National Assembly for Wales

May I welcome everyone to this meeting of the Local Government and Housing Committee? The meeting is being held in a hybrid format with some of the committee members with us in person and some remotely. The public items of this meeting are being broadcast live on Senedd.tv and a Record of Proceedings will be published as usual. The meeting is bilingual with simultaneous translation available. Are there any declarations of interest from committee members? There are not.

We will move on, then, to item 2, which is scrutiny of the Welsh Government's draft budget, and I'm very pleased to welcome our witnesses: joining us remotely, Councillor Jake Berriman, leader of Powys County Council; Councillor Nia Jeffreys, leader of Gwynedd Council; Councillor Mary Ann Brocklesby, leader of Monmouthshire County Council; and Councillor Jane Gebbie, deputy leader of Bridgend County Borough Council. Thank you all very much for joining us in committee this morning. Perhaps I might begin with a few questions before we turn to other committee members, and we're very pleased to have the Welsh Local Government Association represented here today on the important matter of the Welsh Government's draft budget and how it will impact on local authorities.

So, firstly from me, then, in terms of overview, really, in terms of the current financial context, we'd be grateful to hear what the WLGA considers to be the current financial context and workforce issues facing our local authorities here in Wales. Who would like to begin? Yes, Jane.

Thank you very much, Chair. I suppose I will begin by saying that I sit as workforce representative on the LGA for workforce pay, terms and conditions. We are really concerned that our uplift every year does not cover our pay, terms and conditions of our staff, and, indeed, when we look at the real living wage for the social care workforce, there's a line in our settlement notification to say that that is included in the settlement. Well, you'll be aware of the inflationary pressures around all of that matter, including the national insurance, which we were really very grateful to Welsh Government for supporting us somewhat on, but it certainly didn't cover the cost of all commissioned care provision and that additional uplift in all of those contracts.

So, it's difficult. We know that we've got increasing complexities and demand in social care for adults. You'll be aware of the eliminate agenda and the cost of insourcing, essentially, all that work from private contractors. We're having to buy buildings, but still maintain placements for children. I was in a meeting this week earlier with other cabinet members, and we've got one placement for one young person across Wales at the minute that's £20,000 per week. That is excessive. We agree that the eliminate agenda is right, but we are double-heading on finance measures to try and insource and build our own, which is quite right and proper, training all those staff up, but still paying for a placement for young people.

So, to start off, to kick off, we know that our residents are significantly impacted by the cost of living. Council tax is not maintaining some of those services, and they're all quite right and proper when they're angry about the increase in their council tax, because those pressures are felt by them as well. And additionally, we know that when we have severe—. I do want to say that people are living in poverty. We know that people are living in poverty, and we know that, when that happens, we have an additional impact on the demand for our services across the board, whether that's housing, whether that's housing benefit support, whether that's additional food parcels, help with all manner of things. So, we do need to consider what we're doing and how we're doing it.

We know that we've got—. We have a sense that early intervention and prevention have been cut over the years, quite rightly so; we have to deliver statutory services, to discharge those duties. However, we know that early intervention, and, indeed, innovation, now, are helpful at the early stages. We talk about hospital pressures, bedblocking and delayed discharges of care. As a local authority, what we would say to you is early intervention is preventative in that measure. So, if we can't resource it properly, then we're going to see additional demand at the back end of hospital provision, and that's always crisis. So, we would much prefer to deal with those situations at an earlier stage. Thanks very much, Chair.

Thanks very much, Jane, and we'll come on to some of the matters you've mentioned in due course. Jake.

Thank you very much. Councillor Gebbie has taken us into some of the detail there, which, as you say, we'll get to. We are seeing, as has been indicated, inflation in social care, domiciliary care and, obviously, the real living wage impacting on that sector as well. We've seen that. But, just looking overall at our perception about how the finances are unfolding, there's a great deal of nervousness around the potential of a roll-over budget of around 2 per cent. Even at the 2.5 per cent that has been modelled as well, that is opening up a gulf, a shortfall, in budget projections due to in-year pressures and inflationary pressures, increased demand, particularly around children's and adult care, as has been indicated there.

Individually, within local authorities, that's big. Taken collectively within the Welsh setting, which is what we're looking at today, we're seeing something like £560 million of pressures that are opening up there, which, clearly, won't be covered by that. We're looking nervously across the border at authorities in England who have had section 114 notices on them, and we've seen the devastating effects that has as those authorities lose control over their budgets and they're managed by others less sensitive to the needs of their areas. We want to avoid that at all costs, so we're really keen to engage—we're engaging with each other within the local government family, but—with yourselves to see what additionality we can bring to the budget that means that all of the cost pressures don't fall, unfortunately, on regressive council tax rises, which really do impact areas quite badly.

One of the things that we're concerned about when we talk about averages is, of course, they're not evenly distributed. So, in looking at options within local government, we are looking at whether or not there is, again, some capacity to introduce a meaningful floor to the settlement to ensure that we reduce the impact of winners and losers out of the settlement across our local government family. Thank you.

Diolch yn fawr. Mary Ann. 

Mary Ann, we can't hear you at the moment. Oh, there we are. Yes, go on.

