in the Valleys this morning, and, again, no doubt, we'll be redirecting resources. Three years ago this year now—three years in February—we had storm Dennis. We've redirected millions of pounds of our funding in RCT, and I know the Welsh Government's had to do the same. But we've had that, we've then had COVID, we now have the cost-of-living crisis, we've got climate change, for which all local authorities are trying to redirect budgets to transitional fleet, to do other things like rewilding areas and tree planting. So, we have continuous, new problems coming at us, or new priorities, in addition to the day job. So, while we manage all those daily things like managing the roads and collecting the bins, and running the schools, we have all these additional competing demands, which potentially, can skew the figures. But that's why the three-year planning is more important.
I think Anthony—. Yes, Anthony.
Yes, I think Sam asked an important point there about medium-term planning. What I would say is that, obviously, any budget-setting process involves a balance between relieving the immediate pressures and getting to a situation where you've got a balanced budget for the year coming. And, as Andrew and others have said, in this circumstance, you've got a working budget for the current financial year, I'm looking at more medium and longer term pressures, and how you can try and plan ahead. As leaders, we all want to be in that second space; we all want to be planning for the long term; we want to be making sustainable long-term choices rather than just firefighting.
What I'd say is that the better the settlement is, the more it enables us to get into that space and not just in putting out fires all the time. So, it will make a difference to that. It will mean that we can devote more of our attention to making sustainable choices for the long term. What it doesn't do is completely alleviate the pressures that we talked about before. So, the settlement was incredibly welcome.; it was more than we were talking about at the start, and I think it demonstrates that Welsh Government do value the services that we provide. It doesn't make the challenge easy, but it gives us a fighting chance, and as I've said, it gives us a chance to move on to what decisions can we make over four and five years to get the services that we provide in a better shape, rather than just putting out fires all the time.
Thank you very much. Llinos, I think—Llinos?
Diolch. This year, what we have with that medium-term financial plan is having a strategic vision, so we're all trying to put our council plans in place to have that five-year council plan, but then you need to finance that council plan, and that's the challenge that we constantly have. Are we operational or are we strategic, and how are we able to blend both together? Currently, I think we're more operational because of the current financial climate that we're in. We all want to be much more strategic, but to do that, we need that financial security to know that we can deliver that service within five years' time. So, it is a challenge of having that vision but also of managing the day-to-day service and delivering on that day-to-day service. So, the need for that long-term financial security is more than ever, because obviously we need to rebuild public services after this last decade as well. Diolch.
Diolch, Llinos. Sam.
Yes, thank you for those responses. I think they're absolutely fair, and probably something that, at a cross-party level, Chair, as a committee, we can perhaps discuss later as well.
On your revenue support—. On the grants being allocated in your provisional settlement this year, again we're looking at nearly £1.4 billion-worth of grants. I know over recent years, there's been a desire to see a bunch of those grants, and it has, to be fair, at times, happened, moving into the unhypothecated part of the RSG. I was just wondering what your thoughts were at the moment. Is the balance about right? Would you want to see more of those grants move into the unhypothecated element, or are you quite satisfied that the £1.4 billion-ish of grants is about right?
Thank you, Chair. Sam knows, with the WLGA, it's always argued for grants to go into the settlement wherever possible, and the reason for that is that we think that because circumstances vary between authorities, authorities need as much flexibility as possible locally in determining how funding is spent, and we think that we add as much value as possible by allowing as much local determination and placing as few restrictions on authorities as is possible. Historically, what we have always argued is that where the specific grant is linked with a policy intention, then it's appropriate to fund that policy direction through a specific grant, but once the policy is embedding and it's clear that it's being delivered, then the funding should go into the settlement, and the argument is that there are costs associated with audit and administration of those grants, and that that funding could go into services. So, we always promote that idea, and inevitably as well, I think, with Governments, there's a middle ground; Governments and Ministers when they're delivering new policies, they want to see the funding that they allocate to those policies delivered directly to those policies. So, there is an ebb and flow to this debate, but I think generally we would like to see as much grant funding as possible. We would still like to see as much as possible going into the settlement.
Yes, thanks. I'm really conscious that time is flying, so I'll just quickly perhaps get a brief response on your assessment of any concerns you might have of the impact of the new non-domestic rating list, which is due to come into force in April, and your ability to collect those new non-domestic rates at all—any concerns there?
Chris, again? Chris.
Yes. It's just the capacity of the Valuation Office Agency and the Valuation Tribunal for Wales if there are increased levels, whether there's the capacity there to deal with that. Inevitably, when changes like this are—. When change is introduced, there is turbulence in the system, and I think we need to see details of the transition. So, I think there may be difficulties. At this stage, it's difficult to assess, I think.
Yes. So, we'll have to wait and see. Okay. Okay, thanks, Sam. Carolyn Thomas.
Thank you, Chair. I just want to ask you questions about capital funding and to what extent do you believe that the £180 million that's been allocated provides you with sufficient funds to implement Welsh Government's commitments to prioritise the most vulnerable and public services whilst continuing to create a stronger, fairer and greener Wales, which are the Welsh Government's priorities, and is enough for you to actually do your basic funding as well? I see there's nothing this year for highways. Last year, some funding was made available; I think it was some underspend from COVID. But I heard, Andrew, you this morning on the radio, on having to deal with flooding, and I know of the impact flooding and climate change has on our highways and the resilience of highways, going forward—the culverts and resurfacing roads is a major issue, isn't it, trying to keep on top of it. So, your views on that, really, please.
Do you want to come in, Andrew?
Yes, thank you. I think the general capital—we welcome the increase in the general capital this year, which has increased back up to previous levels, prior to the current financial year. So, that is welcomed. In terms of some of the specific funding, the Welsh Government has allocated funding for things like flood resilience, and again we welcome the additional funding that has been put into that over the three-year term of the spending review.
Highways in particular, though, that is probably a pressure area for most local authorities, especially when we have wet and cold winters. Unfortunately, all of us, we see the bane of our lives with potholes and roads breaking up. But also, as we get more and more wetter winters—the winters are becoming, unfortunately, intense periods of weather like we're having now—we do suffer with flooding. So, things like the resilient roads funding, which we've had for a number of years—I know that has reduced in recent times—that is still very welcomed by local authorities. The resurfacing capital funding we had in place for three years has now ended. If there could be a possibility of further capital funding for our highways across Wales to see local authorities carrying out substantial resurfacing works, that does actually save us on revenue. It's much more cost-effective to resurface roads and do it in one go properly, if a road is failing, rather than constantly filling potholes over several years.
So, there are some areas to trade off, but of course capital is more challenging and the Welsh Government and Ministers have explained that to us. But we do lobby for additional capital and, if the committee wanted to recommend additional capital, and if the Welsh Government can find additional capital, I'm sure, for all council leaders and officers across Wales, it would be very welcome, because we do have lots of areas—whether it's our schools, our care homes, our children's homes, there is always a demand. And certainly, because of the cost pressures with inflation, some of the costs in terms of new build for schools and renovation works have gone up by 25 per cent to 30 per cent at least. So, there is additional pressure on us, actually, because in effect our spending power with the capital money we have has diminished because of inflation. Thank you.
That's a very important point, I think, that Andrew made at the end there. The return to historic levels of capital is very welcome, but the spending power that we have is really being cut from the other end of the equation, with costs for construction and all sorts of capital works really increasing and putting more pressure on council leaders to find match funding, to find other sources of funding, to top up to meet those increased costs, or, inevitably, you end up doing less with the same amount of money.
And Christina. Christina.
Yes, thank you. Yes, and also the availability of contractors, actually, out in the market now is—[Inaudible.]—with a number of major contractors actually going into administration. So, very much, the contracting market is very much picking and choosing the types of projects that they want to compete for. And a number of projects, certainly within my own authority—and I know it's mirrored across other authorities—we're having to value-engineer them back, because when the prices do come in, they're significantly higher than what we've estimated. And particularly around the twenty-first century schools programme, that's a significant pressure area for us, and, also, in the emerging Welsh housing quality standard phase 2 programme as well, it is an area of concern for us.
But what I'd also like to just add, though, is capital investment is an area that is part of our transformation as local authorities. We're all looking at our building assets and looking at repurposing them, so, wherever we are building new facilities, we are looking at them as multipurpose buildings, so that we're able to offer a wide range of services from fewer buildings, and that is one of the areas that all local authorities are focusing on. As part of the learning from COVID, we know we can work in an agile way and we know that we can reduce our capital stock that we have. Thank you.
Ie, diolch. Mae'n bwysig nodi bod y gyllideb gyfalaf, er ei bod hi wedi codi o ran gwerth, mae gwerth ariannol yr un swm yn werth llai i ni. Mae hynny'n bwysig i nodi, ac roeddem ni fel cabinet yn trafod yn anffurfiol y gyllideb gyfalaf yma yn Ynys Môn ddydd Mawrth, ac mae’n gallu ni i wneud lot efo’r gyllideb gyfalaf wedi mynd yn brin iawn. Mae DFGs wedi landio yn y gyllideb gyfalaf; mae pethau dydd i ddydd fel rhedeg gwasanaethau—rydym ni hyd yn oed yn rhoi £2 filiwn o’n cyllideb gyfalaf tuag at gynnal priffyrdd ac yn y blaen—felly, mae’r gyllideb gyfalaf yn andros o gyfyngedig i beth oedd o flynyddoedd yn ôl, ac mae hynny’n golygu bod y cynlluniau trawsnewidiol yna yn mynd yn is lawr ar y rhestr, sy’n golygu bod ein gwasanaethau cyhoeddus ni’n gwanhau a ddim yn mynd i’r unfed ganrif ar hugain fel y dylen nhw, oherwydd y prinder yn y cyfalaf. A’r flwyddyn ddiwethaf, fe wnaethom ni yn Ynys Môn roi rhywfaint o gyllideb refeniw tuag at y cyfalaf er mwyn trio symud ychydig o gynlluniau ymlaen er mwyn hyrwyddo pethau sydd ddim yn—. Felly, dydy’r gyfalaf wirioneddol ddim yn ddigon da—[Anghlywadwy.]—i wneud i’r firefighting yma barhau.
Thank you. It's important to note that the capital budget, although it's increased in terms of value, it is worth less to us. That's important to note, and we as a cabinet were informally discussing the capital budget in Anglesey on Tuesday, and our ability to do much with that capital budget is very little. The disabled facilities grants have landed in the capital budget; the day-to-day things in terms of running services—we're even putting £2 million of our capital budget towards maintaining highways—so, the capital budget is very limited compared to what it was years ago, and that means that the transformational plans are getting lower on the list, which means that our public services are weakening and aren't moving into the twenty-first century as they should, because of capital issues. And last year, we in Anglesey put some revenue funding towards the capital budget in order to push some proposals forward that aren't—. So, the capital simply isn't sufficient, and this firefighting will continue.
Carolyn, I think Chris Llewelyn would like to come in as well. Chris.
Yes, just to—. I think most of the points I was going to make have been covered, Chair. I think every one of the contributors has said, in itself, the capital allocation, in other circumstances, authorities would be happy with. But the challenge is—it's been a feature of all this discussion—the inflationary pressures that authorities face and the workforce pressures as well—I think Christina mentioned the difficulty in terms of construction companies—the workforce pressures that authorities face, the increase in material costs, so the purchasing power that authorities have with the capital available has been diminished.
Programmes like twenty-first century schools—the great success of them has been their flexibility and the capacity to adapt to changing circumstances, so what the current circumstances mean is that the current programme will be extended in terms of time period, but, if at some point in the future, more capital is available and circumstances change, then there is the flexibility there to respond as well. But, again, these are very challenging times for local authorities.
Just one more, really, about the resilience of you, going forward, delivering some of these capital projects. I know you said earlier about having planning officers, drainage officers and delivering the active travel fund, even, having highway technical officers as well. So, just is there anything else you want to add on that?
Anybody like to offer anything on that? Andrew.
Yes. It's just worth flagging up, actually, although we do see pressures around, in particular, retention and recruitment in areas such as social services, and everybody probably will know about those problems, we actually have a lot of problems across most other services. I would estimate, probably, in RCT right now, we've got probably between 100 and 200 vacancies across the board. When we tried to recruit recently for a specialist tips team, to have additional resource because of the problems we've had in the Valleys with the weather with coal tips, we've had to go out two and three times in terms of rounds of trying to recruit engineers. There is a real shortage in terms of bridge engineers and highway engineers even for things like active travel routes, which, quite often, are complex in terms of some of the infrastructure that's alongside them. There is a real pressure that local authorities face. Of course, because of the cost-of-living pressures and the cost of inflation, a lot of recruitment is driven by wage salaries, so we are competing with the private sector, and where we can't then recruit directly in-house, we end up having to go to agencies, or we have to go to consultants. To be quite frank about it, the prices that we pay to consultants are sometimes two or even three times the salary if we employed somebody, because that is the mark-up and they know that, unfortunately, because we are in dire need of some of these engineers or highways or other officers, they can name their price, almost. So, we are facing recruitment and retention problems. But that's why my own local authority and a lot of local authorities, in recent years, have introduced either graduate trainee programmes or apprenticeship schemes where we're trying to recruit and build our own staff.
