Local Government and Housing Committee

Item 2, then, is scrutiny of the Welsh Government's draft budget and the committee's first evidence session. I'm very pleased to welcome representatives of the Welsh Local Government Association who are joining committee remotely today. We have Councillor Gary Pritchard, leader of Ynys Môn county council; Councillor Mark Pritchard, leader of Wrexham County Borough council; Councillor Jane Gebbie, deputy leader of Bridgend County Borough Council; and Councillor Mary Ann Brocklesby, leader of Monmouthshire County Council. Croeso, welcome to you all. Thank you for coming in to give evidence to committee this morning.

Perhaps I might begin with an initial question on the current financial context, really, just for the Welsh Local Government Association to provide a brief overview of what you consider to be the current financial situation facing local authorities in Wales. We'd heard that there were a lot of grave concerns around the likely budget for the next financial year, but of course there has been some additional funding available to Welsh Government more recently, and that may have eased the situation to some extent. So, I'd be interested to hear from you, given the current position, what you think faces local authorities in Wales as we move into the next financial year. Who would like to begin? Mary Ann.

Thank you, Chair. Thank you, John. I think it's a mixed picture across Wales and it's a dynamic and changing situation overall. The challenges we face are the same challenges as we faced last year, and the previous year, and the year before that. They are an accumulation of 14 years of austerity and cuts, and reduced funding flows into local government across Wales via consequentials from the UK Government. So, we are in a position where what we're doing now is in a context where we have been facing significant deep structural challenges for some time. So, when we talk about the pressures of social care, the pressures on education, we must put it in that context, because the resources we have available to deal with the increasing pressures are not there.

Nevertheless—. So, if I take, before I go on to the nevertheless, if I take education, for example, many of our external resources that were supporting schools in terms of additional learning needs, but also for children returning to school after COVID, have already been cut to the bone. They're not sufficient to deal with the increasingly complex needs of many of our learners. But nevertheless, I personally heaved a huge sigh of relief when the settlement came, because up to the settlement in November, I was looking at a 0 per cent increase in the budget, which would have been if not catastrophic for some of us, certainly we'd be looking at how do we deal with large-scale redundancies and the cutting back of services, and how we could actually function as a local authority. I'm pleased to say that I'm not in that position any more. I don't think any of us are in that position any more, but we are still in very challenging times.

Okay, Mary Ann, diolch yn fawr. Thank you very much, and Gary.

Thank you, Chair. I would agree with what Councillor Brocklesby said, that the situation is much better than we had anticipated when we started to look at our budgets in the summer of last year. And in a similar fashion to Monmouthshire, we were also looking at 0 to 0.5 per cent of an increase in the settlement, although, having said that, the challenges continue; the challenges are increasing.

The challenge in terms of homelessness, childcare, particularly here in Anglesey, has increased significantly. But as Councillor Brocklesby said, after 14 years of austerity there is nothing left to cut. We have tightened the belt as much as we can. We have cut back where we've been able to cut back; there is nothing left to tighten up. The only thing that's left now is to close services, to get rid of services. To use an English phrase, there is no low-hanging fruit now; that fruit is a long way up the tree and difficult to reach now, and it will make a difference if we were to cut it.

We've been fortunate in that we've used reserves in order to balance the budget, but, of course, once the reserves have been used, they're gone, and you need to find the same amount of additional funding the following year. So, we don't want to be using too much of that reserve funding, but careful budgeting over the last few years has ensured that we have reserves to use. So, I wouldn't say that I heaved a sigh of relief, but it's certainly a better situation than we had thought it would be, but it's not an ideal situation.

Diolch yn fawr, Gary. Okay. If neither—. Oh, yes. Mark.

Yes. Thank you, Chair. Bore da. Good morning, everybody. Can I say something with regard to the announcement on the settlement? Yes, it's an improvement, and I'm really pleased, but it isn't enough money, because the demands are outstripping the services. The Welsh Government received £1.1 billion from Westminster, and we were told that we were a priority by the Welsh Government and we were going to be given a larger settlement. Well, as I said, it's to be welcomed, but it's not enough.

I'll give you an example. In the last five years, in adult social care and children's services in Wrexham, we've had to put in an extra £25 million, and it's still not enough. ALN was touched on earlier—additional learning needs; it's outstripping it, the demands. And the money you've put in is to be welcomed, but it's not enough, and it's all about social care placements. I could go on about homelessness, I could go on about highways, bridges, infrastructure. We are struggling.

Now, what I would say is, with regard to, 'Is it a relief?', yes, it's better, it's improving, but it's not enough. And I think I have to say this: is the Welsh Government setting us up to fail, because they know what the pressures are? You know, as a Government, what the pressures are, and all we want, all of us, the 22 authorities across Wales, is to be funded appropriately. That's all we're asking here; nothing more, nothing less. And if we don't have an increase in the budget, what will happen is it will mean that we will have to make people redundant.

In Wrexham, we went out for EVR, early voluntary retirement, and we got 15. We will have to go back out for compulsory redundancies. That's where we are. So, bankruptcy is still there, it never goes away, and what I would ask you all to consider here: the demands are outstripping the financial amount of money we have. We all know that. And it isn't one authority saying this; it's the 22 authorities.

So, with the committee this morning, what I would say to you, I would plead with you to work with us to give us extra funding, so that we can deliver appropriate services. Because the way we're going—and I've been here over 10 years; I've been a serving member over 20 years, I've seen it come and go—we're on the edge, and unless the money comes, there will be serious consequences with regard to staff. I mean, it could be around about—and these aren't my numbers—15,000 staff lost across Wales from the public services. That's what we're facing here now, and it's very difficult. And every day—and the other leaders will tell you the same, the 22—all we're facing are cuts, cuts and more cuts. We just haven't got the money. I'll stop there, Chair. Thank you.

Thanks, Mark. Well, one of the purposes of this session this morning is to put the committee in a more informed position in terms of the pressures and the realities that local government face, which will aid our scrutiny of Welsh Government and the Cabinet Secretary with responsibility for local government, during a further committee scrutiny session next week. So, obviously, it's important for us to hear directly from you. Jane, did you want to add anything?