I thought I was unmuted. Thank you, Chair. My colleagues Jake and Jane have covered most of the points. I wanted to pick up on two, one about the cost-of-living impacts internally on councils, but also on residents, particularly on children, and older people who are receiving pension credits or, in other ways, are very vulnerable because of their lack of income.The other point I'd like to pick up on is the workforce issues when we're looking at 2.5 per cent, even if a floor was introduced, and the challenges that we face across our local authority family.

I think the points were well made by Councillor Gebbie with regard to the cost of living, but the implication for us across Wales in the local authorities is council tax and the challenge that it is for many of our residents to actually meet those bills. My own council has council tax close to 40 per cent to cover our own revenue. We cannot keep increasing it; it is not fair on our residents. It's not the way to run a council when we have to be dependent on the resources of our residents who are already facing other costs in rent, in mortgages, in food, prices that continually go up. We're very grateful to the Welsh Government for the support they give in terms of reducing or mitigating against council tax, but we do need to—. And I know that a process is under way, looking at how we can reform council tax, but there's a sense in which I believe that this should be accelerated in the context of where we are now and the recognition that, the challenge we face this year, we expect to be greater in the coming years. As councils across Wales, until the elections in 2027, we are not expecting any let-up. As we have argued every year in front of this committee, we need the stability of multi-year settlements. We understand why it's not possible this year, but a roll-over budget with a 2.5 per cent increase doesn't give us confidence that we will be able to, collectively, meet all the challenges.

The issue also around cost of living is that we know the figures on child poverty; they're depressing—they're over 30 per cent. Actually, again, there are differentials across Wales—in some parts of Wales, it is much higher. To be able to deal with that, it's the whole of the authority that is engaged, not just education, not just social services, but other parts, to deliver on our statutory duties, but also to try and maximise the grant and other resources so that we can prevent. I know we were coming on to this issue before, but it's actually key to how we set budgets, when we're looking at the impact on our children and also the increasingly complex cases for both our children and vulnerable adults, which is increasing the cost pressures. Jane mentioned £20,000 a week for a child—I'd like to say, and I think we'd all like to say, that that's unusual. It's not; it's becoming standard. I don't think there is a local authority across Wales that is not facing that kind of singular cost pressure.

Mary Ann, when you mentioned that 30 per cent figure, that's the increase in cost to meet increased demand and inflationary pressures for the next financial year—is that right?

No, I'm talking about the number of children living in poverty in Wales.

Right. A 30 per cent increase in the overall number of children living in poverty in Wales.

I think it's over 30 per cent who are living in poverty. In my own authority, it's around 25 per cent, but, in other authorities that have greater levels of deprivation and vulnerability, you see higher levels of child poverty. The consequentials and impacts for local authorities that are at the front line of supporting children are enormous. It is not just children who are looked after; it's children and their families who are attempting to control their lives, pay rent, pay for heat, pay for food et cetera. And I would add that we try in local authorities, all of us—. Our authority pays a fair living wage, but that's still, for some of our workers within local authorities, not sufficient to cover all their costs. So, it's not just out there, it's also internally.  

What we have in terms of cost pressures for the next financial year—I think Jake might have mentioned it—is a figure from the WLGA of £560 million, agreeing, I think, with the Finance Committee here at the Senedd, and that's 6.6 per cent of budget expenditure. Those are figures that you all recognise, I guess, are they?

Yes. 

That's right, yes. 

Okay, thank you very much. Nia. 

Diolch yn fawr, Nia. Could I just ask one further question before we turn to other committee members? It's on increasing national insurance contributions and the unfunded element of that. How would you describe its impact in terms of your ability to plan medium term and the medium-term impact? Would anybody like to give us some idea on that? Mary Ann, is that a new hand or an old hand?

It's a new hand.

It's a new hand. Mary Ann, please, and then Jake.

As Jane said, we're very grateful to the Welsh Government for stepping in to help. It's not enough to cover it. In the case of my council, it was around 23 per cent of our resource costs that we had to find around wages. That is hard. Our medium-term financial strategy is very clear that we do not draw down resources from our reserves to fund the gaps, apart from in cases where we have earmarked reserves where we can do so. With our council tax premium reserve, we have earmarked that, so we may call on it to deal with specific parts of the budget. It does mean we have to consider various cost savings across the board, including looking at our workforce. For some councils, that will lead to redundancies, which I think we have pointed out in our written submission. In others, it will result in reduced services in order to cover costs, reduced hours, and that has implications for our staff across the board. It's not something that we disagree with in principle, but we do feel that we need proper resources to be able to cover those costs.

Thank you very much. And Jake.

Just to be clear, within local government, we're under a legal obligation to set a balanced budget, and, obviously, going into the current financial year that we're in, local authorities in Wales did do that, some with some very large council tax rises to balance the books. But I think it's fair to say, whilst we provide a large range of services in-house, particularly where that is most cost effective to do so, and there is an awful lot of insourcing going on because of the pressures in the private sector and the ambition that we have to reduce profit in that sector, we're still commissioning care providers in particular who are passing on the cost pressures to local authorities of national insurance. This wasn't expected. As has been indicated by other speakers, we're grateful for the additional assistance in this area, but these cost pressures are contributing to something like an £184 million in-year overspend or cost pressure that we're seeking to manage to contain this year alone. And of course, whilst these are statutory services, that is putting pressure on everything else quite disproportionately. So, those front-line services, as ever, are suffering this year, and will be suffering next year, as a result of this unexpected cost and other cost pressures that we're seeing based on demography and wages et cetera.