Okay. Thank you.
Did you want to add something, Chris Llewelyn, or is that an old hand, Chris, as it were?
No, I think—
You're happy. Okay, we'll move on then to Joel James. Joel.
Thank you, Chair, and apologies about this morning, it's been an absolute nightmare in terms of the technical issues. I just want to thank everyone for coming today to the meeting, and it's nice to see you again, Councillor Morgan. You're looking good, as they say. I've got some questions on council tax and the council tax reduction scheme, so apologies if they've already been asked or answered. Unfortunately, I was dipping in and out of the meeting because of linking up with the technical officers. I know that, for example, prior to the budget, it was estimated that there was going to be an average increase of a 4 per cent rise for council tax, and I just wanted to know what your thoughts were on the budget now and how it might have impacted that figure, but then, also, how you saw meeting that aspiration, where the Welsh Government has asked you then to take into account any rise against the cost-of-living pressures. Thank you.
Obviously, council tax setting is always a difficult decision for any councillor of any political shade, because you've got balancing people's costs of living on one hand with the need to retain valuable local services on the other. So, it's not an easy choice in any year, even more so this year, given the cost-of-living crisis and the huge pressures we've talked about—£800 million of pressures aren't going to go away of themselves. Certainly, the better the settlement is, the more space it gives councils to have a lower council tax rise. You've seen in England there seems to be almost a uniform 5 per cent rise across the board because of the pressures on the services there. We've had a Government that's talked to us about the pressures on those services and has tried to meet us halfway, so that puts us in a better position, but it's still a very difficult situation, given the huge pressures that have been described before.
Joel. Oh, Llinos.
Dwi'n meddwl ei fod o'n bwysig nodi hefyd mai dyma ydy'r her, ein bod ni'n sôn am 4 y cant neu 5 y cant, ond dydy hynna ddim yr un fath ym mhob un awdurdod. So, dwi'n gwybod eich bod chi'n ymwybodol o hyn, ond mae o'n bwysig ein bod ni wastad yn ystyried beth ydy gwerth hynny mewn punnoedd i'r cartrefi yma, achos mae 5 y cant yn Ynys Môn yn £1.32 ar fand D. So, jest fath â'n bod ni'n gwybod hynny, yn fwy na siarad am y canran yma, achos efallai fod yna rai llefydd lle mae o ond yn mynd yn 3 y cant, ond efallai fod y gost yn llawer uwch na 5 y cant mewn awdurdodau eraill. So, dwi'n meddwl bod angen inni ystyried y gwerth ariannol i boced y cyhoedd wrth wneud hynny. Diolch.
I think it's also important to note that this is the challenge, that we're talking about 4 per cent or 5 per cent, but that's not the same across the board in terms of authorities. I know you're aware of this, but it is important that we always take into account what the value of that is in pounds and pence to these homes, because 5 per cent in Ynys Môn is £1.32 in band D. So, we just need to be aware of that, rather than talking about the percentage, because there are certain areas where it would be only 3 per cent, but the cost will be far greater than 5 per cent in other authorities. So, I think we need to consider the financial value and the impact on the public's pocket. Thank you.
Diolch, Llinos. Chris Llewelyn.
Thank you, Chair. It's just to emphasise the difficult or challenging choices that authorities have to make. In any ordinary year—. In other circumstances, at any point over the last 20 years, a 7.9 per cent average settlement increase would seem incredibly generous, in the same way as the 9.4 per cent of last year and the three year indicative figures. Authorities would have been really delighted with that situation. But, these are unprecedented circumstances. With the global economic pressures coming to bear, we've seen nothing like it for a long period of time and it's been a feature of all of today's discussion. Authorities are in this difficult position. Circumstances vary across Wales, as has been reflected today, but authorities are in this difficult situation of trying to balance, using the—. When inflation is 10.5 per cent or 11.5 per cent, a settlement of 7.9 per cent doesn't plug the gap. They have to look at using their reserves or balances, increasing council tax, and cuts in services. None of these choices are particularly palatable, and they are very difficult for authorities.
As we've heard this morning as well, any cuts in services are taking place against a backdrop of increasing demand for services. We've seen the debate during the last few days with regard to health and some of the lifestyle choices that people make. We know that, in the current climate, we would like to see people lead more active lives, and yet local authorities are faced with the choice of having to cut back on their leisure services, leisure centres, swimming pools and so on. Nobody should be in any doubt that authorities are facing very difficult decisions and, where council tax levels do increase, those decisions aren't taken lightly.
Okay, thanks, Chris. Christina.
Thank you. Just to add to what Chris has just said, I think the challenge that all local authorities are facing is that we are very mindful that we are essentially asking people to pay more but in the knowledge that they're going to receive less. Whichever way we package that, that is a very difficult ask, isn't it? Thank you.
Absolutely. Okay. Diolch yn fawr. Joel.
Thank you, Chair, and thanks ever so much for those responses. I've only really got two questions left, if that's okay, Chair. The first one is about council tax collection rates. I know, during the pandemic, that the Welsh Government provided additional funding for councils in order to help them with their collections, but obviously now that has been withdrawn. I just wanted to know the impact that has had on local authorities and the impact that has had then in terms of the council tax payer, if any.
Then, the second question I want to ask is with regard to the council tax reduction scheme. We've heard from previous evidence sessions about how—well, actually, I've got two questions to ask on this, sorry—not everyone who's eligible for the council tax reduction scheme actually applies for it. I just wanted to know some idea about your thoughts on that and how that could be addressed. But also, the amount that is paid out in the council tax reduction scheme—what's the word I'm looking for—is far more than the amount that councils get in order to fund it. I just wanted to know the impact that is having and how councils plan to address the funding shortfall. Thank you.
Okay, Joel. Anthony.
Do you want me to go first on those? Firstly, on collection, collection is a pressure. We're still getting the figures together, but there has been a pressure on collection rates from the pandemic and now into the cost-of-living crisis, and that's something that we've had to factor in. We reduced our assumed collection rate in our budget two years ago now, I think, to make an assumption of that, so we didn't end up with a hole in our budget. That's a challenge, obviously, because if you reduce the assumed collection rate there's less money in your budget, but councils are doing all they can to ensure collection remains as high as possible.
On the council tax reduction scheme, it is a challenge. It's always been a challenge, as it is with many benefits that don't get claimed by people who are entitled to them. We've invested in our benefits advice team and financial inclusion teams, who help identify people who could be entitled to benefits or people who are going through financial crisis and make sure that they apply so that they can get that money in the door. I know that council revenues and benefits teams across the country have been really going above and beyond in the last two years to get money out to people during the pandemic and now, in this cost-of-living crisis, will be stepping up their efforts to try and make sure that people who are entitled to council tax reduction and entitled to other benefits claim as much as possible, rather than getting caught in a poverty trap.
Okay. Thanks, Anthony. Andrew, did you want to add anything?
I was going to just say that, relatively, the council tax collection rates appear to be holding up probably better than a lot of us would have thought in terms of collection and people being able to pay. I suppose one of the questions that Joel James asked was about the council tax reduction scheme. That is a pressure for local government, because that envelope of funding is capped, and has been for a number of years. So, in effect, in our own local authority, for example, in Rhondda Cynon Taf, we always tell members that if we put up council tax by 1 per cent, we only actually get about 80 per cent of the additional income, because, in effect, almost 20 per cent of the additional income is lost because of the council tax reduction scheme and those who don't pay council tax. So, in effect, we have to pay that element. So, we do lose around 20 per cent every time we put the council tax up. Now, that doesn't sound a huge amount, but if you consider that, if a local authority, say Rhondda Cynon Taf, was to put council tax up by 4 per cent, and we needed 4 per cent extra, we have to actually put the council tax up 5 per cent to get 4 per cent extra income. So, it does have a bearing on it, but it's something that local authorities have had to manage for a number of years because that envelope of funding, as I say, has been capped probably for almost a decade now, I believe.
Thank you, all, very much, and thank you, Joel. We'll move on to Mabon ap Gwynfor. Mabon.
Diolch yn fawr iawn, Gadeirydd. Bore da. Diolch ichi am fynychu. Gaf i gychwyn—? O ran fframio'r drafodaeth yma, rydych chi wedi sôn am y gwasanaethau sydd yn angenrheidiol. Rydyn ni'n gwybod bod yna wasanaethau sydd yn statudol y mae'n rhaid i awdurdodau lleol eu darparu, ond yna mi ydych chi'n darparu gwasanaethau sydd yn anstatudol, ac, wrth gwrs, os ydych chi'n gorfod edrych i wneud unrhyw doriadau, mae'r rheini'n mynd i fod yn y gwasanaethau hynny sydd yn anstatudol. Felly, beth ydyn ni, mewn gwirionedd, yn edrych arno yn fan yma? Pa wasanaethau sydd yn debygol o gael eu torri ar draws y bwrdd yng Nghymru? Rydyn ni'n gwybod, er enghraifft, fod Powys wedi sôn am gau canolfannau hamdden, ac yn y blaen. Beth fydd awdurdod lleol yn edrych fel o ran gwasanaethau yn dilyn toriadau sylweddol? Llinos.
Thank you very much, Chair. Good morning to you all, and thank you for joining us. Could I start—? In framing this debate, you've talked about those core services. We know that there are statutory services that local authorities have to provide, but then you also provide non-statutory services, and, of course, if you had to look to make any cuts, they will be to those non-statutory services. So, what are we really looking at here? Which services are likely to be cut across the board in Wales? We know, for example, that Powys has mentioned closing leisure centres, and so on. So, what will local authorities look like in terms of services following these cuts? Llinos.
Beth fuaswn i'n dweud yw mai beth mae'r rhan fwyaf o'r awdurdodau yn trio'i wneud eleni ydy trio balanso'r llyfrau wrth ddefnyddio arian wrth gefn, wrth wneud mân doriadau a chodi'r dreth gyngor yn barod erbyn 2024-25. Yr adeg yna, dwi'n meddwl, y byddwn ni'n gweld y gwir doriadau yna i wasanaethau. So, beth rydyn ni'n mynd i'w weld ydy awdurdodau'n defnyddio arian wrth gefn er mwyn paratoi i'r toriad caled yna sydd i ddod, achos, fel roeddwn i'n nodi gynnau, rydyn ni i gyd yn rhagweld y bydd y flwyddyn nesaf yn waeth arnom ni eto.
Beth ydyn ni'n edrych arno ydy pob dim, ond yr her i ni, fel y nodwyd gynnau, ydy bod y gwasanaethau anstatudol yn cael effaith ar y gwasanaeth statudol, megis hamdden ac iechyd. Os ydyn ni'n cau canolfannau hamdden—ac efallai fod y rhai llai proffidiol i ni yn yr ardaloedd mwyaf difreintiedig, y gallwch chi ddadlau sydd eu hangen nhw fwyaf, ond eto efallai efo'r costau uchaf i ni; mae hynny'n amlwg mewn ardaloedd fel Môn a Gwynedd, sydd efo gordewdra plant a phobl ifanc yn uchel—mae hwnna'n mynd i gael effaith andwyol ar y gwasanaeth iechyd mewn nifer o flynyddoedd, onid ydy?
Rydyn ni hefyd yn edrych ar faterion fel datblygu'r economi. Rydyn ni wedi gweld bod awdurdodau wedi trio dal gafael ar wneud cynlluniau, eu bod nhw'n codi unedau busnes y maen nhw'n eu cefnogi, ac mae'r rheini wedyn, yn amlwg—. Yn yr argyfwng costau byw, mae sicrhau'r economi yn fwy allweddol nag erioed, ond eto, gan nad ydy o'n statudol, ydyn ni'n edrych ar doriadau yn y maes yna?