Yes, please. Thank you very much, Chair, and thank you very much for inviting us this morning, committee. I won't repeat what's already been said, but local government is—. Yes, it's very fortunate, I think, to not have a flat cash settlement budget this year; I think we're all very grateful for that—you know, I need to reiterate that. I would have imagined that there would have been various councils across Wales issuing section 114 notices because they would no longer be in a position to deliver services.

I think what I’d like to reiterate is that local government is often seen as the saviour for the NHS, and we want to stop people going into hospitals. Local government has lost 40 per cent of its staff. When we refer to low-hanging fruit, it’s already gone; when we refer to the additional staff to manage any difficulties, any emergencies, we don’t have them anymore; we don’t have the resilience that we once had. And whilst we're all very grateful for the 4.3 per cent rise, we welcome that, the reality is the pay offer that we offered under the national joint council this year was 5.77 per cent, and, already, that indicates that we won’t have the resource to pay our staff appropriately.

Part of that is around the real living wage, but part of it is around our commissioned provision as well. We’re all very grateful that the Government has said that they are going to cover public service national insurance costs, but, actually, we’re all very reliant on commissioned provision, and none of that is included in that. When we talk about an overspend in social services, we’re not overspending; actually, we’re paying for the demand that we actually have, and it’s a provision that we have to deliver under Welsh Government legislation. So, we’re delivering your provision, and I just think we need to be realistic about what we are able to provide.

We don’t deliver gold-standard services any more in local government. I’ve worked in local government since the 1990s, Chair, so I’m very au fait with how we used to work. We were always gold standard, we were considered best practice; we are not the same any more. We do look to see how we can economise, how we can deliver just what we need to deliver, rather than actually making people’s lives so, so much better, which is what we do. And if we can do that early intervention and prevention work, something that is not statutory for local authorities—and we can have that debate about whether it’s statutory or non-statutory—but we don’t, then, the demand on health provision is going to exacerbate excessively. We can already see that. We don’t refer to winter pressures any more in social care; actually, we have those pressures all year round due to the sheer complexity and the sheer demand on our services. Thank you very much, Chair.

Thank you very much, Jane. Peter Fox.

Good morning, all. It’s really good to see you and to catch up with where you are. Mary Ann, you shared that there was a sigh of relief when the budget came through, but, clearly, as we all know, the variances between the distribution of Newport and Monmouth, being at the lowest, at 2.8 per cent, is quite stark. I was wondering what your position was—all of you—around the need for a funding floor, because that’s been offered in previous years to balance out the massive discrepancy between the highest and the lowest. I just wondered if the sigh of relief, Mary Ann, was that there wasn’t a need for a funding floor.

No, Peter. It’s one sigh of relief. It wasn’t a large, ‘That’s it, we’ve got nothing to worry about’. I’m on record as saying that we were disappointed, but I also understand how the algorithm was made. And there’s a different and longer conversation, I think, we need to have about how the local government settlement is calculated and the data that is used. It’s not one I want to have here, but it is one that we need to recognise. I do think that we are currently, as a council, but also through the WLGA, in very constructive conversations with the Welsh Government about what is needed—including a floor—to ensure that there is sufficient support forward for those councils that, at the moment, received less in the overall settlement. But we also need to recognise that those councils that received more, it is because of characteristics to do with poverty, disadvantage, population numbers, and, in Monmouthshire, it is very different for us.

I would add that one of the pressures that perhaps could be considered more fully are perhaps the pressures we have of older citizens. Monmouthshire is one of the county councils that has the greatest number of older citizens with complex needs and complex support, building on the points that Councillor Gebbie made earlier that demand is rising, and our ability to provide the gold standard support that we would like to is severely constrained by our resources. The floor won’t deal with that, as has been eloquently said by the rest of my colleagues—it is a change in how we understand social care and how we understand the interrelationship and integration between social care, health and other preventative services, so we stop older people and younger people having to go to crisis services like going into hospital, because we have in place those preventative measures which enable them to live a life of the quality that they would want. That’s a longer conversation, and I believe we’re coming on to that later, but I do think and I am optimistic that, when we come to the final settlement in the spring in mid February, we will have a solution that is satisfactory in terms of both the floor but also other ways of dealing with these discrepancies. Thanks, Peter.

Thank you, Peter. Thank you, Mary Ann. Siân Gwenllian.

Good morning. I'm turning to discuss national insurance contributions, and I would like to know from you what the effect of the UK Government's decision to increase national insurance contributions will be on employers, including local government, of course, and also what clarity there is at this point in terms of how you're expected to pay for this increase.

I'm happy to answer, if that's okay, Chair. In terms of Anglesey council, as one of the smaller authorities, I would imagine that the impact on the other authorities is going to be bigger, but we're looking at a risk of about £2 million to £2.5 million in terms of our own staff. But of course, a lot of our services have been outsourced, so waste, highways, an element of care, school meals, for example, have all been outsourced, and we have no certainty at all, even with those statutory elements that have been outsourced, whether there will be any money coming back for the national insurance contributions that are in addition for services that are outsourced. But, in essence, we're not sure how much of the internal money will be covered either. We're hearing that it'll be June before we have any idea how much money will be coming back to us. But of course, we will need to have set our budgets much earlier than that, so there is an element of risk, and we have to accept either that we use reserves, or that we have to increase our council tax to cover what we don't know about. So, it does add uncertainty to discussions about setting the budget, there's no doubt about that. The risk is significant. As I said, we're one of the smallest authorities, so, if we're looking at a risk of about £4 million to £4.5 million for internal services and what is outsourced, across Wales it'll be much bigger than that. Thank you.

Of course, there is talk of £109 million in addition that will come to you to cover this increase in the NI contributions. There is money coming, but what you're saying is that the money will be late in the day, perhaps, and also that there is great uncertainty in terms of the third sector and those outsourced services. But that £109 million, is that in itself going to be enough?

