The Assembly met at 13:30 with the Deputy Presiding Officer (David Melding) in the Chair.
Y Dirprwy Lywydd / The Deputy Presiding Officer
Economic Development of Women in Wales
1. How is the Welsh Government supporting the economic development of Women in Wales? OAQ(4)1250(FM)
We are working with key organisations, such as Chwarae Teg, to increase the number of women who are accessing business support in Wales, and we are encouraging women to sign up to the Business Wales mentoring service.
Thank you, First Minister. The Welsh Government has identified several priority areas for economic development, including construction and information and communications technology, which have traditionally been areas in which women have been underemployed and have taken on more junior roles. Therefore, how is the Welsh Government ensuring that women benefit from its economic strategy?
I will give two examples. The ICT sector team is supporting a bespoke training programme, which is delivered by the Cardiff Women’s Workshop, and which is called Women Adding Value to the Economy. That will recruit 30 employed women from lower-paid and administrative positions to train in website design and social media for business. That is one example. The construction sector team is working with the Construction Industry Training Board to deliver a programme that is entitled Construction Futures Wales. That programme will embrace the CITB’s fairness, inclusion and respect agenda, with specific support. That is also designed to attract more women into construction.
A recent report by the women’s business council highlighted the need to broaden girls’ aspiration and job choices before the start of their working lives. Does the First Minister agree that it is important that girls are offered work experience across a range of different industries, that they have access to high-quality career advice, and that they are provided with role models to demonstrate that women can be successful in all walks of life, so that they can fully maximise their economic potential and so that they have an equal ladder for their salaries?
I do not think that anyone would disagree with that, so the answer, quite clearly, is ‘yes’. We are, of course, encouraged by the Global Entrepreneurship Monitor report that was published last November, which showed that female entrepreneurship in Wales rose to a record high of 6.1%, compared with 5% in the UK as a whole.
I have been working closely with the University and College Union about the over-use of part-time, hourly-paid contracts in the further education sector. Research that it has done shows that women and ethnic minorities are more affected than other people by this, not knowing when they will be paid, especially from term to term. I know that there needs to be flexibility in the system, but could you look into this matter, and talk to the trade unions about the issues that affect those key individuals?
Indeed. We have regular contact with the trade unions, whether it is through the workforce partnership council or through other ways. We stand committed to ensuring that we see equality in terms of pay across Wales.
2. What is the Welsh Government doing to increase passenger numbers on rail routes throughout Wales? OAQ(4)1259(FM)
There has been an increase of more than 50% in the number of passengers using Arriva Trains Wales’s services between the start of the franchise and 2012. Of course, we continue to deliver our programme of rail capital investment to improve rail services throughout Wales.
Increasing the frequency of trains is one opportunity to increase the capacity of some routes. I understand that work is ongoing on the Vale of Glamorgan line, and is completed on the Cambrian line, to allow for an increased frequency there. Can you tell us by what date you expect to be able to give Arriva Trains Wales the go-ahead to run additional services?
The original plan was to look at that in the next two or three years, if I remember correctly in terms of the timescale. However, we have been focusing on the redoubling on the Gowerton to Loughor line, and an announcement was made last week in terms of the Wrexham to Saltney junction line. They will add significant capacity to the services that run north-south, along the borderline, and of course to those that run west. We will now move on to ensuring that we can discuss improving frequency with Arriva Trains Wales, particularly, but not exclusively, on the Vale of Glamorgan line.
First Minister, there is much talk across the industry of using the old diesel-powered First Great Western rolling stock to revitalise the north-south Wales rolling stock with Arriva Trains Wales. What work is your Government doing to secure new rolling stock with partners and ensuring that high-profile services such as the north-south Wales connections are of suitably high quality?
The north-south services have improved over the years. The fact that there are now more three-carriage trains than there were, and that there is the express service that runs in either direction during the course of the day, compares with the way things were some 14 years ago when there were no north-south trains at all directly between Cardiff and any station north of Shrewsbury. Therefore, a lot of work has been done. We will be looking to discuss with any future franchisees the future improvement of the service.
Yr Arglwydd / Lord Elis-Thomas
As a regular user of public transport on the basis of the concessionary travel card that I have, would the First Minister agree that there is no point in calling a bus service ’TrawsCymru’ unless it meets up with trans-Wales rail services? Therefore, can the First Minister give a new priority in his Government’s stance on the integration of rail and bus transport?
Integration is our aim as a Government. We must remember, of course, that it is private companies that run many of these services throughout Wales. There are good examples, for example at Carmarthen station where there are very good links with local bus services. I would imagine that it would be in the interest of any bus company to ensure that it can get more passengers on its buses by ensuring that the buses link up with the trains. As a Government, we will continue to work with them to ensure that that linkage is effective.
Questions Without Notice from the Party Leaders
Y Dirprwy Lywydd / The Deputy Presiding Officer
I now call on the party leaders to question the First Minister. First, I call on the leader of the opposition, Andrew R.T. Davies.
First Minister, last week I asked you about the specifics of a Keogh-style inquiry in Wales. Your only response to me on the second question, which bore any relevance to the question that I put to you, was that such an inquiry would cost £1 million to undertake. When 11 out of 17 district general hospitals in Wales have higher mortality rates than should be expected, is it just the case that it is too expensive to solve this problem?
We do not accept that an inquiry of that nature is needed.
Last week, First Minister, you said that the reason you were not having such an inquiry was based solely on it being too expensive to solve this problem. The north Wales community health council disagrees with you. It has said that it strongly recommends that the Minister commissions an independent review, perhaps, led by Professor Keogh. Also, the Royal College of Surgeons of England, when it brought its report forward at the end of July into untimely cardiac deaths at the University Hospital of Wales said that the current situation represents a surreal risk to patients and urgent action is required. We have subsequently had the review into services provided at Morriston Hospital, again by professionals. When you are talking about reforming the health service in Wales, you say that you will be led by the professionals and the evidence that they put before you. It is clear that the professionals are bringing evidence time and again that we need a Keogh-style inquiry in Wales, but you are turning a deaf ear to that evidence. Why is it the case that you will not undertake such a review so that clinicians and patients can have confidence that incidents of untimely deaths are put to a minimum in our Welsh NHS?
I am not aware of any professionals who have called for a Keogh-style inquiry. Of course, it is right to say that where issues arise they are dealt with promptly. That is done, of course—whether it is done through Abertawe Bro Morgannwg University Local Health Board and the review it commissioned itself into cardiac services at Morriston Hospital or through the swift action that the Minister takes in order to ensure that where problems arise they are dealt with.
Do you not accept, First Minister, that we cannot go on dealing with these cases in isolation. You have touched on how the Minister has responded to Morriston. I have also highlighted to you the problems at the University Hospital of Wales in Cardiff. We have had the issues in north Wales as well. Time and again, your Government responds in isolation rather than looking at the issues across the whole of the Welsh NHS. It is wrong to say that we can continue and that, in particular, your Government can continue to respond to these issues in isolation. In your own Princess of Wales Hospital there are several police investigations going on. Putting politics aside, is it not now time to put—[Interruption.] I fail to see how the Labour benches can think of such an inquiry as being politically motivated, when you look at the weight of professional evidence that is out there. If that inquiry comes out and gives the Government—I know that you are tiring, First Minister, but for many families and clinicians this is a key issue. They would have seen you last week answering that it is too costly to sort this problem out, and they will have seen the way that you have slumped today in questioning. Why not put the politics to one side and deliver an independent review that, ultimately, can solve many of these problems and put solutions in place for the entire Welsh NHS?
I thank the leader of the opposition for his speech. He says to me that this is not a matter of politics—his party has done nothing but politicise the health service. It has come out with spurious figures for weeks in terms of what it says it would put into the health service—between £500 million and £800 million, take your pick—depending on what day of the week it is. That money does not, of course, exist in reality. He says that it should not be politicised. He is trying to construct a scenario when he suggests that the Welsh NHS is in crisis; that is what he is trying to construct.
Let us talk about an NHS in crisis—the NHS in England under his party’s stewardship. Let us talk about the £20 billion-worth of cuts that his party has imposed, which it would impose if it were in Government in Wales. Let us talk about the 4,500 fewer nurses that there are in England—cuts that his party would impose if it were in Government in Wales. Let us talk about the bankruptcies in NHS trusts in England, which it would impose on local health boards in Wales. Let us remember the fact that we in Wales spend more on health than is the case in England. People ask me ‘Why is that relevant?’ I will say why—because the people of Wales deserve to know that if he or his party were in power, those cuts would be visited on Wales.
Y Dirprwy Lywydd / The Deputy Presiding Officer
Order. I fear that the general behaviour in the Chamber is no better than it was last week, when I appealed to you to listen to the answers that are given, which is the purpose of question time.
Y Dirprwy Lywydd / The Deputy Presiding Officer
I call on the leader of the Welsh Liberal Democrats, Kirsty Williams.
First Minister, following the publication yesterday of another critical Estyn report, is it acceptable to you that pupils in England are more likely to achieve a C grade or above in maths GCSE than they are in Wales?
We always look at these reports to ensure that things improve in Wales. There are two points that I would like to make here. First, we saw the figures of the Organisation for Economic Co-operation and Development on the performance of England under the stewardship of the Conservative-Lib Dem Government. Also, of course, we know—or at least it has now been admitted—that schools in England have been gaming the system for years; Michael Gove said it himself. He has taken steps to ensure that that does not happen in future, and the Minister for Education and Skills in Wales has ensured that it will not happen in Wales.
First Minister, whatever your concerns about education systems over the border, I would be grateful if you were a little bit more concerned about what is going on in education here. The percentage of Welsh pupils achieving a C in GCSE maths was over 10% lower than across the border in England. Most employers, I am sure that you would know, demand at least a C in GCSE maths when they are recruiting staff. Why are you tolerating results that are putting the Welsh workforce of tomorrow at such a disadvantage in the global job market?
The report shows where we have been successful in developing maths in our schools at key stage 4 and where we need to sharpen our performance. We welcome the report, because it gives us an idea of what we need to do to improve performance in the future, and that is exactly what the Minister for Education and Skills will be doing.
First Minister, you cannot be satisfied with a system that delivers results that put our young people at such a disadvantage. Despite all of your rhetoric, it is still the case that Wales languishes behind our nearest neighbours and most of our economic competitors. In June this year, when I asked you about the forthcoming Programme for International Student Assessment results, you again confirmed that you were confident of seeing improvements. This latest report from Estyn does not bode too well, does it? Will you put on record again what your expectations are for the PISA results when they are published in December? If we do not improve, what will you do about it?
I expect to see an improvement in our PISA results in December; I have said that before. If you see what we have done, as a Government, to assist with improving teaching in schools in Wales—this report is part of that process to ensure that we have in place a system of improvement—you will understand why I believe that we are making that improvement. You saw the improvement in GCSE results and the gap narrowing, even against the results in England that have been gained, as we know, over the years. So, it is absolutely right that we should say that. The other thing that we have done, of course, is to make sure that school spending is protected in the budget. As you say, that is a commitment that we have made as a party. I contrast that, of course, with the desire of the opposition, the Conservative party, to cut the education budget by 12%.
Y Dirprwy Lywydd / The Deputy Presiding Officer
I call on the leader of Plaid Cymru, Leanne Wood.
First Minister, Wales makes up 4.8% of the UK population but generates only 3.5% of the tax take, according to figures published by Her Majesty’s Revenue and Customs last week. Do you accept HMRC’s figures, which show that the Welsh economy is underperforming?
No, because the position is not particularly complete. For example, we know that London and the south-east tend to distort the UK figures as a whole in any event. It does show, of course, that, financially, independence is obviously not a useful option for Wales given the amount of fiscal transfers that we receive. We need to make sure that we increase tax receipts and that we see delivery, particularly, of the devolution of the four taxes that have been mentioned as part of the Silk commission.
I am not quite clear as to whether you do not accept HMRC’s figures or do not accept whether the Welsh economy is underperforming. Forty-eight per cent of young people in the Cynon Valley are not in employment, education or training. The number of young people claiming benefit for more than a year has gone up by 400% since mid-2011. Those are not the hallmarks of a well-performing economy, First Minister. Information is vital to any plan of action to turn around the Welsh economy. Scotland produces its annual Government Expenditure and Revenue Scotland report, yet the gross value added figures for Wales come out too late to be of any use. When can we expect accurate financial data for Wales?
This is something that I have been discussing with the chief economist. These figures clearly show that Wales is not in a position financially to be an independent state. That much is obvious from the figures themselves. As far as we are concerned, we take heart from the fact that, in the last quarter, exports have increased; we take heart from the fact that foreign direct investment has increased substantially over the last year; and we take heart from the fact that Jobs Growth Wales has been probably the most successful scheme of its type that has ever been done anywhere, certainly in the UK and possibly in Europe. Of course, we cannot ignore the factors that affect the Welsh economy both within and outside the UK, but given the levers that we have, I believe that we have done a tremendous job in helping our young people and helping people to get employment and, of course, to stay in jobs.
First Minister, do you actually want to improve the Welsh economy, because you are talking as though you do not? Your predecessor set a target in Wales of reaching 90% of the UK’s gross domestic product. When are you going to achieve this?
She cannot move off her script again, can she? If she had listened very carefully to what I said, she would have heard me giving three concrete examples of what has been done by the Welsh Government to improve the Welsh economy. Her party held the economic development brief for four years. What did it do with that brief? She forgets that conveniently, of course. Since 2011, we have had Jobs Growth Wales, we have seen huge increases in FDI, we have seen an improvement in exports, we have seen the Welsh economy starting to move in the right direction, we have seen the help that has been given to businesses, and we have seen jobs created and preserved in the enterprise zones, but none of these things happened when her party was holding that brief. I will take lessons from Plaid Cymru when they come up with some ideas of their own. In the meantime, we have the evidence to show that the schemes that we have put in place have helped our young people and have helped the Welsh economy to grow.
3. Will the First Minister provide an update on the Welsh Government’s Flying Start Programme? OAQ(4)1251(FM)
Flying Start is an important part of the Government’s programme. It is a major commitment and, from our point of view, we want to make sure that it grows. For example, by the end of 2013-14, we will reach nearly 28,000 children and their families through Flying Start. A sum of £62 million in revenue will be invested this year.
I was absolutely delighted last week to welcome our colleague, Vaughan Gething, to Holywell, where he launched a new Flying Start service, which already represents £75,000 of very welcome investment in our area. More than 1,000 children in Flintshire currently benefit from the programme, which, as you know, plays an important part in the early years support for some of Wales’s most disadvantaged children. The figure will rise because, eventually, the investment will rise to around £1 million from the Welsh Government. Therefore, First Minister, may I ask for your assurance that we will continue to invest in services such as this, providing support for families and enhancing life opportunities for all our children, despite the harsh cuts to the Welsh Government's budget from the UK coalition Government?
We are absolutely committed to supporting our most disadvantaged families, especially in this very difficult economic climate. That is, of course, demonstrated by our substantial investment in this programme, which, since 2006, has amounted to almost £500 million.
I completely welcome the investment in a new Flying Start facility at Holywell youth centre. However, how will you ensure that the Welsh Government's Flying Start strategic guidance, which states that an element of outreach work should be included in plans for the expansion of Flying Start, will apply from this centre to reach communities in rural north Flintshire?
We will of course want to ensure that Flying Start is as effective as possible and as wide-ranging as possible. I am not quite sure what the point the Member was making was, but I can nevertheless say to him that we welcome any support in ensuring that Flying Start and its benefits are widely accepted and known among the local population. The Minister for Finance will be making an announcement later today with regard to capital funding for the Flying Start programme.
I speak as somebody whose support for Flying Start is evangelical; I think it has been a tremendous success for some of the poorest communities in Wales. It is really important that we make sure that children do not start school two years behind other children, because that disadvantage is very difficult to overcome.
Y Dirprwy Lywydd / The Deputy Presiding Officer
A question now, please.
The question, Deputy Presiding Officer, is this: what can be done to ensure that the cluster boundaries of Flying Start equate to communities rather than to lower-layer super output areas?
We want to make sure, as I said, that it is an effective scheme. It is a closely targeted geographical scheme; it operates only in defined areas that have been identified as the most disadvantaged. However, through the expansion of the programme, we have built in a small element of outreach work to support the most vulnerable families outside the defined areas, based on a referral process, and each local authority will determine how this outreach element is applied.
First Minister, in view of the extremely disturbing increase in Wales of child obesity—your own Minister for health has this week expressed his concern—what action is the Welsh Government taking to ensure that the Flying Start programmes throughout the more deprived areas of Wales are working to reverse this unhealthy trend?
What we know is that, as part of Flying Start, to give children the best possible outcomes from life, we need to make sure that they have the best health outcomes, and that is something that Flying Start will be looking to address in dealing with children between the ages of nought and four. We know that if people's underlying state of health is improved, they will live longer, and, importantly, they will live healthier lives for longer.
First Minister, I also acknowledge the work that Flying Start has done, but, as the Minister who has responsibility for the Welsh language, I would like to raise with you the fact that the Government at present does not collate data on the number of Welsh-medium places available within the scheme. You will be surprised to hear that, in Conwy, it is 9% of places, compared with 23% of year 2 children. The situation is even worse in Neath Port Talbot and Carmarthenshire. Will the Government look at these figures in order to improve the Welsh-medium provision and to ensure that deprived families, too, can improve their situation?
A total of 61 Flying Start schemes ensure that they work through the medium of Welsh, and another 27 ensure that they operate bilingually. Data have been collated by local authorities in order to ensure that demand is met in terms of Welsh-language provision, and that is currently being monitored. So, there are a number of Flying Start schemes that operate either through the medium of Welsh or bilingually.
4. Will the First Minister outline how the Welsh Government’s policies are improving the financial well-being of South Wales Central residents? OAQ(4)1256(FM)
We have a range of policies to improve financial wellbeing for people in South Wales Central. They are reflected within the tackling poverty action plan, among other things.
Thank you for that answer, First Minister. One of the policies that your previous Minister for transport brought forward was the change in support for bus services, via the bus service operators’ grant, which has had a dramatic impact on the provision of bus services in South Wales Central, and in particular on the Vale of Glamorgan, with the withdrawal of many of those services. Is it your Government’s intention to do an assessment of the impact that those changes have had, and will you step in and intervene and work with local authorities to try to put some form of service back in place in those many communities that have seen services withdrawn completely?
Yes, it is. That is happening with the surprise announcement last week in Ceredigion, which will potentially leave many communities—Aberaeron, particularly—with a single bus service if those services are not reinstated. I know that the Minister has put a task and finish group in place to report by the end of this week, I think, to ensure that new proposals are put forward to provide a service there. There is no reason why that cannot be done in other parts of Wales as well.
5. Will the First Minister make a statement on the Welsh Government’s policy on tuition fees for Welsh-domiciled students? OAQ(4)1242(FM)
We are committed to maintaining the tuition fee grant for Welsh-domiciled students for the lifetime of this Assembly.
First Minister, I am glad that you have confirmed that our party will maintain that policy. Do you recognise that, this term, only the second cohort of students to benefit from the tuition fee grant has started its courses? Of course, the first cohort will not graduate until 2015—in other words, in the 2015-16 financial year. Is it not the case that this is a marked difference to the policies of the Welsh Conservatives, who would make Welsh students pay the full cost of their higher education wherever they study?
Indeed, they would. As we know and as they reiterated this morning, they are strongly committed to cutting educational spending by 12%. I suppose that we should be grateful, because it was 20% before the Assembly election, as was said live by the previous leader on ‘BBC Wales Today’. We know the effect that that would have on Welsh universities. I was surprised to hear, when they were asked this morning what their figures were for an alternative budget, that they said that they stuck with their figures for December 2012. I think that Wales deserves a better opposition than that—it is an incredibly lazy approach to say that we should look at their figures from four years ago. We know that if the Welsh Conservatives were ever in power in Wales, students in Wales would be far worse off and so would universities.
First Minister, because of the financial pressure on the budget of the Higher Education Funding Council for Wales, there is a ceiling on the amount of funds allocated to Welsh universities in terms of paying tuition fees. That ceiling, to all intents and purposes, limits the number of students from Wales who are able to study in universities in Wales. There is not, of course, a similar ceiling for those studying in England. Is this fair on Welsh universities?
I believe that it is important that students should have the opportunity to study wherever they wish and that there is no financial penalty associated with that. Of course, this is something that we are going to retain for the life of this Assembly. As regards the income available for higher education institutions in Wales, it has increased by 13.8% in this financial year, and so we know that universities have benefited greatly from the policies that we have introduced.
6. Will the First Minister make a statement on how the Welsh Government is tackling issues around the stigmatising of people with mental health problems? OAQ(4)1245(FM)
Our commitment to tackling stigma and removing the barriers faced by people with mental health problems is reinforced in a cross-Government strategy ‘Together for Mental Health’, and the related delivery plan. Our action includes co-funding the Time to Change Wales anti-stigma campaign.
First Minister, one in four people will suffer from some sort of mental illness in their lifetime. We recently saw a major retailer having to withdraw a Halloween outfit that was described as a ‘mental patient’ outfit. First Minister, will you join me in calling on all retailers to act responsibly with regard to this serious matter?
I think that there were two retailers, were there not? The very fact that they withdrew the outfits as quickly as possible is a sign that they realised how daft they had been to do that. There is no sense at all in stigmatising people in this way. I am happy to support your call for responsible retailing. That kind of irresponsible approach causes distress for people and for those who have lived with, or are living with, mental health problems, and their families. How do we change that? Time to Change Wales is the first national campaign to end the stigma and discrimination faced by people who have experience of mental health problems in Wales. We will take that campaign forward over the course of the next three years.
Thank you, First Minister, for that answer. I agree with you that Time to Change Wales is a very effective campaign, which was welcomed on all sides of the Chamber when it was announced. However, the funding provision for that campaign is going to expire by the end of next year. While it will have had three years to change attitudes towards mental health among the general population, it sometimes takes much longer than that to embed a change in the Welsh population. Will you commit further resources to that campaign, should they be necessary, beyond the end of its lifetime?
Bear in mind that the campaign is funded not just by us, but by the Big Lottery Fund and Comic Relief as well, and is delivered by three charities. We will be looking at the effectiveness of the campaign as it comes to the end of its three-year period with a view to seeing how the campaign might be strengthened and taken forward in the future.
First Minister, it is normally page 3 of ‘The Sun’ that I take issue with, but following yesterday’s quite disgraceful and irresponsible front page on mental illness, will you join me in reminding ‘The Sun’ that people with mental ill health are many times more likely to be a victim of crime than a perpetrator?
That is very true. If you look, for example, at the rate of serious crime, there is no connection, in terms of offenders, when it comes to people with mental health problems being more likely to commit serious crime. That is not the way that it operates. We know, for example, that with murder rates, most murders are actually committed in a domestic setting by attackers who know their victims. Again, this panders to the unfortunate view that is sometimes expressed by people that, if people have mental health problems, to put it simply, they should all be locked up. We know that that simplistic approach is something that was tried many years ago, particularly in Victorian times, and it is not an approach that anyone could possibly advocate now. The approach has to be to ensure that people with mental health problems are able to lead full lives in the community.
First Minister, apologies—I did not hear your answer as you had your back to me. My question also relates to the front page of yesterday’s ’The Sun’. I take it that you criticised the stigmatisation seen in yesterday’s ’The Sun’, linking the murder rate with mental illness. I would like to ask you to take a step further and write to the editor of ’The Sun’ to express your view that the stigmatisation seen in yesterday’s paper was a step too far, going against the values of fair play and fairness that we, as a country, want to see, and the fairness that we want to see for all, whatever their mental health status.
I will consider that. It is important, when these things happen, that a viewpoint is expressed. If I was to do that, I would be expressing the view of all in this Assembly. I understand that, so I will consider your request.
Onshore Wind Farm Developments
7. What impact assessments have the Welsh Government made on the effects that onshore wind farm developments have on local communities in Wales? OAQ(4)1257(FM)
The various impacts of energy projects are assessed as part of the planning process. Toward the end of the year, we will see the results of a study looking into the economic impacts of windfarms and associated infrastructure on Welsh tourism.
Windfarms do have an effect on house prices. I have received tangible evidence from one constituent, near Dolfor, that her family house has been significantly affected. She has had four quotations, two from local agents and two from agents outside the area who are unaware of the local circumstances, and the price differential was over £200,000. What community impact assessments have been developed in relation to Government energy and planning policy, and if they have not been developed, is this something that you would be looking to include in the forthcoming planning Bill?