Mae gwarchod y cyhoedd yn un maes sydd wedi derbyn nifer o doriadau dros y degawd diwethaf, ond, yn ystod COVID, fe ddaeth pawb i weld parch i dîm iechyd yr amgylchedd fwy nag erioed. Felly, rydyn ni'n gwybod mai jest abówt manejo wnaethon ni yn yr argyfwng, gydag ewyllys da y timau yna, ond, eto, pe bydden ni'n torri yn fanna ac yn cael argyfwng o'r fath eto, fuasem ni ddim yn gallu delio efo argyfwng fel COVID. A hwnna yw'r un neges, dwi'n meddwl, sydd yn dod yn glir gan yr arweinyddion a'r prif weithredwyr: os daw argyfwng fel COVID eto, dydy'r gwydnwch ddim yn llywodraeth leol i ddelio efo argyfwng. Dyna ydy'r her. Felly, yr ateb syml i Mabon ydy bod yr awdurdodau'n gorfod edrych ar bob dim, ac, yn anffodus—a dwi'n gwybod eich bod chi'n gwybod hyn—fel awdurdodau lleol, rydyn ni'n gorfod balanso'r llyfrau'n statudol. Felly, nid mater o obeithio; mae'n rhaid inni wneud yn siŵr bod ein syms ni yn adio ac, yn anffodus i ni, efallai y byddwn ni’n gwneud penderfyniadau ofnadwy o anodd oherwydd bod yn rhaid i ni, yn statudol, falansio’r llyfrau, yn wahanol i rai cyrff cyhoeddus eraill. Diolch.
What I would say is that what most local authorities are trying to do this year is to try and balance the books by using reserves and making minor cuts and raising council tax in preparation for 2024-25. I think that's when we will see the real cuts kicking in to services. So, what we'll see is local authorities using reserves in order to prepare for that harder cut that's to come, because, as I noted earlier, we're all anticipating that next year will be even worse for us.
What we're looking at is everything, but the challenge for us, as was noted earlier, is that non-statutory services do have an impact on statutory services—so, leisure and health are connected. If we close a leisure centre—and perhaps those that are least profitable are in the most deprived areas, and you could argue that that's where they're most needed, but that's where the costs are highest, and that's clear in areas such as Gwynedd and Anglesey, where child obesity levels are high—that's going to have an impact on health in years to come.
We're also looking at things like economic development. We've seen that local authorities have tried to keep proceeding with proposals and with support for business developments, and so on. In a cost-of-living crisis, ensuring a strong economy is more important than ever, but, again, are we looking at cuts in that area because it's non-statutory?
Public protection is an area that's seen a number of cuts over the past decade, but, during COVID, everyone started to understand the importance of the environmental health team more than ever. We just about managed through the crisis with the goodwill of those teams, but, again, if we make cuts there and see another similar crisis to COVID, then we couldn't cope with that. And that's the one message that comes through from the chief executives and leaders: if we see another COVID, then the resilience isn't within local government to deal with such a crisis again. That's the challenge. So, the simple response to Mabon is that local authorities have to look at absolutely everything and—I know that you're aware of this—as local authorities, we do have to balance the books statutorily. So, it's not a matter of hoping for the best; we have to ensure that our sums do add up and, unfortunately for us, we will have to make some very difficult decisions, perhaps, because we have do have that statutory responsibility to balance our books, unlike some other public bodies.
I think Llinos’s point about health and leisure is a great example of how non-statutory and statutory services are linked. We want to comply with the aims and objectives of the Well-being of Future Generations (Wales) Act 2015, and we can only do that by investing in those early intervention and prevention services that are so key to keeping people out of the acute services. If we’re not careful—. We’ve all seen the graph of the jaws of doom, as it’s called in local government circles, where at a certain point in time we can spend money on nothing other than social care, and if we don’t spend money on those non-statutory services, then we’ll get there ever quicker.
Also, the point about back office pre pandemic has shown itself not really to be as back office as it was. My planning department or environmental health used to wince every time I came into the building, because, by dint of protecting schools and social care, they knew I’d be trying to get another chunk of money out of them for the next budget. The environmental health teams in councils have shown themselves to be invaluable during the pandemic, leading the response, keeping people safe, running the test and tracing scheme that we had in Wales, which didn’t suck up huge amounts of money into the private sector like in England. So, they’re no longer the targets, perhaps, for budgetary savings that they once were—a combination of showing their worth and a decade of cuts to those budgets means they’re a skeleton in many authorities—I would say in most, in fact. So, there are really no easy ways to turn.
The other thing I’d say is the public don’t recognise this distinction between statutory and non-statutory services. Lots of the services the public value most are technically non-statutory services, so we have to keep that in mind as public representatives, too.
Thanks, Anthony. I think Chris Llewelyn and then Christina wanted to come in as well, Mabon. Chris.
Diolch yn fawr, Cadeirydd. Jest i ategu pwyntiau Anthony a Llinos, rydych chi’n codi pwynt dilys iawn, Mabon—mae rhyw 80 y cant o wariant awdurdodau lleol yn mynd ar wasanaethau statudol, 20 y cant ar wasanaethau sydd ddim yn statudol, gwirfoddol. Ond un o’r pethau rŷn ni’n ymwybodol ohono yn hanesyddol yw bod y 20 y cant yna wedi dioddef nifer o doriadau dros y degawd diwethaf neu fwy pan fod cyllid cyhoeddus wedi cael ei dorri, a’r eironi yw, wrth gwrs, fel roedd Anthony yn sôn, ein bod ni’n ymwybodol bod y cyhoedd y gwerthfawrogi’r 20 y cant yna o wasanaethau—pethau fel diwylliant a hamdden, gwasanaethau gweledol. Felly, eto, mae’n dipyn o her i awdurdodau; yn statudol, maen nhw’n gorfod adfer gwasanaethau fel gwasanaethau cymdeithasol, addysg, ac yn y blaen, ond yr hyn maen nhw’n deall yn iawn yw bod y cyhoedd yn gwerthfawrogi’r 20 y cant sydd ddim yn statudol ond sydd mor bwysig i fywyd normal pobl yn ddyddiol, ac o ran iechyd ac ansawdd bywyd, sy’n cyfrannu’n helaeth at y ffactorau hynny.
Thank you very much, Chair. Just to add to Anthony and Llinos’s points, you raise a very valid point, Mabon—some 80 per cent of the expenditure of local authorities is on statutory services, and 20 per cent on services that are not statutory. But one of the things that we’re historically aware of is that that 20 per cent has suffered numerous cuts over the past decade and more when public funding has been cut, and the irony, of course, as Anthony mentioned, is that we’re aware that the public really appreciate that 20 per cent of non-statutory services—culture, leisure, services that are very visible in our communities. So, it’s quite a challenge for local authorities; statutorily, they do have to restore services such as education and social services, but what they fully understand is that the public do really value that 20 per cent that’s non-statutory but is so very important to normal, everyday life for people in Wales in terms of their health and quality of life, and it makes a great contribution in that regard.
Unfortunately, it’s not as straightforward as statutory versus non-statutory, for the reasons that have been presented. But, if I may say, if you think of the breakdown of our budget, where is the money spent? It’s essentially service provision, front-line service provision, it’s staffing and it’s buildings. As I said earlier, we’re looking, all of us, at reducing our building stock and reducing costs through adopting the agile model. We want to protect our staff, because we recognise we need to reskill our staff in order to protect our services. We have to transform our services, looking at our services through a different lens, collaborating wherever we’re able to. What commercialisation opportunities are there for us? What digitisation, automation processes are available to us? And how do we provide those services as a package in order to maximise efficiencies and effectiveness?
But the challenge we have—I think it was Llinos who mentioned it earlier—is juggling and balancing the day job, because of the demands that we have, which have exceeded what we’ve been dealing with previously, whilst building in capacity to transform, and, again, the need for further financial planning and having certainty around our financial forecasting as well as managing that transformation programme is key. But again, as we've mentioned earlier, the problems that we have in recruiting and retaining staff, and also recognising that when we are recruiting staff, we are looking for different skills. As well as the technical skills where we know we have shortfalls, we are looking at much more innovative skillsets than maybe what we've had previously. And as Andrew mentioned earlier, we are competing with the private sector. They've caught up with us. The benefit packages that we are able to offer as local government have been far exceeded now by the private sector, and cash is key now, and we are unable to respond as quickly as the private sector in that space, unfortunately. Thank you.
Okay. Diolch yn fawr. Mabon.
Diolch yn fawr iawn. Dwi'n meddwl bod y neges yna yn reit glir o'r heriau sydd o'ch blaen, a gobeithio fydd o'n cyfoethogi ein dealltwriaeth ni a'r cyhoedd, o leiaf. O fynd ymlaen at wasanaethau oedolion a phlant, yn gyffredinol o edrych ar Gymru ar hyn o bryd, sut fuasech chi'n categoreiddio'r lefel risg bresennol ar gyfer y ddarpariaeth o ran gweithwyr gwasanaethau oedolion a phlant yn ein hawdurdodau lleol ni?
Thank you very much. I think the message was quite clear in terms of the challenges that you're facing, and hopefully it will enhance our understanding and the public's understanding too. Moving on to adult and children's services, generally speaking in looking at Wales at the moment, how would you categorise the current risk level for the provision in terms of adult and children's services in our local authorities?
Ie, diolch. Dwi'n meddwl bod o'n bwysig peidio dod â fo i gyd yn un. Dyma ydy'r her rydyn ni wedi gael. Mae pwysau yn y gwasanaethau oedolion yn amlwg ar hyn o bryd oherwydd newid mewn demograffi, oherwydd y newid mewn amodau gwaith, fel sydd wedi cael ei nodi, a diffyg staff, a hefyd oherwydd cymhlethdod anghenion gofal unigolion. Ac mae hynny'n newid ledled Cymru gyfan hefyd. So, mae gwasanaethau oedolion mewn sefyllfa fregus am nifer o resymau.
Mae'r gwasanaeth plant wedyn hefyd mewn sefyllfa fregus. Mae hyn yn ymwneud ag effaith COVID ac effaith yr argyfwng costau byw ar yr amodau mae teuluoedd yn byw ynddynt. Rydyn ni wedi gweld cynnydd aruthrol mewn trais yn y cartref, cynnydd mewn camddefnyddio sylweddau, ac wedyn yr argyfwng costau byw yn cael effaith ar fywyd teuluoedd fuasai ddim wedi bod ar ein gofyn ni o'r blaen. Felly, beth rydyn ni'n weld ydy bregusrwydd cymdeithas yn creu nifer helaeth o ymholiadau i'n gwasanaeth ni ar gyfnod lle mae pryder staffio, fel sydd wedi cael ei nodi yn barod.
Felly, y rheswm dwi eisiau gwahaniaethu rhyngddyn nhw ydy bod y costau yn amrywio hefyd. Rydyn ni'n ymwybodol yn y maes plant os oes gennym ni un plentyn yn dod i ofal efo anghenion gofal dwys, gallai hynna fod yn £0.5 miliwn i un awdurdod. Yn amlwg, dydy'r costau ddim mor sylweddol yn y gwasanaeth oedolion, ond mae'r niferoedd yn fwy yn y gwasanaeth oedolion. Mae hwn yn risg uchel ar hyn o bryd, ond a gaf i nodi bod gwasanaethau cymdeithasol wedi bod yn risg uchel ers nifer o flynyddoedd, ond nad ydynt wedi bod yn derbyn y sylw haeddiannol tan yn ddiweddar yma?
Yr her fwyaf i ni fel arweinwyr ydy sicrhau bod y gwasanaethau yma yn parhau yn ystod yr argyfwng rydyn ni'n ei wynebu rŵan, a'n bod ni'n gallu—. Fel roedd Andrew yn dweud gynnau, fuasem ni ddim yn dod ag unigolion allan o'r ysbyty heb sicrhau eu bod nhw'n ddiogel. Yn yr un modd, fuasem ni ddim yn cadw teulu allan yn y gymuned heb ymyrraeth, achos mae cadw nhw'n ddiogel yn hanfodol bwysig i ni. A dyma ydy'r rhwygiadau rydyn ni'n eu derbyn fel arweinyddion pan rydyn ni'n gosod y gyllideb, gwybod y risg o dynnu—. Roeddech chi'n sôn am anstatudol. Mae gennym ni gyd wasanaethau anstatudol yn ein meysydd gwasanaethau cymdeithasol er mwyn atal y risgiau yna. Yn amlwg, hwnna ydy ein mitigation ni i'r risg, ond buasai tynnu hwnna allan yn creu mwy o risg i ni.
Felly, mae o'n faes hynod o gymhleth, a dydw i ddim yn meddwl bod yna ddealltwriaeth digon cynhwysfawr o'i gymhlethdod o, ond mae o'n mynd i waethygu tra bod ni—. Mae'r flwyddyn yma yn mynd i fod yn anoddach fyth arnom ni yn y maes yma, ac mae gennym ni ddyletswydd fel arweinyddion i sicrhau bod y maes yn cael y sylw, ond eto bod y gweithwyr yn y maes yn cael y parch haeddiannol hefyd oherwydd yr heriau maen nhw'n trio delio â nhw o ddydd i ddydd.
Thank you. I think it's important not to bundle it all together. This is the challenge that we face. Pressures in adult services are apparent now because of the change in demography, changes in working conditions, as has been noted, and shortages of staff, and also because of the complexities of the care needs of individuals. That's changing across Wales. So, adult services are in a vulnerable situation for a number of different reasons.