Okay, Jake, thanks very much. Lesley Griffiths.

Bore da, bawb. Good morning, everyone. I absolutely have heard everything you have all said. I'm just looking at the evidence you gave to us in committee. You said that whilst the settlement for 2025-26 was better than anticipated, it was still not enough to cover the financial pressures that you are experiencing, and I heard all about the complexities and the rise in demand et cetera. But I wonder if there's anything further that you can add as to why the estimates for future pressures are higher than anticipated compared to those that you provided before the last budget. Jake.

Jake, and then Jane.

I think we've alluded to these, and I'm really happy for Jane to come in and give some more detail, which I'm sure she'll do really well, because she has already indicated where a number of these pressures are. They are on external factors.

But I come back to the term I've just used, the increase in pressures that we have around demography. I can't speak for all areas, but of course, Powys is a border county, and we have a tendency to lose our young people and to import older people. We've seen an acceleration of that post COVID, and within that balance there is an increasing dependency that we're seeing arise on elderly care services, not necessarily in care homes, because our effort is on prevention and looking after people in their own property. There's a big agenda about that, but demographically there's a big change there.

And within children's services, whilst our numbers of looked-after children remain around the same, the pressures within the sector that is supporting that—. As has been indicated, those figures have just risen exponentially over the last few years, and of course we can't control those. I think there are some inadvertent things that have come out of—and I don't think the Welsh Government had seen this, either; we didn't see it coming—the push to reduce the profit element in children's services, for instance, which has meant that some providers have left that sector and other providers have simply doubled their costs, which we have to pay because there is no choice within the market. So, I think they are making hay while it is there to be made and the sun is shining, and we are paying the price for that, and that was unforeseen.

Keeping children safe is one of the council's greatest priorities. We know that our child protection figures have now stabilised, but that doesn't equate to the numbers reducing in placements, as an example, and the reason that I say that is because once a child has been taken into care and they are looked after, they will either be in a foster placement, a kinship caring arrangement, or they will be in residential accommodation of some description. That trajectory is just keeping on, and where Mary Ann referred earlier to other departments covering those costs, at the minute, across local government in Wales, we have an expectation with the budgets in-year just for social services that there’s £69 million that councils have to find, essentially, across Wales.

When we talk about ageing demographics, here in Bridgend, I am not going to be able to deliver social care without automation in future years, because I do not have the birth rate to sustain a workforce at that level with the trajectory that is predicted. When we look at the population needs assessment across all regional partnership boards, it's clearly indicating that we've got a lower birth rate, we've got lower economic activity for younger people, and we also know that we've got an ageing demographic with really complex health conditions, some of which could be addressed earlier with an early intervention and prevention strategy. If we could stop them going into crisis, that would assist us. But people are generally living longer. I know there are different areas of Wales that are particularly stricken—that is what I want to say—and their death rate, their morbidity rate, is actually lowering.

I do think that we provide excellent services, and I think that we have prioritised the health board, quite rightly so, during COVID, but what we do know is that we are losing staff to health boards from social care, because they are paid better, and across the UK there are different ways of addressing the disparity of pay between health and social care. You'll understand that the national care service is looking and addressing that, but there's a call for all our workforce in health and social care to be on the ‘Agenda for Change’ framework, which is the case across the UK, I have to say, and that was a way of the UK addressing those inequalities in pay. But I know, just to keep my social workers—. You'll be aware of the problems that children's services had in Bridgend. One of the ways that we maintained and created a stable workforce was by giving a market supplement to our social workers, particularly in children's services, and particularly in child protection and safeguarding arrangements, because we cannot recruit to that level for the pay that our staff are on.

I think the other thing we need to say is that we expect cumulative pressures across Wales to hit £200 million in social care arrangements in the next three years. So, we need to look at what we're doing. We need to look carefully at what we're doing, but we need to pay our staff fairly and appropriately, because we are losing them to health board pay, terms and conditions.

And residential placements, when we talk about residential placements for children with complex needs, that's an awful lot around behaviour management and psychology. Yes, health boards are assisting in some regard, but they're not fending all of it. And we will always do that as a standard, because those children deserve the best that we can offer them under our corporate parenting framework. Thanks very much, Chair.

Okay, thank you very much, Jane, and Nia. 

Okay, and Mary Ann. 

Thanks, Chair. I'd just like to pick up on that point of the pressure next year, and put it into the context of the pressures over the next three years. As we've been saying since we began this discussion, demand, particularly for older vulnerable adults and children, is rising year on year—well, month on month is often the case. Funding the national insurance gap is also a pressure. You'll have seen from the paper that we submitted that, as Jane pointed out, social care accounts for about 36 per cent of those pressures, and is continuing to rise. But we can't forget education. Education pressures across the board are around £137 million or 24 per cent of our overall costs, which leaves around 40 per cent or £223 million for all the other services, and this is increasing. The system pressures, if we take account over the next three years, we are looking to an amount of £1.6 billion of pressures that, currently, we are not clear how we will be able to fund.

Okay. Thank you, Mary Ann. 

Thank you, Chair.

Thank you very much, Lesley. We haven't covered as much as we anticipated covering in terms of our questions at this stage, so we might need greater brevity, I'm afraid, as we move forward. We're always up against these time constraints. So, please don't feel that you all have to speak on particular questions if there's nothing particularly different you need to add to what one of your colleagues has said.