As I said, this is something that is being looked at towards the end of this year. The UK Government has to do the same, of course, because a number of the applications that exist in your constituency are applications that will be determined by UK Government, not by Welsh Government. We should bear in mind that there are substantial community benefits that can be expected from wind energy, including in Carno in your constituency, where a large number of bursaries and grants to local residents have been provided for those wishing to pursue further or higher education courses. That community trust fund is a great example of what can be done. Of course there are community benefits or payments that will be associated with Pen y Cymoedd, Mynydd y Gwair and Brechfa west.
You have listed a number of potential advantages and community benefits emanating from developments. Why has the Welsh Government not made it a requirement that all windfarms located in communities have to include community benefits as part of the planning permission on every occasion?
We cannot force developers to do that, as we are not responsible for all planning applications in Wales. However, we are working with developers in order to produce a register of community benefits, which will be available publicly, so that people are able to see beforehand what benefits are available for their communities and, of course, so that companies know what communities, and we as the Government, expected in terms of community benefits. So, it is not possible to legally require this, because of our lack of powers, but we have been working with developers on producing a register that people will be able to see.
First Minister, you may have heard that, last week, there was some rejoicing in Montgomeryshire regarding the decision by Powys County Council to reject the proposed closure of Llandinam School. It is somewhat less well known that, over a number of years, the school has received direct payments from a community trust associated with the local windfarm. Given that I understand that the governors are currently in negotiation with the trustees to increase the contribution that comes from the trust directly into the school’s delegated budget, and with the re-powering of the local windfarm also—
Y Dirprwy Lywydd / The Deputy Presiding Officer
Your question now, please.
What assessment have you made of the potential for securing vulnerable rural facilities across Wales from windfarm investments?
I think that you gave a very good example of what can be done. It is sometimes portrayed—sometimes in this Chamber, and certainly outside the Chamber—that windfarms bring no community benefits whatsoever. Yet, we know that there are examples within Wales—you have just given one—where that is not the case. Clearly, we want to ensure that community benefits are maximised. Yes, there is a need to improve facilities in communities, but there is a limit to how far you can take that. It is important, of course, that there is innovative thinking in terms of community benefits, such as providing extra money for a school, as in this set of circumstances, or through the innovation that is being seen in Carno. The important thing is that, as wind energy is developed across Wales, community benefit is maximised, in a way that was not the case with other forms of energy in the past. We need to make sure that people have that maximisation of benefits in the future.
8. Will the First Minister make a statement on plans to improve the national infrastructure? OAQ(4)1252(FM)
The Wales infrastructure investment plan sets out our seven core strategic priorities and how, over the next decade, we will invest around £15 billion to boost growth and jobs and improve public services across Wales.
I was very pleased to hear from the Minister for Economy, Science and Transport that progress is being made on the south-east Wales city region and the prospect of a metro. You will be aware that the south east Wales transport alliance recently closed its consultation on future improvements to rail links in the region. What steps are you taking to ensure that, as new structures take shape, delays are avoided in improving infrastructure? Can you give an assurance that new stations on the Ebbw Vale line will be central to the improvements?
Yes. With regard to Ebbw Vale town and Pye Corner, that is being examined at the moment. In terms of the Valley lines, it is included in the next control period, between 2014 and 2019. At the moment, Network Rail is undertaking a detailed engineering study for it. It will set out in more detail how the project will be delivered and what the project costs are likely to be. We will, of course, work with Network Rail, and indeed with the UK Government to make sure that there are no delays—first in terms of electrification of the south Wales main line, and secondly in terms of electrification of the Valley lines and the Ebbw vale line.
First Minister, you will welcome the consultation put out by your Minister regarding the M4 relief road. Clearly, there are consultations going on about finance, but hopefully it will go according to plan. May I ask you whether your Government has had, or will have, negotiations with the UK Government regarding the future maintenance of the Severn bridges and the level of tolls?
It has had exhaustive communications with the UK Government on this issue. The reality is that, if we do not have borrowing powers, the M4 relief road cannot be built. It is that simple. We cannot have borrowing powers, by the Treasury’s own definition, if we do not have stamp duty—no stamp duty, no borrowing powers, no M4 relief road and no major projects. The tragedy is, of course, that it would mean that major structural projects could not go ahead because they were in Wales. In England, Scotland or Northern Ireland, they could, but Wales would be at a competitive disadvantage. Why on earth the UK Government thinks that this is fair is beyond me. Perhaps I am being unfair. I know the views of the Liberal Democrat side of the UK Government, but the reality is that, unless we get borrowing powers, we will not be able to take forward major projects. In terms of the issue of the Severn Bridge, we have had exhaustive correspondence with UK Government on this. We have had several different figures across a wide range on what the maintenance costs and the backlog of maintenance is on the bridges—none of which we believe, because they have been so varied. We have said many times that our view is that, preferably, we should control the tolls and the bridges. We are willing to take the maintenance of both bridges and then examine how we might look to reduce tolls in the future. So far, that has fallen on deaf ears.
9. Will the First Minister make a statement on the Welsh Government’s plans to boost tourism in Ynys Môn? OAQ(4)1254(FM)
Tourism is a key economic driver for Wales. Our new tourism strategy aims to drive forward sustainable growth in tourism and ensure that we deliver jobs and wealth for all parts of Wales.
Given that the tourism industry is so important to the Ynys Môn economy, does the First Minister agree that the next generation of high-voltage cables to support offshore and onshore energy generation schemes in Ynys Môn should be laid at sea rather than across the land, as that would be detrimental to the visual environment and, therefore, to the tourism industry?
I would expect any schemes to be implemented in a way that is supportive of the local environment. We must remember that, without this network of cables, Wylfa B might be unable to continue. However, I would urge National Grid to consider the situation in Ynys Môn and ensure that there is no detrimental affect on tourism on the island.
You are right, of course, First Minister that tourism is an important feature of the economy of Ynys Môn, as elsewhere. While I fully understand that Visit Wales’s marketing spend is allocated months in advance, are you concerned at all about the lack of agility in responding to opportunities, such as the captive audience we had over the summer with the extra visitors?
If you market tourism, you do it many months in advance; you do not do it when people have already decided where they want to go. If you look at the holiday companies, you will see that they always start marketing after Christmas, without fail. They do it either the autumn before or, particularly, in the spring of the holiday period during the summer. That is exactly what we have done. We want to ensure that people are coming to Wales and booking holidays in Wales well in advance of the summer, and that is precisely what Visit Wales has done.
Economy of the Llanelli Constituency
10. Will the First Minister make a statement on Welsh Government actions to boost the economy of the Llanelli constituency? OAQ(4)1258(FM)
We are continuing to prioritise our efforts to boost the economy across Wales by focusing on activities that encourage jobs and growth. One example is the repayable business finance funding that was awarded to Calsonic Kansei.
Llanelli has felt the benefit of the Welsh Labour Government’s micro-economic levers—in this year alone, BCB International, Hydro Industries’s US shipments and Dafen’s one-stop shop. Yet Westminster holds the macro-economic levers. Its devastating budget cuts and austerity measures show no signs of stopping. We are holding a business breakfast in Llanelli this week, with Chuka Umunna MP speaking to local businesses on the challenges ahead. How can the Welsh Labour Government, in spite of the Westminster cuts agenda, champion Welsh business for our future prosperity?
I am taking forward business improvement districts, of course, and the Wales economic growth fund, which has been a huge success for Llanelli in particular. Some 13 businesses were successful with their applications, and that has led to funding of over £5 million being approved, with the potential to create 105 jobs and to safeguard a further 391. That has helped, of course, to make up for the inaction of the UK Government.
Whatever the virtues of what the Welsh Government is doing, it has some way to go before it emulates the success of Ieuan Wyn Jones and his ProAct scheme, which safeguarded 10,000 jobs, including very many at Calsonic Kansei—to which you have just referred, First Minister. However, for people in Llanelli now, do you still believe in reducing VAT levels?
If I remember correctly, Jane Hutt was the one behind Pro Act and ReAct, but there we are, they were members of the same Government, so there is no need to squabble about that. However, we want to ensure that industry in that area is given adequate Government support. On the figures that I mentioned for the growth fund, that is true; more than £5 million has been invested in the area, which demonstrates the importance of the Llanelli economy—not only for the town, of course, but for that part of Wales.
Planning Process in Wales
11. Will the First Minister make a statement on the role of Natural Resources Wales in the planning process in Wales? OAQ(4)1248(FM)
Natural Resources Wales has a key role advising local planning authorities and others about how development proposals will affect their statutory purpose, which is to ensure that the natural resources of Wales are sustainably maintained, enhanced and used, now and in the future.
Thank you for that response. Will you also confirm therefore that Natural Resources Wales acts entirely independently of the Welsh Government when it comes to giving opinions on planning applications? Will you also confirm that it would not be appropriate for officials or Members of the Welsh Government to try to influence that in any way?
Yes, I can. Natural Resources Wales is a body that is independent of Government.
You said two weeks ago, First Minister, in response to Suzy Davies that you were currently examining guidance that would be available for Natural Resources Wales and local planning authorities to make informed decisions on whether to grant or refuse planning permission for shale gas development. Can you tell me, First Minister, what current guidance you are examining? Is that the current minerals guidance and when do you envisage that review being completed?
We are giving active consideration to what may need to be done to shape the planning system with regard not just to shale gas, but also to methane. The licensing system is not within the competence of the Welsh Government, and this is something that we are examining in great detail over the course of this week.
Thank you for that very helpful answer in terms of what you are currently doing. Do you agree, in terms of Natural Resources Wales’s role, that although it is independent of Government, it needs to develop policies that fit in with those of the Welsh Government on the exploration for unconventional gas? What work are you doing with it to try to take a common approach to make sure that any extraction of unconventional gas is safe for the communities involved?
It will need to make its own assessments, but it is not asked to do so in a vacuum. We are looking to see what further guidance might be needed in the future to deal with what is still a fairly new technology—it is not immediately new, but it is a fairly new technology. We already have guidance in place with regard to fracking, but we are examining to see whether further guidance needs to be put in place for the future.
Y Dirprwy Lywydd / The Deputy Presiding Officer
Thank you very much, First Minister.
I have one change to report to this week’s business. The statement on the draft budget for 2014-15 will take place after the statement on progress on the development of European structural fund programmes 2014-20. Business for the next three weeks is as shown on the business statement and announcement, which can be found among the agenda papers that are available to Members electronically.
Minister, there are two statements that I would like. The first relates to the recent agreement between the UK Government and the Association of British Insurers relating to insurance for properties in flood risk areas. It appears that that agreement may exclude homes built after 2009, and may not apply to small businesses. Will you look into that and get a statement on the action that the Welsh Government is taking to bring those two classes of property into the scheme?
The second statement relates to superfast broadband. I know that we debated it extensively last week, but it appears that, since that debate, BT has designated all the exchanges within Wales as future exchanges. It means that Access Broadband Cymru is no longer available to people, because one of the requirements of that is that the exchange is not a future exchange in the programme. So, I would be very grateful if the Minister could look into and report back on that, because that blocks any access for people with very severe broadband difficulties, such as broadband speeds of below 2 Mbps. I would be grateful if the Minister could look into that and report back on that.
In relation to your first question, I am sure that the Minister is having ongoing conversations with the Department for Environment, Food and Rural Affairs. The Deputy Minister for Skills and Technology will have heard your question and he will be happy to look into it.
I am given to understand, Minister, that the report of the Royal College of Paediatrics and Child Health on the intention to move intensive care services for newborn babies from north Wales to Arrowe Park has been presented to Government—that was done last month. Can you ensure, therefore, that the First Minister makes an oral statement as soon as possible to highlight the outcomes of that report, but also the Welsh Government’s intentions in responding to what is contained within that review? At the time of the announcement of that review, back in April, the First Minister said that a decision needed to be taken quickly and that conclusions needed to be reached as soon as possible.
The second matter that I would like to raise with you is the issue of floods in Glasdir in Ruthin recently. Will you ask the Minister for Natural Resources and Food, who is present in the Chamber, to come to an early decision on any possible commitment by the Welsh Government to contribute financially towards the cost of the work that needs to be done in order to tackle the flooding problem there? We have learnt that Denbighshire County Council is to contribute a third of the cost of £300,000, that the developers have also committed to contribute a third of the cost, and we now need to know whether the Welsh Government will also contribute a third.
As you state, the report is with the First Minister who is considering it and the recommendations, and he will come forward with further information in due course.
The Minister for Natural Resources and Food, I know, visited the area to which you referred and is having conversations regarding the cost with both Denbighshire council and the contractors.
Minister, last week, my colleague Lynne Neagle called for a debate in the Chamber on the UK Government’s Lobbyists (Registration of Code of Conduct) Bill. May I request a statement from you on any assessment that the Welsh Government has carried out into the potential implications and the effect that the Bill will have in Wales?
Thank you for that question. I know that the First Minister has written to Andrew Lansley, the leader of the House of Commons, regarding the Bill, which, as you say, is going through the UK Parliament and is awaiting further information regarding that. I am aware of concerns about the potential impact on voluntary organisations; I think that we have all been contacted about that.
Minister, I am sure that you will be concerned, as I am, to see news reports of measles outbreaks at Ysgol Cwmtawe and potential outbreaks at Ysgol y Cribarth in my constituency in Abercrave. While the number of children in Abercrave who have received their full dose of MMR is very high, it is low in Cwmtawe and demonstrates the continuing problem in persuading parents to get their children vaccinated, especially those who are now teenagers and were perhaps not vaccinated as babies. Will the Government issue a new statement urging all parents to contact their family doctors to discuss any concerns that they have about vaccination and make arrangements for their children, especially their teenagers, to be vaccinated?
Minister, you were very kind at a previous session to say that the Government would issue a statement on public conveniences and access to public toilets as an important public health issue. Could you give us an update on when that statement might be forthcoming from the Government?
In relation to your last point, that is in my portfolio and I am currently considering bringing that statement forward as soon as possible.
We were very concerned to hear about the further outbreak of measles. I know that 200 pupils at the secondary school in Neath Port Talbot are being offered the MMR vaccination. I am sure that the Minister for Health and Social Services is happy to issue the guidance that you suggest.
Following a series of horrific cases of parental child abuse and neglect across the border in England, I would be grateful if the Deputy Minister for Social Services would provide us with an update on safeguarding. Perhaps using her annual safeguarding statement, which I think is due this autumn, she could provide us with an update on how we are making sure that authorities in Wales are not missing opportunities to protect and intervene where children are being abused or neglected at home.
Certainly, the events to which you refer are very tragic and the Deputy Minister for Social Services will be publishing a statement to update Members on action being taken by the Welsh Government to further strengthen safeguarding and protection arrangements in the coming weeks.
Minister, may I call for two statements, please? First, a statement on neonatal care in north Wales. Members in north Wales are very anxious to learn the outcome of the Royal College of Paediatric and Child Health’s review of neonatal services in north Wales. We appreciate that the First Minister is going to make a final decision on this matter before the end of the year, but it would be great to see that report published in the public domain for people to be able to see. So, it would be good to have an update on that from the First Minister.
Secondly, may I ask for a statement from the Minister for Natural Resources and Food in respect of flood defences in Ruthin? The local authority in Denbighshire has confirmed today that it will agree to fund up to a third of the necessary improvements in the flood defence costs—
Both the points that you have raised—
I appreciate that—as has the developer of the land, and I think that it is important that we move quickly, before the poor weather over the winter appears, to resolve this issue once and for all. Residents are very anxious about what the poor winter weather might bring, and I think that we need a statement as soon as possible on this matter.
Both the points that you raised were raised by Llyr Huws Gruffydd, and I mentioned that the First Minister is currently considering the report into neonatal care in north Wales and will be bringing forward further information. Also, the Minister for Natural Resources and Food is having conversations regarding the funding to which you referred in relation to flooding.
Minister, I have just been told that the Secretary of State for Transport has announced a three-month review of the Driver and Vehicle Licensing Agency’s business and I wondered whether we could have a statement from you on whether the Welsh Government will be responding, due to the possible economic impact on south Wales of any changes that could be proposed. Given the many people in my region who have jobs in the DVLA, I would be very keen for the Welsh Government to have some sort of input into this review, and also given its importance.
The Welsh Government will be responding to the consultation in due course.
I call for two statements. The first is in respect of free school lunches, announced, as you know, last month by the UK Government for England, for every child in state-funded infant schools and disadvantaged students in further education in England. This followed a key recommendation in the independent ‘The School Food Plan’ report commissioned by the Department for Education. Last week, the First Minister told the Chamber that the Welsh Government had not been notified of what consequential there might be to this announcement, if any, and that it would be difficult to know what could be done,
‘because we do not even know whether there will be a penny in it’.
However, when the announcement was made for England, it was made clear that money was being provided for Wales, Scotland and Northern Ireland and, in fact, a Scottish Government spokesperson commented that they are committed to expanding this provision further and that, once they see financial implications, they will examine how best to deliver this expansion. Could we therefore have a statement from the Welsh Government announcing whether, when it receives or is made aware of how much money it will be receiving, it intends to announce an expansion of this nature in Wales or not?
Secondly, could I have a statement on the Menai science park? I am advised that a new interchange off the A5 will now be required, costing an estimated £2 million. Therefore, what costings were carried out for the original £10 million costs, what costings were carried out for the interchange, and will that be coming from the £10 million or will new moneys be provided for it? On a related matter, how was the role of director advertised, how many applicants were there and how many people were interviewed?
We are still waiting to hear the amount of money that we will be receiving as a consequential to the UK Government’s announcement about free school lunches. Obviously, we provide free school breakfasts. We have not had that information. As far as I am aware, the role of the director was advertised by Bangor University.
Deputy Presiding Officer, in July, I reported to this Chamber on the outcome of the public consultation on our future structural fund programmes for the 2014-20 programme period. This afternoon, I am pleased to provide a further progress report on these programmes. Over recent months, we have been refining the detail of the draft operational programmes and the Welsh chapter of the UK partnership agreement. This work has been undertaken in consultation with the European programmes partnership forum, Welsh Government departments and, through informal discussions, European Commission officials.
Our current proposals continue to reflect the priorities previously agreed by Cabinet and remain underpinned by our key guiding principles of partnership, concentration, integration and simplification. The programmes continue to focus on investments that have the capacity to transform economic growth and to increase jobs. As previously reported, at least 20% of ESF programme funding will be spent on tackling poverty and promoting social inclusion. We are also proposing specific priorities for tackling poverty through sustainable employment in both the west Wales and the Valleys and the east Wales programmes.
Our other ESF investment priorities, which span both programmes, are skills for growth and youth employment. Our ERDF investment priorities, again spanning both west Wales and the Valleys and east Wales, are research and innovation, SME competitiveness, renewable energy and energy efficiency, and strategic infrastructure. I confirm that it remains our objective to reach agreement on our programmes with the European Commission so that we are able to commence implementation as early as possible in 2014.
However, we cannot submit the programmes for formal consideration by the Commission until the legislative package that underpins the future programmes has been agreed. Work on that is progressing well under the Lithuanian presidency, although there remain some areas that are yet to be resolved, including on the performance reserve and the macro-economic conditionalities. The European Parliament is expected to vote on the package later this month, which means that the regulations will, hopefully, be adopted in late November or early December.
We also need the UK partnership agreement to have been submitted to the European Commission before we can submit our draft programmes. I have therefore been actively encouraging UK Ministers to ensure that this document arrives with the European Commission at the earliest opportunity. There has been good progress in developing the agreement over recent months and, while there remains some work to be completed, especially surrounding proposals in England, an initial draft has been sent to the Commission.
Our forthcoming negotiations will, I am sure, be greatly assisted by the positive informal discussions that have already taken place with the European Commission. However, the Commission has made it clear from the outset that this round of programmes is not business as usual, and we are responding by being much more specific in describing our aims and objectives, and by presenting a sound evidence base to support our investments. We also need to balance this by ensuring sufficient flexibility in our programming options over the next seven years. I intend to publish details of our proposals in the next few months, with the aim of giving stakeholders and partners as much time as possible for planning and fine-tuning future investment proposals. Officials are also making good progress in making wider preparations for the implementation of the programmes. This includes more streamlined application and assessment arrangements, together with comprehensive guidance and support.
Careful attention is also being paid, in developing implementation arrangements, to the recommendations of the Guilford review. The economic prioritisation framework, which is a key recommendation of the Guilford review, will be launched at the Welsh European Funding Office’s annual structural funds information event in November. The framework, which is being developed by WEFO in conjunction with Welsh Government policy departments and key stakeholders, will assist prospective structural fund project applicants to focus their projects on key opportunities for the Welsh economy. It will help to maximise the transformational impact of structural funds by ensuring that our programmes complement and add value to key existing and planned investments in the wider economy. The EPF will be a living document, which will be updated regularly to reflect the evolving economic climate in Wales.
We will also be holding a number of other stakeholder and media events, including next month’s Wales Forum on Europe, to make people aware of the importance of European funding. This will include marking the launch of Horizon 2020, and the opportunities that it presents to help build a strong Welsh economy at the cutting-edge of innovation, with structural funds providing a stepping stone to accessing support. It is important, and I will continue to ensure, that the Welsh Government takes every opportunity to enhance Wales’s economic development programmes and the funds that are available for their implementation. To this end, I went to Luxembourg last month to meet senior officials in the European Investment Bank. The EIB is a potentially significant funding partner, and my message that Wales is open for business was very well received. The EIB is keen to increase its investment in Wales in sound, robust programmes and projects that support European Union policy goals.
I also remain determined to ensure that Wales takes full advantage of the UK’s membership of the European Union. Our membership of the EU, and our active participation in the development and implementation of its policies and programmes, contribute significantly to the achievement of the goals that we set out in our programme for government. That is why the European Union is essential for the future success of Wales and the UK. I have mentioned previously in the Chamber the importance of EU membership to Wales, and I offer no apologies for doing so again: some 150,000 jobs in Wales are dependent on the single market, more than 450 firms from other member states are located in Wales, and provide over 50,000 jobs, and, since 2007, Wales has received just over £1.8 billion in funding from Europe. EU membership has helped boost businesses, people and communities through very difficult economic times. That is why I attach great importance to seeking early agreement to our structural fund programme proposals for 2014 to 2020.
Minister, thank you for that statement. I welcome the statement and the progress being made. We on this side of the Chamber have long been strong advocates for tackling poverty through sustainable employment, especially with our key partners in the private sector, and we welcome that as another specific priority. Much of your statement, I see, covers the process in agreeing the legislative package that underpins the programme, much of which I cannot add anything to. However, it would be churlish not to welcome the work undertaken so far on informal discussions and draft programmes. I would welcome, as I am sure would other Members, a meeting to discuss some examples of those draft programmes in greater depth than perhaps allowed today.
I welcome the economic prioritisation framework, which was a key recommendation of the Guilford review and one we welcome on the Welsh Conservative benches. While I appreciate this document must be flexible, I am slightly worried about your assertion that it will be a living document to reflect the evolving economic climate in Wales. What do you mean by that specifically? I think that we must robustly judge how our structural fund programme is adding value to investment. We want assurances, on this side of the Chamber, that the goalposts will not change too often, which would make monitoring all but impossible over the long term.
I also want to welcome that you have realised that the European Investment Bank is ‘a potentially significant funding partner’. We have, on many occasions in this Chamber, urged you and your Government to make greater use of the EIB. I am, frankly, stunned at your use of the word ‘potentially’. Let me tell you why. For example, Minister, during 2007 and 2011, Wales received €464 million from the EIB. In comparison, Scotland received €1,713 million. Are you really happy with that, Minister, or is it, perhaps, that Scotland has more influence with the EIB? The word ‘potentially’, I contend, has no place within a description of the role of the European Investment Bank for Wales. It could be described as a missed opportunity—one of the many in this subject area—or a significantly under used funding partner, but certainly not ‘potential’. You have previously wasted its potential, as has been debated many times in this Chamber. Please, let us not do it again. Will you outline, since your rediscovery of the EIB, what action you will be taking to maximise its use in Wales and outperform Scotland in the next funding cycle in terms of take-up from the EIB?
I thank Byron Davies for his comments welcoming the statement and acknowledging the work that has been undertaken thus far, including the economic prioritisation framework. I will just pause on that and answer the points you make as far as the EPF is concerned, which I know you welcome. It is not going to replace or duplicate the operational programmes. It is designed to add value. It is going to give direction and focus to the funds. Of course, that will help project applicants and sponsors with regard to the key economic opportunities that they can focus on, ensuring that they align their projects appropriately in terms of the use of EU funds and make the appropriate interventions that address key economic opportunities. The main economic opportunities identified in the EPF are clearly aligned with not only the programme for government through to economic policy but also the Wales infrastructure investment plan and sector and area-specific policies. That is the meaning of it being a living document, but, as we progress with these policies, we need to align and the EPF will assist us in terms of Government and in terms of EU funds.