Children's services are also vulnerable. That's related to the impact of COVID and the impact of the cost-of-living crisis on the conditions that families are living in. We've seen a huge increase in domestic violence, in substance abuse, and there's also the cost-of-living crisis that is having an impact on the lives of families that perhaps wouldn't have been on our radar in the past. So, what we're seeing is social issues creating a significant number of enquiries to our services at a time when staffing concerns are very much an issue, as has already been noted.
The reason I'm trying to unbundle this is because the costs vary too. We are aware in children's services that if a child with particularly intensive needs comes into care, that could be £0.5 million in one authority. The costs aren't as great in adult services, but the numbers are greater in adult services. This is a high risk at the moment, but could I also note that social services have been high risk for a number of years, but they haven't been given the attention they deserve until very recently?
The greatest challenge for us as leaders is to ensure that these services are maintained during the crisis that we're currently facing, and that we can—. As Andrew said earlier, we wouldn't be taking individuals out of hospital without the proper care package, just as we wouldn't leave a family out in the community without intervention, because keeping those people safe is crucially important to us. And these are the problems that we face as leaders when we're setting the budget, that we're aware of the risk of removing—. You talked about non-statutory services. We all have non-statutory services in the social services sphere in order to prevent those risks. Those are the mitigations against those risks, but removing those would create greater risk for us.
So, it is a very complex field, and I don't think there's a comprehensive understanding of the complexities, but it will get worse while we—. This year is going to be even more difficult for us in this area, and we have a duty as leaders to ensure that it's given due consideration, but also that the workers in this area are given the respect that they deserve because of the challenges that they are facing from day to day.
Diolch am yr ateb yna. Mae'r pwynt olaf yna yn dod â fi at fy nghwestiwn nesaf. Rydyn ni wedi sôn am yr angen i ddangos parch i'r gweithlu yn y sector gofal cymdeithasol, ac, wrth gwrs, mae'r cyflog byw go iawn yn mynd i fod yn rhan o hyn rŵan. Ydy'r cyflog byw go iawn yna yn mynd i leihau'r risg?
Thank you for that response. That final point brings me to my next question. We've talked about the need to respect the workforce in social care, and, of course, the real living wage will be part of this now. Is that real living wage going to reduce the risk?
Mi wnaf i ddod yn ôl a dweud, 'Nac ydy'. Oherwydd, fel sydd wedi cael ei ddweud yn barod yn y fan yma, mae'r sector preifat wedi'n pasio ni, o bell ffordd, a dydy'r cyflog byw go iawn ddim wedi cymryd i ystyriaeth costau chwyddiant ac effaith hynny ar gartrefi. A dwi ddim yn meddwl fy mod i'n siarad o'n lle—rydyn ni'n derbyn ymholiadau gan weithwyr rŵan sy'n chwilio am eu trydydd job, er mwyn medru byw. Felly, na, dydy o ddim yn ddigonol, ond dyma ydy'r her a'r drafodaeth rydyn ni yn ei chael efo'r Llywodraeth, ac mae'r Gweinidogion yn barod i drafod hyn, o ran sut ydyn ni'n symud y maes gofal i fod yn faes sydd yn cael ei ariannu a'i gyflogi'n gymaint gwell. Felly, mae honna'n her, nid yn unig yma yng Nghymru, ond ar draws y Deyrnas Unedig, sydd angen ei symud ymlaen, a hefyd bod pobl ifanc yn gweld bod yna gyflog a gyrfa i'w cael yn y maes.
Well, if I could come back, and say, 'Well, no'. Because, as has been said already here, the private sector have already overtaken us, quite significantly, and the real living wage hasn't taken into account inflationary costs and the impact that that has on households. And I don't think I'm speaking out of turn—we receive inquiries from workers now who are looking for a third job, just in order to sustain themselves. So, no, it's not adequate, but that's the challenge and that's the discussion we're having with Government, and Ministers are willing to discuss this, in terms of how we move care forward, so that it is an area that is properly funded and remunerated. So, that's the challenge, not only here in Wales, but across the UK, on which we do need to make progress, and also so that young people see that there is a proper salary and a career to be made in that area.
Os caf i ofyn un cwestiwn arall, os gwelwch yn dda. Os caf i jest fynd at un adran wahanol, fwy penodol, o fewn eich awdurdodau lleol, a hynny ydy tai a digartrefedd yn benodol. Y tu hwnt i'ch cyllidebau chi, wrth gwrs, rydyn ni'n gweld bod yr housing support grant wedi cael ei dorri, neu ddim wedi cael ei gynyddu, felly mae'r setliad fflat yn golygu ei fod o'n doriad go iawn. Sut mae hynny'n mynd i effeithio ar eich darpariaeth chi, a sut mae'r setliad yma i chi fel awdurdodau lleol yn mynd i effeithio ar eich darpariaeth er mwyn sicrhau bod lefel digartrefedd yn cadw'n isel a'n bod ni'n medru rhoi tai i bawb yn ein cymunedau ni?
If I could just ask one further question, please. If I could turn to another, more specific area within local authorities, and that's housing and homelessness particularly. Beyond your budgets, of course, we see that the housing support grant has been cut, or hasn't been increased, so the flat settlement means that it's a real-terms cut. How is that going to impact your provision, and how is this settlement for you as local authorities going to impact your provision in ensuring that the level of homelessness remains low and that we can provide housing to everyone in our communities?
Mi wnaf i ddod yn ôl. Felly, mae'r toriad yn yr adran dai yn heriol, yn amlwg, achos rydych chi'n sôn am y toriad yn hwnnw, ond eto rydyn ni'n gweld cynnydd mewn angen. Mae digartrefedd ar ei fyny'n barod, heb sôn am bobl yn cael eu gwneud yn ddigartref, efallai'n methu â fforddio mortgage neu rent, a thai ddim ar gael. Felly, rydyn ni'n gwybod y bydd hwn yn cynyddu yn y cyfnod i ddod. Ac yn ychwanegol i hynny, mae'r gyllideb cyfalaf, ac yn y blaen, a'n gallu ni i adeiladu. So, mae'n costau adeiladu ni wedi mynd i fyny, ac mae'r cynlluniau busnes roeddem ni i gyd wedi eu rhoi yn eu lle wedi newid oherwydd hynny, a beth ddywedwyd gynnau ynglŷn â'r contractwyr i ddatblygu hefyd. Felly, mae'r sefyllfa yn y maes tai yn heriol ofnadwy ar hyn o bryd—yr angen ar i fyny, y costau adeiladu ar i fyny, y diffyg mewn contractwyr i wneud y gwaith yna, a'r staff mewnol hefyd, o ran yr arbenigedd cynllunio, ac yn y blaen, i adeiladu, ar ben y toriad ariannol, fel rydych chi wedi ei ddweud, i ni fedru gwasanaethu'r rhain. Mi fydd o'n her, does yna ddim amheuaeth am hynny, a dyna pam y bydd yn rhaid i ni—. Ac i ni, y rhai sydd efo stoc dai, rydyn ni'n ffodus iawn bod gennym ni'r housing revenue account, i fedru edrych yn fwy creadigol ar y gefnogaeth honno. Ac mewn ardaloedd fel Môn, rydyn ni'n ffodus o fod yn defnyddio'r premiwm ail dai a thai gwag i fedru lliniaru'r effaith ar y gymuned leol hefyd.
If I could come in there again. So, the cuts in the housing department are challenging, obviously, because you talk about that cut, yet we've seen an increase in demand. Homelessness is already up, never mind people being made homeless, perhaps unable to afford their mortgage or rent, and a shortage of housing in the first place. So, we know that this problem will get worse. And in addition to that, the capital budget, and so on, and our ability to build is impacted. So, our construction costs have gone up, and the business plans that we'd all put in place have had to change because of that, and also what was mentioned earlier in terms of contractors for developments too. So, the situation in housing is very challenging indeed at the moment—the demand is greater, the construction costs are greater, there's a shortage of contractors to undertake that work, as well as internal staff, in terms of planning expertise, and so on, in addition to that financial cut that you've mentioned, for us to be able to service these. It will be a challenge, there are no two ways about that, and that's why we will have to—. And for us who do have housing stock, we're very fortunate that we have the housing revenue account, to be able to look more creatively at that support. And in areas such as Anglesey, we're fortunate to be able to use the second homes and empty homes premium to mitigate the impact on the local community too.
Okay. Diolch, Llinos. Thank you, Mabon. Carolyn Thomas.
Thank you. Earlier, you talked about the re-tendering of contracts and the extra costs now being incurred. I just want to ask about home-to-school transport, which seems to be a particular concern. I know another committee is looking at the Learner Travel (Wales) Measure 2008, and would like to alter it. And also, the impact that might have on Welsh-medium education, and just your thoughts really on that. Are you having particular difficulties with contracting the home-to-school transport?
Can I say that this is something that all local authorities are facing huge pressures on? In my own local authority, we've seen something like a 40 per cent increase in costs. That is quite substantial, and when you consider that Rhondda Cynon Taf—I think I'm right in saying—has the largest, or the most expensive in terms of the numbers, home-to-school programme in Wales, our budget for home-to-school is around £11 million. So, a 40 per cent increase for us has been substantial—it's well over £4 million.
That is driven a lot by costs in terms of recruiting drivers. So, companies are struggling with HGV drivers. Partly because of Brexit and because some of the rules about people coming here to work, we've seen some of the home-to-school drivers being recruited by large companies, and supermarket chains in particular, where they've been giving them as much as £3,000 and £4,000 in golden hellos to go and work for them, to drive their lorries and delivery vehicles. That has meant that, with an ageing population and an ageing workforce, I should say, within home to school—many of them are retired HGV drivers who drive the buses—that is an area that's been really difficult. So, they've had to increase their salaries to retain staff.
Similarly, we've had the cost of fuel, which has been rocketing, they're hit by inflation costs, and home to school is a real pressure for local authorities, not just the financial cost, but actually working with the operators who are doing their best to maintain the services. At the same time, of course, they've been affected by things like COVID and by just general flu, and we have drivers off, so maintaining that daily service, I have to say, is very much juggling. I think that in every home-to-school transport department, or integrated transport department, in local authorities, it's now almost a daily chore for them to make sure that every bus is operating in the way it needs to.
Thank you very much, Andrew. Carolyn.
Okay. So, if the learner travel Measure did change, you would have to try and provide more of a service. That could be an issue for you, because it's difficult providing the current service. Okay. I see you nodding. Thank you. And then, just finally, how challenging will it be for local authorities to contribute towards the target of net zero by 2030, and what could Welsh Government do to facilitate the pace of change required?
Okay. Who would like to provide—? Andrew.
Yes. Thank you, Chair. Can I just say I'm probably going to have to leave the call very shortly because of some of the problems we have today in the county because of the flooding? I need to join a call with emergency services.
No, that's absolutely fine, Andrew. We've only got a few minutes left, anyway. Yes, please carry on.
In terms of climate change and some of the things we're looking at as local authorities, again, it comes at a significant cost. For us to transition most of our fleets over to electric vehicles is something that I think most, if not all, local authorities have commissioned reports on, and have committed to doing part of their fleet. So, my own, in Rhondda Cynon Taf, we're going to commission about 300 or 350, actually, vehicles—the smaller vans and lightweight vehicles—to electric. We're probably not going to be doing the heavy goods, the highways vehicles and the refuse vehicles, because we trialled electric ones in our county and, unfortunately, because of the hills in lots of areas, they just didn't work for us, unfortunately. They didn't have enough power and they went flat before they could complete their days. But longer term, we may look to do hydrogen and work with public sector transport around hydrogen support for bus services and our larger vehicles. But we have to appreciate that this comes at a considerable cost, because electric vehicles are tens of thousands of pounds more expensive. So, if you change a 3.5 tonne cleansing pick-up or highways pick-up over to an electric vehicle, they can be £20,000 to £25,000 more expensive. And of course then we need to make sure that we can charge them. And, unfortunately, some locations in the Valleys—and I know it's the same in other local authority areas—there isn't actually the power in the grid in our localities. So, even though we could put chargers in, we can't, in some cases, charge a full fleet of vehicles, because there just isn't the grid capacity. So, there are lots of things to take into account, not just the cost, but the practicality of some of the net-zero things we want to take forward.
Okay. Thank you very much, Andrew. Okay, Carolyn?
Yes. Thank you. Thanks very much for attending, Andrew. I know how busy you are. Anthony, did you want to come in on that?