Could I just ask about an inflation-only budget? You've touched on this already, but how might local authorities bridge the gap in their finances if it was to be an inflation-only budget? Jane. Jane, you're—. Our witnesses shouldn't have to unmute themselves. Oh, there you are. Go on, Jane.

I'm sorry; it all went a bit strange for a minute.

Not at all.

I'm going to be really honest with the committee: I think Welsh Government need to tell us what they don't want us to do. I feel like I'm saying that out of turn, however, local government is the best provider for local services, for early intervention and prevention, and if we don't manage to sustain some of the services that we're doing—. You'll be aware that education across Wales was always the biggest spend for any council. That is not the case. I think I reported last year to you that it was now one council that was spending more on social care than it was on education. That's now increased to about four. So, you need to tell us what you don't want us to do, I think is my honest answer, Chair. I'm not sure of any other way to phrase it, and I'm being succinct.

Thank you very much, Jane. Jake. Jake, we can't hear you at the minute. Oh, go on, yes, that's fine.

Sorry. The host is taking a bit longer to unmute. But I'll, again, try and be brief here. We're all mapping our budgets as we go ahead. We're all basing that on what we anticipate might come forward, and actually it's a really, really painful picture. One of the things that, like Jane, I bang on about all the time is the degree of regulation and audit and oversight that we have at a local government level. Much of it, yes, might be required, but I think some of it can be stripped out. Where we are asked to do things directly, then we should be funded directly for that and not expect our local council tax to pick up the slack. Because I think that's, in essence, what you're asking there: could we put more on council tax locally? And, of course, it impacts; every 1 per cent less that we get in Powys from you means a 3 per cent council tax increase, just to meet that. That's where it is. Because, like Mary Ann, we're one of the losers in the council tax equation in terms of how funding is broken down for services.

But, just to give you an indication, we've started to look at a five-year financial strategy, going ahead. We've mapped what it looks like, and bear in mind that only 15 per cent of what we spend goes on what the public can see—so, that's roads, that's lighting, that's planning, that's environmental health, that's waste collection, that's all of that. Fifteen per cent, that's what that is, with an extra 1 per cent on our statutory housing responsibilities. The rest goes on the things that Jane has already indicated, and that's where the pressures are, and that is eating the rest of our budgets. We're required to provide that, and if we're required to provide it, we should be funded in full for it.

We have mapped, over the next five years, a 0 per cent increase in all of that 15 per cent of the budget, those services. We've mapped that. That's painful, because that means that we're mapping out workforce, and Jane, in very simple terms, that means a reduction in workforce in areas to maintain that, because any pay rises have to be taken out of that zero increase. And even by doing that, we're looking at a gap of £10 million still at the moment, mapping out a 5 per cent council tax increase, which is not eye watering, but I don't think that the people of Powys are prepared to pay any more than that going forward, and we're looking at a gap of about £30 million by 2030, going forward. So, even doing that, even stripping that out and doing that, the cost pressures in these areas, the big spending areas that we've talked about, are such that we are diminishing the local government offer and we just can't carry on on that basis.

Okay, thank you, Jake. I'm just going to bring in Lee Waters. Lee.

Yes, thank you. I have great sympathy for the position you're in, and clearly the cost pressures are very real and I have great respect for the leadership you're showing. I don't wish to be glib about any of this, but obviously the purpose of this committee is to scrutinise the evidence we're given. So, in that spirit, let me ask you this. Year on year, we have the same thrust of the evidence from the WLGA, and the discussion we've been having with the Welsh Government Ministers is on the extent to which local authorities are expected to adopt good practice—rather than simply point out where good practice exists, but adopt or justify—and the response we keep getting is that every local authority is different and that the good practice simply wouldn't apply to them. But given the budget situations you face, all your demands are for extra funding from the Welsh Government, and there's very little in your evidence about challenging each other to adapt the good practice each of you will have in different areas that could be applied elsewhere and could, if not produce massive savings, could certainly improve performance and could produce some savings. So, why aren't we hearing more from you about your challenge to each other about how you can spend the money you already have better?

Okay, Mary Ann—

Did you want me to come back on that first?

Well, you could do, Jake, and then I'll bring in Mary Ann and Jane, but you will all have to be reasonably brief in your answers.

So, just very briefly, I'm absolutely clear that we can do more through collaborative arrangements, and certainly across the mid Wales area, the way that we operate our corporate joint committee together and have a partnership with Ceredigion, I think, is quite progressive in its outlook. But I come back to regulatory constraints. We've recently made an offer in respect of strategic development planning and taking our local development plan forward. These evidence-based plans are really, really expensive and we've suggested ways directly that we can save those costs and map out our aspirations in a very different way, and sought a little bit of support to do that, because of the skills gap that we have in some of these areas, and the response that we get automatically, whether that's from Ministers or officers supporting Ministers, is one of citing the regulations about what we're required to do. We're looking at increased freedoms and flexibilities on a constant basis, and it does seem that there's pushback to say, 'No, you have to do it in this way, and by the way you'll be audited about how you're performing.' So, I'm really happy to take that challenge further.

Okay, Jake. And Mary Ann.

It's a fair challenge, Lee. Equally, I think we do challenge each other to improve our practice. Certainly, in my council and in my area, the focus is on continuous improvement, but let's be real about this: we're looking at marginal gains, Lee, not transformative practice. After years and years of cuts to services, cuts to local authorities, you cannot pull out of the bag a whole-authority approach to early intervention and prevention without resources.