Turning to the European Investment Bank, I am happy to repeat what I said in my statement: that the European Investment Bank is keen to increase its investment in Wales. That was the message when I visited the bank in Luxembourg. Of course, we have been encouraging that investment. I have met with the EIB in the past in previous ministerial roles, as have my colleagues. It wants to increase its investment in Wales, recognising that it has to be in sound, robust programmes and projects that support EU policy goals. So, this is a step change for the EIB, I would say, as well as a positive response from the Welsh Government.
I thank the Minister for the statement. There is not very much that is new in it, but it is good to hear that everything is going well. However, until we see the programme document, it is difficult to judge or to say anything, to be honest, so I hope that the discussions will come to fruition very soon.
There are two objectives to the new European programmes: the transformation of economic growth and increasing the number of jobs. I always thought that that was the aim of the first two programmes also. I would add that it is not just the number of jobs needed that is important, but the quality of those jobs, as there are too many low-paid jobs in many parts of Wales.
I have two or three specific questions. One is about the statement on the economic priorities framework that you are developing. There is a reference there to discussions between WEFO and the Welsh Government and key stakeholders. Who are the other key stakeholders outwith the Government? Then there is a reference here, naturally, to Horizon 2020. That programme gives our universities special opportunities. I have a specific question about the Menai Science Park, which, hopefully, will be able to benefit from the Horizon 2020 programme. What collaboration has taken place between the Government and the new chief executive to ensure that that park brings benefits to Wales and to north-west Wales specifically?
Byron Davies has alluded to the European Investment Bank, and I also wish to support the comments he has made. According to your own figures, I believe that the bank invested €25 billion in the United Kingdom in the past five years. However, only 1.5% of that funding has come to Wales. Can you explain why we benefitted so little from the investment bank, and what exactly are you doing to ensure that that percentage increases significantly? In fact, it should be at least triple that in order for us to receive the investment that would match that which the rest of Britain benefits from. Those are my main questions.
As I said, the funds of both the last two programmes run in Wales have been judged by the Governments of the day to be successes. Unfortunately, the GVA figures for west Wales and the Valleys do not reflect that judgment that they were a success, because, as we all know, the GVA figures are exceptionally low in the majority of the funds areas. So, how do you think the Government will approach transforming that to get real success over the ensuing period?
Diolch yn fawr. I welcome the questions and the response from Alun Ffred Jones. It is important that we look very seriously and carefully at how we progress. We are only just emerging from financial circumstances that have been extremely difficult, in terms of our economy and our opportunities for beneficiaries—not only individuals but businesses. We need to recognise that we need to move with the beginnings of the recovery of the economy, using the structural funds most appropriately. Alun Ffred Jones’s point about quality as well as quantity is key. When we look at the progress of the 2007-13 programme, we will see that it is not just about the numbers who were supported to gain qualifications, it is about the numbers who get into work, into jobs, and into further learning. That, of course, proves that the outcomes of the investment of European structural funds and the programme of government are making a difference. That is critical to research and development, ICT and innovation in terms of the opportunities to regenerate communities, as well as in improving the environment and sustainable transport. We have to focus on the outcomes, not just on the numbers.
I also welcome your recognition of the fact that we are moving forward with the European Investment Bank. I know that you support the steps that I have taken, and the steps that we are now taking, following my visit to Luxembourg only a couple of weeks ago. I think that I will now be able to report back on the developments and, I am sure, welcome EIB senior officers, and its vice-president, who is visiting in the new year. Perhaps he or she could meet with the committees in the Assembly to report on the bank’s new level of engagement with the Welsh Government.
It is important that we look at the importance of the economic prioritisation framework for the next round of programmes. If you recall, we are looking at the all-important backbone projects that need to be identified and assessed for EU funds. This is a move forward in terms of those key strategic projects, and they, of course, build on the already strategic projects that we have used in the current programmes. We have come a long way since the 2000 and 2006 programmes, and we need to use the experience in the backbone projects, which will be very rigorously assessed, to see what has worked. Schemes such as modern apprenticeships, Jobs Growth Wales and JEREMIE are particularly important in terms of those outcomes.
You asked about the stakeholders involved in the EPF and in the discussions leading up to the document, which will be launched in November. Of course, the European partnership forum includes members from across the private, third and public sectors. They have had their opportunity to input into the development of the EPF at meetings in July and September.
First of all, I welcome the statement by the Minister. I have three questions. I believe in research and innovation. If we intend to have a high-wage, high-skills economy, then that is one of the ways of going about it. What involvement will the Welsh universities have in research and innovation?
The second question is on structure and infrastructure. I am very much in favour of improving infrastructure, but I suppose that you would never get anybody here standing up and saying, ‘I’m against improving infrastructure’. I have two questions. Would the infrastructure include ICT infrastructure, and does it include dualling the A48?
Finally, on the European Investment Bank, like many others, I am very pleased to see Swansea University, under the former First Minister, make a very substantial borrowing from the European Investment Bank to build its second campus. What can be done to promote it? My understanding of why people are concerned about it is that they are worried about it not having a fixed interest rate. I do not know whether it is currently true, but at the time, we had to borrow in euros, so you are actually speculating on the currency. Can you now borrow and pay back in pounds, and can you borrow and pay back on a fixed interest rate? If that is true, and if that can be promoted, it may well get people to want to borrow from it.
I thank Mike Hedges for his questions, and also for his acknowledgement of the importance of research and development and the role of the universities—particularly, I am sure, Swansea University in terms of his constituency. I must say how impressed I have been during my visits to Swansea University, Aberystwyth, Bangor and Cardiff to see the projects that they have been taking forward. Those universities are now looking at the opportunities through the new Horizon 2020 unit. That will of course increase the Welsh element of the funding and maximise synergy between Horizon 2020 and structural funds. However, it is also a stepping stone to accessing funding, and it is important in terms of research funding. It will also help to build that capacity through the structural funds for the use of Horizon 2020. So, my message to the universities is that they have to gear up, and, indeed, they are in terms of the opportunities.
I am also glad that you welcome the stronger partnership with the European Investment Bank. It was very pleased to come over to Swansea for the opening of the second campus, for which EIB support was so important.
I would also like to thank the Minister for her statement today and for the regular nature of the updates that we have received on this subject. The focus of this statement is the structural funds but both the other spokespeople have referenced our underrepresentation in other funding streams—for example, the framework programmes, FP7, and the European Investment Bank. One of the priorities that you suggest, Minister, is to use the structural funds as an opportunity to lever in funding from some of these sources. Can you publish details of how you intend to structure that? How do you intend to go about that, given that, previously, we have not been successful?
In looking at some of the other specifics, I note that you are proposing to tackle poverty through sustainable employment priorities in both the west Wales and the Valleys and the east Wales programmes. I noticed that on 9 July you announced the ‘tackling poverty through sustainable employment’ strand for east Wales. You said that there would be a refocus of the ‘helping people into work’ priority for west Wales and the Valleys. Why do both areas now appear to have the same programme when in July they did not? Can you give us an idea of why you have abandoned the ‘helping people into work’ priority for west Wales and the Valleys? Why do you now believe that having the same programme priority across the two areas is the way forward, when previously it was stated that a tailored approach to the two different areas was preferable?
You say that you want to be much more specific about aims and objectives, which is very welcome, Minister, as I am sure that you will appreciate. You have said that you will publish details of those proposals in the next few weeks, which is very welcome. Will you also, at the same time, publish a draft evaluation framework so that people preparing bids and programmes will have an idea of how they will be measured against the targets and objectives that you intend to set? I am also wondering whether you will be welcoming feedback on those proposals at this time or do you consider them as being fixed?
As regards the economic prioritisation framework, I look forward to seeing what that looks like. You describe it in your statement as a living document, which will be updated regularly. Can I assume, Minister, that the aims and objectives—the targets, essentially—will not evolve over time, but will be fixed? Can you confirm that it will only be the ways in which you choose to address your targets that will evolve over time? I also note that on 14 May, you said that you had
‘agreed with the Minister for Natural Resources and Food that we should go further than recommended and develop a framework that covers all our EU funding programmes, including the rural development and fisheries funds.’
I wonder whether that is being done, Minister, because today’s statement does not mention rural development or fisheries, or how the framework will impact on those streams of funding as well.
Finally, I will take a moment to welcome your stated commitment to EU membership and how important it is for Wales and the United Kingdom. This morning saw the launch of a campaign called #whyIamIN, which some Members may have seen on Twitter. If we are serious about making a positive contribution to the debate about keeping the UK in Europe, we, as Members here, need to be proactive. I encourage Members to join in that debate and to tweet their support, telling people why they believe that we are better off in Europe because if we only say it within the Chamber, we are only doing part of the job. We need to be out there, telling our constituents and leading on this debate if we are ever to have a hope of overturning the negative rhetoric that swims from other places.
I certainly spent my summer on a mission to find out why we are in across Wales, particularly visiting those projects and beneficiaries—the businesses, universities, communities and individuals—that are demonstrating the impact of European Union funds, and the benefits of being in the European Union are coming through very clearly. We all have a responsibility but, as Minister, I take that as a key priority.
Of course, this statement is about the progress in terms of our negotiation with the Commission, how it is progressing, and updating Members, as Eluned Parrott has said. I will just focus on two points of clarification. In terms of tackling and preventing poverty, of course that is underpinning the structural fund programmes in Wales, and we are negotiating the inclusion of that cross-cutting theme to future programmes. We all recognise—and I am sure that you share the evidence—that employment is the best route out of poverty, so we continue to tackle poverty by helping people to access sustainable employment. Of course, recognising that we do have this new priority, the Commission has welcomed the development, and having a priority that we can also introduce in east Wales is a step forward. We will ensure that at least 20% of our ESF will be allocated to achieve these outcomes in terms of moving into sustainable employment. Also, it links to tackling youth unemployment and improving attainment. The 31% of funding for west Wales and the Valleys and 30% in east Wales is taking that forward, aligning with youth employment and the progression framework. I would also comment on the evaluation arrangements as well, because WEFO is working very closely with our monitoring and evaluation work stream. Again, like the European partnership forum, that includes representatives from the public, private and third sectors.
Y Dirprwy Lywydd / The Deputy Presiding Officer
I still have three Members I want to call, but we have reached the ‘just a minute’ stage of this statement, please.
It is good to hear that there is enthusiasm on all sides of the house in the Senedd on the benefits of being in Europe. However, we know that that is not the case among the Conservative-led Government. There is a sort of schizophrenic approach to Europe, which I am concerned may derail our good progress. I am glad to hear that initial proposals about England have now been submitted, but what are the risks of derailing the good progress that we have been making in Wales in terms of the feedback that we have got from the EU, with the English proposals lagging behind and then delaying the programmes starting here in Wales?
I think that I would like to respond to the point that Jenny Rathbone has made by saying that yesterday I had a very constructive engagement with the Joint Ministerial Committee on Europe. It was chaired by David Lidington, the Minister of State for Europe, who is in fact visiting Wales in a few weeks’ time, and I am sure that we are going to welcome him. I think that he is going to be attending and giving evidence to the Deputy Presiding Officer’s Constitutional and Legislative Affairs Committee. It was very important that we were there—all the devolved administrations were there—putting a very strong case in terms of the benefits of being in Europe. I can assure Jenny Rathbone that we are making progress and having an influence in terms of the UK’s negotiations on structural funds.
Minister, Eluned Parrott asked you a question about the link between the CAP and the CFP programmes, and I would be grateful if you could answer that, particularly because they were due to start—certainly, the new CAP framework—in 2014. It now will start in 2015, so what progress is being made on the transitional arrangements in relation to that?
On the Horizon 2020 funding, how are you assisting universities like Bangor in looking at partnerships, both within the UK to try to leverage in that funding and perhaps elsewhere in Europe? It seems that successful partnerships have led to 2020 funding being granted, which we have missed out on.
Finally, in relation to stakeholder events, can I put in a plea for some of those to be held in north Wales, and perhaps in every region of Wales—mid Wales and west Wales as well—so that people can easily access those stakeholder information events without having to lose a whole day in travelling?
I thank Antoinette Sandbach for her points. The Minister for Natural Resources and Food will update her on negotiations relating to CAP and the rural development programmes. We have a new unit for Horizon 2020, which of course is active in WEFO, and is already engaging proactively across the board in terms of bringing forward supporting project applicants. Of course, the point about consultation and networking in north Wales is taken.
I have already raised this point with the Deputy Minister for Skills and Technology, and I am keen to gather your thoughts on it, too: the FE sector is concerned about funding for 2013-14, but perhaps more particularly about funding for 2014-15 and beyond, in anticipation of possible cuts in recurrent funding. What are your thoughts on the use of structural funds and the possibilities there, in particular when it comes to plugging the gap and the potential for benefits in terms of workplace learning?
Clearly, the FE sector is fully engaged already and benefiting from the use of the European structural funds—one example of this is Pathways to Apprenticeships, which is engaging with employers and young people and beneficiaries of all ages in terms of apprenticeship groups. The FE sector is fully engaged and, of course, I am sure that Ken Skates will be giving a full update on how he will ensure that the European structural funds support the FE sector through these challenging times. It does provide an opportunity for change and development.
I have published today our spending plans for the next two years. These plans cover the final year of the current spending review period and, for the first time, set out our proposals for 2015-16, the last year for which we have a firm settlement.
I will start with the financial context as the backdrop to this budget. Despite some early and welcome signs that the economy has begun to recover, it is clear that the financial constraints are far from over. The cumulative impact of the UK Government’s decisions means that our budget has been cut by £1.7 billion in real terms since 2010-11. While the UK Government has responded to our calls for capital injections, our capital budget in 2015-16 is still 33% lower in real terms than it was in 2009-10, and new restrictions have been imposed on 12% of our capital spend.
We have taken account of the impact of these cuts on people, communities and businesses. These cuts are not just about money; they are about services, facilities and the life chances of the people of Wales. How we respond will shape the future. We have taken tough decisions, as a responsible Government, sticking to our principles and ensuring that our priorities are addressed.
I welcome the agreement that has been forged with Plaid Cymru and the Welsh Liberal Democrats. We have acknowledged our shared priorities and reached agreement around a response to two major challenges that we face in Wales: breaking the link between poverty and educational attainment, and joining up health, housing and social care to support independent living. These initiatives align with the Government’s priorities and the areas that we believe need protecting, namely health, schools and universal benefits. We have also been clear that our focus will continue to rest on creating growth and jobs for the Welsh economy, enhancing educational attainment and protecting the vulnerable. These themes reflect the priorities embedded in our programme for government and underpin all that we do.
Our spending plans demonstrate how we will deliver against them. It is not just the financial environment that shapes our challenge. Rising demand levels, new pressures, cost increases and the adverse impacts of the UK Government’s welfare reforms are biting. We have had to take some tough decisions and choices between areas, as well as within programmes.
At the heart of today’s plans is our commitment to the NHS. Health underpins so many of our objectives. We know that the NHS faces new burdens from the implications of the Francis review and immunology developments.
Deputy Presiding Officer, to respond to these challenges, I am announcing today a total additional funding package for the NHS of £570 million over three years. This will provide the financial resources it needs to respond to the Francis agenda. We cannot delay that response, so this package includes an additional £150 million for this financial year.
This is an important investment, however it does not remove the need for change. The pressures that the NHS faces will continue to grow, which is why it is important that our agreement with Plaid Cymru and the Welsh Liberal Democrats includes a new innovative £50-million intermediate care fund. It will allow more co-ordinated and joined-up care to be provided to support independent living and secure the best decision making for the lives of people who need health, housing and social services.
In developing our plans, we have also kept a strong focus on the interventions we can make to support growth and jobs. The budget includes a significant package of capital investment of nearly £552 million—including £15 million for the intermediate care fund—over the next two years to support our priorities as set out in the Wales infrastructure investment plan. I will be providing more detail on capital in a statement tomorrow, including a further £65.5 million to be invested this year. Funded through a mix of traditional capital and financial transaction resources, this total package will deliver real benefits for Wales, creating or supporting more than 11,000 jobs over three years. This package also includes £174.5 million over three years for our new Help to Buy Cymru shared equity scheme.
Supporting our young people into jobs and apprenticeships as well as meeting their continuing educational needs is a major priority. We are investing in a range of employment and skills programmes, including extending funding beyond our three-year commitment for 16 to 25-year-olds through the successful Jobs Growth Wales programme. This investment will be supported by match funding from the European social fund and will extend the programme to 2015-16, enabling over 4,000 jobs to be created in addition to the 12,000 already promised.
Our budget proposals reflect the importance we place on improving educational attainment and breaking the link between poverty and educational achievement, a key priority in our tackling poverty action plan. We are maintaining our 1% commitment to protect front-line spending for schools by growing our schools budgets more rapidly than changes to our settlement overall and by extending our support for the pupil deprivation grant to 2015-16. As a result of our agreement with Plaid Cymru and the Welsh Liberal Democrats, we have been able to provide an extra £35 million of investment in 2014-15 to increase the targeted support from £450 per pupil to £918.
Our commitment to supporting children, families and deprived communities remains a firm priority. By 2016, we will have doubled the number of children and families benefiting from free childcare and parenting support through Flying Start, with an additional £11 million in this budget, bringing our total additional investment over four years to £115 million. We will also hit our target of 500 community support officers this autumn, and these plans will ensure that they are still serving communities in 2016.
Once again, our plans ensure that the budgets for universal benefits grow faster than our settlement. These make a tangible contribution to children, families, and disabled and elderly people, reflecting our priority to cushion the impact of rising costs for hard-pressed households and vulnerable people.
We value the wide variety of public services provided by local government and continue to invest in them, with a focus on preventative investment and early intervention. Flying Start, integrating health and social care, and capital investment in schools, housing and roads through our local government borrowing initiative are clear examples of our shared priorities. Over the summer, I met a wide range of people and partners who told me that they valued these services, too. In line with our budget agreement, we are providing £5.5 million to mitigate the reductions to the Supporting People programme in 2014-15, with continued investment of £134.4 million in that programme.
To date, we have been able to cushion local authorities from the impact of the UK Government’s severe cuts. As a result, they have received higher funding levels than their counterparts in England. This has given them time and space to embark on the changes needed to enable them to manage the combination of financial constraints and rising demand. I am also opening the next round of invest-to-save today, with a further £19 million of funding available in 2014-15 to help deliver that change.
The decisions that we face require clarity of purpose based on our priorities. All indications are that there are more difficult budgets to come. The recent Institute for Fiscal Studies report on Wales was salutary. We have upheld our responsibilities to prioritise for our diverse communities, respecting our sustainable development principles and seeking equality of outcomes.
This is a fair budget that marks out the Welsh Government as a Government that keeps faith with its principles and priorities. With our leadership as a Welsh Labour Government, we have shown that we can work together to address shared goals of prioritising growth and jobs, tackling poverty, and supporting vulnerable people, true to Welsh values and Welsh needs.
I welcome the fact that the Welsh Government has continued to produce an oral statement at the start of the budget process. Of course, this statement is being made against a backdrop of a budget deal that has already been agreed before this draft budget was even laid—so much for the other opposition parties holding this Government to account. One has to question why Plaid Cymru and the Lib Dems are willing to reach a deal before the budget plans are even in the public domain. Clearly, they have negotiated from a position of weakness, showing their hand before the Government has dealt the cards. Clearly, they are prepared to prop up this failing Labour Government.
We continue to find ourselves in a difficult financial climate, so it is crucial that every pound spent by the Welsh Government is spent effectively, ensuring value for money for the Welsh taxpayer. It is clear that this Labour Government’s previous budgets have failed to deliver, given that real outcomes in health and education have not improved. Given this, how will the Minister for Finance effectively monitor this draft budget to ensure that the moneys allocated in it deliver real outcomes for the people of Wales?
It will come as no surprise to the Minister that we on this side of the Chamber continue to call for the ring-fencing of the health budget in real terms. Even under these new plans, the NHS budget is not being protected and has been brought to the brink of crisis. I put it to the Minister that the year-on-year real-term cuts to the Welsh NHS by this Government is coming back to haunt us today. That is why it has been forced to provide an additional £150 million in this financial year. If the Government had protected the health service budget over the last few years, we would not be in this position. Therefore, will the Minister confirm that the Government was wrong to impose record-breaking cuts on the Welsh NHS over the last few years?
The Minister claims that an additional £570 million will be invested in health and social services over the next three years. Is she confident that this will sufficiently support the NHS in Wales going forward? Now more than ever, the NHS needs the Welsh Government’s support, but even though additional money is being made available, the NHS budget is again not being protected in real terms. Clearly, this Government is letting down the patients of Wales.
On several occasions in evidence to the Finance Committee, the Minister for Finance has assured us that the Welsh Government wants to be more open and transparent in the way that it presents its budget, and that it wants to be transparent and clear in the way that it funds public services. This is something that I very much welcome. However, in February of this year, further education colleges were advised by letter that they were to receive a 1% increase in funding for 2013-14 compared with 2012-13. Understandably, colleges planned ahead on this basis in terms of expenditure on staffing, courses and so on. However, colleges received a further letter in late July this year to advise that instead of a 1% increase, they would now receive a decrease of 1.48% compared with 2012-13 figures. This change has understandably caused great concern at a time when public bodies are being encouraged to plan further ahead. Given her commitment to provide clarity in the way that the Government finances public bodies, can the Minister pledge for the record that a situation like this will not happen again next year, where public bodies are told one thing and, a few months later, are told something completely different? Can she tell us what mechanisms are in place in this draft budget to provide clarity in future funding arrangements for FE institutions and other public bodies?
An aim of the Welsh Government in 2003 was that all schools in Wales should be fit for purpose by 2010. The director-general of education and skills told the Public Accounts Committee recently that he was confident that, within five years, all not-fit-for-purpose schools would be renovated, adapted or rebuilt. Can the Minister tell us how the twenty-first century schools programme is being prioritised in this draft budget? Can she tell us whether existing projects will proceed as planned?
With regard to the budget process, last year, the Finance Committee noted that few specific targets or objectives with measurable outcomes were clearly presented for scrutiny, against which committees could consider the potential impact and effectiveness of the allocations proposed in the draft budget and evaluate value for money achieved with the resources allocated.
Therefore, could the Minister tell us what specific changes the Welsh Government has introduced this year to specifically work towards this aim? In other words, does the Minister feel that the document laid today provides sufficient transparency to allow for effective budget scrutiny?
I am sure that the Minister will agree with me that planning ahead is vital to securing stability within budgets. Given that Cardiff Airport was purchased under an emergency procedure, which did not give this Chamber the opportunity to properly scrutinise the nationalisation of the airport, could the Minister confirm that appropriate planning and more transparency will, indeed, be applied to this draft budget?
As well as laying a draft budget outlining where money will be spent, it is essential that the Government uses the levers that it has at its disposal to maximise its resources and lever in additional funds where it can. As I have said before, it is important that the Welsh Government looks at other innovative financing models, such as the non-profit distributing model and tax increment financing, in order to improve our infrastructure and, at the same time, boost our economy. Could the Minister provide us with an update on the work that the Welsh Government has done in relation to these models? How will they work alongside this draft budget?
Deputy Presiding Officer, I would like, if I may, to quickly ask about preventative spending in this draft budget. The auditor general’s February 2013 report on the procurement and management of consultancy services identifies a number of specific areas where financial savings could potentially be made. There are a number of public bodies and schemes that can deliver long-term savings in the future, because of the preventative policies that they adopt. It is important, therefore, that these bodies receive priority funding. I welcome the fact that the Supporting People programme has been supported, but can the Minister tell us how the Government is specifically prioritising the funding of other schemes such as this, which will result in long-term savings in this draft budget?
It is now crucial that the Welsh Government ensures that any spending through this Assembly is efficient and effective, delivering value for money and real outcomes for the people of Wales. Therefore, Deputy Presiding Officer, I thank the Minister for her statement today. I look forward to scrutinising this draft budget further over the next few weeks.
In responding to Paul Davies, perhaps I could start by reminding him why we are in the position that we are in today. The Welsh budget has faced unprecedented cuts—[Interruption.]