Yes, just if I can. It's certainly a necessary challenge and it's a vital one, one that we're up for helping Welsh Government meet and helping our nation meet at the end of the day. But there are inevitable costs in the short term, even if there are sometimes savings in the longer term. An example is school projects—new schools. Of course we'd hope to make a revenue saving if those are net-zero schools, because we look to be, in the longer term, paying less for the heating and lighting costs of those schools. But in the short term, there is a large construction cost to building them to those standards. Vehicles, as Andrew said, again, hopefully there'll be a long-term revenue saving in terms of fuel and maintenance; in the short term, the vehicles are a lot more expensive. In terms of infrastructure, Andrew mentioned the challenges in many of our authority areas. There's also a challenge about skills availability. If we're looking to design more active transport routes, for example, that requires a level of engineering expertise, in many cases, that we are struggling to find. So, all of those are challenges. That doesn't make it any less necessary, but there are certainly costs attached to it in an environment, as you've heard this morning, of significant pressures.
Okay, thank you. Thank you very much. Thank you, Carolyn.
Okay. Well, let me just thank all our witnesses for this first evidence session today for joining us to answer our questions and state views and concerns. Thank you very much, Andrew, who's had to depart a moment or two ago, Llinos, Christina, Anthony and Chris, and just to say that you will be sent a transcript to check for factual accuracy in the usual way. Diolch yn fawr. Hwyl fawr.
bod y pwyllgor yn penderfynu gwahardd y cyhoedd o eitem 4, eitem 7 ac eitem 8 ar agenda’r cyfarfod hwn yn unol â Rheol Sefydlog 17.42(ix).
that the committee resolves to exclude the public from items 4, 7 and 8 of the meeting in accordance with Standing Order 17.42(ix).
Cynigiwyd y cynnig.
Okay, the next item then on the committee's agenda today is item 3, which is a motion under Standing Order 17.42 to resolve to exclude the public from items 4, 7 and 8 of this meeting. Is committee content to do so? I see that you are. Thank you very much. We will move into private session.
Derbyniwyd y cynnig.
Daeth rhan gyhoeddus y cyfarfod i ben am 10:16.
The public part of the meeting ended at 10:16.
Ailymgynullodd y pwyllgor yn gyhoeddus am 10:45.
The committee reconvened in public at 10:45.
Okay. Item 5 on our agenda, then, is scrutiny of the Welsh Government's draft budget 2023-24, and our second evidence session with the Minister for Finance and Local Government, Rebecca Evans, who is accompanied by Emma Smith, head of local government finance policy with Welsh Government, and Reg Kilpatrick, director general, COVID recovery and local government. So, welcome to you all. Thanks for coming along to give evidence to the committee this morning. Perhaps I might begin with some general questions, Minister.
Firstly, could you outline how the local government settlement reflects Welsh Government's priorities for the sector, as set out in the programme for government?
Yes, certainly. I think the first thing to reflect on really, and just to remind colleagues, is that this settlement builds on that which was provided in previous years. So, it was last year when we undertook our three-year spending review, and this budget for next year now builds on that three-year spending review. So, lots of those decisions were taken in the last financial year. And that was a year, again, where we prioritised public services, and, in particular, sought to give local government the best possible settlement.
But, in terms of the programme for government commitments, when you look explicitly at those that I'm responsible for within my finance and local government portfolio, they do relate, really, to the changes in the governance, the administrative burdens, the procurement processes and performance frameworks, alongside, of course, the important work that we're doing on council tax reform.
So, those are the things that I'm responsible for within the portfolio in the programme for government, and, as you can appreciate, many of those either have specific funding attached to them, or they are areas where the main call really is on staff time as a resource. So, I'm quite confident that we're able to continue to progress those important policy areas within the settlement that we've provided. It really is about partnership working, those kinds of things that I'm driving forward. So, looking at how we reduce the administrative burden on local authorities, for example, that's about a piece of work that we're doing with local authorities, scoping out what they understand the most significant administrative burdens to be, and then working with my colleagues who have responsibility for particular grant areas, for example, to seek to reduce those burdens as far as we possibly can.
Yes, in terms of that partnership working, Minister, I think we're all familiar with the progress, really, made during the pandemic, when there were very regular meetings between Welsh Government Ministers and lots of key partner organisations, and, obviously, local government is an absolutely crucial partner. How would you characterise the current situation in terms of those meetings? Has that sort of pattern been sustained?
I would say that our relationships are extremely strong with local government, and we do meet very frequently. So, during the pandemic, those meetings were taking place on a daily basis at some points, but they were extremely regular, obviously, in order to respond to the changes in the pandemic, and to plan ahead, and to share vital information with our partners.
Over the autumn term, we obviously had another two really significant issues to grapple with together. One being, of course, the cost-of-living crisis, and then the issues relating to the war in Ukraine and how we provide people coming from Ukraine with the best possible welcome and ongoing support. So, we were meeting through the autumn term on a fortnightly basis, and we had standing items on that agenda, led by my colleague the Minister for Social Justice, on Ukraine and the cost of living. But then, also, we took the time during those meetings to discuss other pressing issues. So, for example, the Minister for Climate Change would lead an item on housing issues, just to make sure that we had all the right partners in the room, sharing the latest information, but also hearing from them in terms of shaping our policy agenda as well. So, those have been really useful.
Now that we're grappling on an ongoing basis with the cost-of-living crisis, but we're not having to take those urgent decisions in the way that we were in the autumn term, and things have settled down in terms of our support for people arriving from Ukraine, we've moved back into our more normal routine of meetings. So, I'll be meeting on a regular basis with leaders, and I also attend the Welsh Local Government executive meetings—every other meeting, usually. So, we're having those ongoing meetings on a regular basis, but not as much as we were before.
No. But would the way that you're meeting now that we're in, as you say, less crisis-driven relations at the moment, would, nonetheless, the pattern of meetings be more regular than pre pandemic?
Yes, I would certainly say that. The kind of meetings that I have with leaders are one type of meeting, but of course colleagues meet all the time with either leaders or with cabinet members for respective portfolios on an ongoing basis. So, you'll often hear the Minister for Health and Social Services in the Chamber saying about her fortnightly, I think, meetings alongside the Deputy Minister for Social Services, with their counterparts within local government, to discuss issues relating to social services. So, those meetings are ongoing. Then you have strategic things that you want to discuss with local government, so I will have meetings with local government to discuss council tax reform, for example, to make sure that they're fully involved in understanding the work that we're doing, the work that we've commissioned, but then also able to inform the future of that work. So, there are all kinds of different meetings going on on an ongoing basis, both kind of urgent, so I'm sure Julie James will be speaking to local government today about the weather issues and flooding issues, but then those kinds of longer term partnership working as well.
Yes, okay. In terms of the budget process from year to year, Minister, which you mentioned, we heard earlier from local government in Wales that a three-year indicative budget process would be very valuable in terms of the ability to plan and so on, but obviously even if an indicative budget is set, there will be considerable fluctuation, for one reason or another, in either direction, I guess, in terms of more or less resource. Obviously, UK Government is central to this in terms of its own budget process and how that relates to the Welsh Government's budget. What would you say about the value of a three-year approach, if it was possible to get to that?
I'm always in favour of giving as much certainty as we can to all partners in terms of our budgets and the length at which we set them. This is the first time since I've been in portfolio in terms of being able to set a budget that is beyond one year, because of course, for a number of years, we were having just one-year settlements from the UK Government, and it just doesn't give us the kind of certainty that we need to be able to pass that certainty on to colleagues and to partners in local government and in health and other places as well. So, absolutely, the more certainty that we have. So, I hope that when we come to the end of this three-year spending review, we will go into another spending review period that will be a multi-year period as well.
I think, just as an aside really, that was one of the real benefits in terms of the membership of the European Union, because of course we had long multi-year settlements there, which did allow for planning, which is obviously important in terms of getting value for money, but also certainty for services, and being able to take that longer look.
Ok, thank you for that, Minister. In terms of inequalities and the context of the cost-of-living crisis, could you tell the committee how budget allocations for local government have been determined in terms of the potential impact on inequalities in that cost-of-living crisis context, and how outcomes will be measured?
I think there are two sides to this, first in relation to the RSG itself and then in relation to specific grants. I think that there are different issues in both of those.
The first thing to say, really, is that obviously local government plays an important role in driving forward the equalities agenda, because so many of the services that they provide do support those people who are most vulnerable, who have one or more protected characteristics. So, I think that prioritising public services in itself is a thing that helps drive forward equality.
Then I would also point to the distributional analysis of the budget, which we provided last year. We did that as part of our three-year spending review. Again, that was something new, it was the first time that we had done a piece of work like that. I think we were supported by Cardiff University in preparing that. We haven't updated it for this budget because this budget builds on the three-year spending review, and lots of the things that underpin our assessment of equality haven't changed within that 12-month period. So, it still remains valid. And it did show that our Welsh Government budget overall was a progressive one in terms of the distribution. I think that that overall focus that we have on local government in itself is important.
When it comes to the RSG, it is really important that we recognise the role of the existing mechanisms—so, the role that councillors have to play in terms of scrutinising their own local authorities. And they'll be really keen to understand the equality impacts of the decisions that those councils have taken. So, that's really important. And, of course, they're also held to account through their electorate as well, and I think that just respecting that autonomy of local government in that sense is really important.
But then, of course, we also have the specific grants, and there'll be particular ways in which individual Ministers will be assessing the impact of those grants. An example, I think, would be the housing support grant. There has been independent research published by Cymorth Cymru and Cardiff Metropolitan University into the social and financial impact of the housing support grant, and that really did show that, for every £1 that we're spending for the housing support grant, the net saving to public services in Wales is £1.40. I think that that shows that really is something that demonstrates value for money, of course, but in itself is a scheme that supports the most vulnerable as well. So, I think there are lots of things that individual Ministers will do when they look at their individual grants to try to drive forward those equality issues.
And then, finally, I'd just point to our budget improvement plan as well. That's informed by our new budget equalities group, which helps us make sure that we have the processes in place, really, in terms of the budget to be considering the equality impacts of the things that we do right across the budget, not specifically in local government.
Thank you, Minister. Moving on to a particular grant, then, the Gypsy and Traveller sites capital grant. As you know, Minister, the committee has recently concluded a report on the situation with Gypsy, Traveller and Roma communities in Wales. Sites are an absolutely crucial part of that, and it's far from a satisfactory position. I wonder if you could say something about the amount of the grant, but also the use of the grant. Because we heard many times that there was very poor consultation between local government and Gypsy, Traveller and Roma communities in Wales in determining how money is spent and, as a result, it was often not well spent. Sometimes I think there has, for whatever reason, been a failure to use resource to carry out the work required. I wonder if you could say a little bit about the process around this, the adequacy of the level of funding and the way that use is monitored and hopefully made sure that it's used effectively.
I'll certainly do my best. That does lie within the portfolio of the Minister for Social Justice. I know that, as you said, the committee has done a quite in-depth piece of work on this particular issue.
Just to clarify, in terms of my own responsibilities for local government, it's much more around the structural, democratic, financial and constitutional reform of local government; it's about local government finance, in terms of the reform of council tax and non-domestic rates, for example, and then around local government performance, governance, constitutional matters, scrutiny arrangements, and diversity in democracy, of course—we had a really good discussion on that in the Chamber this week. The individual grants and the issue of the Gypsy and Traveller sites does lie with the Minister for Social Justice.
I do know that the budget is for refurbishing existing accommodation, constructing new pitches and improving the sustainability of sites. The proposed budget for this financial year is £3.19 million. That is lower than in previous years, but as I understand it, that amount is deemed to be sufficient to meet the proposals that have been received and the commitments that have been made. Since April 2021, there have been 93 pitches that have been improved in terms of access to utilities. There are five new pitches that have been constructed, and 88 pitches have been improved or refurbished to improve site safety.
I know from the work that the committee's done that there have been concerns about the level of engagement with the communities themselves to explore whether what's been provided is actually what the communities themselves would like to see provided.
I suppose, just from a finance perspective, is the funding provided sufficient to meet the proposals that we have received? Yes, we believe that it is. But I think that the Minister for Social Justice would acknowledge that there's definitely more work to be doing in terms of engaging with the community themselves to understand what it is the community would like to see provided.
I see. And as with all other grants, Minister, I'm sure you'll be keeping a weather eye on what happens from here on in terms of the Welsh Government's response to the committee's report and the need for adequate resource to fulfil the response that's been made.
Indeed. I have regular bilateral meetings with all ministerial colleagues to discuss exactly these kinds of issues in terms of is the funding provided sufficient. If there are underspends emerging, then I need to understand the reason for that. This particular budget line has underspent in recent years, and that's because there haven't been sufficient numbers of projects coming forward. Those are the things that I need to understand to help ensure that we are delivering value for money.
Thanks for that. One further question from me before we move on to other committee members, and that is on the situation regarding people fleeing the war in Ukraine, Minister, and coming here to Wales. There's an allocation of £40 million, isn't there, for the next financial year, and £20 million for 2024-25 to local authorities. Could you just tell the committee how confident you are that that will be sufficient, and what flexibility there might be, given that it's a rapidly changing situation?