But nevertheless, if I can point to some of the things we're doing and that are happening in other parts of the WLGA: Gwent is a Marmot region; we are working together on the best start in life, collectively across five local authorities, to look at ways in which we can maximise the way that we work across services, not just with local authorities, to support children through those first 1,000 days and before they actually get to school, so that there is a level playing field for all our children. 

In Gwent also we have shared data resources, where we're looking at digital and data transformation together. We're piloting through one local authority, which will be carried out for all of us, having a 360 degree view of the child with data resource changes, so that we can really maximise where we target our resources and look at it. This is making a difference, this is making us more effective, but it takes time. Also, much of this work is not funded through our core settlement, it's through those extra grants, and yet these are parts of the work that are absolutely fundamental to that preventative and innovative work, but also early intervention work. We need to start thinking about that as core, not extras but core, because that shifts us. And I think that that's something across the WLGA that we all agree with, however different our local authority is.

And Jane. 

Just for some brief context, every regional partnership board meets regularly to discuss and debate and help share good practice and best practice and where we've seen things moving on. To give you an example, you've heard me say before that the ALN Bill was introduced on a cost-neutral basis. It wasn't going to cost us any more money. However, over the past 10 years, it's increased from £304 million to £668 million. It's completely unfunded. Now, that is the additional demand of the additional learning needs requirements of our young people across Wales. And it's quite right and proper that we do that. However, it was unfunded. We were told it was going to be cost-neutral to all local authorities; it certainly isn't. And that is a piece of evidence that we have collected because we need to understand the data in order that we deliver best practice across Wales. Thanks very much, Chair.

And Nia. Sorry, Nia, did you put your hand down?

Okay, thank you, Nia. Peter. Peter Fox.

Just a quick point. We raise this, about how you can work together, most years, and we'll keep raising it, because we need to understand the potential for it. Now, many years ago, the WLGA always maintained a compendium of shared services and collaborative working. Have we still got that, so that we can actually assess the benefit of working together, so you can demonstrate how your joint working and shared practice is actually saving money? Because, otherwise, you'll keep having to defend this, but what we need to understand is: how is that working? How much is that driving benefit to us? So, it may be something I'm not expecting a comment on, but it may be something you take back and think about.

Yes, maybe—. Mary Ann.

I think that's right, Peter. We do review shared services, but your point about evaluating, reviewing and recognising the impact, I think is a good one, and certainly will be part of our discussions going forward.

Well, if it's something you want to get back to us on, that matter, in the short term, in terms of the work that we're doing on this draft budget and the impact on local authorities, that would be fine.

Fair enough, Chair.

Okay. Could I just ask—? We know that it would take something like a 9 per cent increase in the settlement for local authorities to meet all the funding pressures for the next financial year, but, given all the circumstances and context we know about, that's probably unlikely. Would any of you like to offer a figure as to what you think would be an acceptable increase, given, you know, the reality of the situation that we all exist within? Mary Ann.

Mary Ann, you're muted at the moment.

I'm mindful you want us to be brief, Chair.

Yes.

Four per cent more would be even more welcome. We recognise the constraints we're all under, but to start really sustaining our services, but also doing that preventative, early intervention work, we need to look at a figure of around 4 per cent or more.

OK, that's great. Thank you very much. Jake.

Just within that context—and Nia's mentioned rural far more than I have today, and I thank Nia for that, but, within that—I just think that we do need to look at the floor, because a 4 per cent average does mean that, in Powys, we will lose out significantly in relation to that 4 per cent. So, that won't be 4 per cent for us, that will be less. So, we really need to be looking at some parity here, because I know we're looking at averages, and you've got the averages in the table, but, the winners and losers, it's always really difficult, and I would echo the points that are made about rurality, and it is time that we saw a shift. Now, we're not going to do that in the time that we have, but rural poverty is a huge issue. Sparsity of population and distance between service centres is a huge issue for us here, so I just think we do need to look at a floor of 4 per cent or thereabouts to give us parity.

Okay, thank you, Jake. Peter.

I'll give you a little bit of reassurance there. You might have heard the Cabinet Secretary, Mark Drakeford, talking to the budget in Finance Committee, and he suggested he's minded to fund a floor—and it will be funded, not taken from the rest of the settlement, and he was very firm on that. So, the rural or those lower authorities might have some security from that.

Thank you.

Okay, could I just ask: in terms of usable reserves, we've seen a pattern of using reserves to plug gaps in budgets—has that continued in the current financial year? And at what point does the level of usable reserves as a proportion of the net cost of services become critical? I know it's difficult to be brief, but I'm afraid we really do need brevity at this point. Jake.

You'll find that there's a range of reserves that local authorities hold across the piece. I was having a conversation with the leader of Rhondda Cynon Taf a couple of weeks ago about this. Their reserves are much higher than ours, but they're using the reserves to manage their capital programme in ways that are common practice, whereas, for us, we set our reserves at the minimum provision, but have in-year specific reserves for areas of pressure that we anticipate. So, you're not planning for budget failure within your budget, but you're setting specific reserves so that you can at least offset and meet some of those in-year pressures. But our overall reserve is absolutely at the minimum.

Okay, thank you, Jake. Nia.