Y Dirprwy Lywydd / The Deputy Presiding Officer
Order. I have to say to the Conservative group, your spokesperson has hardly sat down and you have started to heckle the Minister. That was a long contribution, as is appropriate given that this is the draft budget, but we will hear the Minister’s reply.
Thank you, Deputy Presiding Officer. The Welsh budget has faced cuts that are unprecedented since devolution. By 2015-16, our budget will be nearly £1.7 billion lower in real terms than it was in 2010-11. So, the spending plans that we publish today are based on a clear set of priorities and we have done everything that we can to mitigate the impact of those UK Government spending cuts.
As far as the health service is concerned, are you saying that you do not welcome the announcement today of £570 million in additional funding into the health service? I really do question where the Conservatives are coming from. Surely, the people of Wales will be listening to you and to whether you welcome the £570 million. We recognise that the NHS faces new burdens. Turning to the implications of the Francis report in England, did not the Minister for Health and Social Services come to this Chamber in July and say that we were undertaking a financial review to see how we could respond to the new burdens, as a result of the Francis report?
Indeed, we have four new vaccinations, the orphan drugs and the new challenges, and it is right that we as a Welsh Government respond to those. That is why we are protecting the health budget and that is why we are responding to the Francis agenda this year with £150 million.
Do you not deny that the intermediate care fund is exactly what we want to develop as a result of the Social Services and Well-being (Wales) Bill? I am sure that Darren Millar will engage in that, of course, with Gwenda Thomas’s leadership, alongside our colleagues in Plaid Cymru and the Welsh Liberal Democrats, because it is clear that an intermediate care fund that addresses the health and social care and housing needs of our most vulnerable people is what we would want and what our services expect.
I will answer two key points that have been made by Paul Davies, and, of course, this will come through in scrutiny—I look forward to the scrutiny, as do all my colleagues in the Cabinet. Let us look at further education and working closely with our further education institutions to help them manage what is turning into a series of difficult budgets. We are working closely with the sector. We are evaluating options and minimising the impact of any reductions on learning, but, of course, action has already been taken. There have been important mergers, the creation of the Grŵp Llandrillo Menai, Coleg Cambria and the Trinity Saint David group. In 2009, there were 18 FE corporations; now we have 10.
I also welcome the way that the FE sector and other sectors have risen to the challenge. They were expecting difficulties in terms of the new settlement, and, of course, we need to work with them to ensure that we maintain their high-level skills provision. Earlier questions about the importance of using our other funds, such as European structural funds in helping us to support the 16 to 18 cohort, are particularly important.
It is important that you look at the issues in terms of innovative finance. Innovative finance is what we have made the hallmark of this Welsh Labour Government in taking forward our invest-to-save programme. I know that Paul Davies would welcome the local government borrowing initiative for highways improvement but also would recognise that the Welsh housing finance grant, which Carl Sargeant and I launched only a couple of weeks ago, unlocking finance to build 1,000 affordable homes, is the progress that we are making in developing those non-dividend investment vehicles, which I know he welcomes. That will also help to deliver sections 5 and 6 of the A465.
I am sure that others will want to explore the ways in which we are using innovative finance to develop Help to Buy Wales as well. That is using the financial transaction capital funding from the UK Government. We have risen, as a responsible Government, to take on board all those opportunities.
Finally, your point about prevention is key. You will note, I am sure, Paul Davies, that we have published today our equality impact assessment. If you look at that, you will see the ways in which we have considered the impact on all areas of our spend. We have looked at the equality impacts in terms of jobs and growth, educational attainment and tackling poverty. These are ways in which we can ensure that we are recognising and assessing the impacts of our decisions. I know that you will use that in terms of your scrutiny of this draft budget, which I am very pleased to be tabling today.
Minister, I am, of course, very pleased with those elements of the draft budget that were agreed by my party, Plaid Cymru, jointly with our colleagues from other parties. Our close-to-home healthcare package will deliver care to patients at home and in their communities, easing well known pressures on the health budget. It will start to bridge the gap between healthcare and social care, helping local authorities to provide more care at home and beginning the process of integrating two services. The package will address head-on the problem of delayed transfers of care, which will, in turn, reduce hospital waiting times. It will, of course, assist local government too.
Investing in prostate care treatment means that Welsh patients will not have to cross the border for vital treatment, saving the costs of eye-watering private medical bills. We have also secured investment in a health technology and telemedicine fund to bring specialist care closer to patients, saving both time and money in pockets, as people will not have to travel to hospital for many non-urgent visits.
The Party of Wales wants to break the link between poverty and attainment, so we are pleased to have been able to secure a deal whereby the pupil deprivation grant has been extended to £918 per pupil. This will be targeted directly at disadvantaged students. The Party of Wales wants this increased expenditure to have the greatest possible impact, which is why we also welcome the Welsh Government’s review of its effectiveness.
Plaid Cymru recognises that this is a tough budget. Wales has no control over the money that is raised here, which is a situation that is not sustainable. That is why we want to see the full recommendations of the Silk report implemented, according to the timetable that the commission set out. The current set-up makes no sense. Minister, I would be grateful for answers to the following questions. You are making substantial cuts to local government in the coming years. What effect will this have on its ability to provide essential services? What will this mean for council tax increases next year? What advice do you intend to issue to local government about council tax? Also, what impact will this budget have on young people trying to stay in education and gain qualifications? Finally, Minister, I would be grateful to know how you will ensure that young people are fully aware of all of the options that are available to them post 16, including the apprenticeship opportunities that were agreed in last year’s budget.
I am very pleased to respond to the leader of Plaid Cymru and to welcome the fact that she and her party have recognised the opportunities that this draft budget provides. As she says, this is the toughest budget that we have had to set. The fact that we have been able to work together to find shared priorities between the Welsh Labour Government, Plaid Cymru and the Welsh Liberal Democrats demonstrates how mature this institution has become, putting the interests of the people of Wales and the interests of people who need the integration of health and social care at the forefront of the opportunities provided by the £50 million in revenue and capital funding for intermediate care and help close to home. This also recognises the importance of the preventative element, in terms of its impact on the health service.
Her points and questions about local government are important. The Minister for local government will be making her statement next week on the draft settlement. However, over the last three years, we have been able to cushion local authorities from the impact of the relentless cuts to our budget from the UK Government. They have received higher funding levels than their counterparts in England. In fact, if you look at the comparison, you will see that, according to the Institute for Fiscal Studies, between 2010-11 and 2013-14, the local government resource in England fell by 9.5% in real terms—around double the reduction in Wales. We have worked closely, as has the Minister, with local government, to prepare and pave the way for what she has rightly described as the financial realities of where we are. We recognise that the decisions that we have made, partly through the budget agreement, will help local authorities in terms of the resource that will be available, particularly for the integration of health, social care and housing, and the wide range of public services provided by our local councils, including Flying Start, investment in schools—through the pupil deprivation grant—and capital investment. We now have to work through this, in terms of the consideration of the local government settlement, which will be scrutinised in the coming weeks, and work with local authorities to see how they will be able to respond to the challenges of this budget.
I thank the Minister for her statement. Unlike the main opposition party, the Welsh Liberal Democrats are pleased that we reached this agreement prior to the draft budget being published, because it enables our proposals to be scrutinised as much as the Welsh Government’s proposals. In that sense, it shows that we are in favour of accountability and transparency. In the past, we have left those agreements to the very last minute and what we have brought forward has not been properly scrutinised as a result. It is a good thing that three parties have been able to show maturity and have been able to work together on common objectives to deliver this deal in time for the draft budget to be published. I am very proud indeed that we now have £71.3 million supporting the poorest pupils in our communities next year, which is a commitment to investment in education and training. By contrast, the Welsh Conservatives have today confirmed that they want to cut school funding by 12%. I think that that shows more than anything the difference between the three parties that have been able to come together on this budget and those over there who want to carp from the sidelines.
I also welcome very much the health technology fund, and the extra money that has been put into that. As someone who represents Swansea, I am pleased that that cancer centre will also now be getting robotic cancer treatment, which has already been put into Velindre Cancer Centre, and that a similar provision will be put into north Wales. However, I would refer the Minister to the comments of Marcus Longley on the radio this morning, when he said that the Welsh NHS is not as efficient as it could be in terms of how it spends the money. I think that we are all aware of the pressures that the NHS has been under, and the difficulties that the Government has had in meeting those targets. To that extent, I very much welcome the extra money that is being put into the health service this year, and in subsequent years. Can the Minister confirm that that money will not be unconditional, and that they will be asking the local health boards to use that money to make sure that they can deliver better and more efficiently and effectively, and that they will be using the opportunity to seek the sorts of efficiencies that Marcus Longley highlighted this morning?
I very much welcome the extra money for Supporting People—£5.5 million. It means that that budget is not being cut to the extent that had been originally planned. There is now £134.4 million in there. However, can the Minister confirm that that is an opportunity to reform the way that that budget is being spent, to ensure that we are getting value for money from that too, and that, not only are we supporting the most vulnerable people in our communities, with that commitment of the extra money, but that we are using that money in the wisest possible way, to ensure that it is getting to those who are most in need, and is being used in the most effective manner?
Finally, I notice that the Minister, again, referred to apprenticeships in her statement. She will know that 1.2 million extra apprenticeships have been created in England, whereas the number of apprenticeships in Wales is actually in decline. Can the Minister confirm that the resources that are available in this budget will be used to try to reverse that decline, and ensure that we are investing in those apprenticeships in the future?
Thank you very much, Peter Black. You have focused, quite rightly, on this constructive engagement that we have had, in order to bring a draft budget to the Chamber today. This constructive engagement means that we are able, as you say, to then go through a period of weeks of scrutiny, not just in the Chamber and in our committees, and with our opposition colleagues, but also with stakeholders—our partners in the third sector, in local government, in our communities, and in business.
I have been talking over the summer to people who are directly affected by the cuts. They come to me and they say that they have concerns not just about our budget, but the impact of not only the cuts by the UK Government to our budget, but welfare reform, as a major example of something that is impinging on people’s lives and communities.
I think that the recognition of the investment that we are making in health is very important and very welcome. However, as you will recall, I said in my statement that it is an important investment, but it does not remove the need for change; that is where your point about efficiencies is key. Of course, the Minister will be responding in terms of how this money will be allocated. It is in response to the Francis review and the new challenges that face the NHS. However, Marcus Longley is quite right in terms of the need for reform, to enable the health service to be more efficient and more integrated, in terms of health and social care, where of course we will have that extra investment as well.
Efficiencies will be driven as a result of the Supporting People arrangements, and the fact that we have been able to mitigate the cuts to that programme. The Supporting People programme in Wales helps vulnerable people to stay in their own homes, and to live independent lives. We talked about mental health earlier today, and Supporting People is a key source of support for people with mental health needs. We have honoured the importance of the Supporting People programme, and, through our agreement, we have protected it even further. However, again, efficiencies will need to be made. That is a cross-sectoral partnership that is working on the Supporting People programme. Once again, I thank you for your constructive engagement and recognition that this is a responsible and fair budget in tough times.
I thank the Minister for her statement. May I say that any budget needs to be looked at in context, and this budget needs to be set against unprecedented cuts by the Westminster Government? It is macro-economic madness. Police community support officers and the Flying Start programme are very popular in my constituency. I am glad to see that there is continued support for them. I have two specific questions. On invest-to-save, is this additional money or is it reinvesting money that is coming in from previous invest-to-save initiatives? My second question is: will school funding be protected within local authority budgets, that is, when local authorities have the funding will they have to send the money out to schools or will they be able to treat it as part of their income?
It is important to say that invest-to-save is a key tool that local government and the health service have used proactively and constructively to incentivise change and drive collaboration and efficiencies. It is additional invest-to-save funding that I am announcing. However, we are also recycling invest-to-save. It is working as a recycled programme. The Finance Committee undertook careful and helpful research into the positive impact of invest-to-save. The Minister for local government has identified the importance of not only invest-to-save, but her own regional collaboration fund in supporting local government to make those changes.
In my statement, I said that we were maintaining that 1% commitment to protect front-line spending for schools by growing our school budgets more rapidly than changes to our settlement overall. That is a benefit to local authorities. The way in which we fund our pupil deprivation grant is important, in that schools have that funding in terms of the numbers of children eligible for free school meals. The 1% will help school budgets in terms of being 1% above the overall settlement.
I would like to congratulate the Minister on her statement today, for presenting it at an early stage in the process and in such difficult economic circumstances. I would particularly like to welcome the extra money for the health service. In Cardiff North, we have had unprecedented demands on A&E in the Heath hospital and huge numbers of over 85s being admitted to hospital, and these are additional pressures, as well as the new vaccines that she’s mentioned and all the other things that are putting a huge pressure on the NHS. Therefore, I welcome that extra money. How far does she think that can go in tackling those issues? I am also pleased that she was able to make an agreement with the other parties. I particularly welcome the extra money for the health technology fund. Velindre hospital in Cardiff North has already benefited from that fund and I am pleased that other areas will benefit from it. Does she see that as a fund that will continue in future years? Finally, I was pleased to hear her commitment to universal benefits. Does she not agree that they are so important for people’s health and wellbeing, particularly in the current climate of the welfare cuts that are gradually coming in?
I thank Julie Morgan for her questions and contribution. In representing Cardiff North, her constituency not only includes the University Hospital of Wales, but Velindre hospital and many other health facilities at the sharp end of the challenges and pressures. I mentioned the rising demand levels, the new pressures, the cost increases, and the adverse effects of the UK Government’s welfare reforms. It is particularly important that we safeguard our universal benefits. A great number of children are benefiting from a free school breakfast and the free prescriptions and concessionary fares are all important in terms of the £21 billion that will be taken out again in the cuts to welfare benefits as a result of UK Government policies. We have new burdens in the NHS and that is what the spend that I am announcing today is going to meet. Also, as a result of the agreement, as you say, it is important that we can extend that health technology fund and extend it to include telemedicine as well, particularly recognising the importance of that robotic cancer equipment across the whole of Wales, benefiting all our patients.
Does the Minister agree with me that the disastrous UK Government austerity policies underpin the backdrop to this budget? Does she recall that, in February, George Osborne become the first Chancellor in 35 years to lose the UK's AAA credit rating? Despite these austerity policies, may I congratulate her on a remarkable increase in NHS finance? Can she confirm today that the additional 1% for schools will mean a further £70 million over the next two years? Is this not a budget for fairness that shows that Welsh Labour is standing up for people in tough times?
I thank Leighton Andrews, who is standing up for his constituents in the Rhondda—constituents who have been the hardest hit, I would say, by the welfare reforms and, indeed, by the austerity measures of the UK Government. In fact, that is why I believe that, when we go into the coming weeks of scrutiny, this should be a budget that we and, I am sure, parties here will want to debate, not just in this Chamber and in committees, but with the people that they represent, and the businesses, communities, volunteers and the people at the sharp end of the UK Government’s austerity policies and the cuts to our Welsh Government grant.
Sandy Mewies took the Chair at 15:41.
The following amendments have been selected: amendments 1 and 3 in the name of William Graham, amendments 2, 4 and 6 in the name of Aled Roberts, and amendment 5 in the name of Elin Jones. If amendment 3 is agreed, amendment 4 will be deselected.
Motion NDM5315 Lesley Griffiths
To propose that the National Assembly for Wales:
1. Notes the UK Government’s continuing plans to introduce direct payments;
2. Calls again on the UK Government to change its policy on direct payments to reflect the likely negative impact on many tenants, as well the risk to the financial viability of housing organisations; and
3. Commends work by housing and other organisations to help people to cope with the changes.
I move the motion.
I am pleased to open the debate on direct payments of housing costs within the benefits system. This allows me the opportunity to highlight the considerable difficulties that these challenges are bringing to tenants and their families, and to social housing providers.
First, I would like to address the proposed amendments to the motion for debate today. I have accepted the amendments tabled in the name of Elin Jones with regard to the implementation of best practice, and I have also accepted the last amendment proposed by Aled Roberts, amendment 6, with regard to the availability of financial products and money advice services to tenants. Work is already being taken forward on this agenda; the Welsh Government funds credit unions to support financially excluded people to ensure that they have access to financial products. The credit unions are independent organisations, and Welsh Government recognises that they can offer a variety of products to support those who are financially excluded and to support the sustainability of the family unit—for example, working closely with local authorities and registered social landlords to promote rent accounts and budgeting accounts. This is a positive example of the sector continuing to help people to manage their money, particularly in relation to welfare reform changes.
William Graham suggests that the UK Government is standardising direct payments. These were originally introduced to the private sector with assurances of protection for vulnerable tenants and of payments made more frequently than a month in arrears, not as is the case under these reforms. He also wants us to welcome a support network that has yet to be agreed by the Department for Work and Pensions—yet again, clearly out of touch.
In amendment 2, Aled Roberts refers to the potential to empower people. The Department for Work and Pensions has yet to show us how financial control and enhanced work opportunities are linked. Not all tenants will have the same opportunity to be financially included, let alone those who are sufficiently financially astute.
At this point, I wish to comment on the demonstration project results. I do not believe that the information coming out of the project indicates anything other than that the UK Government’s policy on direct payments should be fundamentally changed. Housing benefit is not a devolved matter, but is the responsibility of the Department for Work and Pensions. We have no control over the policy, but we have to manage the consequences here. As we have seen, the impact of the UK Government's policy is already considerable, with levels of arrears increasing, despite the efforts of support being provided for people to cope with the changes. Direct payments will add to this problem. Direct payments became mandatory in 2008 to private sector tenants. This provision will be extended to the social rented sector when universal credit is finally introduced.
It should be remembered that, in the private rented sector, payments will be made fortnightly; when introduced to the social rented sector, all will be paid on a calendar-month basis in arrears. This is fraught with problems: not only will this push tenants into debt and, ultimately, homelessness, it also threatens the financial viability of registered social landlords and housing providers. I have written to Lord Freud at the Department for Work and Pensions. My colleague, the Minister for Finance, has also corresponded directly with the Chief Secretary to the Treasury regarding this matter. Let me make it very clear: tenants, landlords, the devolved Government and housing stakeholders in Wales do not want this. We want tenants in the social sector to have a choice as to how they manage their finances, including direct payment of rent to their landlord. However, the intransigent UK Government spins its work as work-readiness provision. Work-readiness provision requires getting a claimant to the point at which they are ready, willing and able to contribute to their working community. The only incentive to work here is fear—fear of the spiral of debt and the potential loss of one’s home. It is just not right.
I am not scaremongering, before the opposition parties say that I am saying this only to scare people. The publication of the Department for Work and Pensions, ‘Direct Payment Demonstration Project: Learning and Payment figures—May 2013’, the Torfaen report, demonstrates that. It states:
‘arrears amongst tenants on direct payment are significantly higher than amongst the general tenant population;’
‘direct payment creates high levels of debt amongst substantial numbers of tenants;’
‘the rent collection process demands considerably more effort for a lower rate of return;’
‘contact levels with tenants are three times higher than was the case previously;’
‘staffing levels are well above those for “business as usual”.’
Those are not my words; they are from a publication of the Department for Work and Pensions. The outcomes are clearly worrying, particularly given that only tenants deemed to be the most financially astute participated in the beginning of the project and the payment cycle was four-weekly in arrears.
So, what about the impact on landlords? Most housing associations have had bad debt rises, which will rise further when direct payments are introduced. This adds to their overheads and increases transaction, processing and staffing costs. Furthermore, there is the added expense of litigation as more tenants default on their rents. Each organisation will need to decide what resources should be used to chase small debts as the cost of chasing such debts may simply outweigh the financial benefits. If bad debts and arrears are higher than modelled, landlords will have to take mitigating action to protect and sustain the viability of the whole of their organisation. Landlords have estimated that arrears will increase from 2% to around 7%, which equates to approximately £17 million per annum in lost revenue across the sector. That amount of revenue could service around £340 million of private finance, which could fund the development of 3,000 new affordable homes and support wider employment in Wales through up to 2,000 jobs. If these figures are extrapolated at the UK level, there would be a potential loss of £6.8 billion of private finance, which could fund around 60,000 new homes and support around 40,000 new jobs. This just does not make sense. This is an example of the UK Government not looking at the bigger picture and the consequences of its policy decisions.
Deputy Presiding Officer, I am aware of the time. I am not surprised by the recent National Audit Office report that highlighted the failure of the information technology system for universal credit at the cost of £34 million. The Conservative opposition benches do not really want me to mention this but, in Plenary, only last year, my predecessor said that she had real concerns about the bespoke IT system and whether it would be able to cope. She did not think so and did not think that they had any idea what they were doing in Westminster. It seems that the questions that were posed then are questions that we are posing now regarding having something that is fit for purpose. Following Lord Freud’s announcement at the Chartered Institute of Housing in June, the Department for Work and Pensions has worked with landlords, their representative bodies and devolved administrations to consider how they may start getting tenants ready for the move to universal credit. This identifies how tenants will need support and what that support might be, and also who could manage without the support and could be put onto direct payment of housing benefit early. This would help claimants to take a step closer to being work ready.
I support some of the elements of the initiative, but would be surprised if any social landlord in Wales outside of the Torfaen pilot scheme would be willing to participate in a direct payment scheme sooner than required. We are, together with Community Housing Cymru, in discussions with the Department for Work and Pensions on this matter.
In an effort to protect the income streams of landlords, Lord Freud will allow them to receive direct payments of housing costs once arrears have reached a certain level. In essence, in order for you to have direct payment to your landlord, you need to be in eight weeks’ arrears in rent. It is suggested that they are not managing their financial affairs. How does removing 40% of a tenant’s income help address the problem post-debt? This is supposed to improve matters, but it could indeed make matters a lot worse, putting even more pressure on household income. Ultimately, it could increase the chances of tenants losing their home, which will, in turn, increase unnecessary costs for landlords. I look forward to hearing the arguments presented by the opposition party, and welcome comments from colleagues across the Chamber on this very important debate today on direct payments.
The Deputy Presiding Officer has selected the six amendments to the motion and I call on Mark Isherwood to move amendments 1 and 3, tabled in the name of William Graham.
Amendment 1—William Graham
In point 1, delete all after ’plans’ and replace with:
’to standardise direct payments introduced by the previous UK Labour Government’.
Amendment 3—William Graham
Delete point 2 and replace with:
Welcomes the ’Universal Credit Local Support Services Framework’, issued by the UK Government and compiled jointly with agencies including the Welsh Local Government Association, which lists the support available to claimants needing payment of housing costs directly to landlords.
I move amendments 1 and 3.
When direct payment of housing benefit to tenants was introduced by the former UK Labour Government in 2008, with local housing allowance paid directly to private sector tenants, there was a deafening silence from Labour AMs. As amendment 1 notes, the rollout of universal credit therefore standardises the changes introduced by Labour. Universal credit aims to help claimants to become more independent, to simplify the benefits system by bringing together a range of working-age benefits into a single payment, to replicate as far as possible how people are paid when in work, and to encourage people to manage their own budgets in the same way as other households do. However, exemptions will enable housing benefit payments to continue to be paid directly to landlords. After direct payments were introduced by Labour in 2008, housing benefit could still be paid to a landlord directly where the tenant had a history of arrears, there were rent arrears of eight weeks or more, or the landlord had reduced the rent to help make the tenancy more affordable. In 2011, the UK coalition Government issued further guidance to local authorities stating that benefits can also be paid to a landlord when a local authority becomes aware that the tenant is failing to pay their rent before eight weeks of payments had been missed, and that alternative payment arrangements will be considered on a case-by-case basis. So, yes, Minister—scaremongering. [Interruption.] I will take one intervention.
Thank you for taking an intervention. Do you accept, though, that people have to fall into debt before action is taken? Do you also accept that they will not be able to get back out of it on minimum income?
Thankfully, the exemptions that I am about to outline will address that very point. The UK Government has since looked again at the support households may need, and on 11 February it did issue the universal credit local support services framework, developed between the DWP and the Welsh Local Government Association, the Local Government Association, the Convention of Scottish Local Authorities and local authority representatives. Hence amendment 3.
The framework says that universal credit will make work pay so that people are better off in work than claiming benefits, and bring the experience of claiming and receiving benefits into line with the world of work, with the majority making monthly claims paid direct to the household online, reflecting the 75% of people in work who are paid that way. Although most people on low incomes do manage their money, the introduction of universal credit provides an opportunity to look again at the support households may need, making sure that claimants who are not ready to budget for themselves on a monthly basis, or who are unable to use the internet, are protected and assisted onto the new system, and ensuring that claimants with debt problems or other vulnerabilities, such as poor numeracy skills, substance misuse or mental health issues, are given practical support at the onset of their claim through a network of local services. Having worked closely with local authorities and other organisations to establish the services required, the DWP states that it is looking to local authorities as key partners to help them provide targeted local support. The framework explains who may need help, what services they may need, and how these services will be provided.