According to our original assessment of the money required to continue to deliver our Homes for Ukraine supersponsor scheme in 2023-24 and 2024-25, the funding that we allocated was sufficient. However, you'll have seen the written statement from the Minister for Social Justice on 14 December, which sets out that the UK Government is not going to be providing year 2 funding for the Homes for Ukraine visa holders. Obviously, that's extremely disappointing. There's also no clarity about any year 3 tariff or alternative fund to continue to support people coming from Ukraine also. That obviously is of concern. We are seeing the overall costs of supporting people coming from Ukraine declining. We are able when people arrive from Ukraine to support them to access benefits. I know lots of people from Ukraine are now in work and so on, so we are seeing people become more settled, and as they become more settled, the costs to the Government decrease over time.
We'll have to keep a very close eye on the spend that is required for supporting people from Ukraine, but overall, there's no more room within the budget for further allocations within the next financial year. We've taken the step in the next financial year to manage in-year pressures from within the Wales reserve, rather than holding an unallocated DEL, which we've done in previous years. That does mean that we've absolutely stretched the budget to the limit, alongside overprogramming on the capital side by £100 million. This isn't going to be a budget where we're able to look to reserves, for example, to find additional funding; it will be about redirecting funding within existing budgets and also meeting those pressures within existing MEGs. I think that what we allocated was sufficient at the time; as you say, the situation is so rapidly changing, and the projections of the number of people who will be arriving change over time as well. We'll have to just keep a really close eye on it to make sure that we are able to continue to offer the good welcome and high level of support that we provide.
Thank you very much, Minister. Sam Rowlands.
Good morning, Minister. Thanks, Mr Chairman. Thank you for your time, Minister, and the time of your officials joining us today. Just a quick question off the bat. I'm just wondering how satisfied you are with the provisional settlement that you've been able to indicate to councils.
[Inaudible.]—able to provide the best possible settlement to councils, and I hope that they've recognised that. I do also want to say that it still is the case that they will have to take really difficult decisions in order to manage the budget, because the additional funding that we did receive from the UK Government doesn't meet the pressures of inflation. Even though we were able to provide councils with at least the funding that we received in terms of consequential funding on both the education side and the social care side, there are still going to be gaps that they're going to have to address, and that will make for difficult decisions. I know you've heard very much of that already from leaders this morning. But overall, I think we've done the best possible job that we could have done in the circumstances, and, obviously, it builds on a good settlement last year and in the previous years before that as well.
Thanks. I note that you mentioned those gaps that local authorities are going to have to face up to. Do you have any particular concerns within those gaps? Are there any that jump out to you that really concern you?
I think social care would probably be one of the greatest pressures that local government faces, and it's an ever-increasing pressure, so that will be one of the areas where we'll be continuing, I know, to have those regular meetings with local government, both in terms of adult social care and children's social care. But if I had to choose one area that I think probably causes leaders and Ministers most concern within the local government space, it would be social care.
Thanks. On that point—I wouldn't disagree with you—there's obviously, from a preventative point of view, work that local authorities can do in terms of preventing the need for that social care intervention. But then, further down the line, we all understand the interventions or the mitigations that can be put in place to prevent the need for the health service to have to intervene in the future as well. I just wonder, from a finance point of view, what kind of consideration do you give to the preventative agenda, as it were, and the role that local authorities can play in preventing the call on the public purse in the future? When you look at those provisional settlements for councils, how much of the preventative agenda is in your thinking?
The preventative agenda has been in our thinking right across Government as part of our budget-setting process now for a number of years. It's certainly one of the lenses through which we consider our budget allocations. Local government is involved in a huge range of preventative services—so, the work that it does in terms of leisure, for example, the great work that libraries do in terms of being able to link people up to the services that they need. Just thinking locally, we've got—I'm sure it's the same in other areas—an incredible team of local area co-ordinators, who are absolutely at the forefront of prevention in the sense that they work directly with older people and more vulnerable people to try and ensure that they have support within the community, and self-sustaining support as well in many cases, so that there's less of a call on statutory services and other services in due course. But, I will ask Reg as well to come in on this point.
Thank you, Minister. Just to add, as the Minister says, the RSG itself is unhypothecated and it's down to locally determined budget setting to aim at particular priorities. I would say, in a wider sense, across Welsh Government many, many of our policies and programmes are actually aimed at prevention. The Minister's mentioned one. Some of the work we do on drugs and alcohol and some of the education programmes are all aimed at prevention. Those are delivered through a different set of financial arrangements, sometimes through specific grants, potentially, but they will actually be delivered by partnership and collaborative working on particular policy initiatives with our colleagues in health or social care or education directly with local government. I think I can say with a very high degree of confidence that my local government colleagues are also acutely aware of the power of prevention and—in terms of setting their own strategic plans, their own transformation and some of their own shorter term budgets—this figures very highly in the work that they're doing.
If I can take it a bit further, Chair, on that point, because it all sounds very good, but I guess the risk at the moment is that there's so much focus on firefighting, on the immediate pressures around inflation, around pay rises that are being demanded as well, that there's a risk, I suppose, that people's eyes are being taken off the ball in terms of the preventative agenda. They're probably the first things that go when it comes to trying to find savings. I wonder if you have processes or systems in place that ensure that those preventative measures are not always the first to go. Systems and processes that satisfy you that, actually, that preventative agenda is being seriously looked at and, especially, that the relationship between the health service and local authorities isn't just people in a room talking, there are actually transfers of money, when it's appropriate, to reduce the impact on health budgets in the future by supporting a preventative agenda.
I think those are really good points. Certainly, on the social care issue, which the Minister has already mentioned, there is a great deal of work that goes on between local government and the health service through the regional partnership boards. Those boards have funding and can use that funding in a way that will address their local preventative needs as well as the very short term priorities that you rightly recognise.
In terms of processes, we don't have processes, but what we do have is this ongoing policy dialogue about prevention, which happens throughout the Welsh Government and throughout the range of policy issues that we're dealing with. In that sense, it is part of the approach that we have as a Government to local government. We know, as I say, local government are also very clearly committed to this agenda. But ultimately, as you say, there are real tensions between how the local authorities and councillors and my colleagues in the organisations get through some of these really acute short term pressures without taking their eye off that transformational and preventative ball. That is a balance that I think only they can make locally in response to the pressures and priorities on each authority.
I think you heard some of that again this morning from leaders in terms of that tension about the firefighting, the constant series of crises that we've had over the recent years, and responding to those whilst also trying to lay that preventative foundation as well to try and support people and reduce pressures on services in future years. If I had to point to a really good example of joint working, we've got the integrated care fund, which I think is really important in terms of trying to ensure that smoother process between health and social care. I know that my colleague the health Minister will want to talk more to her committee about that, but I think it is a really good example of joint working.
On that point there, Chairman, absolutely, the ICF, for example, where it could or should work really well between the big beast budgets of health and the local authority social care budgets in particular, it's keeping up the momentum for that. And please hear me, even as a Member of the opposition, I accept the challenge that you're having to deal with with this, and it's not easy, but I think it's probably one of the biggest opportunities in terms of the sustainability of these budgets.
Perhaps one more quick question, Chairman, linked to this. I know, historically, there were specific spend-to-save financial initiatives, as it were, that Welsh Government supported local authorities with. Is that something you're continuing to look at, or is that something you'd consider rejuvenating, especially in respect of local authority estates and assets, and especially with a significant move towards hybrid working at an officer or official level? Is there an opportunity there for local authorities to tap into a spend-to-save type fund?
We do have the invest-to-save fund, which, in recent years, has been repurposed with a particular focus on care leavers and those at the edge of care. That's a really important fund and there are some great projects that are being supported through that. And then, also, we have Ystadau Cymru, which is the body that takes that kind of role of making sure that there is good joint working, of sharing of good practice within estate management across the whole of the public sector. We've recently had our Ystadau Cymru annual awards, and I think that, if you have a look at some of the projects that were awarded through that, right across the whole of Wales, where health boards, where local authorities and others—police, for example—have come together and collaborated to make sure that we're making the best use of our estates, that's really important. We do have funding in the budget in the next financial year to continue with some of those projects as well. Also, that has a specific strong focus on decarbonisation and on—I want to see biodiversity, for example, also driven forward through the Ystadau Cymru work. So, that's really important. We've got an Ystadau Cymru board, which leads that work as well, and they are injecting some real enthusiasm into this agenda.
Okay. Thank you very much. Thank you, Sam. Carolyn Thomas.
I just want to ask some questions regarding capital funding and borrowing, and your thoughts on whether the allocation of £180 million in general capital funding provides sufficient capital. Earlier, we did hear—. They welcome the extra funding, but there were some concerns about there being enough to meet the commitments of Welsh Government, but also to carry on with the normal day job as well. You know that one of my particular interests is highways, as well. You talked about if you invest in capital, then it will help revenue later on. I know they're struggling with highway servicing; if you resurface a road, rather than just pothole patching—I know they've been struggling with that.
You said earlier that there's no extra money this year. There was last year, wasn't there, which you were able to give to councils to help them. But maybe the redirecting of funding. I know there's nothing there for highway resilience this time. There is funding for—there's a line there for active travel, which is £60 million this year and £60 million next year. But, there's also another line of funding, called the LTF fund, and that increases to £40 million, but when you look at that line at the sector, it's also called active and sustainable travel. I'm not sure if you have the detail—I don't know if you have that with you now. Is that maybe for bus shelters, or, what is it for? Why are there two lines, then, for this active travel, and could that money be repurposed for highway resilience instead? I know they were saying that, with delivering some of these schemes, which are quite detailed, they haven't got the officers in place, they're really struggling, and so they have to go out sometimes to consultants and agencies, which can be three times the cost as well, so that has that impact, too. So I was wondering if you could respond to that. Thank you.
Great, thank you. So, capital funding is a particular area of concern for me. I know that leaders are also concerned about the level of capital funding that we have. The capital funding over the three-year spending review period falls by 11 per cent, and that was even starting from an insufficient base in the first place, so it's a real area of concern. There is no additional capital funding in the autumn statement. Of course, we've got the spring statement, so maybe looking ahead to future years, there might be an indication in the spring statement of increased capital, because that's exactly the kind of money that we need to recover from the pandemic in terms of being able to invest in infrastructure, creating jobs, and so on. So, that is a concern.
There is no real change to our capital plans as a result of this budget, partly because there is no additional funding to allocate in any case, but also because we undertook a zero-based review of our capital plans at the spending review. That's the first time that we've ever done that. We were the only part of the UK to do it, but what you did see as a result of that was a refocusing, really, of our capital investment towards those things that help deliver on our climate ambitions and take us further down that road to net zero. So, I think that's all been really important, and that, I think you see, really, the fact that the climate change main expenditure group has around half of our capital funding within it. I think that's been really important.
I will ask the Deputy Minister for Climate Change to provide the specific details that you're after in terms of the programme plans within those two particular budget lines, but I think that you probably will see within that the active travel fund, but also, I'm assuming, the Safe Routes to School fund, the safe communities fund and perhaps others as well. But I will ask him to provide you with the detail on that because—
Do you want me just to clarify the resilient—?
There we are—we've got a response already.
I haven't got all the detail of the splits, but the resilient roads fund, when you look at the grant tables, the resilient roads fund budget is part of that local transport fund, so you can see the transport fund going up from £15 to £23 million. I believe the proposals for the resilient roads fund are due in at the beginning of February, so they'll be looking through those to see what's coming in through that, to then decide which bit of the budget gets allocated against that. So, that's why that's got a 'TBC' on there—the budgets are linked up.
Okay. It would be good if I could just make a bid for it now, because in my column it does say 'active and sustainable travel' next to it, so it would be nice to make that bid for the road resilience fund, because it's the cyclists and pedestrians who are impacted more by potholes as opposed to cars, and you can't put designated cycle routes everywhere. Heavy rain today, a blocked culvert, it washes away the surface of the road and it's going to get worse as well. So, if we don't do more work on that, regarding resilience—. So that's great. And again, there was concern raised earlier about the increased costs now of doing these capital projects, which I'm sure you're aware of now—procurement's increasing rapidly, isn't it, as well? So, just to raise regarding the capital projects there.
I have really frequent reports from our commercial procurement team, and that talks through the increased costs on a whole range of things that are important to the public sector. I think that what we've heard this morning is definitely borne out in those reports that I get as well. So, in terms of what we deliver through this three-year budget period, and next year as part of that, I think that inevitably, because of inflation, we'll be delivering less, or we'll have to deliver some things over a longer period. You look at the cost of new schools, for example; we can't deliver the same number of schools as we would have previously, just because of the cost, but I know that that's only part of the challenge; you've talked about workforce and availability of people to undertake the work and there are supply issues that are ongoing. So, I think that there are lots of challenges on the capital side beyond the quantum of funding available.
Thank you. Thanks, Chair.