We don't know exactly how much every authority is going to receive, and whether the contribution that will come to us is going to be 100 per cent of what we have to spend. We're not quite sure whether every element of the work—. For the non-statutory services, for example, such as leisure, is the money going to come to contribute towards the national insurance of our leisure staff, for example, in addition? There is no clarity in term of whether every element of the council's work will be paid, or whether just the statutory elements. There's no clarity either in terms of if every element of the council's work will be compensated, or only the statutory elements. And there's no clarity either, as I said earlier, on those elements of statutory work that we as a council here in Anglesey outsource.

What's your experience in the other councils? Does anyone have any clarity about the £109 million?

Thank you very much for the question. I think what might be indicative for you is the Treasury has stated that any directly employed staff we will be paid the national insurance contribution for, which is what the £109 million, there or thereabouts, should cover. What I would say to you is that the WLGA has done an exercise on behalf of the Welsh Government, across Wales, just in relation to social care expenditure. We estimate that the additional cost for commissioned care—so, that's all those people who are receiving care in their homes, or within care homes—is £44 million for local authorities. That's just one indicator that we believe the £109 million will not cover directly.

Jane's covered one of the topics I was going to cover, so thank you for that, Jane. With regard to whether the £109 million is enough, no, absolutely not, and the reason being is—and I'll give you another example in social care—Wrexham's social care budget is £100 million, £70 million of that we externalise, external providers will put the NI contribution onto us, and that will be a cost, so it isn't enough. And can I say—I'm perplexed on this—that I can't understand why we have to wait until March? Surely, if there's a commitment from Westminster and the Senedd that the money's going to come, they should give it to us. We can't wait. We're setting our budgets before it. It's a nonsense. But we are where we are. Again, I would ask you, as a committee, to look at this. And can I ask, is there a commitment we're having 100 per cent of the NI? Are we going to have it all, or are they only going to give us 80 per cent of it, or 70 per cent? Will there be shortfall? That's the problem here. That's what we're grappling with here. So, no, it isn't enough, but the sooner a decision is made on how much we're going to have on the percentages—. Are we having 100 per cent? And for us to wait until March is too late. We've set our budget by then. Thank you, Chair.

Thank you, Mark. We'll come on to NDR. Siân, are you content?

I just had one other thing I wanted to ask: are you certain that this £109 million will be for that increase in NI? What about the pay uplifts? There is great money needed there towards those. Does this £109 million include those pay uplifts, according to your understanding, or is there another pot of money that's on the way to meet that need? No, it doesn't look like that's the case.

No. Okay. Perhaps we will move on to the provisional local government settlement. I think, from what you've already said, there's a view that, although the better than initially expected situation was quite a relief, local authorities will not really have the stability that they need to move forward in service delivery and with their general operations. So, that being the case, I just wonder if there's anything in particular you might point to in terms of what the Welsh Government might have done differently in relation to the settlement. I suppose the obvious point is, 'Provide a lot more money', but I guess that's not realistic in the overall financial circumstances. Anything in particular? Gary, and then Jane.

Thank you, Chair. Just to pick up on the point that Councillor Brocklesby made earlier on, I think the same thing, that maybe this is a discussion for a different committee on a different day, but the way that the cake is sliced, the formula that's used, does punish rural authorities, authorities that have a demographic that's a little bit different. For example, here on Anglesey, the number of people that we serve remains constant from year to year, but because it is a lower percentage of the population of Wales, the settlement that we receive gets worse and worse. We are also punished because we have more older people in the population here. So, there is a discussion to be had about the formula that does punish rural authorities who have a population that is older. But I think the truth about it is that it's not how the cake is sliced up that's the focus today, but the size of the cake itself. I think that's true to say.

Thank you, Gary. Yes, absolutely, and I'm sure there'll be all sorts of ongoing discussions around a wide range of other matters that are very relevant to local authorities' budgets and service delivery. Mark.

Thank you, Chair. With regard to what the Government could have done differently, I think they should seriously consider this: introduce statutory overrides to give parity with the English authorities to take children's services, care and specialist education provision out of the revenue and into the balance sheet. This would provide and give us much-needed short-term breathing space. They do it in England. There are pots of money there. It works well. It's good practice. Why wouldn't you do it here? Thank you.

Thank you, Mark. Let me just bring in Lesley Griffiths. Lesley.

Thank you, John. Gary, you mentioned the formula. What would you say the appetite is from the WLGA to have a look at the formula? Because clearly it needs to be done in partnership between Welsh Government and WLGA. Because with 22 local authorities, you're always going to have people at the top, people at the bottom, and people in the middle, and I appreciate what you're saying about the size of the cake, but for me the formula, which has been in place for quite a long time—I was just wondering what the appetite was like to have a look at that.

Thank you for that question. I'm a relatively new council leader, but in the recent meetings I've had, I think that there has been a discussion that has started on the formula and the need to change the formula. Certainly, obviously, I would say this as a leader in an authority that is penalised by the current formula, but I do believe that there is room and a desire to look at the formula again, but as you say, with 22 local authorities, you need at least 12 of us to decide that the formula needs to be looked at for it to become a majority. But, yes, the discussion needs to be had, that is for sure.

Mary Ann.

It's not so much as what could be done differently. I think what we all recognise is what local authorities desperately need is multi-year settlements that can allow us to be much more flexible about how we allocate our resources. We're promised this and I hope this will happen, but I think rather than have it on an ad hoc basis, it needs to be built into how settlements are made for local government and there be an acceptance that multi-year settlements are the way forward.

I take the point of Councillor Pritchard. I don't feel penalised and I don't think that is the most helpful way of thinking through what allocation of resources could look like, and what kind of distribution criteria we need to look at and review on a regular basis, not on a one-off basis—on a regular basis as population dynamics change by age, but also by other characteristics. Parts of my council have a lot in common with Newport in terms of the town demographics, our transport needs, the needs of our elderly people, our young people, leisure services, et cetera, but other parts of Monmouthshire—and I think this is probably true for most rural areas—have particular transaction costs to do with transport, to do with access to services, not just our own services but also GP services and dental services, which comes back to my earlier point about prevention. Dealing with that in some parts of our county is much more problematic because the integrated service model that we are all attempting through work with health boards et cetera is much harder to put into practice in those areas where there is no transport in place. So, people who do not have access to a car or have mobility issues et cetera cannot even get to a health centre in a timely manner, picking up prescriptions. But, equally, care staff being able to do regular visits, being able to recruit care staff et cetera, et cetera is more problematic, and we need to look at that in terms of our social care offer and social care provision in a much wider discussion, which, as we know, is ongoing, and Councillor Gebbie is far more eloquent on this matter than I am. But we need to look at it in the round and the holistic round, and not just see it in terms of the settlement.