Alternative payment arrangements will be available to help claimants who need additional support: in particular paying housing costs directly to landlords, making more frequent than monthly payments to help with budgeting, and splitting payments between partners where there is financial or other abuse.
Applications will be considered on a case-by-case basis, and alternative payment arrangements will be done with the claimants, rather than to the claimants. Alternative payment arrangements can be considered at any point during the universal credit claim and can be triggered by the claimant, their representative, their caseworker, and/or their landlord as a result of a build-up of rent arrears.
The DWP advised that officials have been working closely with other departments and the devolved administrations since 2012 on plans for the phased roll-out of universal credit, which includes direct payments, and the Minister should therefore share the facts, rather than spread uncertainty.
It is important that universal credit is delivered in a slow and safe manner. The DWP official who is leading on the universal credit programme engagement with the Welsh Government confirmed to me last week that it will be rolled out into six more jobcentre areas, including Shotton in Flintshire, between October 2013 and spring 2014.
So, instead of—yes—scaremongering, the Minister should be reporting to this Assembly on the Government’s work with the DWP over this. Members should be informed. Let us hope, therefore, that this Labour Welsh Government is not again seeking to delay action, thereby maximising the pain for political gain, despite advanced notice and engagement, as it did with the removal of the spare room subsidy.
I call on Peter Black to move amendments 2, 4 and 6 tabled in the name of Aled Roberts.
Insert at the end of point 1:
’which offer the potential to empower people through greater control over their finances and provide a clearer route into work and independence.’
Delete point 2 and replace with:
Calls on the UK Government to carefully examine the full findings of the Direct Payment Demonstration Projects which will conclude at the end of December 2013.
Add as a new point at end of motion:
Calls on the Welsh Government to work with local authorities, credit unions and housing associations to consider the best ways to make financial products with built-in budgeting features more widely available and to promote the use of money advice services to tenants, in order to help those affected by direct payments.
I move amendments 2, 4 and 6.
I am not going to stand here and defend the spare room subsidy, but I do think that we need to accept that there are people who cannot cope with direct payments and that there needs to be exceptions in relation to that. However, in general terms, direct payments do offer the potential to empower people through greater control over their finances, and provide a clearer route into work and independence.
As I understand it, the UK Government recognises the importance of stable income from rent for social landlords to support the creation of new homes. Safeguards have been included in universal credit to help protect landlords’ income. However, as I said, even the UK Government recognises that not everyone can manage their own budgets, therefore systems are being put in place to support people.
The majority of tenants are expected to manage direct payments of benefit, but the DWP has been clear that protection needs to be in place so that landlords can work with tenants early to avoid arrears, and that there needs to be a secure backstop to stop tenants falling into unmanageable arrears.
The projects that are in place at the moment are testing different levels of support that social sector tenants may need to move to direct payments of housing benefit, such as advice on managing personal finances and budgeting, the exemptions that need to be in place for direct payments—payments that switch back to the landlord if a tenant falls into arrears, with support to help tenants in arrears to pay back their arrears and potentially to return to direct payments, and early intervention switchbacks before arrears reach trigger points.
So, I think that the impression given in this motion that everything is set in concrete is not absolutely correct. Clearly, the DWP is not just testing how this should be rolled out, but also listening to the feedback from these pilot schemes, learning from them and trying to ensure that arrangements are made so that those tenants who cannot manage their own finances—and there are a number of those—are going to be accommodated.
I want to use this opportunity to highlight the work of the credit unions in this regard. Swansea is setting a shining example of how credit unions as mutuals can work with their members and the local community to ensure that landlords, local authorities, and housing associations do not end up with a significant number of tenants in arrears. The credit union in Swansea has developed a product, a rent direct account, which is being used by a number of other credit unions across Wales. This account takes a person’s universal credit and pays the landlord, ensuring that the tenant never goes into arrears.
The credit union has a service-level agreement with the housing association and the local authority so that any new tenants are also signed up to that credit union. It is unfortunate that this example is not being replicated across Wales. I hope that the Minister can take on board the need to provide a steer to all local authorities, housing associations and credit unions across the country on the benefits of this particular approach and the way in which it can assist tenants with the transition to universal credit and managing the direct payments that are made to them.
The Welsh Government needs to work with the Welsh Local Government Association and Community Housing Cymru to ensure that local authorities and housing associations build their relationships with credit unions. It also needs to work with the two trade associations in Wales to arrive at a strategy after the first quarter of 2014 that will operate alongside the Department for Work and Pensions’s ongoing project for UK credit unions, to which many Welsh credit unions are committed.
Although a credit union is not a private business, it is not a charity and the service that it provides comes at a cost. Although local authorities and housing associations in Swansea have been happy to pay a small fee for every tenant that signs up to the credit union rent direct account as this will ensure that the tenant does not go into arrears, we have to understand that there is a cost and that will have to be met. However, the contrast is that, in Swansea and elsewhere, if you seek to repossess a property and evict a tenant, it costs £7,000, on average. That is far greater than the minimal cost of the credit union service. Therefore, it is well worth exploring that particular route.
We support the Conservatives’ amendment 3 and support the work of the UK Government in issuing the universal credit local support services framework. As has been said, this framework will help those claimants who may need extra support with universal credit. It is pleasing to see that it is working with the Welsh Local Government Association in that regard. We will not support amendment 5, as it is scaremongering. I do not believe that those conclusions can be drawn until we see the final evaluation of the universal credit demonstration project.
In conclusion, it is important to say that this is work in progress. Drawing conclusions now is not helpful, but we need to take account of the lessons that are coming from the pilot projects, apply them accordingly and find solutions to the problems that are arising.
Add as a new point at end of motion:
Believes that direct payments could lead to more evictions, resulting in additional costs to evict and re-house individuals, and calls on the Welsh Government to work with local authorities and housing associations to implement best practice on avoiding evictions.
I move amendment 5.
The main difficulty in debating one strand of welfare reform is that there have been so many cuts and changes to the social security system that it becomes difficult to pinpoint precisely which particular reform or cut will have done the most damage, which resulted in homelessness or children not eating on a particular night. We also, of course, have the backdrop of increased pressures on family budgets, generally, and the wider economic context. Nevertheless, initial trials of direct payments, which included Bron Afon Community Housing in Torfaen, were not promising—arrears rose. I know that there was great disappointment in Bron Afon, where even those who were considered to be low risk saw increases in arrears. This is a social landlord that took its responsibility very seriously indeed and made every effort to engage with tenants and assist them. Despite the trials, the UK Government has gone ahead where I believe that others might have waited.
I would like to say from the outset that it is wholly unacceptable to generalise that people on low incomes are incapable of prioritising budgets. In fact, many on low incomes show ingenuity in managing their finances, simply because they have to get things in order to manage in their lives. Therefore, just being poor does not mean that tenants will not pay their rent. However, this UK Government gives the impression that people who rent are somehow a burden on the state, although they are perfectly happy to guarantee mortgages of £600,000 for those who cannot raise a deposit.
There are three issues that we have to consider: the impact of monthly direct payments to individuals who are used to budgeting on a weekly basis; financial exclusion; and, perhaps most importantly, the fact that welfare cuts have led to people simply not having money to live on—and those with disabilities have been the hardest hit.
On the first point, there clearly needs to be support for people to deal with monthly direct payments. Our amendment reflects the fact that we would like to see the Welsh Government do something to ensure that such support is available. Secondly, there is a real issue in some of our communities in terms of access to banking services—branches closing, electronic banking becoming more prevalent and people who are already financially and digitally excluded finding it difficult to overcome barriers to financial services in their communities. Many people affected prefer to deal in cash as they fear charges from banks if direct debit payments are taken on the wrong day or if something on there is left short. That is an example of why ethical banking is essential in this country. However, remember that even though Government expects people to submit claims electronically, just 42% of tenants in Blaenau Gwent have any internet access. They would struggle to submit claims and to inform the Department for Work and Pensions of any changes to their circumstances.
On the point of the wider changes to social security and the economic climate more generally, all of us in the Chamber know of the impact of such policies as the bedroom tax on people in every community. I reiterate my party’s call for a national no evictions policy for those who suffer as a direct consequence of the bedroom tax. I call on the Welsh Government to do so as a matter of urgency to help vulnerable people, and to save public money from being wasted on evicting people from their homes and being rehoused by their local authority.
Those arguing that the bedroom tax will save money are financially illiterate. It costs thousands to evict tenants—I think that we heard a figure of £7,000 earlier on—and housing benefit in the private sector on smaller properties costs more. Some local authorities estimate that the cost could be £4,000, we have heard £7,000 and some estimate a little less. This shows the short-sightedness of the Treasury in failing to consider the real financial impact of its policy. There is no saving to the public purse of this spiteful policy. What is the cost of the misery of eviction, especially for those with no choices? Bron Afon Community Housing had 1,300 tenants affected, and 22 moved—22 out of 1,300 people. Arrears quadrupled. The only solution, according to one of its officials, was to brick up the extra bedroom to exclude it from their tenancy, so that the tenants could afford the property, like people bricked up their windows to avoid the light tax. So, it is important to note that the background to the idea of direct payments, the local housing allowance applicable to private sector tenants, which is paid directly to tenants rather than to landlords, is that it was introduced by the Labour Party, and I understand that Labour is reviewing direct payment policy in the social sector. I hope that that will apply to the local housing allowance, too. Perhaps the Minister will tell us.
Can you wind up, please?
Let us give people the choice. Overwhelmingly, social tenants say that they want their housing benefit to be paid to their landlord. That will also safeguard the financial viability of the sector.
Having called for this debate on direct payments before the end of last term, I am very pleased that the Welsh Government has made time for this debate today. I am also proud that as with the bedroom tax, my party nationally is pledging to scrap this senseless policy should it be elected in 2015. However, with this current administration seemingly hell bent on pressing ahead despite the loud chorus of opposition from the housing sector and the vast majority of tenants, this remains a very important and timely issue.
I want to be crystal clear about one thing before I move on. I believe that it is right that social housing tenants who feel ready to take on the additional responsibility of budgeting and paying for their housing costs themselves should be allowed to do so, particularly if there are safeguards in place to allow landlords to assess their readiness for such a move. For me, this is not a question of preventing positive choice; rather, it is about looking empirically at the evidence before us and rejecting an approach we know will lead to huge and unsustainable increases in debts and arrears.
That is exactly why the previous Labour Government decided against this idea in the first place. Its 2004 pilot, which saw direct payments trialled by the London and Quadrant Housing Association, found that arrears leapt from 3% to 7%, an increase in total arrears in cash terms from £2.5 million to over £6 million just on that housing association’s books alone. Frankly, this should have been warning enough for anyone seeking to introduce such a change, but beneath those stark headline figures were a number of deeply worrying trends. For example, it was found that some tenants with existing financial pressures used their housing payments to cover other bills, or to pay off existing debts, thereby worsening the pressures facing hard-pressed households. There were massively increased legal and administration costs because of the greatly increased need to chase arrears. Indeed, London and Quadrant Housing Association estimated that it would need to employ the equivalent of 30 full-time staff just to deal with the additional administrative burden. We know, too, that such a sharp rise in arrears levels could, in some cases, threaten the financial viability of social landlords. At the very least, it would impact on their ability to improve services for tenants, preventing them from investing in housing stock and, most crucially of all in these difficult economic times, threaten their capacity to build new homes.
The more recent DWP pathfinder studies, including the pilot in Torfaen, not only backed up these previous findings, but revealed other potentially worrying issues, too—not least was the fact that the initial tranche of Bron Afon tenants who were transferred on to direct payments—those who had been deemed lower risk and therefore more able to cope with the shift—actually found the change far more difficult to deal with than had been expected.
Indeed, the total debt of those 435 lower-risk tenants skyrocketed from £21,000 to £116,000—more than a five-fold increase—within six months of the switch to direct payments.
Part of this is undoubtedly about households that are used to managing their budgets on a weekly basis finding it tough to cope with their monthly payments for housing costs. Even more fundamentally, it highlights the extreme challenges in trying to impose this kind of change on tenants who, in many cases, are completely financially excluded. In fact, Bron Afon’s own tenant survey suggests that 14% of its residents simply do not have a bank account at all.
In the end, for me, the fact that the UK Government seems so determined to push ahead with this policy in the face of all of this worrying evidence just exposes how ideologically driven its approach to this whole area really is. I know that the Minister agrees with me that this is bad news for Welsh tenants and I urge him to continue to do everything that he can to try to secure a Welsh opt out from the Government in Westminster.
I know, too, that Plaid Cymru is opposed to this move, and as much as I do not agree with the Tories at all on this issue, at least we are clear where they stand. Perhaps the Lib Dems in the Chamber, who for all of their talk of being a moderating force within the coalition, as far as I can tell have remained conspicuously silent on this issue up until now. Perhaps they could finally nail their own colourd to the mast and set out exactly where they stand on a policy that is potentially disastrous for Wales. If I may say, Peter, it is not a question of waiting for the evidence; we know that this is going to be a disaster.
It is so surprising to hear that rhetoric from Lynne Neagle, particularly, as Mark Isherwood pointed out, that it was the last Labour Government that had housing benefit being paid directly to tenants. That process was justified precisely on the basis that people needed to have the responsibility of managing their own budgets.
I agree with Jocelyn Davies when she says that just because you have a limited amount of money available to you, it does not mean that you cannot manage your budget. If you are used to managing your budget on a weekly basis and you understand how that works, it is possible to manage your budget on a monthly basis. It is quite clear that there is considerable assistance being offered for vulnerable people who will not be able to manage.
In fact, the payment direct to landlords after eight weeks of arrears is no different to what happens now—[Interruption.] I will not take an intervention at the moment.
A mechanism has been put in place to allow direct payments prior to that eight-week limit, which, under housing benefit, does not happen until you have reached that eight weeks of arrears.
I welcome the fact that Bethan Jenkins will be introducing, in the Siambr, a Bill about financial inclusion and education. That is, perhaps, the key behind this—to embed into our education system training for people on how to manage their budgets. They need to understand what the cost of debt—
That is patronising.
No, I am not patronising. It applies to everybody—
Could I ask people not to enter dialogues, but to speak to the Chamber, please, and for people not to interrupt other than for an intervention?
I think that financial education and training is an incredibly important life skill for anybody, from any walk of life and from any background. If Joyce Watson thinks that that is patronising then she has another thing coming.
Will you take an intervention?
Are you taking an intervention?
No. Sit down, please.
The reality is that, for those who are going to have greater difficulty, money can be paid directly to the landlords, guaranteeing the use of the money for its intended purpose. I welcome the example that Peter Black gave of the credit unions, which are working to help people. In fact, anything that can encourage contact with credit unions, which provide a much better deal for their clients than any other form of financing, has to be welcomed. They are the people who encourage managing budgets. I know that, for example, there are considerable programmes in north Wales where organisations can get training and help, and if there are issues, that is offered through the citizens advice bureaux, where a budget can be set up and that assistance can be given, so people get that education and support if they are having difficulties managing their budget.
I just want to answer one point that Jocelyn Davies made that I do not agree with, which is in relation to the spare room subsidy. If you are renting from the private sector and you are getting support through housing benefit, you do not get a subsidy for your spare room. That happens only if you are in social housing. We have 91,000 people on our waiting list for social housing in Wales, and some of them are also in private accommodation, where they are overcrowded, or they are in social housing and need to move or swap to a larger property, with other people moving or swapping into a smaller one. One of the main problems is that housing associations, which had lots of warning about these changes, were unable to make the investment in the smaller one and two-bedroomed properties, because all their financing and money was going on upgrading their existing housing stock to the Welsh housing quality standard. If there had been a longer—
Can you wind up, please?
If there had been a longer programme to allow that to happen, then this issue would not have arisen.
These changes, which begin this month, are from a long line of welfare reforms introduced by an out-of-touch UK Government. Last month, the Payments Council said that 2.7 million claimants will struggle with their finances as a result of the reforms, and the National Audit Office said that,
‘the programme suffered from weak management, ineffective control and poor governance.’
While our Welsh Labour Government has pressed to exempt tenants in Wales, Westminster is pressing ahead, regardless, despite views based on our own research and on specialist third sector organisations, such as Shelter, Community Housing Cymru and Citizens Advice.
For those of my constituents in Llanelli who will be affected, the sad reality is that the impacts do not end with rent arrears. If rent goes into arrears and subsequently leads to homelessness and eviction, what implications do you foresee for the health and general wellbeing of these people? In the Station Road area of Llanelli, rent arrears are exactly the concern that my constituents have raised with me. Tenants will now be paid a lump sum in arrears and are worried about that, and landlords are concerned that rent will no longer be paid directly to them. Surely, as called for by Shelter, Citizens Advice and the Money Advice Trust, tenants should be given a choice on direct payments.
I held an advice event in the past in the St Elli centre, where organisations such as Citizens Advice, the SAVEeasy Credit Union and the Money Advice Service were present to speak to people and to offer advice and support. Due to the continued need for support and advice, where funding for such services has been cut by the coalition in Westminster, I intend to hold similar events for those who need it again this year.
I met recently with the Wales Co-operative Centre, which operates a credit union rent account, available to all credit union members. As Peter Black has said, they are designed to help with budgeting and, specifically, paying rent. Rent money, in full or in part, is set aside, so that it is not used for other expenses. Its focus is housing benefit, but it is paid into a credit union account and the money is then transferred into a nominated landlord account. However, is this, by any means, a fix-all solution? In fact, it relies on awareness and membership of a credit union. If you are not aware of that, you cannot be involved in it.
On the point about the credit unions, I have spoken to a lot of credit unions over the last few weeks because of the financial literacy Bill that I am trying to take through. Many of them say that the risk is so high with this sector of society. We need to be looking at alternatives as well, so that when we are mentioning credit unions, we are also giving enough resources to credit unions, so that they can carry policies like this—which we do not want to be bringing forward—successfully.
Indeed. The more information that we give people, the better. People are not aware of what can be done, and we need to give out more information.
The former Minister for Communities and Tackling Poverty rightly said that cuts and welfare reforms create a perfect storm. He said that, given the scale of Welsh budget cuts, we will not be able to refund all services, but we are determined that people do not fall between the cracks. Following the commissioning of an advice services review, £1.8 million was allocated to the advice sector to adapt to increased demand and funding cuts. The advice services review identifies that every pound spent on advice creates a saving of £2.43 for housing advice, and a saving of £2.98 for debt and money advice. I would be interested in how the Minister is ensuring that all Welsh Government schemes and actions are specifically tailored to meet needs as they arise from these changes. In the initial phase, we have a strong evidence base of research and practical ideas from Torfaen on any adaptations required, as we go along this route. Finally, I welcome the financial inclusion delivery group, established in 2011 to provide expert, evidence-based advice to the Welsh Government. I would welcome comments about how wider strategies such as this one can play a role and integrate into our efforts.
If universal credit is rolled out to the whole country—and that is a big ‘if’—it will be a pyrrhic victory for the Tories and a disaster for low-income households. What is the point of universal credit? Is it to save public money, to promote greater personal responsibility, as we have heard this afternoon, or to penalise people in jobs who do not get a proper wage? Universal credit not only costs more, as the pilot projects show, it does not even work. According to the National Audit Office, £34 million has already been wasted on failed IT programmes. Hundreds of millions of pounds have been spent on software that may not be fit for purpose and, in the Welsh pilot area alone, arrears have increased seven-fold.
Minister, could you tell me if your department has calculated the cost to the Welsh public purse of dealing with arrears and statutory homelessness if that seven-fold increase was to be replicated across Wales? I sincerely hope that we do not find out. I hope that the policy crashes. It is in serious trouble. David Cameron’s evidence to the Work and Pensions Select Committee was revealing. The weathercock Prime Minister appeared to take the wind out of the sails of his Government’s flagship policy. Universal credit is a colossal folly, and it should collapse under its own weight. Simplifying the benefits system is not a new idea. However, universal credit is a one-size-fits-all approach to a hugely complex problem. As H.L. Mencken wrote:
‘For every complex problem there is an answer that is clear, simple and wrong.’
Right now, however, we must deal with the next stage of roll-outs. Ministers, could you please update Members on the discussions that you have had with the Department for Work and Pensions about the likely timetable for roll-out in Wales? As I understand it, Iain Duncan Smith now says that there will be significant volumes of new claimants moving to universal credit throughout 2014. However, the timetable has changed so many times that he has surely had to move on to a new fag packet. Nevertheless, tenants and social landlords in my region and throughout Wales will be anxious to plan ahead now.
We know that a single monthly direct payment makes managing a tight budget and keeping clear of the spiral of debt that much more difficult, and many have said that here today. So, credit unions and other financial service and advice providers will need to be prepared for the upsurge in demand.
Minister, what conversations have you had with local authorities in particular? If they are going to invest in new properties, surely, there has to be a risk factor that is taken into their calculations for what they might invest if it is the case that they have to pay tenants directly. Just to let the Tory benches know, that same risk assessment will actually happen in businesses throughout the land, in those private sector businesses that are currently renting out their houses.
I also want to put on the record, Minister, that I support—unlike those on the Tory benches, clearly—the investment that has been made in the local housing quality standard, so that people are living in good quality houses. I absolutely refute the suggestion made from the Tory benches earlier that we should have left people in substandard housing to somehow build houses for their crazy policies that are going to make people homeless.
I am not at all opposed to encouraging people to manage their money or to financial inclusion. What I am opposed to is the refusal to allow people to choose. This is very much an ideologically driven reform by a Government that zealously embraces free choice and free schools, and free bungs for hedge funds when it comes to selling off our Royal Mail. It is therefore counterintuitive that tenants who will be in receipt of universal credit will not be given the right to choose with regard to paying their rent directly to their landlord. That is what all the Members on this side of the Chamber have been saying, namely that it is about their right to choose.
The DWP has consistently refused to tell us at what point, and how, it applies to those vulnerable people, when organisations such as Crisis, Shelter, the Salvation Army, and the Money Advice Trust all say that tenants must be given that right. Unfortunately, the Government in Westminster is not listening. This universal credit has all the hallmarks of a new system for organised chaos.
Will you take an intervention?
I need to take it a bit further.
I find the DWP guidance on how vulnerable people are going to be handled woefully inadequate. It demonstrates a serious lack of concern for the people it is supposed to be serving. People who may or may not be given personal budgeting support are divided into two tiers as to whether or not they may be unsuitable for direct payments. Tier 2 individuals are described as being,
‘Less likely / possible need for alternative payment arrangements.’
Those tier 2 indicators include not having a bank account, third-party deductions already in place, and a history of rent arrears. So, those are people who are described as possibly needing alternative arrangements. Imagine the tenant whose bank account is going to be cleared by unscrupulous lenders using continuous payment authorities as soon as that money hits the account. Think of the tenant who does not have a bank account. Surely, such people should have a definite, not just a possible, need for alternative payment arrangements. However, the UK Government still refuses to issue guidance on what constitutes a vulnerable claimant, much to the frustration of organisations that are already dealing with the complexities of a reduction in the benefits system, the bedroom tax and other changes. At the benefits advice surgery that I ran last Friday, all these issues were writ large.
I am particularly concerned about the impact of this on people with substance misuse issues. Sadly, this is an increasing problem, as is the worrying level of gambling addiction. For those families, this direct payment of universal credit, made monthly in arrears, will only serve to feed many people's addictions. A revealing comment by a tenant in one of the other pilot areas, which is not Torfaen was,
‘I suffer from substance abuse and would not be good on the scheme as I’m in a lot of debt etc. Why put temptation in front of my eyes. I don’t want any more debt’.
What the Government is saying is that people who admit to addiction are so intoxicated that third parties inform the DWP that they will get these alternative arrangements, but there are plenty of people who are so-called ‘functioning addicts’ who will not come to the attention of the DWP until it is too late and they get into a lot of debt. In Bronafan, I was told last week that the pilot scheme led to a spike in the activity of package holiday companies, fuelled by people who had never had a holiday suddenly being presented with more money than they had ever had before. I fear that universal credit will provide a major stimulus to the pay-day-loan companies, which are already plaguing my constituency, preying on those who are the victims of frozen wages and rising prices. These pay-day-loan companies, with their usurious interest rates, will now be able to empty the bank accounts of claimants as well, just adding to the misery that advice services are dealing with.