Minister, could you say anything, perhaps, about the funds that would enable Welsh Government to meet its commitment to prioritise the most vulnerable and public services, while continuing to create a stronger, fairer and greener Wales? Do you believe the extent of local authority capital settlement for these coming two years is sufficient?
I think, again, we would always want to be able to provide a greater general capital settlement to give local authorities the flexibility they want, but we'd also want to be investing more in the housing agenda and so on. But, in the absence of those additional funds, we're not able to. We do have the mutual investment model, for example, which is helping us invest in schools, and it's helping us with the completion of the A465 work as well. But, beyond that, we're also looking at other innovative funding models that we can operate—you know, can we work with local government to further support borrowing in that space? So, we're trying to be as creative as we can in terms of our capital plans.
We do have some important specific grants, though, that are being provided to local authorities; so, £1.3 billion-worth in the next financial year. Two hundred and sixty seven million pounds we're providing for sustainable communities for learning; £58 million for social housing; £60 million for active travel. And I think that all of those things really help to support us on our journey to, as you say, that fairer, greener and more equal Wales.
Okay, Minister. Thank you for that. Joel James.
Thank you, Chair, and I've got to apologise for before. I'm having a few technical issues. So, if I start to turn green, as in the screen, I'll have to take the camera off. But thanks ever so much for attending today's evidence session, Minister. There were just a couple of questions I wanted to ask about the council tax reduction scheme, namely—. Well, to start off, really, over the past 10 years, the amount given to local authorities has basically remained the same; I think it's about £244 million. The latest estimate is that local authorities are spending about £287 million on distributing this scheme, but also, as we've heard from evidence sessions, there are far more that need it that haven't actually been applying for it. And I just wanted to know your thoughts on this. What sorts of interactions have you been having with local authorities about this, and is that a sustainable level, going forward?
I think that £244 million is obviously a significant investment in supporting some of our worst-off households in terms of paying or being supported—in terms of either having a full reduction to their council tax, or partial. That's absolutely a significant investment and important thing that we're committed to. But I would say also that it's a shared commitment between local government and Welsh Government, and some of the decisions that we've taken since this was devolved to us have actually helped local government very much, because we've taken a very different approach. So, in Wales, we have a national scheme, whereas, across the border, authorities have to develop their own individual schemes. That, inevitably, costs a lot more to administer, so we've reduced a lot of that administrative burden on local authorities, and, obviously, the cost that goes alongside that. I think that it shows in our relatively high collection rates. In Wales, we've managed to sustain those high collection rates of council tax, and that is because our system is simple and fair.
What I'd also say is that the number of people who've been claiming that generally since it was devolved to us has been falling. Now, we did see the figure start to come up during the course of the pandemic, but that general reduction now is continuing. We think that's for a number of reasons, firstly being the increase in the state retirement age—so, obviously, that changes some people's eligibility for the scheme—and then also the impact of the changes to universal credit. That means people aren't automatically entitled to this; it's something that they have to apply for. We know that there are lots of people who still are entitled to it and not claiming it. So, that's why our 'green pig' campaign is so important in terms of being able to try and impress upon people the importance of applying for the scheme. Lots of people think that you have to be out of work. That's not the case—you can be in work and you can still access the scheme. So, we continue to try and promote that scheme to people.
Thank you, Minister. Joel.
Thank you, Minister, and thank you, Chair. If I could actually just come back then, you mentioned there about local authorities having quite effective collection rates. As you know, during the pandemic, extra money was given to local authorities to help them with their council tax collection. Obviously, this funding isn't available any more. And I just wanted to get some idea of the discussions you've been having with local authorities about that, and the impact that will have on the effectiveness of council tax collection rates, and whether or not they'll have any impact, then, on cost of living, as they say. Thank you.
Our collection rates in Wales have generally been very high—around 97 per cent, which is a high figure. But it is the case, as you say, that, during the pandemic, it was an exceptional year, and collection rates were affected by that, falling to 95.7 per cent on average. Rates climbed again after that particular year, so we're not seeing those lower rates again. The reason why we were able to support local authorities in that way during the pandemic was really because we recognised it was a very different circumstance. We recognised that lots of the teams who were normally involved in council tax collection had had their work diverted to, for example, distributing our Welsh Government grants to businesses and so on. So, we were putting pressure on local authorities to undertake that kind of work, whilst thinking it was only fair then that we were able to provide a contribution to their lost council tax. What I would say, again, is that we were able to do that because of the way that we managed our funds here in Wales. So, we didn't have those very expensive test, trace, protect contracts—we worked with the public sector to ensure that that was delivered in that space, on a basis of value for money, and where we were providing contracts that respected the workers involved. So, because we took that different approach, we were able to do different things and additional things here in Wales, which weren't available across the border, including providing authorities with some compensation for the loss of council tax.
Okay, Joel? Thank you very much. Mabon.
Diolch, Cadeirydd. Os caf i fynd at un pwynt ddaru chi sôn amdano ar y cychwyn, fe ddaru chi, Weinidog, sôn yn eich cyflwyniad am yr housing support grant—
Thank you, Chair. If I could return to a point you mentioned at the outset, Minister, in your presentation, you mentioned the housing support grant—
O, un funud, os gwelwch chi'n dda.
Oh, one moment, please.
Ydy o'n gweithio rŵan?
Fe wnawn ni wirio bod yr offer technegol yn gweithio.
Is it working now?
We'll check that the technical equipment is working.
Gwych. Diolch. Fe ddaru chi sôn ar y cychwyn am y grant cefnogi cartrefi—yr housing support grant—a sut roedd o'n dod â budd ac arbedion ariannol, a'i werth o yn gyllidol. Allwch chi jest ymhelaethu ychydig ar hynny, os gwelwch chi'n dda, i gychwyn?
Excellent. Thank you. You mentioned at the outset the housing support grant, and how that brought financial savings, and its budgetary value. Can you just expand on that, please, to begin with?
I'll do my best, but, again, this is something that I think that the Minister for housing will probably do more justice to when she gives evidence to you in due course. But, yes, it was my understanding that—. Just bear with me, I will find my notes on this particular point, because, as I say, it's not something I'm as familiar with as other things. So, the work done by Cymorth Cymru and Cardiff Metropolitan University estimated the grant generates a gross annual saving to public services of £300.4 million, or a net annual saving of £176.7 million, when taking into account the annual HSG spend. That was at July 2019—so, the latest figures that they had when undertaking that work. And as I said, that represents an estimated net saving to public services in Wales of £140 for every £1 of funding for the housing support grant. Every £1 of housing support grant funding generates an estimated net saving of £5.20 for mental health services.
Felly, mae yna werth cyllidol i'r Llywodraeth yn y grant yma, mae yna werth o ran lles iechyd i'r grant, ac mae yna, yn amlwg, werth cymdeithasol iddo fo. Yn naratif y gyllideb ddrafft ddaru chi ei gyflwyno ar ddiwedd y flwyddyn ddiwethaf, mae sôn ynddo fo am effaith tal isel a chostau byw ar staff rheng flaen y gweithlu digartrefedd: er enghraifft, mae'n sôn bod 44 y cant o'r gweithlu yn cael trafferth talu biliau; mae 11 y cant o'r gweithlu yna yn methu â thalu rhent. Ond eto, mae'r setliad fflat rydych chi wedi'i roi ar gyfer yr housing support grant yn golygu bod yna doriad mewn gwirionedd, yn nhermau go iawn, yn mynd i fod, a fydd yn effeithio ar y staff yna, yn golygu y byddem ni hwyrach yn gweld mwy o'r staff yna yn gadael y sector, oherwydd nad oes setliad gwell wedi dod mewn, fydd yn effeithio wedyn ar y ddarpariaeth digartrefedd. Ydych chi'n meddwl, felly, ydych chi'n hyderus, fod y setliad rydych chi'n ei roi i'r housing support grant yn mynd i fod yn ddigonol er mwyn i'r Llywodraeth gyrraedd eu targedau digartrefedd?
So, there is a monetary value to the Government in this grant, there is a value in terms of health benefits, and, clearly, there are social benefits too. Now, in the narrative of the draft budget that you presented at the end of last year, it mentions the impact of low pay and cost-of-living on front-line staff in the homelessness workforce. It mentioned that 44 per cent of the workforce have trouble paying their bills; 11 per cent of the workforce can't pay their rent. But the flat settlement that you've provided for the housing support grant means that there will be a real-terms cut, which will impact on those staff and will mean that perhaps we will see more of those staff leaving the sector, because there isn't a better settlement in place, which will, in turn, have an impact on the homelessness provision. Are you therefore confident that the settlement that you're providing, through the housing support grant, will be sufficient for the Government to reach its homelessness targets?
Chair, if I may, I'll ask the Minister for Climate Change to write to the committee to provide a more detailed response to that issue. I know that she would have had discussions with the housing sector about the housing support grant and so on, unless, Reg, there was something you wanted to add.
No, no. I think that those decisions would have been made by the housing Minister in her portfolio and it's right that she responds.
A gaf i—? Jest er mwyn ymhelaethu—a dwi'n deall eich bod chi'n dweud bod Gweinidog yr amgylchedd yn mynd i fod yn ymateb—ydych chi'n hyderus, fel y deiliad portffolio cyllid, fod hwn yn setliad teg?
Just to expand on that a little—I do understand that you say that the Minister will respond—but are you yourself, as the finance portfolio holder, confident that this is a fair settlement?
I think it's the best settlement that we could have provided in the circumstances. Obviously we would have wanted to provide additional funding, and increased funding across a whole range of services, but, given the settlement that we had, it wasn't possible to go any further than we already have.
In terms of the information that the housing Minister took, and the discussions that she had when formulating her budget proposals, I probably should leave it to her to discuss in more detail, I'm afraid, with committee.
Ocê. Diolch. Os caf i edrych ychydig ar y gweithlu gofal cymdeithasol, fedrwch chi ymhelaethu jest ychydig ar eich meddwl chi y tu ôl i'r setliad o ran rhoi cyflog byw go iawn ac effaith hwnnw ar y sector a'r gweithlu yna, os gwelwch yn dda?
Okay. Thank you. If I could turn now to the social care workforce, can you expand on your thinking behind the settlement in terms of providing the real living wage and the impact of that on the sector and the workforce, please?
Yes. Obviously, it was a manifesto commitment to introduce the real living wage, over the course of this Senedd term, in fact. But, bearing in mind the significant pressures within the social care sector, we were able to introduce that in this financial year. And, obviously, the cost of living has meant that the value of the real living wage is going to be—. There's pressure on what's available in this year. So, obviously, the Low Pay Commission has indicated that it should be significantly increased for next year, so we're able to provide that additional funding of £70 million to address that. Is it going to be sufficient? Well, hopefully, it will have an impact on retention and recruitment into the sector, but we know that pay is only part of the picture for social care. The Deputy Minister for Social Services is doing work in terms of the kudos of the sector, making sure that people have appropriate learning and development opportunities, if that's something that they want to pursue within their career and so on. So, I think that the real living wage is important, but it's not the solution and it's only part of the picture, I think.
Diolch. Mae darn olaf eich ateb chi yn ddifyr, oherwydd mae'r dystiolaeth ddaru ni ei chael y bore yma gan lywodraeth leol yn dweud yn eithaf clir nad ydy o'n mynd i fod yn ddigonol er mwyn lleihau'r risg mae'r sector yna yn ei wynebu. Felly, eto, yn mynd nôl i gwestiwn blaenorol, ydych chi'n hyderus bod y setliad yma yn mynd i fynd i'r afael â'r problemau yn y sector gofal cymdeithasol? Ydych chi'n hyderus fod o'n ddigonol, neu beth yn fwy medrwch chi ei wneud o ran yr envelope cyllidol sydd gennych chi er mwyn lliniaru ar y problemau yn y sector yna?
Thank you. That last section of your response is interesting, because the evidence that we heard this morning from local government stated quite clearly that it won't be sufficient to mitigate the risk faced by that sector. So, again, returning to an earlier question, are you confident that this settlement will tackle the problems in the social care sector? Can you be confident that it's sufficient, or what more can you do, in terms of the funding envelope available to you, in order to mitigate problems in that sector?
So, as I say, I think funding is only part of the picture in the social care sector. There are many complex things happening within social care and many, many reasons why people decide to go into social care as a career, but then also a whole range of reasons why people leave. What we can do is make sure that people are fairly remunerated for the work that they do, and I think that the real living wage is important in that space. But, is it going to solve all of the issues? No, it certainly won't, because there's ever-increasing pressure on the sector. People are finding work in the sector very stressful. It's a very stressful and pressured and very responsible role, and it's not going to be for everyone. So, we need to try and find ways to support people who are working in that sector in ways beyond just financial support, I think. So, is it an important part of the offer? Yes, but it's not going to solve everything, and I think that the work that's going on, again, around the kudos, the training, the support, looking at those other things, and the other costs that people in that sector face in terms of, often, their uniform costs, going to see different clients and so on, all of those things need to be looked at. I know lots of work is going on. Again, I'm afraid that's outside of my portfolio, but I know the health Minister and Deputy Minister are very active in this space. And, again, they're things that they'll be talking to local government about in those fortnightly meetings that they have.