I'm not getting the translation. I'm not getting the translation.

Okay, could you begin again, Nia, please? Yes, okay. Nia.

No, dim problem at all. Diolch yn fawr, Nia. Okay, Joel James. Joel.

Thank you, Chair. Thanks ever so much for coming this morning. We talked a little bit earlier in the Chair's opening questions about the preventative agenda and early intervention. I know from your written evidence that you've said that the Welsh Government seems to be getting it more and more in terms of its policy output, but it's not necessarily backed up with the resources to do much about it—the financial resources. I just wanted to get an idea there about that, if that chimes with your experiences, and get a better idea of the leadership that the Welsh Government is showing towards this preventative agenda.

And then, my final question, actually, would be, as you understand, a lot of that stuff that would come under the scope of prevention is non-statutory provision, if I think about leisure centres, day centres, libraries even. I just wanted to get how you balance that with then providing the statutory duties that you have to provide. Those are my three questions, really, Chair.

That's great, thank you, Joel. I know you've touched on some of these matters in your previous comments, but who would like to respond to that? Jane.

Very briefly, as cabinet member for well-being here in Bridgend, I think a prime example would be the outsourcing of our leisure and cultural services for our green space, play parks, leisure, swimming pools, whatever. They're all outsourced. It's purely a not-for-profit arrangement. We had to use some other funding last year to sustain that service of £279,000, which doesn't appear a lot, but actually they're able to bring in to leisure and cultural services more money than we can as a council. As an example, if you are a charity organising in this space, you get free rates. As a council, if you're delivering that service, you pay the rates on a building, so the rates on a building for a swimming pool are excessive.

Every local authority is trying to innovate and use third and voluntary sector and volunteers to deliver some of those arrangements, but we need to ensure that that's sustainable and we need to ensure that our voluntary and third sector organisations are supported financially very much appropriately. We also need to consider the health inequities across Wales. There are various spots in Wales where we know that health inequities are so significant because of the poverty of the area. The more that we can intervene in an early intervention and prevention space and innovate our way out of those arrangements, the less demand we will have on statutory provision. And we know that. But, over 15 years, every council in Wales has cut services to that space. But we know how much it's supportive. We saw during COVID, our green spaces, how much they were valued. We already know the cultural impact of those arrangements, with people preferring to staycate, do the staycation arrangement, now across Wales, utilising those green spaces and those beautiful beaches that we have. And we're responsible for all of them. So, I'm being brief, but I could witter on for hours.

Diolch yn fawr, Jane. Mary Ann.

Thanks. It's two parts, really. We really welcome the focus that Welsh Government and the ambition that the Welsh Government has for being in the preventative and early intervention space. But we do collectively have to realise that we cannot—I think I've made this point previously in this session—expect the transformations we want without shifting resources to prevention. Historically, any prevention work has been overtaken by crisis, particularly in getting people out of hospital as quick as possible, and talking about what we do at the front door of the hospital. My argument has to be that, actually, the front door we need to be looking at is the front door where people live, and allowing them to remain at home as healthy as possible for as long as possible.

In my own area, you have the example of Torfaen and Blaenau Gwent, who are working together to become Marmot councils. We have the Gwent councils, which are looking at ways in which we can work across all sectors, including the third sector, to maximise how we work around the preventative agenda. If I can give you an example from my own authority, we have just agreed a preventative strategy that, given limited resources, we have focused on older, frail, disadvantaged, vulnerable adults, to look at a whole-authority approach to supporting them to remain in the home as long as possible and as healthy as possible. We're doing that by looking precisely at, as Jane was saying, how we can harness the work done in our leisure centres, through our parks, through our community hubs, with social services, with adult education, with the work that the voluntary sector does, seeing where, mapping out where, there are duplications, mapping out who does what better, and having a holistic approach to how we support that person, being person-centred rather than service-centred. We are seeing, in some of our enablement work, trends that are allowing people to stay in their community for as long as possible. That could be accelerated across all local authorities if the funding was shifted to prevention and community-based medical services, because, of course, we need to work with GPs, but there are constraints around that as well.

Okay. Thank you very much, Mary Ann. It's a wider issue, isn't it, in terms of where the big—very big—health budget gets spent.

Yes, but it needs to be addressed, I believe.

Absolutely. Jake.

Yes, thank you. I'm glad you brought up the larger health and social care budget. It's taken in the round there, and yet there does still seem to be a continuous disconnect between that interface between adult social care and health, particularly. I think we're conscious that, ever more, there needs to be a refocus on community health, and I do think that local authorities have a much greater role, potentially, to play within that.

We are unique in Powys here because we have a coterminus health board and we have a good relationship, but too much time is spent talking about discharge into the community, 'bedblocking' in other language, and we definitely need to have a shift left in that conversation and in resources to look upstream and think how we can work together more clearly to protect people's health and well-being. It's really ironic, isn't it, that we have just—and here I would just like to thank the Welsh Government, the Welsh Local Government Association, in supporting Powys with a really thorough piece of work in reviewing adult social care with consultants Newton Europe. That has identified some real savings that we can introduce within our practices, which will impact, in real, cashable terms, on demand et cetera. And I think that answers one of the earlier points as well, because that now will be shared across adult social care in Wales. That's available for others to share.