It has been a very interesting debate and I thank Members for their contributions today. I will start by addressing some of the issues that have been raised by Members. It does not take a rocket scientist to see that the UK Government’s approach will have a negative impact on employment, new housing and growth. I made reference to this in my opening contribution: if we were to make the investment instead of chasing rent arrears or evictions, and invest that money into the growth of housing and homes that are much needed in the UK, it could be a huge economic and financial benefit for all our communities across the UK. As you are aware, the direct payment is not a policy that is devolved to Wales but something that the UK Government has decided to pursue.
On the issue of Governments—my position on the UK Government and how it operates is well documented—the fact of the matter is that it has the right to introduce policies that it considers appropriate. The issue that I have—which is an issue that many in this Chamber have—is the implementation of such a plan. It does not make any sense to see a pilot scheme in Torfaen—and I thank Lynne Neagle for bringing this to the Assembly’s attention many weeks ago, asking for this debate to take place—clearly demonstrating that many more people are moving into arrears, potentially losing their property and increasing their debt profile. There is something significantly wrong with the policy’s implementation. However, we see continuing pressure from the UK Government to drive this policy forward.
I was speaking to a registered social landlord only last week, which informed me that at least one in four of its tenants were now in debt because of the bedroom tax. This is really not a good place to be—not for the tenants and not for the association. It is quite troubling that we have lost the thrust of identification regarding what this debate is about. We should be talking about the tenants being impacted by these proposals. I partially welcome Peter Black’s contribution, in recognising that there is still some work to be done on this. I would welcome his party’s involvement in trying to work with the UK Government to ensure that we are not more disaffected in Wales because we have a higher proportion of people in receipt of benefits, both in and out of work, than in Great Britain as a whole. The reforms will, therefore, have a greater impact here.
There were thoughtful contributions from Jocelyn Davies and Lynne Neagle, who made it very clear the Labour Party’s stance in the UK on this non-devolved function. I just hope that the UK Government takes the brave step of recognising that, while wanting and seeking to introduce a policy that it believes in, we do not want it. The timeline that it has introduced for this policy is having a dramatic effect on communities, not just in Wales but across Britain, driving debt and despair in our communities. That is not about scaremongering—that is fact.
May I touch on the contributions made by the opposition Members, finally? I was astonished that they rolled out the same two to defend the policies of the masters in Westminster, Mr Cameron and co. The fact of the matter is that we have made it very clear that, in Wales, we do not want this proposal. We did not want this at the beginning, and this is still being implemented in the UK. Antoinette Sandbach chose to mention the issues around the bedroom tax; I found some of the comments that she made quite astonishing. The private rented sector and the bedroom tax—of course, she did raise that, and said that it was a very different scenario. Well, of course it is a very different scenario, because of the benefits situation with the private rented sector. Benefit is not based on property, but on family size, so there is a benefit for the private sector to put as many people in their properties as possible.
That is the reason why we have to regulate around these things—for the right reason, not the reason that the Tory Government wants to introduce. The policy of the introduction of the bedroom tax here in Wales has had dire consequences. The fact of the matter is that, by changing the way the system works, we would have to invest around £2 billion in housing supply for smaller properties, when the UK Government has removed £1.7 billion from our Welsh budget. You are on a different planet. You are in a completely different world with regard to housing-related support for these people in Wales.
Are you taking an intervention? No. Sit down, please, Antoinette Sandbach. He is not taking an intervention.
I will take an intervention from the Member.
You are building less social housing now than was built under Mrs Thatcher in the 1990s. The reality is that, when your budgets were large and you had the opportunity to build that housing, you did not do it. You did not fix the roof while the sun was shining.
Minister, you are out of time.
I will conclude by saying that the Member’s Government is in charge of this policy in the UK. Do not dismiss that fact. I conclude today by thanking Members for their contribution, but the UK Government has a lot to answer for in terms of people being evicted in Wales today.
The proposal is to agree amendment 1. Does any Member object? There are objections, therefore I will defer all further voting under this item until voting time.
The Deputy Presiding Officer took the Chair at 16:38.
The following amendment has been selected: amendment 1 in the name of William Graham.
Motion NDM5316 Gwenda Thomas
To propose that the National Assembly for Wales in accordance with Standing Order 26.11:
Agrees to the general principles of the Social Services and Well-being (Wales) Bill.
I move the motion.
It is my pleasure to bring this motion before Members this afternoon, and to accept the amendment tabled in the name of William Graham. I would like to thank the four Assembly committees for their detailed scrutiny work on this Bill. In turn, I have given their reports my detailed consideration. I would also like to thank former and current officials for their hard work and dedication to this agenda.
It would be impossible for me to deal with all the recommendations in the time available today. However, I hope to be able to assure you that I will be making a number of statements over the coming weeks, in line with the recommendations of the Health and Social Care Committee. I intend to table some Government amendments for consideration at the next stage, in response to Stage 1 scrutiny reports.
The key statements that I will make will provide further information in areas such as assessment and eligibility, portability, charging, safeguarding and, importantly, how we see this legislation as furthering the best interests of the child, and moving on from existing duties, such as section 17 of the Children Act 1989. I know that these will be welcomed by Assembly Members and our stakeholders. The Bill is a response to the challenges that will face social services across Wales. The Bill will introduce a new system that sees people as people and as part of families and communities, not as isolated individuals. I was pleased that the Health and Social Care Committee’s report indicated support for this approach.
This has become known as the people model, and I know that it has raised some concerns during scrutiny—particularly in relation to children. Let me be clear: the people model is a concept. It does not equate to a one-size-fits-all; in fact, quite the opposite. The Bill has been drafted in a way that is sensitive to the differing considerations of children and adults. Replacing an overarching duty for those carrying out social services functions to promote wellbeing, this Bill will underpin a shift in focus to the outcomes that people have a right to expect. It is because of the shift in thinking that wellbeing will bring about that I retain my view that it needs to be defined on the face of the Bill.
Wellbeing is also the starting point for a principle that runs throughout the legislation—that of voice and control. Too often, we hear—tragically, too late—of cases where the voice of the individual, be they adult or child, has been lost in the system.
The Bill is premised on the view that a competent adult is best placed to determine their own needs. As a result of this, they simply must be involved in deciding how they receive their care and support.
The committee recommended statutory principles in its Stage 1 report. I am clear in my view that the Bill already contains principles with which those delivering functions must comply. Among these, voice and control are paramount.
Delivering high-quality and focused services in a time of declining resource requires us all to work together. This is a whole-system change and no single part of social services or health will be able to deliver the new outcomes-focused approach that the Bill requires on their own. The duties around integration, co-operation and partnership within the Bill are fundamental and will now also be strengthened as a result of recommendations made by the committee.
It is my view, however, that legislation for greater integration and partnership through this Bill is the right way forward. I see no merit in separating out legislation on matters that must be intertwined in law before they can be in practice.
I want to recognise and thank at this point the Minister for Finance and colleagues from across the Chamber for the substantial additional funding announced earlier today. It will support our vision for integrated health and social care, and support the implementation of the Bill in this important regard.
I know that there have been concerns about the impact assessment for the Bill and a call for more detailed costing. I have committed to bring forward further information to support the consultation on the regulations that will give effect to the new system.
Our budget debate today reinforces what we know—that public services face the biggest fiscal challenge that they have ever faced. We must deliver the future within the resources available now. We have no choice. We cannot buy our way out of this. Legislation for a change in how we deliver services is the only way forward.
I have welcomed the support shown for the Bill by stakeholders throughout the development of the legislation and during Stage 1. I would also like to recognise the cross-party engagement here during this Stage.
I also very much welcome the Health and Social Care Committee’s conclusion that this legislation is needed. I urge Members to take the same view and support the Bill today.
Y Dirprwy Lywydd / The Deputy Presiding Officer
I call on the Chair of the Health and Social Care Committee, David Rees.
I am pleased to be able to contribute to today’s debate on behalf of the Health and Social Care Committee. I would like to take this opportunity to thank the members of the committee for their hard work throughout Stage 1 and to place on record my thanks to my predecessors, Mark Drakeford and Vaughan Gething, for their work on this Bill while Chairs of the committee. I also wish to pay tribute to the clerking team for their hard work and professional approach during the Stage 1 inquiry. Finally, I would like to thank all those who contributed to the committee’s work, either by submitting written evidence or giving oral evidence, particularly our expert advisers, Professor John Williams and Professor Ray Jones. This Bill has generated a lot of interest, and the committee is grateful for the input it has received.
The committee’s role was to consider and report on the general principles of the Bill. Our report, which made 61 recommendations, was laid before the Assembly on 18 July. At this point, I would like to express my thanks to the Deputy Minister for providing committee members with copies of her consideration of each of those recommendations prior to this debate, thereby continuing with the open and transparent policy that was evident throughout Stage 1.
Examining the Social Services and Well-being (Wales) Bill has been a challenging process. The Bill is far-reaching and broad in its impact. Throughout Stage 1, the committee heard that this is a Bill for a generation and, as such, it was vital that we took the time to get it right. That ethos will continue to apply throughout the remaining stages, assuming that it is passed today. The stated intention of the Bill is to consolidate and clarify social care law and to create a specifically Welsh legal framework, both for adults and for children, in line with the Welsh Government’s stated aim of achieving integrated adult and children’s social services—and, as the Deputy Minister has just stated, it is a people approach.
As a committee, we welcome and agree with the general principles of the Bill and the need for this legislation. However, we also recognise the concerns raised about whether the policy objectives of the Bill would be realised in practice. We heard a number of concerns about specific elements of the Bill, and considered these concerns carefully. Our conclusions are set out in our report, but in the time available, I will briefly run through a small number of the recommendations that were made. However, I am sure that my fellow committee members will add to or expand on these during the debate.
The Deputy Minister has indicated that she believes that the core principles are embedded throughout the Bill’s provisions. However, as a committee, we agreed with the evidence presented that including statutory principles on the face of the Bill would assist practitioners and service users to understand the ethos of the Bill. We recommended that such principles should be included on the face of Bill and, with the help of our expert adviser, we prepared draft statutory principles for the Deputy Minister’s consideration. I must admit to being disappointed to hear that the Deputy Minister will not be accepting this approach, but I recognise her belief that this will be identified and embedded throughout the Bill, particularly in section 4, and her statement regarding the importance of the voice and control of the individual.
The Bill introduces an overarching wellbeing duty based on a definition of wellbeing that permeates throughout the Bill. However, once again, we heard evidence that it was unclear how this definition interacts with other duties in the Bill and concerns about the clarity of the duty. This is a complex issue, which led to significant discussion. We recommended that the Deputy Minister consider whether the Bill should, instead of defining wellbeing, require decision makers to have regard to a number of factors when considering the wellbeing of an individual, and that she should consider bringing forward amendments to this effect at Stage 2. We also recommended that amendments should be tabled to reflect the evidence we received about the profound impact that suitable accommodation can have on wellbeing. Several witnesses raised the importance of ensuring that the approach to wellbeing is consistent across Welsh legislation, so I am pleased to understand that the Deputy Minister and the Welsh Government will be looking at that point.
As a committee, we were clear that if the Bill is to be successfully implemented and fulfil its stated policy objectives, getting eligibility right is key. The Deputy Minister has indicated that she intends to bring forward amendments to strengthen the connections between assessment, eligibility, preventative services, and information, advice and assistance. This is to be welcomed. However, while as a committee we understand and accept that an eligibility framework needs the flexibility of regulations, we were concerned by the lack of detail that was available on the proposed national eligibility framework during Stage 1. The Deputy Minister announced in July that she intended to work with stakeholders to develop the national framework and that we might expect a major policy statement on eligibility in the autumn. Given the importance of eligibility criteria to the outcomes for people from this Bill, we look forward to this policy statement. We stated in our report that we would like to scrutinise the draft eligibility regulations and have sufficient time to review the regulations, question the Deputy Minister, and report as a committee prior to Stage 3 proceedings in the new year. I therefore reiterate this recommendation and urge the Deputy Minister to make every effort to meet this timescale.
The Bill seeks to promote and encourage the integration of health and social care. We were persuaded by the evidence that we heard in support of this intention, but believe that a separate Bill on integrated care would provide a better opportunity to address the barriers to integrated working. We recommended that the Deputy Minister should consider a separate piece of legislation, or if she were not minded to do so, that she should consider strengthening those sections of the Bill that relate to partnership arrangements.
I welcome the Deputy Minister’s indication that she intends to bring forward amendments that give effect to the second part of our recommendation—the strengthening of arrangements for co-operation and partnership working in the Bill—and I am sure that the committee will look forward to scrutinising those arrangements during Stage 2 proceedings.
We have serious reservations about the financial information with which we were provided during Stage 1. We are not satisfied that the Bill will be cost-neutral as stated in the explanatory memorandum. We are mindful that the size and complexity of the Bill makes it difficult to cost, and welcome the Deputy Minister’s stated intention to provide a revised regulatory impact assessment covering the funding available for transition and implementation of the Bill. I am pleased to note the Deputy Minister’s intention to provide that information about her intended approach, and I ask that it be presented before the end of Stage 2 if possible.
To conclude my contribution, we hope that the Deputy Minister will address the conclusions and recommendations contained in our report and will, where necessary, provide further clarity and bring forward amendments at Stage 2, assuming progress is made today.
Y Dirprwy Lywydd / The Deputy Presiding Officer
I call on Suzy Davies to speak on behalf of the Constitutional and Legislative Affairs Committee.
I am speaking this afternoon on behalf of the Constitutional and Legislative Affairs Committee’s Chair, and in respect of our report on this Bill, which was laid before the Assembly on 18 July 2013.
Members will remember that the committee does not comment on policy. Its remit includes reporting on provisions in Assembly Bills that give powers to Welsh Ministers to make subordinate legislation. It also reports on legislative matters of a general nature within, or relating to, the competence of the National Assembly or Welsh Ministers.
A Bill of this length and complexity merits detailed attention, and our report made 14 recommendations as well as drawing some general conclusions. That is too many recommendations to take in turn in this debate, so I will focus rather on some of the broader conclusions that we reached.
We welcome the Deputy Minister’s intention to table amendments to take account of four or possibly five of our 14 recommendations; it is not entirely clear from your correspondence, Deputy Minister. We would like to place on record our thanks to you for writing to the committee in advance of today’s debate to inform us of some of your decisions.
A key theme of our committee’s scrutiny is to assess whether a Bill strikes the right balance between the detail on its face and the matters that are left to subordinate legislation. This is a Bill of comprehensive ambition in a major and significant area of public policy. Despite that, it lacks the level of information and detail about the policy principles that we would expect to see on the face of a Bill of such public importance. We concluded that it is, in essence, a framework Bill and so are concerned about the balance struck between what is on its face and what is left to subordinate legislation.
During her evidence session, the Deputy Minister referred to the flexibility and futureproofing afforded to the Welsh Government by the Bill. Flexibility and futureproofing are admirable concepts to include in a Bill, but not at the expense of having a clear understanding of what the Bill will deliver at the time of its introduction. It was therefore surprising to hear the Deputy Minister say that the policy intent of the regulations would be available later in the year, by December. The question we asked was: ‘Why was that policy intent not known at the time of introduction?’ The concepts of flexibility and futureproofing would be more valid if they were used to develop an existing policy framework in light of experience, rather than to develop the key policy once a Bill has become an Act. Such an approach does not allow for the more extensive legislative scrutiny carried out through the introduction of a Bill, as compared to the processes that exist in relation to subordinate legislation.
We therefore recommended that the Deputy Minister review the balance of the Bill with a view to tabling amendments to ensure that the Bill’s policy intent is much clearer. We hope that the Deputy Minister gives serious consideration to delivering this recommendation through the amendments she intends to table.
As part of reviewing the balance of the Bill, we also recommended that the Deputy Minister consider all the procedures to be applied to the making of subordinate legislation, and that she issue a written statement on that aspect of the review prior to tabling appropriate amendments. Members might like to know that the Deputy Minister has written to us regarding our recommendations in respect of individual subordinate legislative provisions. However, we would have preferred to see a written statement to all Members, setting out a clearer and more detailed rationale for the use of each procedure than was set out in the explanatory memorandum.
This Bill has highlighted an important principle that we will continue to monitor very closely over the remainder of this Assembly. We do not consider it good practice to introduce a framework Bill unless there are good reasons for doing so. Ultimately, it is better to delay the introduction of a Bill than to introduce one that requires further detailed policy development and the outcome of which is to be achieved by means of subordinate legislation.
I would like to draw Members’ attention to section 167 of the Bill, which provides that the Welsh Ministers can, if they consider it expedient, make regulations that provide for different provisions of this Bill to come into force at different times. The explanatory memorandum stated that,
‘It is not possible to set all these provisions out on the face of the Bill as it may be that provision can be made in the UK Care and Support Bill, depending on the timing of commencement of the two Bills’.
The Deputy Minister told us that section 167 is a broad power, needed to deal with consequentials between the Welsh Government and UK Bills. She indicated that the overlap between the Assembly and parliamentary processes at Westminster means that it is not possible to be certain which will come into force first, although she conceded that the Welsh Government was far ahead of the UK Government in developing their respective Bills.
I acknowledge that the Deputy Minister has provided further information in relation to consequential provisions, and that she is proposing to table an amendment to clarify the nature of the power provided by section 167. However, in our view, the fact that consequential amendments and revocations were not dealt with on the face of the Bill, has led to considerable difficulty in scrutinising how they will be dealt with.
It was not possible, initially, to assess with any certainty what existing provisions are to be revoked, amended or replaced and how this Bill works alongside existing legislation. In particular, key stakeholders directly affected by the new Bill have been left in the dark on this issue and have not therefore been in a position to give a fully considered appraisal of the Bill.
We saw no reason why the Welsh Government could not have included information about consequentials and repeals in the Bill as introduced. That would have been a much more open and transparent way of proceeding. The National Assembly’s Standing Orders provide ample opportunity for developments at Westminster to be taken into account through proceedings at Stage 2 and Stage 3 and, if necessary, by using the optional Report Stage.
In our view, the fact that legislation in the same policy area is being developed by the UK Government in England should not be used as a reason for excluding information on the face of a Welsh Government Bill. This is because it can have a negative impact on the effective scrutiny of legislation in Wales. We do not expect to see the Welsh Government put forward such an argument in future, unless there are exceptional reasons for doing so.
Y Dirprwy Lywydd / The Deputy Presiding Officer
You will have to make this your last point. I have been generous.
Certainly. In closing, I would like to draw your attention, Deputy Minister, to the issue of consents. Our report noted that you were still seeking consents from the UK Government regarding this Bill and I would be grateful, in your response, if you could tell us a bit more about that. Thank you.
Y Dirprwy Lywydd / The Deputy Presiding Officer
I call on William Graham to move amendment 1, tabled in his name.
Amendment 1—William Graham
Add as new point at end of the motion:
Notes the importance of individual advocacy in ensuring that the best interests of people reliant upon social services are met.
I move amendment 1.
May I place on record my thanks to the Deputy Minister for the way in which she has introduced this Bill and the large way in which she has co-operated with and briefed the opposition parties in bringing forward so many parts of this particular Bill? I would also like to pay tribute, as previously, to the previous Chairs and the existing Chair. We dealt with over 60 recommendations and our thanks must go to those Chairs and to the clerks for making it such a reasonable process.
In my contribution today, I wonder if I might pose some particular questions to the Deputy Minister about her understanding of how this Bill will really take effect, using constituency cases. I put to her the one about an older person who has been discharged from hospital and is at home alone, without any support or adaptation, or any part of the care package having been put into practice. So, how will this Bill help an individual of that kind?
I also put to her the case of the parents of a severely disabled child who also suffers from mental problems ageing into adulthood. All of the complex necessities have been put in place and everybody has agreed that this should go forward, but nobody tells the parents that they have to apply for housing for the child.
Why is it, as we have discussed in committee so often, that these decisions for elderly people are made at a time of crisis? If the Bill achieves any of the aims in helping those particular individuals, we welcome it and ask the Deputy Minister to bring forward her amendments as soon as possible. Clearly, the successful implementation of the Bill will depend heavily on the interplay between wellbeing, prevention, assessment, eligibility, information and guidance, if it is at all possible for it to achieve its aims and to enable local parties to meet the challenges set out in the sustainable services framework.
Securing rights and entitlements to ensure that people have a strong voice and real control over their care and support will enable them to maximise their wellbeing. There are many people who advocate for individuals to ensure that they have their voices heard. However, there are times when, because of a person’s capacity or incapacity, the environment or the circumstances in which they find themselves, the individual does not feel empowered to use their voice to ensure that they are safe, have a voice in what matters to them about their daily life, or where they can get care and support. When this happens, having access to an independent advocate who can represent them well and be their voice to communicate their views and wishes freely and directly is clearly critical. Advocacy needs to be viewed as part of a wider framework for strengthening the voice and control of citizens, and it is something that my colleague Mark Isherwood has encouraged for many years. We believe that it is right that this approach should be determined through policy as part of the work to support a national outcomes framework. We believe that independent advocacy is a critical tool, but should be viewed as part of a wider suite of services. It should be developed into a Welsh framework around voice, choice and control.
These duties must also be set out for specific situations where advocacy must be offered, including when making decisions about where they live, entering a care home, making decisions about entering residential care and being discharged from hospital and, clearly, where there is risk of harm, either emotional or physical. Last week, the Deputy Minister made a commitment that these provisions would be subject to regulation and inspection. I trust that she will provide robust, quality monitoring arrangements. I ask the Deputy Minister to consider the need for appropriate quality assurance and to provide detail of how this will be operated in practice, and who will be entitled to this, before the end of Stage 2.
The Bill will place a duty on local authorities to work with partners to provide preventative services. However, it is not clear how the Welsh Government intends to define these services and there remain concerns that failure to address this issue could lead to a lack of recognition of the value and breadth of services that can be categorised as preventative and an acceptance of a narrow or excessively medical definition.
Models of care delivery rely heavily on the role of housing in meeting needs. It will be important, therefore, that the role of housing in meeting such need is further promoted and that closer working is developed between social services, the NHS and housing providers. Given the financial climate and the nature of the proposed legislation, and, particularly, the emphasised responsibility that local partners will need to take in working out the details of the arrangements together at a local level, there is an equally, if not more, significant role that the Welsh Government will have to ensure that developments across the country are co-ordinated, that local areas learn from each other, and that resources are not wasted by being developed in parallel. The Deputy Minister has suggested that there may be well over 250 further amendments. Deputy Minister, bring them on.
Y Dirprwy Lywydd / The Deputy Presiding Officer
I have eight Members who wish to speak, and I intend to call everyone, given that this is an important Bill and the general principles need to be properly debated. However, I remind Members that they need not speak for five minutes. That is the limit, but, if you want to come in at a shorter time, that is fine, and you do not have to repeat points that have already been made several times during the debate. So, if you can be succinct, that will be a great help.
Diolch, Dirprwy Lywydd. I will take your hint; thank you.
Y Dirprwy Lywydd / The Deputy Presiding Officer
It was to all Members, and not to you in particular.
I am sure. This debate could not come at a better time, following on the heels of the £100 million extra budget deal secured today, and my party is proud of that, because that will ease pressure on A&E and ensure that people receive care in their own homes. Deputy Minister, I doubt whether anyone in the Chamber would argue against the key principles of the Bill. I am surprised that there has been an amendment to the motion, as I thought that we were simply talking about the principles, but there you go. However, if you look at the key principles—Deputy Minister, I will quote you; it is a good quotation, do not panic:
‘the delivery of care will be centred on citizens having a greater voice and greater control, within a much more integrated system of care across Wales.’
Let us deal with the parts of that quotation. First, on citizens having a greater voice and greater control, section 7 of the Bill refers to service users being involved in the design and running of services. I hope that that means that they will be encouraged to give their views on how the service should be run, rather than being invited to help run the services. It is rather ambiguous wording such as this that has no doubt led to a multitude of proposed amendments being put forward by numerous organisations. They have been coming into our desks like a tsunami. For example, the Bill now includes the term ‘wellbeing’ in its title, but there is no agreement on what that means. For that reason, the section in Part 9 of the Bill that sets out to discuss the wellbeing outcomes to be achieved depends on agreement by all interested parties as to what ‘wellbeing’ involves. However, let us focus on a citizen-centred service or services. There is no mention in the Bill of ensuring that the person will have a right of appeal if they consider that they have not been fully involved in the preparation of a care plan or if, in their opinion, the care plan does not adequately meet their needs.
