Peter Black and South Wales West Liberal Democrats

Local Government Settlement

Peter Black: Some interesting phrases are being used in this debate, particularly from the Government side; we have heard the phrase 'tight settlement' on a number of occasions, and we also heard Dai Lloyd talking once more about the Barnett formula and how the amount of money coming to Wales has impacted on the Assembly Government's ability to deliver for local government. I will not argue that Dai Lloyd does not have a point, because he does.

However, the bottom line is not necessarily that the Assembly Government has had a tight settlement or that it has been short-changed yet again by the evil Westminster Labour Government. The bottom line is that the Assembly Government is giving local councils an increase of 2.4 per cent, on average, when the rate of inflation is 2.7 per cent-over 4 per cent if you go with the retail price index. Yet, the Assembly Government itself has had a 3.4 per cent increase, but it has not passed that on to local government. In those circumstances, with local government getting less than the rate of inflation and a settlement that is lower than that which the Assembly Government received from Westminster, local councillors and local council leaders are perfectly justified in feeling aggrieved at the way in which they have been treated by the Assembly Government.

We have heard about efficiency savings and, particularly from the Minister for Finance and Public Service Delivery, a new way of doing things. However, that is the same sort of rhetoric that we have heard for many years. Local councils have been implementing efficiency savings for a number of years-certainly for the life of the previous Assembly-where they had to knock 1 per cent off their budgets on a year-by-year basis, and put efficiency measures in place. It is getting to the point where it will be very difficult, in the short term, to do any more than that. There is a lot more that can be done-they can work with other local councils, they can work in partnership, and share back-office systems-but those are long-term measures that will not deliver in the next financial year; they will be delivered over a number of years and that is another reason why local council leaders feel aggrieved by the settlement.

In fact, we are suffering a little from déjà vu. I was a councillor during the bad old days of the last Conservative Government, when we had some really poor local government settlements. At one stage, schools had to effectively fund from their own savings a certain percentage of teachers' pay increases, because local councils did not have the money to be passed on to those schools. We are back here again, with local government being given 2.4 per cent. People talk a lot about the bad old days of the Conservatives, but is now looks as though we are going back to the same old tactics and are hearing the Government effectively saying, 'We are giving local councils a really good settlement', and local councils reply with, 'But we cannot manage with that money because of all the extra responsibilities that you have given us and because of all the money that we have to spend on delivering the services that have to be delivered to people in our area'. Therefore, we are going back to that ping-pong blame game, which, in this instance, is between the Welsh Assembly Government and local councils. It is clear from the figures that I mentioned that the ball is clearly in the Welsh Assembly Government's court as to where responsibility lies for the poor settlement; it has failed to pass on the money that it has had to local councils.

I have also heard talk about reviewing the formula. Yes, we can review the formula, but, at the end of the day, you have a single quantum of money, and if you give more money to one local council, you will have less money for other local councils. It is like rearranging the deckchairs on the Titanic. The formula may always be under review, but, if you want to deal fairly with local councils, we have to ensure that they have sufficient resources to deliver the services that they have a statutory duty to deliver.

Jenny Randerson referred to Steve Thomas from the Welsh Local Government Association, who said that councils will have to make a Hobson's choice between putting up council tax and cutting back on services. The choice for local authorities really is that stark. They are being capped at 5 per cent; they will not be able to put their council tax up. The only option that they have is to cut services, and we are getting to the point where those cuts and efficiency savings will hit front-line services. When that happens, I am sure that people, when they go to vote on 1 May, will understand that the responsibility for those cuts in front-line services lies squarely with this Welsh Assembly Government. The facts and the figures will prove that to be the case.