Thank you, Mary Ann. And Jane.

You're on mute, Jane.

Somebody unmuted me and I muted myself back; I do apologise. I won't repeat everything Councillor Brocklesby has just very eloquently said. I think I have three asks from Welsh Government and I'm quite happy to give you some examples in relation to that, but it's about specific grant funding. We get told that Welsh Government are going to fund specific areas of work, and then we wait so long for acknowledgement and the detail of that grant funding it causes particular difficulties. I will reference one from a social care perspective, and that is the Connecting Care brief across Wales. On every corporate risk register in every local authority, our Connecting Care digital platform is something that we are working at risk with. We still do not have any acknowledgement from Welsh Government who informed us that they would work with us, and we're still waiting for that. So, we're all going at risk because we have to, because, actually, there is a potential safeguarding risk across Wales for the failure of any of those digital systems. So, I think that's something we really do need to highlight. If we're going to have a grant, that's fine, but we need acknowledgement and we need to understand what that grant means, what it entails, and we need that real clarity around those grants much quicker, please.

I'd also ask for a letter of comfort around the national insurance, because we're all working at risk on that. And as every other member has said, we're already setting our budgets. We have to statutorily, just like yourselves. However, we don't know what we're expecting. If we could understand what minimum each council might expect, that will go some way for planning purposes.

And the other thing I want to reference is revenue funding for highways. Our highways have suffered over the years. It's okay us being able to borrow, a more extensive funding package, that's great, but we haven't got the revenue to support that funding to apply for it in the first place. So, I do think it's something that we really would encourage Welsh Government to give some serious consideration to. Thank you very much, Chair.

Thank you, Jane. Let me just bring in Lee Waters for a moment. Lee.

Can I just ask specifically on that question of highways funding, because it's my understanding that the Welsh Government is providing £5 million to enable you to draw down a further £60 million? So, I'd just like to ask Councillor Gebbie to expand on her point about not being able to draw that down, and also to reflect on how much flexibility is there. Could more be drawn down if further revenue funding to underpin it was available?

So, yes, there are some moneys available, Lee, but it's certainly not enough to recover the position of our highways. We do need some additional, and if we could have up to £120 million, which is what I would suggest, I think that would be beneficial to Wales. Does that answer your question for you sufficiently? I'm happy to take this offline as well and have that discussion.

And how confident are you that you'll be able to spend that?

Oh, easily. I think one of the biggest problems that we have with any capital project currently is the cost of them. So, whereas we used to be able to deliver—I want to say, on £1 million; if my leader was here he'd tell me the costs in detail, because it's his brief more than mine—what I would say is that we know that the costs have doubled just to do any road maintenance. So, in that regard, we're very much behind, and we need to catch up, I would suggest.

Thank you.

Okay, thank you. Mark.

Thank you, Chair. Can I thank both Members for the questions? Can I cover the first question, with regard to the formula? Yes, I would support a change in it, because it's out of date, it's pretty historic, and it needs to be looked at. If you have a look at how it was set up, many, many years ago, it's not fit for purpose now—on population and areas of deprivation et cetera. But can I come back, and I'll give you an example why it's not fit for purpose. To be fair, the Welsh Government are putting more money into additional learning needs. Now, that will go on the formula. It shouldn't go on the formula, it should go where the need and requirement is and the demand is, and that's what's at fault here. Gary is right, it is a democratic process, through the WLGA, and I have tried to get some support, but there seems to be a reluctance on this, but I hope in the future we can move forward. But when you're working on 15 years' or 20 years' data that is out of date, it's not very good. With regard to the funding on the transport side, highways, it's not enough; £60 million—I could spend that in Wrexham alone. But, yes, I would be very grateful of some more money so we can borrow on top of that, yes. Thank you, Chair.

Diolch yn fawr. Just in terms of the budget shortfalls that local authorities will still face, despite the improved situation, I wonder if you could just share with committee the ways in which you might address that gap in budgets, particularly with regard to social care and schools. We know that there are possibilities around increasing council tax, obviously, making cuts to services, reducing jobs, all of which are not palatable in many ways. If you have any emerging thinking, as it were, particularly with regard to social care and schools, in terms of how budget gaps might be addressed, I'd be grateful if you could just share that with us now. Mark.

Thank you, Chair. I'll make this fairly simplistic, really. It will be cuts to services, redundancies and higher council tax. That's the frankness of it. Where the council tax will be set in Wrexham, I don't know, but we're having a discussion now. It could be between 9.9 per cent, 15 per cent—we don't know. It needs political support. But what I would say is, it will be cuts to services, redundancies and higher council tax. We've got no option. We've got no other option here. Thank you, Chair.

Thank you, Mark. Anybody want to add to that? Mary Ann.

You're on mute, Mary Ann.

Thank you, Mark. Yes, we have to look at council tax raises, as every other council will have to look at. There is a gap. We have been on a two-and-a-half-year journey of changing and transforming the ways in which we support education and social services. This is long term, it needs to be long term. At the core of this are three issues, I think: one, how we use data; two, how we collaborate with other councils; and, three, how we become more efficient in the way that we take forward prevention. If I take that one first, Councillor Gebbie has alluded to this, and while she quite rightly says it's a question for maybe another committee and a further debate, there is no doubt in my mind that this connection between statutory and non-statutory services is framed in the wrong way.

In order to provide services in the long term, which absolutely support reablement, the empowering of our citizens to make decisions for the quality of their lives, their households, their families, then we cannot make a distinction between what we need to do statutorily and what we need to do to support our ability to fulfil those statutory duties. They are one and the same thing. Part of our transformation journey is thinking of what staff and our approach are doing to ensure that the person is put first, their needs are considered first, and that we work around that, given the resources we have, in collaboration, in order to make changes that are effective.