The irony is, of course—. I talked about this small 15 per cent of the budget, and a very small part of that 15 per cent of the council budget goes on, and touches upon, things like leisure centres. And we're not just talking about outsourcing now to a charity—we all do that—we're now talking about actual closure of facilities, or partial closures of facilities. The energy crisis that we saw put huge pressure on swimming pools in particular, and they've seen a catastrophic lack of investment right across Wales, and a number of those services are under pressure just at the time when we know that we need a proper, meaningful dialogue, and here the assistance of the Welsh Government would be appreciated in providing a space for that dialogue to ensure that we do shift resource left, and that is out of that health budget into local authorities and into health prevention, around supporting some of these facilities, because when they're gone, they're gone, and yet that's the space we're being forced to look at in order to meet those adult social care and children's care demands. 

Okay. Thank you, Jake. Nia.

Okay. Diolch yn fawr, Nia. Okay. We will move on to Lee Waters. Lee.

Thanks. I'm going to focus on looked-after children. Given that time is against us, and we've already touched upon this, I'll just keep my question to one very specific one, but, if there are any broader comments you don't feel you've put on the record that you'd like to, perhaps you can do that briefly. I just want to ask about the scheme to bring in unaccompanied asylum seekers, the national transfer scheme, and the concern that the funding from the Home Office is not sufficient to cover the costs of that. I'm just interested to know whether or not children coming into the care system in your authorities through this scheme have additional needs or additional costs over and above domestic young people.

Jane.

Very simply, 'yes', and the amount that we receive from the Home Office does not cover that arrangement. You'll have heard me refer to the £20,000 for one young person. Some of the unaccompanied asylum-seeking children that we have—even those that are ageing out, we do need to support them—they really do have some complex needs, and, when you look at the psychological and behavioural issues that they're displaying, there is additional support required by them.

Can I just understand a bit more about that? Because obviously the £20,000 figure you quote there is an outlier, isn't it? And that's not, unless I'm misunderstanding, an asylum-seeker child; that's a UK-resident child with complex needs. So, what, specifically, extra costs—are you able to quantify them—do asylum-seeker children bring with them? 

Not off the top of my head, no. We do have some data in Bridgend. I'm quite happy to share that with the committee following this meeting, if you'd like me to.

That would be very helpful, thank you.

Yes, please, Jane. And Jake.

Yes, I haven't got that overall figure either, but one of the issues that we have in addition to complex needs, and it may be because of just where we are in the geography of Wales, is that obviously Wales has an allocation and local authorities have an allocation, and we all wish to play our part in providing a safe and welcoming environment, but one of the issues is that some of the unaccompanied asylum-seeking children simply don't want to be in rural mid Wales, and then we have to support their choice to be somewhere else, and, obviously, supporting people out of county is additionally expensive, and I'm sure we can provide some costs associated with that.

Okay. And Nia.

Was that okay, Lee? 

Diolch.

Okay. Well, thank you very much for sharing that, Nia, and it does illustrate the terrible human impact of what's happening in our world, doesn't it, and how that then impacts on local authorities. Thank you very much.

If you as witnesses could bear with us a little longer beyond the time that we've allotted, we've just got a few more questions to cover, if that's okay. Siân Gwenllian. Siân.

Do you have some examples of some issues in terms of Welsh Government responsibilities on local authorities, and the funding not being delivered to allow fulfilment of those responsibilities? Mary Ann. Mary Ann, we can't hear you at the moment. 

Sorry about that. If we look at the Additional Learning Needs and Education Tribunal (Wales) Act 2018 and the impact on additional learning needs, it was supposed to be cost neutral and it's nowhere near. The spend has more than doubled from £304 million to £668 million over that 10-year period, and we as local authorities are picking up that bill, and of course we want to. We have a duty of care, we have a regulatory and statutory obligation, but the costs are enormous.

You may, Siân, be referring to the regulatory impact assessments from the Homelessness and Social Housing Allocation (Wales) Bill. Again, a good piece of legislation. But the guidelines were dense and incurred huge additional burdens on local authorities as we worked our way through it and tried to work out how we could do that, as well as to meet our statutory obligation of housing the homeless.

There is a more general principle, I think, of when we're looking at the implementation of Acts, to look at, in tandem, the monitoring and evaluation of the effectiveness of those Acts and the ability to implement, as well as what resources are needed in the interim from the short to medium term to actually implement in a robust way.

Okay. Jake. 

Thank you. Whilst Mary Ann has given the example that I was going to give, there is another example, really, around regulatory impact, and it's a very real one that cuts across a number of areas, particularly in terms of our ambitions as a nation to have additional appropriate housing, affordable housing, to meet the needs of people in our communities. The very real experience that I have here in Powys as a border county—and we meet with our agents and developers regularly through the planning forums that we have—and the feedback is that we have outpriced the opportunities to build, in our area at least, because of excessive regulatory constraints. So, the opportunities, whether it's building regulations or sustainable drainage schemes—so, sprinkler systems, sustainable drainage and some of the requirements that we have over housing standards—have put pressure on the ability of private developers to fund the proportion of affordable housing that we would seek of them. Developers are simply saying, 'We will stay in Herefordshire and Shropshire to build', or Welsh developers—and I've met with them personally—have shown me examples where they're holding land, they can't develop it, and they are moving across into England to develop where they can actually turn a profit.