The second principle that I quoted refers to an integrated system of care across Wales. Well, it was only last week that we on this side made it clear that we shall be pressing for health and social care services to be fully integrated into a single organisation. Until that happens, we shall be forever sounding off about better collaboration between agencies and pooled budgets, but without this Government having any real teeth to make different agencies work in a seamless way together. We will argue strongly against any payments having to be made for information and advice. That is the basic right of any citizen who is seeking help in this country, and that word ‘help’ is very important, because it is in danger of being swamped by the words ‘care’ and ‘support’. By talking about care and support, the Bill is in danger of promoting a service-led, rather than a citizen-led, approach. What many people, young and old, might need is nothing that could be provided directly either by social services or health. It might relate to financial advice, more suitable housing, transport needs, or the opportunity simply to meet people. That has nothing to do with care as it appears in this Bill. As far as advocacy is concerned, I am pleased that the Deputy Minister seems to agree with our view that independent advocates should be registered. However, I also want them inspected and regulated. Direct payments should be more widely promoted, but they should not be the default option.
I welcome the statement in the Bill about the duty of local authorities to promote cooperatives and social enterprises as providers of care and support. However, there is a need for greater clarity about what is meant by a duty to promote, with guidelines, perhaps, on the minimum responsibility for local authorities.
To conclude, I want to make it quite clear that, with the support—I hope—of other Members in other parties, I will be making a strong case for this Assembly to take action at last, after more than a decade of formal agreement in Plenary meetings, to make the smacking of children illegal. As the Children’s Commissioner for Wales has forcefully stated, without such legislative action, children’s rights would clearly be breached by this Bill. I care about the wellbeing of children, and I cannot over-emphasise how important that is. Finally, I thank the Deputy Minister for her regular meetings with the spokespersons and for the courtesy that she has always afforded us.
To be clear from the outset, I will be supporting this Bill through Stage 1 today, because I want to see this important legislation passed. I recognise the personal commitment and hard work that the Deputy Minister is putting into steering this Bill through the Assembly, and I also welcome the almost unprecedented level of engagement that we have seen from outside organisations, such as the NSPCC, the WLGA, Carers Wales, Leonard Cheshire Disability and many others. However, having been closely involved with the detailed scrutiny, I feel that I have to raise my concerns on a number of important points, on which I hope to be reassured in the months ahead. First and foremost for me is the need for more clarity on the new eligibility criteria that will underpin the implementation of this Bill: the crucial question of who will and who will not be eligible for care. I recognise that the Deputy Minister feels strongly that this is best set out in regulations, and I am sympathetic to her view that the current thresholds need updating, but without knowing more about the nuts and bolts of this new system, in many ways, we are still in the dark when it comes to understanding the full impact of this Bill.
Of course, I welcome the recent commitment to make a major policy statement during the autumn term, and I am really pleased that the Minister has pledged to work closely with key stakeholders in the development of the criteria. However, it still feels like we are being asked to make a significant leap of faith, and I am disappointed that the Deputy Minister did not agree with the Health and Social Care Committee that the finalised eligibility criteria should be subject to further scrutiny by the committee and subject to the superaffirmative procedure in the Assembly. Indeed, I really welcome the fact that the Deputy Minister has said that she will bring forward an amendment that will require the superaffirmative procedure to be used if and when the decision is taken to merge children and adult safeguarding boards. I therefore urge the Deputy Minister to reconsider her response to recommendation 20.
While I recognise that this Bill seeks to strengthen rights and to improve outcomes for disabled children and adults, I am concerned over the repeal of section 17 of the Children Act and the removal of the right to support that it confers. We have to tread very carefully in this area. While I know that the Deputy Minister’s commitment to the social model of disability is deeply held, I felt that our committee’s suggested amendment to section 17 managed to strike a tricky balance without diminishing that principle.
I am also keen to see more work done to satisfy similar concerns raised by Carers Wales and others that aspects of the Assembly’s Carers Strategies (Wales) Measure 2010 will be lost when they are subsumed by this legislation. There seems to be a consensus that giving health boards statutory responsibilities for carers is working well, and it would be a pity if we put at risk some of the real wins that we have seen for carers as a result of this legislation.
Finally, I want to touch on the Bill’s provisions for adult protection and support orders—powers that would allow agencies to enter a home in order to gain access to and speak to an adult at risk. They are very welcome, new safeguarding powers in the Bill. While I recognise the perplexing questions around competence in relation to this issue, I am worried about the risk of very vulnerable adults being placed in even more difficulty and at greater risk if they are left in situ, following a visit from social services or another agency. I hope that the Minister will be able to do further work in this area.
Like every other Member who has been involved in the detailed scrutiny of this legislation, I have lived and breathed it over the past six months and more. However, boil it down, and, in the end, I have to be assured on two fundamental questions. First, will this Bill actually deliver positive change on the ground? Will it improve the lives of people in Wales? Secondly, given the number of separate threads it seeks to tie together and the number of elements of our current social service framework that it attempts to reconcile, can we be sure that nothing will fall through the gaps and that we will do no harm to the very people whose rights and interests we are trying to protect and strengthen? As an Assembly, we all have a responsibility to ensure that this Bill passes both tests before it is passed into legislation.
I think that the fact that the committee’s report included so many recommendations and so many calls for clarity demonstrates that there are significant problems with how the Bill is currently drafted. When the Bill was introduced in January, I was very clear about the fact that the Welsh Liberal Democrats supported the main principle of the enhancement and promotion of people's wellbeing. As I said at the time, it would be a pretty strange Government that did not want to do that. We are also very much in support of people having a voice and control over the services and support that they receive, and we are very much aware of the need to do things differently if we are to make our social services sustainable into the future, what with the financial challenges and the demographic challenges that those services face. Also, we are supportive of the need to unify processes the length and breadth of Wales. However, then as now, I believe that the Bill as it is currently drafted does not actually satisfy the stated policy intentions of the Government.
Lynne Neagle is absolutely right when she says that the elephant in the corner of the room is the lack of clarity around eligibility. We are no clearer in our understanding than we were in January as to what the effect of this legislation will be on our individual constituents. Until we have that clarity, as Lynne Neagle quite rightly said, the Government is asking us to make a pretty big leap in the dark. It seems to me a very curious way of proceeding. Surely, if one has a clear policy intention, that comes first and the legislation that delivers on that follows. Apparently, that is not the case; otherwise, by now, the Government would have been able to have made the policy intention statement that is promised for later this year. The converse side of that argument is that the legislation has been drafted and the Government has not been clear to this date and is still working on how the eligibility criteria will look. Given the importance of these services to so many of our constituents, I do not think that that is the right way to proceed.
It says that it wants to enhance and promote wellbeing. The arguments about what constitutes wellbeing have been rehearsed by the Chair of the committee. It says that it wants to enhance voice and control; Lindsay Whittle has already outlined some of the issues with that. I would like to draw people’s attention to the issue of direct payments. The way that this Bill is currently drafted means that the local authorities will continue to be the final arbiter and will still be able to decide whether they think that direct payments are suitable for you or not. That is not the kind of voice and control that my party is interested in seeing being developed.
As regards integration, the fact that the committee recommended that this section should be removed and that a separate Bill should be brought forward cannot be dismissed lightly by the Government. These are incredibly complex areas and the Bill, as currently drafted, will do nothing to remove the professional barriers, the need for double assessments and all the other artificial barriers that exist within those two systems. I wish that the Government would think again.
With regard to sustainability, if we are to make social services sustainable, the Deputy Minister says that we have to intervene earlier. I agree, Deputy Minister: we do. However, the way that the Bill is currently drafted will drive demand. It will drive people to receive services at the higher end by the simple act of charging for information and advice in the earlier stages. People are not going to volunteer to pay for information and advice when later on down the line they think that they might be entitled to free or limited services.
With regard to financial stability, there is no evidence at all to suggest that the claims that the Government makes are clear.
On a personal note, I still find it difficult to reconcile how a Bill that purports to be about wellbeing can fail to address the issue of the physical chastisement of children. I said back in January that the Welsh Liberal Democrats could not support a Bill until there was clarity on eligibility. The Government has had from January until now to be clear about what the eligibility framework will look like and it has failed to do so. For those reasons, the Welsh Liberal Democrats will not vote in favour of this Bill today.
This Bill is very wide-ranging and significant. It is impossible to cover all aspects in a short contribution. The Bill will mean a change in the way in which services are delivered and will promote new forms of delivery, a different way of looking a services and a different role for service users. It will put strategic duties on the health and social services department in a way that we have not seen before. I was particularly interested in looking at the general functions: the duty for local government to promote social enterprises, co-operatives and user-led organisations. I think that that is a very important part of the Bill, which I hope will receive some prominence.
There is a lot to be welcomed to the Bill. The principle of wellbeing is something that we all embrace but I agree with the Health and Social Care Committee’s recommendation regarding how we should address the issue of defining wellbeing. It is very important that everybody’s voice is heard and that prevention is at the core of the Bill. I welcome the emphasis on carers, in particular, and the increased emphasis on their rights. It is good that carers, particularly women who usually do the caring, are given equal status in the Bill to those who are being cared for. The fact that women need to work and be educated, as well as caring, is also recognised in the Bill, which I think is very good. Also, the unique issue of young carers is being addressed.
I also want to say a bit about the opportunity signposted in the Bill for local authorities to work collaboratively on adoption to boost the opportunities for children who are unable to live with their parents to have permanency. That is particularly pressing as the number of looked-after children increased by 24% in the five years up to March 2012. I would also like to welcome the very recent big increase in adoption that has taken place recently in Wales. I believe that it is a third more, which is a tremendous achievement, so I think we should all celebrate that. It is important that there is an emphasis on post-adoption support, which I think the committee also recommended.
Thank you very much for taking the intervention. You mentioned earlier that you hope that third sector organisations will be given due prominence under this Bill. Would you, along with me, seek reassurance from the Deputy Minister that voluntary adoption agencies will be given a level playing field along with local authorities under the new model for the national adoption agency?
Yes, I agree with Suzy Davies. That is extremely important. The Children and Young People Committee did an excellent report on adoption, where we met with the voluntary sector and many parents who had adopted. I think that what came out very strongly was the need for the voluntary sector to have parity with the statutory sector, and that the services that were provided by both must both be supported. I will be interested to know what the Deputy Minister might say about that.
I was very pleased to hear the Deputy Minister say that the people’s model is a concept, not a one-size-fits-all approach, because I have also had concerns about how children and adults fit together in this people’s concept. I am very concerned that the best interests of the child will be fulfilled and addressed in this situation. I am concerned about the possibility of adult and children’s safeguarding boards being merged at a local level, because I think there is a danger that children’s issues and children’s rights will suffer if that happens. I hope that the Deputy Minister will be able to respond to that. I feel that the issue of advocacy is tremendously important and that that should be professional, independent advocacy, because it is essential that people are able to speak up, and have support that makes their voices heard. The key issue in this Bill is that everybody’s voice should be heard, and I am very concerned that children’s voices should not be lost.
Finally, I felt that the evidence given to the Children and Young People Committee by the Children are Unbeatable! Alliance about the need to reform the law on physical punishment was absolutely compelling. I hope the Deputy Minister will also consider that.
Referring to direct payments for people who would like choice and control over their own care and support services during last week’s Assembly debate on social care services, the Deputy Minister, Gwenda Thomas, kindly said:
‘I reflect Mark Isherwood’s role in developing our thinking here. Members will be aware that I have already made a commitment to bring forward an amendment in relation to direct payments.’
I thank her for that. Members will be aware that I withdrew my proposed Bill on community care direct payments after the Deputy Minister agreed to take forward its principles in the Welsh Government’s Social Services and Well-being (Wales) Bill. Working with organisations including MS Society Cymru and Disability Wales, I have long backed the independent living campaign and called for action to tackle the very low take up of direct payments in Wales. Concern remains at the continued denial for people in Wales of opportunity to pool health and social services direct payments. As MS Society Cymru has stated:
‘Local authorities are currently required to offer direct payments as one option for social care, but it is limited in its current form as it does not offer the freedom that Personal Budgets and self-directed support could do’.
Scotland’s Social Care (Self-directed Support) (Scotland) Act 2013 places a requirement on local authorities to offer individuals four choices on how they can obtain social care: direct payment; the person directs the available support; the local authority arranges the support; or a mix of these. There is a requirement to point people towards available advice and support.
Mind Cymru believes the Bill must be based on the principles of the social model of disability. I agree. Speaking in the Chamber in March, I highlighted the cross-party group on disability concern that independent living and citizen-directed support were then missing from the Bill, and that with the approach taken in Scotland, known as Talking Points, there was a huge contrast. Scotland was working with the person to identify what is important to them, and then working backwards to identify how to get there and supporting the individual to be as independent as possible while paying attention to their quality of life.
Although the mental health charity Hafal welcomes the Bill’s intention to give people a stronger voice and greater control over services and the Bill’s commitment to extend the availability of direct payments, it believes that the proposed legislation goes nowhere near far enough in extending the power and control that it believes people should have, and it has stated its strong belief that this Bill must grasp the opportunity and introduce radical changes to make sure that people who need both health and social services have real choices and real control over what those services are.
The Welsh Local Government Association states that this Bill does not impose strongly enough the need for health colleagues to work with social services, particularly the community health councils, joint packages and pooled budgets, and it advocates this being addressed through amendment. It adds that there is growing evidence that local authorities wish to explore the use of co-production, social enterprise and pooled budgets for direct payments. However, the Wales Co-operative Centre is concerned that the duty to promote social enterprises and co-operatives could be ambiguous or overlooked, adding that it is concerned that action taken under the new duty could be as nominal as the availability of a promotional flyer and that a clear understanding will help local authorities to understand and meet the requirements of the Bill.
Housing organisations have stated that, although the Welsh Government has already identified the role of housing as an enabler through its inclusion in the recently released framework for action on independent living, which they welcome, the themes identified within the framework need to be realised in the Bill in order that this can be achieved.
Given the concerns currently being raised regarding the number of 15-minute care visits in England, with Leonard Cheshire Disability finding that 60% of responding English local authorities now commission 15-minute visits, I will conclude by referring to Leonard Cheshire Disability Cymru’s concern over figures that have been released that show that 83% of local authorities in Wales currently commission 15-minute care visits and this Bill should also address this.
I would like to associate myself with the thanks that some other Members have expressed to the committee’s clerking team, our expert advisers and the advisory group, as well as the many other individuals and organisations who provided evidence to the committee and engaged in a multitude of meetings during the course of the scrutiny of the Bill. A great many people in Wales have a big stake in getting this Bill right.
I would also like to record my thanks to the Deputy Minister, who has been open in her engagement and her dialogue and has gone beyond what is required of her by providing a detailed response to each of the 61 recommendations that our committee made. I particularly welcome the Deputy Minister’s intention to respond positively to a number of our key recommendations by bringing forward amendments providing for independent advocacy, placing a duty on local authorities to promote direct payments, introducing provisions to strengthen arrangements for co-operation and partnership working, and the inclusion of a specific reference in the Bill to the provision of aids and adaptations. I am confident that these amendments will significantly strengthen the Bill and help it to deliver its objectives.
I also welcome the Deputy Minister’s willingness to provide a series of written and oral statements in response to our recommendations, and I look forward to those, particularly the statement on the national eligibility framework, which will be the key to the success of this Bill in transforming the way that we deliver social services to the people who need them in Wales. I am glad that the Deputy Minister is determined to develop that framework in an open and inclusive way in partnership with all of the interested parties, and Assembly Members are very much interested parties.
We are debating the general principles of the Bill today, and I believe that the principles are sound. The amendments and statements that the Deputy Minister has outlined her intention to bring forward in response to our committee report bring the Bill much closer to a place where it will be able to deliver its stated aims. However, there are some areas in which I look forward to seeing the Bill continue to develop and strengthen. The first of these relates to the use of the social model of disability.
It is more than 10 years since the Welsh Government adopted the social model of disability, acknowledging that people are disabled by the systemic barriers in society, such as inaccessible services and negative attitudes and exclusion by society and not by their own individual impairment. The recent publication of the framework for action on independent living by the Welsh Government was an excellent and groundbreaking example of that commitment being translated into clear policy and direction.
However, many witnesses, including Diverse Cymru, the national social services citizens panel for Wales, Disability Wales and the Wales Alliance for Mental Health expressed concerns that the model of disability included in this Bill, based on the Equalities Act 2010, perpetuates the medical model of disability. As a committee, we questioned how the social model would be realised in practice without specific reference to it in the Bill. At the same time, we recognise that there is currently no legislative basis for the social model of disability. I know that the Deputy Minister is fully committed to the social model, and I was pleased to hear her indicate in her evidence to the committee that she would consider whether she could add to the definition of disability in the Equalities Act 2010 to reflect the social model. I would be grateful if the Deputy Minister could provide an update on whether this is something that the Government will take forward should the Bill proceed today.
As a committee, we also recommended that the Deputy Minister give consideration as to how the social model could be embedded in practice—for example, in regulations or codes of practice—to put the principle in context and to see how services and support should be designed to reflect the social model. I am very pleased that the Deputy Minister has accepted this recommendation, and I hope that the social model becomes a lens through which we view the way forward for this Bill and for social services and wellbeing generally.
There is further work to do on the Bill, however. For example, I would like to see some further discussion and clarity about what the Welsh Government intends by the phrase ‘care and support’, and whether there is a danger that this may lead to situations where help only becomes available when a person’s needs reach a level where they need both care and support, and not just support. There is also a debate to be had about charging, particularly charging 16 and 17-year-olds, and charging for information and advice. Fears need to be allayed about the impact of the repeal of the carers Measure on the NHS’s duty to provide strategies to meet the needs of carers, and about the coherent joining-up of existing care and treatment plans under the mental health Measure with plans for health and social care. We also need to talk more about the role of housing and where independent living fits into this Bill.
However, none of these issues are insurmountable, and I hope that this Assembly will vote to see this Bill move forward to Stage 2 to continue work to strengthen the Bill.
To conclude, I would argue that this is the single most important piece of legislation that will come before this Assembly, and I look forward to it having a positive and transformative effect on social services and wellbeing in Wales.
The scrutiny process during Stage 1 of the Bill has been comprehensive and interesting. During that process, I have concentrated my interest mainly on integration of the health service and social care, on specific sections in the legislation that deal with that, and on some of the clauses in the proposed legislation that militate against the ability of public bodies to integrate in real terms.
In terms of section 9 in the Bill on collaboration and integration, this needs to be strengthened considerably. I am still of the opinion that we should ensure the full integration of health and social services and do so through creating a specific piece of legislation to that end. We heard the Deputy Minister say again today that it is not the Government’s intention to do that. So, in the absence of such legislation, I am pleased to hear that the Government intends to strengthen this part in order to demand collaboration. We will see in due course what those amendments are and how far the Government is prepared to travel down that route.
I am also pleased that the Deputy Minister has referred to the budget agreement between some of the parties here today, which will lead to the creation of an integration fund to tackle and promote the collaboration that is so essential at the grass-roots level. We will all be working to ensure that that happens.
Turning to some of the individual clauses in the legislation that draw a distinction between health boards and local authorities, they are clauses that will, to all intents and purposes, allow those professional and organisational boundaries to continue after this legislation is passed if they are not amended. The first example of this is the clause that prevents local authorities from employing nurses. Why do we need such a clause in legislation in the twenty-first century? We should be allowing flexibility rather than being obstructive, especially when there are some local authorities that wish to integrate services and to run services directly themselves, including those services provided by nurses.
Another example of the failure to anticipate the needs of an integrated service is the fact that the legislation confirms the right to delegate responsibility to conduct assessments to local authorities but not to health boards. We took evidence from some of the health boards that there were frequent examples of patients occupying hospital beds when, in fact, they were ready to leave, but that a social worker from the relevant local authority was not available to conduct an assessment. Therefore, the patient was stuck in that hospital bed. The health boards want clarity in this legislation on the right to delegate assessments to health boards, alongside the right for local authorities to do the same. That would assist in breaking down the artificial professional barriers between different agencies.
Another matter that I will be looking to introduce an amendment on in due course is the power for health boards, and for local authorities, to make direct payments, particularly in the context of integrated care packages for specific patients.
I would like to conclude by referring to the Welsh language within health and social care. The Deputy Minister has undertaken some thorough work in identifying the need for a bilingual workforce in the health and care sectors, in order to provide services in an individual’s language of choice—the language in which the individual is most comfortable—in their hour of need. We took evidence during Stage 1 from the Welsh Language Commissioner and the Care Council for Wales, which asked us to recognise the need to provide services and information through the medium of Welsh, by including a specific clause in the legislation to reinforce that need and to ensure that specific public bodies fulfil their duty to promote Welsh-language services. I agree with that opinion, therefore it is my intention to introduce an amendment to that end during Stage 2.
Much of what I was going to say has been said, so I will take your word and I will not repeat it. However, I think that integration between health and social services is vital. As somebody who, some 12 months ago, tried to enter the system and work my way around it, the frustration that I found was abound. Therefore, I take my hat off to those people who got the care plans and the support that they needed without the frustration that I faced. So, we do need the framework that looks for and, more importantly, delivers the consistent approach so that people know what they can expect.
I also wanted to talk about the social model of disability, for those people who are already trying to experience a care plan, or some sort of independent living, and those with a sensory impairment. Those people find it difficult now, and yet what they are telling me is that they have looked at some of the issues around the Bill and what they are saying, quite clearly, is that the criteria for eligibility worries them and they cannot understand it. Therefore, if it worries those people who are actually in the system, it is right that we have to take notice of it. The eligibility criteria have to be right. If it is not right, then the issues of adequacy that we all try to help those people with will not be there.
Therefore, I think that a lot has been said around the eligibility criteria from all sides of the Chamber. This is a big issue that has to be addressed. We all have to be comfortable with the legislation as it goes through. Yes, it is a big piece of legislation; it is not an insurmountable piece of legislation that we cannot deal with here. What we have to do is make sure that when we pass legislation, we pass it correctly, in the right way and with the interests of our constituents at heart.
There is still a lot more work to be done at Stage 2, or even before Stage 2 amendments are put before committees, and there is a need for us all to recognise that we are not dealing with numbers, or people who are just there. These are our people, our constituents; people who come to see us on a daily basis and who, at a time when they need it, are often let down by the authorities because of a bureaucratic system. I feel that the framework that is being produced could be amended—and I only say ‘could’, because I am sure that it will be amended—as I am sure that the Deputy Minister has the best interests of her constituents and the constituents of Wales in mind in terms of making social services acceptable for all across Wales.
There are huge issues around young people between the ages of 16 to 18, and there are big issues around adoption, as we have heard. We have heard about issues around how the safeguarding of children could be lost—I am not saying that it will be. I think that what we have to do is to make sure that we have a consistent approach across Wales. I am sure, Deputy Minister, that you will go away having heard what has happened in this debate today and, more importantly, I know that we will deliver some good legislation for the benefit of all the people in Wales, whatever their need and at the time that they need it.
Y Dirprwy Lywydd / The Deputy Presiding Officer
I call on the Deputy Minister to reply.
I thank Members for their contributions this afternoon. The Chair of the Health and Social Care Committee has made clear the situation with the committee and mentioned that I have responded to all the recommendations that the committee made, accepting about 37 out of 61. I think that some of the remaining ones were to do with statements. Therefore, I think that it might be helpful, right at the beginning, to make clear what statements I am going to make from now to January. Some of these are in response to committee recommendations.
By the end of this month, 31 October, there will be a written statement on a review of the balance between primary and subordinate legislation and procedural changes. That is in response to a recommendation of the Constitutional and Legislative Affairs Committee. I also would like to respond in more detail to some of the points that you raised with regard to consequentials and competence, and, of course, I have been open with everybody that we are still negotiating with the Westminster Government with regard to competence. I am due to meet the Secretary of State next week with regard to that, and I will keep everybody informed. By the end of the month also, there will be a major statement, which I have been absolutely clear about before today, on assessment and eligibility. That is one that I intended to make in any case, but it responds to some of the committee recommendations. By the end of the month also, and I think that Lynne Neagle mentioned this, there will be a written ministerial statement on safeguarding a year on, which includes children.
By 8 November, there will be a written ministerial statement on the launch of consultation on the regulation and guidance for the new social services complaints procedure. By 22 November, there will be a letter to the Health and Social Care Committee and a written statement on preventative and early intervention services. By 29 November, there will be a written ministerial statement on children’s social care, which Lynne Neagle also brought up. By 16 December, there will be a written ministerial statement on finance and funding for the Bill, and an approach to implementation and outline planning. By 31 January, there will be three statements: another update on the finance and funding for the Bill in a written statement—that is a recommendation of the Health and Social Care Committee—on resource implications regarding assessing and meeting the needs of carers, which has been mentioned this afternoon, and assurances regarding the rights of carers in the Bill; and on cross-border care arrangements and portability arrangements. That is a complete list in response to some of the recommendations of the committee.