So, I can give some examples with the integrated care support that we give in Chepstow, which involves GPs, it involves our staff, it involves leisure centres, it involves the health board, and, between us, we are seeing results in the way that we are supporting and keeping vulnerable adults out of hospital or from returning to hospital. We're also using assistive technologies, and we are also using data analysis in a different way, so that we can do reviews quicker and we can share the data quicker. All this takes time. I'm not suggesting that we are a model authority, by any means; what I am saying is that, when we're thinking about how we deal with this ongoing crisis for public services, particularly for local government, we do have to take the long view while dealing with the immediate concerns of the budget year in, year out—and I come back to my point of needing multi-year settlements to allow us to continue that long transformation that every council is going through. Public services in the twenty-first century look very different to those in the twentieth century. If I look at the others—. I think I've just lost my train of thought there.

Well, don't worry, Mary. Lee Waters, I think, probably has a question for you. Lee.

Thanks. Yes, I was really interested in that point about the use of data and digital to remodel services, because there's no mention in the WLGA evidence paper at all about collaboration, sharing services, the use of automation to reduce burdens on the way services are run. So, I'd be keen to know what thinking there is amongst the political leadership about the opportunities for that, and what work is being done to modernise the way you deliver, using technology and new ways of working.

If I could quickly reply to you there, Lee, digital and data is an absolute passion of mine. I represent WLGA on Data Cymru; I'm also on the board of Shared Regulatory Services, which is the Gwent shared data platform—I believe it's the only one in Wales. It's absolutely essential that we use data differently and that we share data in ways that we put a human focus and a human-centred data use. For example, in SRS, we're starting to pilot, in the Gwent area, the whole-of-child approach, where that data can be shared so that different agencies working to support children can use that data effectively to intervene before crisis occurs or before situations escalate into something that could lead to, for example, being taken into care. This is really important.

I'd come back to the fact that, with regards to data, particularly data management and analysis, no council currently has the capability to do all this alone; we have to collaborate. And we have to collaborate with other organisations and agencies that have the expertise, knowledge and data banks to support us to reconfigure how we use our data. I think we need to learn from other parts of the UK, but also other parts of Europe, and how they do it. It is the way forward, with one caveat: it doesn't replace front-line staff and the work they do with our citizens—it supports that work.

Can I follow up on that? Because, on that last point in particular, there was a case study from Caerphilly County Borough Council a number of years ago now about the use of robotic process automation to take away mundane work in administering free school meals, to redeploy staff to front-line work, but that's gone rather quiet, and I'm a little surprised there's nothing in the whole of the evidence paper about the opportunities for using innovations like that and for spreading good practice to deal with the many pressures you've all eloquently told us about.

Well, it's something we can continue to have a chat on, Lee. I'm happy to take that one offline.

Thank you.

Okay. Peter.

Just briefly, on the whole collaborative agenda, because it was something I certainly, in my past life, could see that was fundamental, actually, to a sustainable local government family. I just wondered, can you give us a flavour—obviously, that could go into a long time and we might not have that, but a flavour—of how the appetite is still for collaboration? Where are we on things like procurement and opportunities where groups or local networks of authorities can really plug some of these gaps? I'm assuming that is continuing, but I'd like some reassurance.

Okay. We've got Jane and Gary. Jane first, then Gary.

Thank you very much for the questions. I won't repeat everything that Councillor Brocklesby has said around digital platforms, but digital platforms are normally held, and the strategy around all those is held, by the regional partnership boards. I'm chair of one of those regional partnership boards, so I can give you a flavour of some of that work. We do use data in order to plan our services, and that's regionally, that's not just around local authority use.

The reason I wanted to come in specifically was around a longer term view of how we're going to deliver services and the health of our nation, because, if we don't do something about the health of our nation, because we always focus on the crisis, and the crisis for us in local government is always about bedblocking, delayed transfers of care—whichever terminology you want to use, that is where our focus is—and it's about getting people out of hospital. Actually, we need to flip that story on its head. We need to start from birth. We have a population that, I would suggest, do not know how to cook, eat well, stay off processed foods. We hear about diets all the time. Actually, your diet is something that you imbibe every day. It's not a specific food group; it's about the way you eat and the way you manage your own health, and I do think that we have a population that are, sadly, lacking in leadership around their health, is what I want to say very bluntly.

I say that because we know that we have more and more difficulties of children. If we use the example of children in residential care as an example, we can give you an example from one local authority in Wales that had a court order to have one child in a placement and they were on a 4:1 ratio of staffing. That is over £1 million in-year in a placement cost for one person, and there was something that could have been done previously. The early intervention and prevention strategies I really do think we need to consider, and that's around education, that's around social care, and that's around some social responsibility, because, if we don't start doing this, our services are not going to be there for future use, and we don't have the population being born for the people in order to deliver all those services at the current demand levels that we're currently experiencing. Thanks very much, Chair.

Thank you, Jane. Gary.

Thank you, Chair. There are several questions that have been asked since I put my hand up, so just to respond to a few of them now, I think that Councillor Gebbie said a lot of things that struck a chord with me in terms of the preventative work that we do, and that preventative work is considered work that is non-statutory, whether that's even within our youth services, which are, of course, non-statutory, within our schools, the early intervention work, and, unfortunately, when there is pressure on budgets, it's that preventative work that are sometimes the easiest things to cut, and we as politicians have to be brave and to not think—. As local authorities, we shouldn't be thinking about 2027 as some sort of marker. We have to be brave and ensure that that preventative work is funded and does continue, or otherwise we dig a bigger hole for ourselves that will appear later on down the road. And everything that has been mentioned in the last few minutes goes back to budgets and without budgets it's very difficult for us to do this preventative work, and that pressure is going to be worse in the years that are to come if that preventative work is cut.