Un cwestiwn terfynol ar hynny, os caf i. Roedd fy chwaer yn arfer gweithio yn y sector—roedd yn arfer gweithio mewn cartref gofal, flynyddoedd yn ôl. O siarad efo hi bryd hynny, ac yn sicr yn siarad â gweithwyr yn y sector yna heddiw a phobl sydd yn mynd allan i'r gymuned i weithio a gofalu am ein hanwyliaid ni, pobl fwyaf bregus yn ein cymdeithas ni, pobl sydd wedi cyfrannu drwy eu hoes i gymdeithas—ac rydym ni'n gofyn ar bobl i fynd i edrych ar eu hôl nhw, i'w codi nhw i fyny o'r llawr yn aml, i helpu i'w glanhau nhw, i ofalu amdanyn nhw, i sicrhau eu bod nhw'n cael y gofal a'r bwyd a mynd allan i gymdeithasu—fel rydych chi'n dweud, mae o’n ofyn mawr iawn ac yn dasg anferthol. Rydyn ni'n rhoi ein hanwyliaid ni i'w gofal nhw. Ydych chi’n meddwl bod y cyflog byw go iawn yn ddigon i'r bobl yna sy'n gwneud y gwaith arbennig o bwysig yna? Ynteu a ddylen nhw, mewn gwirionedd, gael mwy, ac a ddylai’r setliad yma, felly, adlewyrchu hynny?
Just a final question on that, if I may. My sister used to work in the sector—she used to work in a care home, many years ago. Having spoken to her at that time, and certainly from speaking to workers in the sector today, and those who go out into the community to look after our loved ones, the most vulnerable people in our society, people who've contributed throughout their lives to society—and we ask people to go and look after them, to pick them up from the floor very often, to help them to wash, to care for them, to ensure that they get to be fed and can go out to socialise—it's a huge ask and a huge task. And we're putting our loved ones into their hands. Do you think that the real living wage is sufficient for those people who do that exceptionally important work? Or should they receive more and, therefore, should this settlement reflect that?
I think we would always want to pay people more. I know there are lots of difficult discussions going on across a whole range of public sector services at the moment in that space but, at the end of the day, we can only pay what's available within the envelope that we have. So, I think this is the best that we could offer within the resources available to us. But, obviously, we would want to do more.
Diolch yn fawr iawn.
Iawn, Mabon. Diolch yn fawr. Jayne Bryant.
Okay, Mabon. Thank you very much. Jayne Bryant.
Diolch, Cadeirydd, and good morning, Minister. You mentioned in one of your answers the work that's been going on to move us closer to net-zero targets. Perhaps you could expand on the capital and revenue allocations made to support decarbonisation. Also, in evidence from the WLGA, they told us that, at a time of significant financial pressure, it's going to be challenging for councils to do the right thing as opposed to choosing the most affordable option. Do you accept that local authorities might not be able to make the changes required at the pace required to meet those net-zero targets, despite that additional capital funding?
Well, I'll make a start and then I'll ask Reg to come in on this one as well. Just to recognise from the outset, really, meeting net zero within the public sector by 2030 will be very challenging, but there is a huge amount of excellent work that is already under way across local government. One thing I would point to is the local government climate strategy panel. That was established in November 2020 and, even through the pandemic, they were doing great work to accelerate change within the local government sector, providing really good leadership and then also promoting greater collaboration within the climate change space as well. And I think that you could argue, as well, that doing the right thing can also be the affordable option. So, both the public sector route-map to net zero by 2030 and Net Zero Wales make it really clear that the requirement for organisations by 2023 to develop their planning, upon which they can better assess the planning implications of decarbonising, will be important, because that really makes sure that they have that kind of strategic look at this. And, of course, there's a cost to inaction as well, because we only have to think about flooding, and so on, for the cost of that kind of inaction, but, then, also—we talked about prevention earlier—the preventative nature of active travel, for example, both in terms of health and well-being, but also in terms of pollution. So, I think that doing the right thing, and the climate conscious thing, can also be an affordable thing to do in the short term and the longer term as well. I'll ask Reg to comment on this a bit more.
Thank you, Minister. I think we've all got to accept that meeting net zero is going to be challenging for Welsh Government, as well as us personally, as well as local government. It is a really significant issue. But, from my contact across local authorities particularly, there is an enormous amount of energy and commitment to this agenda. And I know that we are going through very difficult circumstances at the moment, but, actually, some of those authorities are using the idea that moving towards net zero will be a cost-saving activity as a means of helping to manage at least some of the future financial pressures.
The other point to make on this agenda, I think, is the commitment across local government, and with Welsh Government, to work at a national level on some really significant issues. So, Ystadau Cymru are working with local authorities to look at how to decarbonise the estate, and there's some money in the budget that can be used towards doing that. But, actually, there's no point in 22, or, including us, 23 organisations doing that individually; we have to work together. And through that local government climate change panel, that's exactly what we're doing.
Another part of my area is trying to deal with one Welsh public service. And so, that as a theme of us all working together runs through some of these really, really critical projects. Another good example is about electrifying fleet, where, clearly, that is a really important thing to do, but, actually, the power of the public sector to procure at a national level is much greater, and much cheaper, not just in terms of the procurement process itself, but also the vehicles or the products that are being procured, than any sort of single organisation could undertake on its own. And, as well as that, we can bring to bear a huge range of expertise and commitment, which varies across authorities, but, put together, we have a very powerful mechanism.
So, those are two examples. There are others, and I'd be very happy if we write back to the committee to provide some examples of that. But I think you're absolutely right—it is a real challenge. I think the point does relate to an earlier question about the preventative agenda—the more we can do now, the more we are going to prevent the impacts of climate change in the future.
Thank you. That's really helpful. If you could provide us with some more information, I'm sure the Chair would be keen to have that.
And just finally from me, do you have concerns about councils' ability to fund and source contractors to provide home-to-school transport? This is something that is a big issue for many young people and parents. Has the Welsh Government undertaken any analysis on the potential impact, perhaps, on access to Welsh-medium provision for example?
Yes, I know that there are a number of concerns relating to the availability of bus drivers and the costs of delivering those services as a result of inflation. The Deputy Minister for Climate Change and the Minister for education are actually meeting this week—I think it was yesterday—to discuss issues in relation to school transport and the Welsh language in particular. So, I'd be happy to ask them to provide committee with an update from that meeting.
Also, I understand as well that there's a detailed review of the Learner Travel (Wales) Measure 2008 that is due to take place soon, and that will also include consideration of the threshold of home-to-school travel, and also travel support for learners who are in Welsh-medium schools. So, I can provide a bit of an update on some of those timescales as well.
Thank you, Minister. Diolch yn fawr. Diolch, Cadeirydd.
Can I come in on that?
Yes, certainly, Carolyn.
Just earlier on in evidence—I don't know if you were listening—Andrew Morgan, the leader of RCT, was saying it's a daily battle sometimes just to ensure that the current learner travel Measure is delivered, ensuring that there are enough operators just to deliver it as it stands at the moment. So, if you do get to feed that into the discussion that the Minister for education and the Deputy Minister for transport are having, it's worth while feeding in what was said earlier.
We'll make sure that we send them a copy of the relevant part of the transcript.
Thank you. Thank you.
Okay, thank you, Carolyn. Thank you. Oh, sorry—Joel.
Thank you, Chair. I hope you don't mind me coming back in. It was just an interesting—
Oh, sorry, can you hear me okay?
Yes. Please carry on, Joel—that's fine.
Perfect. It was just a question that came up from a comment that Councillor Andrew Morgan made about trying to address net zero and moving the commercial vehicles to electric. He was just saying, in some areas, that they just don't have the grid capacity to do that, because they can invest this money in having an electric fleet, but they just can't really plug it into the system, as they say. I just wanted to know your thoughts on that and what steps the Welsh Government can take to help address that. Thank you.
I know that's a point that Councillor Morgan has made to the climate change Minister in the past, and given some examples of how the terrain sometimes can make it difficult for some of these particular vehicles, but I will ask the Minister for Climate Change to perhaps provide a more detailed response on that issue as well.
Perfect. Thank you, Minister. Again, sorry about the camera up here.
Okay, Joel. Minister, just a final question from me, returning to the preventative theme, really. We heard from local authorities earlier that they would like to do more on the preventative front, and they're concerned in terms of the financial strains of these times, as to whether they'll be able to do less, and if they are, then that will then impact on statutory services such as social services, for example. I think one prime example they give of preventative services is leisure centres and all that they bring in terms of health and well-being, and there are real concerns now, because of energy costs and staff costs and the general pressures that they're under that we may see a reduction in leisure services, and maybe even the closure of swimming pools and leisure centres. Given their importance generally, including in terms of those preventative aspects, I wonder if there's any more you might say to give us a little comfort, really, that we're not going to see that level of reduction in those preventative services.
We've been doing some work with CLES, the Centre for Local Economic Strategies, which is looking at innovative models of providing local services. We do see, particularly in the leisure space, ways in which local authorities in some places have sought to operate a social model, looking to social enterprises and so on, to help them in this space to potentially deliver a service that is more sustainable over the long term. So, we're looking at some of those different models that exist both in Wales and beyond Wales as well, to understand what might make for sustainable models for this in the future. But, no, I absolutely understand those anxieties on the part of local government. They'll all be preparing their draft budgets at the moment and be making the same considerations as we have to make. So, they'll be looking across their budgets, considering things through that preventative lens, but also through the lens of the statutory services that they have to provide. And I know that they'll be consulting with their communities as well. So, I would encourage people in communities, if these services are really valuable, to then let the local authority know. Let the local authority know what you want them to be prioritising on your behalf, because despite the best possible settlement that we could provide, there will, I think, inevitably be some difficult choices. But local authorities are really alive, and you've heard it already today, to the importance of those preventative services, and how those services will save them money in years to come as well.
I think what they told us as well, Minister, was that their difficulty is that they're constantly told by the communities they serve that the 20 per cent of services that are non-statutory are very much valued, and perhaps valued most by local communities, but then of course they have their legal responsibilities in terms of the 80 per cent that is spent on statutory services. Obviously, that puts them in a very difficult position, doesn't it?
It does, but then I think that takes us into a whole different space of what do we require local authorities to do. None of those authorities would suggest that we shouldn't be requiring the provision of education, which is a massive area of spend, or the provision of social care, because those two areas alone really do account for a massive proportion of authorities' funding. We'll always push for greater funding to the Welsh Government, which then means that we'll be able to provide a more generous settlement to local authorities in future years. But I think authorities themselves would probably recognise that we've done our absolute utmost to give them the best settlement that we could in the circumstances that we have.
Thank you for that, Minister. If there is any further information you could send us in terms of looking at alternative models and whatever else might help meet those pressures in terms of the non-statutory services, that would be very useful. Thank you.
I will do.
Thank you very much, then, Minister, and to your officials, for coming along to give evidence to the committee this morning. You will be sent a transcript in the usual way to check for factual accuracy. Diolch yn fawr.
Item 6 on our agenda today is papers to note. We have a letter from the Llywydd to all Members in relation to committee business; a letter from the Chair of the Public Accounts and Public Administration Committee in relation to its inquiry into public appointments; correspondence between the First Minister and the Chair of the Finance Committee in relation to the financial implications of Bills; a letter from the Chair of the Finance Committee to all committee Chairs in relation to the Welsh Government's draft budget for the forthcoming financial year; a joint letter from Cymorth Cymru and Community Housing Cymru to the Minister for Climate Change and the Minister for Finance and Local Government in relation to the Welsh Government's draft budget for 2023-24; a letter from the Chair of the Health and Social Care Committee to the Chairs of the Children, Young People and Education Committee, the Equality and Social Justice Committee and this committee in relation to mental health inequalities; a joint letter from the Minister for Social Justice and the Scottish Government's Minister with responsibility for refugees from Ukraine to the Secretary of State for Levelling Up, Housing and Communities and the Minister for Intergovernmental Relations in relation to housing Ukrainian refugees; a letter from the Minister for Climate Change in relation to building safety; a letter from the Welsh Cladiators in relation to building safety; and finally, further information from Shelter Cymru in relation to homelessness.
I think we may be returning to a number of those matters later in this meeting, but are Members content to note the papers at this stage? I see that you are. Thank you very much. We will then move into private session in accordance with the earlier item.
Daeth rhan gyhoeddus y cyfarfod i ben am 11:58.
The public part of the meeting ended at 11:58.