So, we have to, I think, be really careful not only at the RIA stage, but also to monitor, review and to take stock. Now, I know there's been some work around delivering affordable homes. This may have been highlighted through that—I don't know—but I think it is an area that we should give greater attention to because of the adverse impacts that we're having, or unintended consequences, if you like, of good intent.

Siân, did you want to continue?

Okay. Diolch yn fawr, Siân. Peter Fox.

I just wanted to touch on capital, if you could perhaps give a whole WLGA family position. Obviously, capital is going to be pretty well stagnant—the same as it was last year. I'm not sure what the local government family thinks of that. And the other part of my question is, there was—. One thing I really welcomed last year was the finance Secretary enabling—well, funding—capital borrowing, so you can accelerate repair schemes. I think it was £10 million that would service £120 million-worth of capital. Has the local government family drawn down the borrowing, because it's not costing them anything—the revenue costs are covered? And is this something you would like to see perhaps considered in other areas of council life with regard to capital spend?

Jane.

Yes, please. The local government borrowing initiative was a very welcome addition to local government last year. When we look at the costs and the prediction of increased capital spending for future years, it's already at 15 per cent. When we keep talking about percentage figures, we know that some of what we're doing is for the best, but, actually, we need to ensure that we can keep doing it.

I will always bang on about looked-after children and early intervention and prevention, because that is my portfolio as deputy leader, and we highlight it so much. We are taking strides to have capital budgets around our looked-after children, and utilising them for the 'eliminate' agenda, but I've already spoken about that.

The LGBI was very much welcomed by local authorities. When you look at the Menai bridge as an example, that was one where we used that funding. Every local authority was really grateful for it, because it meant that it limited the interest arrangements around it. Thank you.

Has there been the capacity in organisations to be able to deliver that, because it's great having the money, but you need to be able to spend it, then? This is a great offer funded for 20 years, and if we can keep the Government doing this sort of thing, you'll be able to really accelerate capital responsibilities. So, are you equipped to be able to use these initiatives? 

We're delivering at pace is what I want to say. Thank you very much for the question. But what it also ensures is that we can keep doing that. So, we've already spoken about grant funding and things, but when that's a short-term element, if we've got a longer term arrangement to deliver some of these functions, it's always more helpful to councils.

And Mary Ann.

'Yes' is the short answer, but we shouldn't ignore the challenges. We have pooled resources in terms of the contractors we use, but also the capacity within our highways. In my own council, because of the pressures on that pooled resource, we've been largely doing the work in-house. The funding is very tight, and that sometimes means, I think, councils have to prioritise, ensuring that we utilise it in a timely way and at the pace that Jane referred to. But it also means that there are some areas, like bridge infrastructure, which takes much longer, and footways and so forth, that we're still not able to address as quickly as we would like to.

Okay. Jake.

Just finally on that, I won't repeat what's been said, but, ultimately, we have huge capital requirements across the local government family. Most of us will have lots of backlog maintenance on the assets we hold, and we're all looking at asset rationalisation in order to reduce our ongoing costs, but also to get income back into the system to pay down debt that we have. Of course, that's what borrowing is, and debt isn't bad per se, but we still have to pay that back and that's a revenue cost. So, however you make capital available, there is still a revenue cost to borrowing, which we can see with the Government, with its trillions that it has borrowed. It has to be paid back, and, of course, the proportion that we cover of doing that from council tax falls on our local people. So, we still have to moderate our aspirations, because it's got to be paid back. Thanks.

This specific question was around the money that the Government provided to cover all of those costs, Jake, so you wouldn't have to pay any penny of revenue toward spending the money—the £120 million across the local government family. That revenue is covered. But it is specific only to those certain areas, and I can what you're saying, that the bridges and other things, you couldn't do with it.

Yes. So, just to respond to that, I think our overall spending requirements are something like £1.5 billion—that's the figure that I have—so, any money there is really welcome, and the other speakers had referred to that. So, I was taking the opportunity to broaden that out, but thank you for bringing us back to that. It's most welcome.

Okay, Jake. Thank you very much. Well, that brings us to the end, I think, of this session. So, it just remains for me to thank you all very much—Mary Ann, Jane, Nia and Jake—for giving evidence to committee today. It is very useful and valuable for us. You will be sent a transcript to check for factual accuracy. Diolch yn fawr.

Thank you very much, Chair. Thank you very much, Senedd Members. Diolch yn fawr.

Thank you.

Our next item, then, is papers to note. We have paper 2, additional information from Swansea Council in relation to the Building Safety (Wales) Bill; paper 3, additional information on that Bill from the Chartered Institute of Environmental Health; similarly, paper 4 from Community Housing Cymru; and paper 5, additional information again on that Bill, from the Cabinet Secretary for Housing and Local Government. Paper 6 is a response from the Cabinet Secretary to the Chair of the Legislation, Justice and Constitution Committee, again with regard to that Bill. Paper 7 is correspondence from the Finance Committee to the WLGA in relation to the Welsh Government's draft budget for the forthcoming financial year. And paper 8 is a letter from the Office for National Statistics regarding the 2031 census topic consultation. Are Members content to note those papers? Lee.

The letters on the building safety Bill from Community Housing Cymru, and from the representative of Swansea in particular, on the issues we asked them about are concerning, and I think that's something we'll need to return to in scrutiny. But I think it justifies our approach in going back to the original evidence givers to clarify the points the Minister made.

Yes. Okay. Thank you very much, Lee. Yes.

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