To go back to the original question about how we're going to fill that gap in the budget, as Councillor Pritchard said, unfortunately, it is going to be a combination of reserves, cuts and council tax rises. The percentage of the SSA that comes from council tax here in Anglesey is almost 30 per cent now. Ten years ago it was a little over 20 per cent. The amount that we raise in council tax, in a very difficult period for the residents of the island, is getting bigger and bigger, we're charging more and more, and, to put it very plainly, the message I would pass on is that, unfortunately, we on the ground are going to be challenged on why is council tax rising while services are being cut, while public toilets are closing, while there are potholes in the road, and while the Government in Cardiff and in Westminster are saying that Wales and local authorities have had more money than ever before. That's the basic message that underlies everything that we're discussing this morning. Thank you.

Diolch yn fawr, Gary. Okay, time is moving on. We've covered quite a lot of ground. Hopefully, you're able to stay with us a little beyond 10:30, because we've still got a number of questions to cover. Lesley.

Before I go on to workforce, can I just go back to the formula question? You all came up with ideas of how you could improve your budgets, and I absolutely agree about multi-year settlements. The Welsh Government, I assume, I would like a multi-year settlement. So, I think we have to be very pragmatic about where we are now. I think the point that Mark Pritchard made around the formula is really important, and I appreciate the four of you are here representing your own councils, but I would be very interested, Chair, in the WLGA as a whole, their view on the formula. So, maybe we could write—

We could write, yes.

—to the chair to find out that, because, for me, that is very fundamental in lots of things and ideas that you're coming out with around that.

But if I could just turn to the workforce, and your workforce—obviously, I know Wrexham the best—they're absolutely the jewel in your crown. We have very committed staff working in our public services in our council and delivering those front-line services that so many people rely on. You've all mentioned that you may have to look at redundancies, even though you've had a better budget than you anticipated this year, and I appreciate one good budget after the budgets that you've had over the years, due to austerity, is not going to be the answer to all your concerns. But I am concerned to hear that compulsory redundancies will need to be looked at, and I think it's really important that you look at the areas, rather than just salami slice. I think it is really important that you look. And again, going back you, Mark, you said that you'd only had 15 people coming forward, and would that be the areas that you would need to lose those people from. Sometimes we lose the people that we need the most. So, I think you need to have a look holistically. Again, are you all able to give a percentage of redundancies that you would be looking at? Going back to the transformational agenda, would be that be part of the way that you would look at those redundancies? I read somewhere the other day that there are 140,000 people working across all 22 local authorities, so what percentage, do you think—? Maybe, again, you won't be able to give me a figure for Wales, you'll only be able to do it for your own local authorities, but I would be very interested to know, looking at those three things—cuts to services, redundancies, higher council tax—how you would look at your workforce.

Okay. Jane.

Thank you very much for the question. I think the first thing I'd say from a Bridgend perspective is that we're not looking for voluntary redundancies because we can't fill all our vacancies, and we do run a vacancy factor as part of our savings. I think that’s the one thing I would say.

I’m sure colleagues will be aware of the Welsh Government’s intervention in relation to planning. They’re doing some sort of scheme about apprenticeships for planning, because we can’t actually appoint them on the terms and conditions that we offer in Wales. When I referenced earlier that we’d lost 40 per cent of council staff since 2010, I really do mean that we are struggling to deliver services. Actually, I’m more concerned about my sickness levels and the amount of stress on my workforce, because there is no slack in the system—we just don’t have it.

I’m managing a vacancy management situation rather than anything else at the minute, because that seems to be the better way of doing things, but we haven’t got staff to deliver some of those most important services around planning, which causes delays in the system as well. If I haven’t got people to enter data, as Councillor Brocklesby referenced earlier, if I haven’t got the people to actually set that data in, then there is a delay. I’ll give you an example: we can’t appoint to legal in our chief executive’s department, and part of that is having an impact on our deprivation of liberty safeguards, because there is a requirement now that every deprivation of liberty is assessed yearly. I haven’t got the workforce to do that—not in a timely manner at the minute—because we can’t appoint to those roles. Thanks very much, Chair.

Can I just come back, Jane? Are you saying you’re not looking at any redundancies at all?

We haven’t got any redundancies because we can’t fill some of the vacancies on the terms and conditions that we offer. So, actually, it’s impacting on our staff.

So, you would be looking at the other two areas—cuts to services and higher council tax.

Yes, it will be deletion of services.

You won't be looking at redundancies at all. Okay.

No.

Just like Bridgend, here in Anglesey we’re not looking at redundancies; we’re just not filling some those vacant posts that we have, as a way of saving money, in the same way. That, then, of course, has its own impact, but at least we don’t have to face people losing their jobs.

We’re not looking at redundancies. I’d just like to echo something that you said, Lesley. I think, across the public sector, our staff are the jewel in the crown. It’s certainly true in Monmouthshire that they go above and beyond. We are, like others, not filling vacancies, partly because of the vacancy freeze, but also, partly, because it’s very difficult in some areas, like planning—although we have just appointed a chief planner—to get people on the wages that are offered. That is true also in senior leadership. We have just conducted a review. It’s very difficult to implement given the current resource constraints, but we recognise that we are in the lower third of how much we pay across Wales. That makes it difficult to retain people.

The issue for us, and I think it will be true for other counties, is year in, year out of freezing vacancies, of having voluntary redundancies, or, in the past, maybe having some redundancies, means that some of our staff are doing double the role, triple the role, are moving around the county as we keep some services open on one day in one area, and some services open on another day in another area. So, we’re juggling. You could call it innovation, but it is an innovation born out of such restricted resources, burdens placed on staff to do the best they can, and, my God, they do. Our staff go above and beyond every day of the week, in whatever sector they’re in.

But we cannot carry on like this. I think this is the message coming across from all the leaders here—let’s not just look at this year; let’s look at the next year, and the following year, and the year after, because if the settlements continue like this, then it is going to be very hard not to have redundancies, but also to maintain a level of morale among the staff, so that they are absolutely committed to doing the job that they’re appointed to.

I think the message is coming across that in order to balance your budgets it's not going to be redundancies; it's going to be cuts to services and higher council tax. I think it was Jane that said about low-lying fruit. If you go to statutory and non-statutory services, obviously it's non-statutory services where you will probably look to see if there is any more wiggle room, if you like, in relation to that. If you look at the way your funding is, obviously the majority of it goes to education. You've all mentioned social care. Children's services are increasing—I know, in Wrexham—in the way that you referred to, Jane. So, again, it would be good to know which areas of your services you're looking at to reduce. You're not looking at redundancies, and obviously you're all going to look at raising council tax.

Can I just come back with regard to retention and recruitment? It depends on where you're located within Wales. Our competitors are over the border in England, just 12 miles away, and they pay substantially more money with regard to staff in social care, occupational therapists et cetera, and we lose them all the while. They go across the border, because they can get £4,000 or £6,000 a year more in salaries. That's just the way it is when you're located very close to Chester, Liverpool and Manchester et cetera.

With regard to low-lying fruit, there is no fruit left. I'll turn it around. You've gone through the skin, the bone is gone, the marrow is gone. We've taken all the efficiency savings we can. And with regard to redundancies, I think it's important that we understand that we will lose jobs and a lot of authorities mask them because they take away the vacant management posts, but there are still job losses. They've gone. So, we can sit here this morning and say there won't be redundancies. There are job losses, because you're not recruiting, because you're taking away those posts within those departments, because departments are reducing. They're shrinking. And that's where the job losses are going. But we've done all that, and we've got nowhere else we can go with it, and that's why we've gone out for redundancies, EVRs, and we'll have to go again, because when you have statutory services, which we have a legal responsibility for—it's the law to put the money and deliver those services—the non-statutory services will fall by the wayside. They have to.

I listened to what everybody said, and I've listened to it all the while, in many meetings over the years, that non-statutory should be looked at differently. There are some non-statutory services that are just as important, but the fact of it is, by the law of this land we have to deliver those statutory services. So, it's quite obvious that the non-statutory services, which we don't have a duty to deliver, will fall by the wayside. They have to. Thank you.

I think there is general agreement with the point Mark made there in terms of statutory and non-statutory amongst our witnesses, so shall we move on to Lee Waters?

Thanks. The paper you submitted in evidence talks about unanticipated demand, which we understand, and the WLGA is projecting an overspend of £238 million for the current year. But it also seems to have downgraded its estimates for cost pressures in future years. I just wondered if you could explain that seeming discrepancy.

Thank you very much for the question, Lee. I'm going to be very blunt here. I don't think any of us—. We all have to—. Sorry, let me put my teeth back in and start again. I think that we are all trying to do medium-term financial planning, and we're trying to do it with tea leaves. I'm trying to be very blunt here, because we don't know what's coming over the hill or around the corner. We were expecting a flat cash settlement this year from the Welsh Government, and we are delighted, as we've all said—we're in a much better position than we were expecting to be at the start of the next financial year. However, in terms of the multi-year funding settlement, we don't know what's coming around the corner.

COVID came around the corner. It cost us millions and millions of pounds, and we managed it exceptionally well here in Wales, and I'll put on record my thanks to the Welsh Government for the way that they managed our COVID situation here in Wales, and they did it because we did it through public services. We didn't do private contracts to private businesses to try to deliver services. We all pulled our sleeves up and we all got down to it because we have a workforce that's flexible, they work under demand, they work in circumstances that none of us would really want to be in. And I think that's the point, really. We're trying to do this year on year, but we have a legal responsibility to set a budget that we don't actually know. We're just plucking figures out of the air at times, and I think we've got section 151 officers in our authorities that do an absolutely outstanding, incredible job in such dire circumstances, which we've never been in before.

I would never have expected over 20 years ago to be sitting in front of the Welsh Government pleading the cause for public services and for the finance to support them. I am public service-driven. I can't impress that enough. But we don't have any certainty around our budgets and we are struggling. I want to say that that's a politician's answer for not giving you one, Lee, but it's not, because we can't pluck figures out of the air that we haven't got.

I understand that you don't have perfect visibility, but the estimates for budget pressures have changed for future years and are now lower than the previous estimates. So, I just wonder if there's anything behind that or if, as you've just said, you're plucking them out of the air.

We are definitely plucking them out of the air and reading tea leaves, Lee.

Okay. Thank you.

Gary, do you have a view?

Just very quickly. Obviously, over the past few years, inflation has played a big role in our budgets. No-one would have foreseen that inflation would have been so high when that budget was set two years ago. So, obviously, the pressure is going to change as inflation changes. And, as Councillor Gebbie said, we do have excellent 151 officers within our local authorities. It is not a matter of seeing how the wind is, but at times, when we don't know what's around the corner, there is an element of overspend at those times. But, as Councillor Pritchard said earlier on, it's not overspending but delivering the services that we are required to deliver.

Your budget paper says that two thirds of your projected overspend is not inflation related.

Okay. Lee, did you want to—?

No, that's all I have. Thank you.

Okay. Let's move on to Siân, then, because we've heard Mary Ann and others emphasise the importance of medium and long-term planning and multi-year budgets.

Thank you. Audit Wales, of course, says that there is a need for more long-term planning. We have mentioned this morning the need for budgets that are multi-year. I think that we are quite clear that you feel that that would be of assistance to you with long-term planning. But what else would be useful? For example, Audit Wales say that you should be using reserves in a more strategic way, but how realistic is that?

Who would like to respond? Gary.

I've had this discussion with Audit Wales several times previously. Once you use reserves, that money is gone. I think that if we look—. Perhaps we're jumping through topics here, but if we're talking about grants that arrive with us, sometimes we get grants for spending that, to be completely plain, is irrelevant. Sometimes it would be better if we were to get those grants and we were allowed to decide where that spending needs to go. It's the same with the capital. Give us the capital in the general capital funding and let us decide where the need is, rather than us having to spend on specific things that maybe aren't relevant for every local authority.

But in terms of the reserves, I think sometimes it is easy to say, 'Use reserves.' But the truth is that, if we had used the reserves, as the opposition parties wanted us to do over the past few years, we would not have been able to ensure a budget that balanced over the past two years, because we've been careful over the years in ensuring that we maintain reserves. Once it's gone, it's gone, and that leaves a bigger hole behind for the year to come.

Mary Ann.

I wanted to laugh at that question because of the hand that we were dealt when we assumed the administration in 2022 with a lack of reserves, and it's something that—. I would love to be able to strategically, or otherwise, use reserves in dealing with our budgets and any extenuating circumstances or changes that happen within year, but that is not the case. Certainly, we would like to be in the position—and I'm confident that we will be over the next three years—where we build up those reserves. It is necessary to have them and to use them when they are available.

I think the request on local government to have medium and long-term planning is the right request, but it needs to go hand in hand with national Government medium and long-term planning. So, while we have a commitment from the UK Government to multi-year funding, starting the year after next, we have no indication yet, either from the Welsh Government or the UK Government, of what their spending plans might be and what their medium-term or long-term forecasting is. I recognise that the spending review will shape this, but nevertheless, I do think that it has to be in lockstep, rather than have—. And I'd include our health boards in that as well. We have to have a sense, as a public sector, what our medium and long-term financial plans are and how they are interrelated, otherwise we're just looking at a cliff edge every year as we reset the budget. That's been my experience over the last three years.

Okay. And Mark.

Yes, thank you. Mary Ann made me laugh when she said she wanted to smile with regard to this question. I won't say what I thought of it. I think it's a nonsense. Reserves are there for a reason. If you look at the inclement weather across the country, across the world—floods, snow, trees, winds—we need reserves. Yes, we can spend the reserves, but how do you replenish them? Because we haven't got the money to replenish them. Many years ago, we could replenish them. We can spend over £2 million or £3 million in a month on gritting, snow ploughing, floods. I mean, it's relentless—it goes on. And if you don't want us to have the reserves, well, put in a figure that we can only keep a certain percentage of reserves, and what will happen is, then we will have to come to the Welsh Government for the money because we haven’t got it.

And with regard to reserves, and I think it's important, why should we, as 22 authorities, spend our money when there's inclement weather and floods, and bridges are washed away and we have serious problems on our highways, and then you expect us to fund them? And then when we put a claim in to the Welsh Government for them, you refuse them. It's unacceptable. So, there’s more of a discussion here on reserves and funding. But what I would say is, yes, we can spend them, but how do you replenish them, because we haven’t got the money? Thank you, Chair.

Thank you very much, Mark. Are you content, Siân?

Yes. Just to say I was quoting Audit Wales—it's not my own opinion.

No, absolutely. Okay, Peter. Peter Fox.

Just touching on reserves—and I do recognise how you are having to draw off them every year, and hopefully your treasury management will be replenishing them to a little degree and there are more favourable opportunities to do that—I would ask leaders, and this is something that I did many years ago, to just do some assessment of the earmarked reserves, that they are actually being utilised. Because I would argue that an earmarked reserve that hasn't been drawn on after five years, and there are no plans for it to be drawn on for five years, ought to be in the general reserve and usable for other pressures. And I think that if I was to analyse the earmarked reserves across Wales, I would find quite a lot of money that could be mobilised to better effect. And I think this is part of a debate that needs to be had with that earlier one that needs to happen around funding formula, because I just think there's something not quite right in enabling a system where some authorities can accrue significant reserves and maintain services, whilst others have diminishing reserves and diminishing services, and I think that's part of the case for us to want to look at that funding formula.

Thank you, Peter. Jane.

Thank you very much, Chair. So, I can only speak for Bridgend in this regard. What I would welcome is for you to come in and review our level of reserves, Peter. I'm being very frank here; we've already done it, we've done it in relation to our capital planning. We have looked at every reserve. If it hasn't been drawn down in over a year, it's no longer there because we have used it. I think the position of reserves across Wales, however, is something that I think all Members need to be cognisant of, and that is that local authorities have spent and have drawn down £210 million in the past financial year. That is what they are already planning to spend.

So, I don't think that was a particularly useful question, if I'm very frank. Every council is reviewing those reserves. We are looking to utilise every bit and every pot of money available to us, and it's reviewed regularly. So, yes—I want to say, 15 years ago when I worked for Neath Port Talbot, the level of reserves was such that we used to challenge it every year as a trade union. I don't think any council in Wales is now in that position any more. So, I'm being very frank here, Chair, because I think those frank discussions are required, otherwise we're not going to move any further forward. We have reserves for specific reasons, either for capital projects, as you're aware, or for those rainy day and those crisis situations, as Councillor Pritchard has already referenced. So, thanks very much.

Thank you for that, Jane. Peter.

I'm not knocking councils for having reserves, you need reserves, and I'm appreciating how much you are needing them now, and using them, and you were already doing it in Bridgend, which is great. What I would ask, where there are authorities that have significant reserves over a couple of hundred million, is that, at times, some of those need to be just reassessed so that money can be reprofiled somewhere else. I think that's just good management. So, there's no knocking of councils for having reserves, it's just making sure that they're used as efficiently as possible.

Okay, Peter, thank you very much. I think that concludes our session. I'd like to thank Mary Ann, Mark, Gary and Jane very much indeed for staying with us well beyond the time that we'd allotted for this session. We're very grateful for that. We had a lot of matters to cover, and we're very grateful for all the evidence that you've given and for the very frank exchange that we've had, which is appreciated by the committee very much indeed. So, diolch yn fawr. You will be sent a transcript to check for factual accuracy. Diolch.

Our next item today is item 3, papers to note. Paper 2 is a letter from Community Leisure UK in relation to the Welsh Government draft budget. Paper 3 is a letter from Audit Wales with additional information regarding our work on governance of town and community councils. Paper 4 is a letter from the Chair of the Petitions Committee regarding the right-to-buy scheme. Paper 5 is the Welsh Government's response to the committee's report on the private rented sector, and with regard to that, there will be a debate on our report in Plenary on Wednesday of next week. Are Members content to note the papers? I see that you are. Thank you very much.

Item 4 is a motion under Standing Order 17.42 to resolve to exclude the public from the remainder of this meeting. Is committee content so to do? I see that you are. We will move to private session.