I am grateful to the Deputy Minister for giving way. That is a very comprehensive list of statements that you are going to make, but would you agree that written statements do not give us the opportunity to raise questions about the intent of the Government? Secondly, how does your timetable of statements coincide with the timetable that will be set by the Business Committee for the consideration of the Bill at Stages 2 and 3? Some of this stuff may well come after we have been asked to vote on the legislation.
I assure you that what you need to know by the time you are asked to vote will be there for you. I have set out a timetable of statements. I have made it clear this afternoon, and I hope that that is helpful.
I will not have time to go through every Member’s contribution, but there are thematic issues. I would like to say that, with regard to charging for 16 and 17-year-olds, I believe that I have made it plain that I am minded to look to exclude them from charging. I am considering that. However, the best thing that I can do is to give you a thematic response on some of the issues. In regard to the people model, and that being a concept, and in regard to the rights of children, I am absolutely satisfied that the Bill will enable children and young people to be better transitioned—a point raised by William Graham—through the services, and that there is no diminution of children’s rights as a result of the approach that we have taken.
On assessments and eligibility, I am aware that there has been considerable interest in the detail of my proposals for the new assessment and eligibility arrangements introduced through the Bill. That has been reflected today, quite rightly, in the Chamber. I made a commitment earlier on to share with you and stakeholders my thinking as it developed around the content of the regulations and the implementation of the new system. I have provided further information through a fact sheet in my evidence to the Health and Social Care Committee in June, and a written statement in July. I have said that I will be making a major policy statement on this matter, and I have said that again this afternoon. I have also said that I will be bringing forward amendments at Stage 2 to provide further clarification to the relevant sections of the Bill. Finally, in respect of transition, I have made it clear that this is something that we will consider carefully, and with the full engagement of those who will be working within, or who will benefit from, the new system. It is my intention to ensure that appropriate transitional arrangements are in place to support implementation.
On integration, I heard what Elin Jones had to say on integration and on employing nurses. As I understand it, there could be joint management, as we do now with nurses and social workers in the integrated family support services. I cannot see why that principle could not also be used in the provision of integrated services for other people. I believe that that could happen.
My Bill sets out measures to strengthen partnership arrangements for local authorities and the NHS to work together. That includes regulation-making powers to direct the pace, type and form of partnership. Many of the organisations that gave evidence to committee about the potential need for a separate Bill on integration have welcomed the joint statement made with the Minister for health on a framework for integration. They include ADSS, WLGA and the NHS Confederation, which commented that this framework will bring significant benefits to patients, as part of the greater collaboration between health and social care that NHS Wales wholeheartedly supports. I am confident that we have the necessary levers and legal powers to achieve greater integration and the introduction of new models to drive improvements for people who use health and social care services.
If I have time, I will make a comment on funding that I think is important. I have listened to the comments on the financial implications. I have made a number of commitments during Stage 1 scrutiny, including the fact that I would make a written statement before the summer. That statement was made in July. I have also committed to developing regulatory impact assessments for the key regulations, in partnership with stakeholders, and to making them available as part of the consultation on draft regulations. We have done what we can to protect public services. We will continue to do so. We are subject, of course, to the will of the coalition Government in Westminster, and we have heard today about the difficulty of budgeting. However, I believe that we have done what we can to protect public services. The Social Services and Well-Being (Wales) Bill is an essential element of that protection. It will steer the changes that are necessary and ensure that services innovate and develop within our policy framework. It will take time to get from the current state to the future state, and it will take effort, commitment and resources. Those resources will be needed to bridge the gap between the old and the new, to enable proper planning and capacity building to take place.
I will quickly run through the money that has already been made available this year in order to support transition and implementation. An additional sum of £622,000 will be used to support the safeguarding agenda; a further £50,000 will be made available to ADSS Cymru for the commissioning of resources to further develop plans for the national adoption service, which Julie Morgan has mentioned; and £1.5 million has been made available to local authorities and their partners to build capacity locally and to begin to prepare for implementation. The RIA for the Bill also made clear my intention to use the social care workforce development programme to support implementation, and that amounts to over £8 million; and there has also been agreement that £2.1 million of funding per annum will be provided over the next two years to the Social Services Improvement Agency for the development of local government implementation of sustainable social services.
In the time allowed, I have tried to cover as much as I can. If there are specific questions, I will ask officials to look at the Record and to come back with individual responses to those questions.
Y Dirprwy Lywydd / The Deputy Presiding Officer
The proposal is to agree amendment 1. Does any Member object? I see that there is no objection. Therefore, amendment 1 is agreed in accordance with Standing Order 12.36.
Amendment 1 agreed in accordance with Standing Order 12.36.
Y Dirprwy Lywydd / The Deputy Presiding Officer
The proposal is to agree the motion as amended. Does any Member object? I see that there is objection. Therefore, I will defer voting on this item until voting time.
Voting deferred until voting time.
Motion NDM5317 Lesley Griffiths
To propose that the National Assembly for Wales, for the purposes of any provisions resulting from the Social Services and Well-being (Wales) Bill, agrees to any increase in expenditure of a kind referred to in Standing Order 26.69 arising in consequence of the Bill.
I move the motion.
I am grateful to the Deputy Minister for moving the motion. I would briefly like to draw colleagues’ attention to the comments that I made earlier on the sustainability of funding issues. Once again, the Liberal Democrats will not be able to support this today.
I take on board the comment made by the leader of the Welsh Liberal Democrats. I will remind Members of your positive endorsement last year of the vision defined in ‘Sustainable Social Services for Wales: A Framework for Action’, which set us on the path of transformational change. Fully implementing this Bill will take time, and I have already said that we have done as much as we can to protect public services. I have also mentioned transitional funding and the funding that has been made available already this year.
I also expect key organisations, such as the Care Council for Wales and the Association of Directors of Social Services Cymru, the Social Services Improvement Agency, hosted by the WLGA—all organisations funded by us—to be proactive in ensuring that their work is supporting transition, and I pay tribute to them for the work that they have already done. They are our partners in this endeavour and not our adversaries. Our funding must deliver on our policies. When the budget is set for 2014-15, I will be looking carefully at how I can continue the commitment that I have made in the current year, and I know that I have the support of my Cabinet colleagues in pursuing this approach.
Y Dirprwy Lywydd / The Deputy Presiding Officer
As we have not yet voted on the general principles of the Bill, I defer voting on this item also until voting time.
Voting deferred until voting time.
Motion NDM5318 Mark Drakeford
To propose that the National Assembly for Wales in accordance with Standing Order 26.11:
Agrees to the general principles of the National Health Service Finance (Wales) Bill.
I move the motion.
I am pleased to have the opportunity to open the debate on the general principles of the National Health Service Finance (Wales) Bill, which was introduced last week.
Last week, I explained that the Bill is a simple but effective way of enabling local health boards to manage their resources in a more sensible and effective way. The Bill’s fundamental principle is quite clear. It will make it a requirement for local health boards to balance their budgets over a three-year period, rather than every financial year. This will facilitate better decisions and move away from the short-termism that is encouraged by the current system.
Having stated the fundamental principle of the Bill, I hope to use some of the time that I have this afternoon to address a number of the more detailed matters raised by Members in last week’s discussion, and in particular to set out the practical arrangements that we intend to put in place to ensure that the effects of the Bill are properly managed. There are a number of other matters, such as the possible inclusion of end-of-year flexibility, or tolerance arrangements, as Paul Davies, who introduced the idea, put it, to which further thought is being given, and to which I hope to return during Stage 2 discussions.
The Bill was accompanied by an explanatory memorandum, which laid out the work that is ongoing to develop a more robust approach to planning across NHS Wales that will then underpin the Bill. All elements of the approach will be set out in a framework document to be published at the end of this month, and so to be available to Members in advance of Stage 2. The approach described by this framework will be backed by clear delivery and escalation arrangements, and those will be key to ensuring that the resources and the operation of the flexibility arrangements are managed effectively.
I would like to begin by explaining how the strengthened planning approach will work in practice. I want to assure Members that I fully share the determination expressed in last week’s discussion that adequate checks and balances are put in place to ensure that local health boards are disciplined, structured and consistent in how they develop and approve their plans. I am entirely committed to securing rigour in the system so that we achieve confidence when providing the financial flexibility that this Bill affords.
As part of the new planning approach, I will be issuing revised standing orders and standing financial instructions to local health boards, which will contain new requirements for boards to develop, scrutinise and approve integrated medium-term plans, including balanced medium-term financial plans. The planning framework will also clarify the respective roles and responsibilities of LHBs and the Welsh Government in terms of ownership, scrutiny, assurance, monitoring and approval.
The work being carried out to revise and strengthen the existing planning arrangements will draw directly on the lessons that we have learned from an assessment of LHBs’ existing plans, the latest iteration of which was received in September. That exercise means that, when, in January 2014, LHBs submit their board-approved plans for 2014-15 to 2016-17, they will be much better able to demonstrate convincingly the integration, quality and robustness of their proposals. Careful scrutiny and a detailed review at national level will then follow, with any emerging issues clarified between the LHBs and the Welsh Government. Through this scrutiny process, assurance will be obtained that boards have undertaken a thorough and robust planning process to open the door to the financial flexibility that this Bill aims to provide.
I have just outlined the revised planning cycle, which will thus offer key milestones and opportunities to scrutinise the plans both within LHBs and Welsh Government, including sufficient time to test and revise plans prior to agreeing any financial flexibility that may now be offered as a consequence of this Bill. Scrutiny and approval is a key part of the planning process at local and national level. LHBs are, of course, separate statutory organisations, and their boards must take the responsibility, which is theirs, and be fully accountable for the production and the delivery of their plans. However, I will need to be assured that LHB plans are fully integrated, sustainable and clinically viable, and that they meet the requirements of service and workforce planning, as well as funding. It is only with this assurance that the Welsh Government will action and approve any financial flexibility across financial years.
What would happen if, having been afforded flexibility, it becomes apparent that plans are not being delivered? This is the point that Peter Black raised in last week’s discussion, of the need for early warning systems to be in place, were approval to be given. The explanatory memorandum sets out in some detail the formal processes of escalation and intervention that would be deployed in such circumstances. Ultimately, if either the planning or the performance of an LHB is not satisfactory, I would have to consider the use of the formal powers of intervention that are available to me in the NHS (Wales) Act 2006 to resolve such difficulties.
However, it is important to recognise that planning is a dynamic process, not a one-off event; it does not start nor end with the production of a document. I expect local health boards to review and challenge their own plans regularly, and as part of the routine of their internal structures. As a minimum, plans will be formally updated and approved annually, but LHBs will also be able to update and approve revised plans for consideration at any point in the cycle, should there be a substantial change to their planning.
Last week, during the introduction debate, Elin Jones raised concerns about the level of public scrutiny of the health budget, and called for greater alignment between the scrutiny process and any new regime of increased financial flexibility. I think that these are important points, and that increased public awareness and understanding of the issues addressed in this Bill would be of real value. I will continue to work to see what more can be done in this area. In the meantime, I would like to reassure Members that LHB scrutiny, assurance and approval of their plans will take place at their public meetings, and that, therefore, the plans and expected outcomes will be publicly available, as will reporting against them.
I hope that I have provided some additional clarity around the planning framework that underpins the financial flexibility that this Bill aims to provide, and the monitoring, escalation and intervention arrangements that will underpin its practice. To return to the basic principle that the Assembly is being asked to endorse today, it is simply this: that LHBs should be allowed a managed degree of flexibility to organise their finances over a rolling three-year period, rather than a one-year period, thereby securing better decision making in the future.
I wish to thank all those Assembly Members—from across the Chamber—for their constructive engagement, and for the ideas that have been suggested so far for improving the Bill. I have been greatly encouraged by the support that has been shown for the Bill by stakeholders, since its publication last week, and I urge Members to support it at this stage today.
Y Dirprwy Lywydd / The Deputy Presiding Officer
I call on the Chair of the Finance Committee, Jocelyn Davies.
As the Chair of the Finance Committee, I am pleased to contribute to today’s debate on the general principles of the National Health Service Finance (Wales) Bill. As I am sure the Minister will appreciate, we have not been able to scrutinise and consider the Bill, or its implications, as a committee, or in the way in which committees have become accustomed to at Stage 1. Now, the Minister wants this legislation in place in time for the start of the next financial year. Although I recognise the need for this legislation to be processed through the Assembly with some urgency, I hope that this fast-track approach is not one that will be adopted with any regularity.
Despite the Bill bypassing Stage 1, I am able to provide Members with an insight into the views of the Finance Committee based on work previously undertaken. Before I outline these, I would like to take this opportunity to express our thanks to the Minister for agreeing to attend a meeting of the committee on 23 October to discuss the Bill. We welcome this additional opportunity to question the Minister on the Bill and enable us to make informed decisions at Stage 2.
Members may recall that one of the recommendations of our report on the Welsh Government’s draft budget motion for 2013-14, published last year, highlighted the need to address the case for additional flexibility for local health boards in managing their funding across financial years. During the course of that work, we found that health boards themselves put forward a compelling case for being allowed additional financial flexibility at the end of the year. This would avoid the need to make one-off savings, such as cancelled operations, to break even or to spend in an unplanned way in order to get rid of underspends. However, patient experience and quality of treatment must not be jeopardised by these proposed changes.
We note that the Public Accounts Committee, in its report on health finances, which was published earlier this year, asked the Welsh Government to consider legislation to address the inflexibilities of health board finances across financial years. While we agree with the general principle of the legislation, we have some reservations about how the Bill will be implemented in practice. We must acknowledge the current inability of LHBs to adhere to annual budgets and question whether there is a risk that NHS bodies will build up unsustainable deficits in the early years that will then not be recovered. This was indeed an issue raised in the recent Wales Audit Office report, ‘Health Finances 2012-13 and beyond’. We have to be honest that, despite the annual finger-wagging from the Minister and warnings that there will be no more bail-outs, it is clear that some LHBs actually budget with a clear expectation of extra funding being made available. This attitude presents a real risk that the financial viability of LHBs will not improve without greater accountability.
We all share these concerns and we need assurances from the Minister that this approach is viable and sustainable. I also believe that if this Bill moves LHBs to a three-year break-even period, it will be even more imperative for the Welsh Government to retain a consistent message in terms of the additional funding that will be provided to meet budget deficits at the end of the three-year period.
To close, in the event that the Assembly gives its agreement to the general principles of the Bill today, I hope that the Minister will take into account our concerns when considering any amendments at Stage 2.
I am pleased to be able to take part in this debate today. Last week, I made it clear that we on this side of the Chamber want to support this Bill, and I want to reassure the Minister that we will continue to work constructively with the Welsh Government on this piece of legislation to ensure that LHBs have the right degree of financial flexibility. This proposed legislation is a great opportunity to ensure that LHBs receive the appropriate support that they need. It is therefore essential that we get this Bill right.
Last week, I talked about addressing what I see as the inflexibility in the Bill’s current format because of the rolling three-year accounting period, which will require future years to marry up with previous years’ expenditure. I argued that this three-year period, given that it is a rolling three-year period, means that health boards would only be provided with greater flexibility in the first two years of this Bill being passed—that is, 2014-15 and 2015-16—because after the first two years, each financial year thereafter would require its budget to marry up with the previous two years’ expenditure. Therefore, all that this Bill could achieve in its current format is to push financial pressures on by two years. I am therefore pleased today that the Minister has recognised this and that he will be looking at this at Stage 2. I hope that he will therefore introduce tolerance limits for each year, because this will provide the necessary flexibility for LHBs and, at the same time, provide LHBs with a structure within which to plan their finances.
Members are aware of this summer’s Wales Audit Office report into health finances, which told us that there was a net funding gap at that time of £212 million, but that figure, I am told, has now been revised to just under £200 million. Given this funding gap, I would ask the Minister to consider tolerance limits equivalent to this figure, which equates to around 3.5% of the total health budget.
Deputy Presiding Officer, I would also like to once again raise the possibility of giving local health boards borrowing powers. Given their substantial budgets, it may be appropriate that they are given the ability to borrow to finance capital projects. At the moment, any substantial capital project has to be financed from current budgets and, therefore, giving LHBs the ability to borrow could help alleviate their financial pressures. Last week, the Minister said,
‘If you are going to borrow, you have to be able to provide a revenue stream to pay back that borrowing.’
I very much agree with the Minister on that. Of course, the NHS does raise some of its income and, therefore, a revenue stream is available to pay back any borrowing, because the Welsh NHS often charges rents to tenants on its estate, for example, for consultants using facilities for private practice and for a number of other reasons. In fact, the Wales Audit Office tells us that just under £325 million is raised independently by the Welsh NHS. Therefore, given this potential revenue stream, I would ask the Minister once again to consider this option with a view to incorporating it within this piece of legislation.
I am also supportive of the Minister’s new planning framework requirements for LHBs, which I understand will be sent out to LHBs at the end of this month. I think that any steps to create a more disciplined approach to workforce and financial planning should be supported. I fully accept what he has said today, and I note how this new framework will see a greater role for the Welsh Government in scrutinising, reviewing and approving LHB plans at regular intervals. We, on this side of the Chamber, believe that reporting back to the National Assembly for Wales on an annual basis should be required, so that the Assembly, and not only the Welsh Government, can regularly scrutinise and review LHB plans. Indeed, I also believe that the attendance of the NHS chief executive and the Minister before an Assembly committee to report on this Bill’s implementation should be included in this legislation and for there to be an evaluation of the Bill’s effectiveness after four years. Therefore, I would be grateful for the Minister’s comments on that in his response to this debate.
Even though this Bill could give LHBs greater flexibility, I also agree with the Minister that it is equally important that there are checks and balances in place to effectively control financial spending. As the Minister said earlier, last week, Plaid Cymru made the point that this Bill provides no additional public scrutiny of a three-year budget and that we are being asked to inherently trust the internal scrutiny processes of the Welsh Government. I very much agree that it is absolutely crucial that NHS finances continue to be monitored effectively, and I very much hope that the Government will therefore be producing amendments to this legislation to that effect, given that he has today committed to carry out further work with regard to this.
Therefore, in closing, Deputy Presiding Officer, I am pleased to have been able to take part in this debate and I hope that the Minister will respond positively to the points that I raised and look to bring forward amendments to that effect, so that this Bill brings the benefits to the NHS that we all want to see, and that is to enable LHBs to manage their resources more sensibly and sustainably.
Thank you for the opportunity to contribute to this debate, Deputy Presiding Officer. I do not want to reiterate what I had to say last week when discussing the statement on this Bill. I do, of course, see the advantages of providing this financial flexibility and creating a rolling budget, and to do that for local health boards, but there are two doubts that persist in my mind. The first is the ability of the health boards to undertake financial planning and to spend in accordance with those plans over a period of three years. As we know, they have been particularly unsuccessful in sticking to an annual budget and there is no clear evidence—only a hope—that the health boards will be more responsible in budgetary terms under the new financial regime that is being brought forward here today.
The Minister outlined last week and, again, this week in more detail, the measures that he will put in place to ensure more effective scrutiny of the health boards’ budgets within Government and particularly the relationship between his department and individual health boards. From what the Minister outlined last week and today, it is clear that he has confidence in the processes that he intends to put in place. There will, therefore, be checks and balances between the Government and the health boards, and within Government as well. However, my main concern in all of this, as a Member of this Assembly, is the checks and balances available to us as Assembly Members in terms of how the Minister and the Government control this new financial regime.
I was pleased to hear the Minister’s comments in his opening remarks on his desire to give more thought to how the Bill can be made more robust and how we can get those checks and balances in place. That is one of the first steps that the Minister could take. We are reminded today of the lack of transparency in the health budget. There is a budget line in the health budget tabled today of £5.3 billion for the ’Delivery of core NHS services’. There are no details provided even on how much each individual health board will receive. Therefore, there is a dire need to improve the transparency of the annual budget and the Minister’s accountability for spending that budget. That needs to run alongside the introduction of this legislation.
Plaid Cymru wants to see two specific amendments, or two areas of amendments, for this Bill. First of all, we would want to see the Bill making it a requirement of the Minister to agree the financial plans of the health boards on an annual basis and to publish those plans once they have been approved. Having that on the face of the Bill would ensure the accountability of the Minister for those financial plans put forward by the health boards.
Secondly, I believe that the Bill would be improved by placing on its face that any bail-out or any additional funding over and above the financial plan should be approved by the Assembly as a whole. So, at any time during that three-year period when the Minister believes that additional funding is required by any health board, he should have to bring that recommendation to this Assembly, and that would need approval by resolution of the whole Assembly.
Those are two specific areas that Plaid Cymru will be looking to raise during further scrutiny of the Bill. We want to ensure that the health service is placed on a sound financial footing and a more sustainable footing for the future. We are willing to work with Government in that, but we want to see clearer accountability and greater transparency in the health budget.
What we are looking to do is change from one-year budgeting to three-year budgeting. I would like to look, at the beginning of the next Assembly, at trying to budget for the lifetime of that Assembly. I think that that would make life a lot easier for everybody going forward. However, as they say, we are where we are.
What currently happens with health boards and what used to happen in NHS trusts when I was a member of Swansea NHS Trust, was that each health board had to break even each year. So, each year was the start of a cycle: a large overspend in the first quarter and a subsequent large annual projected overspend; it would not get worse in the second quarter with a small recovery in the third quarter and some additional funding along the way, and breakeven—or near breakeven—in the fourth quarter.
That would be repeated year after year. Of course, if the savings in the fourth quarter were efficiency savings and they were sustainable savings, it would be very good. For every £1 million saved in the fourth quarter in one year, £4 million would be saved in the subsequent year. However, I think that we have learned that that is not what actually happens.
In purely financial terms, these end-of-year savings should carry on into the next year, but history tells us that they do not. How then, are these end-of-year savings made? There are a number of tricks, including running down supplies, cutting back on elective surgery, cutting back on non-emergency treatment, phoning order suppliers then sending in the written order in the next financial year, and reducing end-of-year staffing costs. The end of year is arbitrary; it just happens at a date that has been set. It does not lead to good planning.
The Assembly Commission was given a three-year budget at the start of this Assembly. I know that Angela Burns is not here, but, to paraphrase her, as the Assembly Commissioner in charge of the budget, she said something along the lines that it allowed for planning and investment over a three-year period, making it easier to make the necessary changes. She said that at a meeting of the Finance Committee. That perhaps sums it up, and, if it works for a relatively small organisation such as the Assembly Commission, how much better would it work for the Welsh health boards? Three-year budgets would allow for sensible medium-term planning over a three-year period. Invest-to-save can be used on a larger scale than now, because they would actually use their own money to invest to save. Budgets would still have to be managed—year 3 must not become a rerun of the current fourth quarter. A fully-costed, robust three-year plan needs to be put in place. It must not be based on the hope that something will turn up in year 3.
All this is being done in a time of a reducing Welsh block grant. The belief among consultants I know is that, if there is an overspend, it does not matter, because the Welsh Government has lots of money and will cover it. Unfortunately, the Government has previously covered overspends. What it did last year was give extra funding, so that, the larger your projected overspend, the more you got. Health boards need to be told not only that they can carry forward overspends, but that they can carry forward underspends as reserves, so that they can balance and run like any other organisation. They need to know that, in future budgets, underspending will not be punished—that is, they will not be cut back because they have underspent in one year.
I perhaps know more about local authority spending and budgeting. In my experience, medium-term financial planning over three years gives you some level of idea of how you are moving forward. When each budget is completed, then the planning within the medium-term plan is for the next one that starts. Budget planning needs to be embedded in health boards and not an end-of-year panic. Also, budgets need to be accepted: when we undertook an examination of Betsi Cadwaladr, we found that it created the budget at the beginning of the year and then it went out to consultants and others to see whether they accepted it or not. So, it had a budget, but some people would say, ‘I’m not prepared to accept the budget I’m given’, and just carry on. That sort of management cannot be allowed to continue.
Three-year planning gives an opportunity, but I end with this warning: it must be fairly run and the plans must be robust, and, while it is planned over three years, it cannot be based on hoping for something for year 3. It is, however, sensible to plan over three years and is a further step in bringing health finances towards being planned and controlled.
I start by thanking the Minister for answering all the questions I had and leaving me very little to say. Certainly, the planning regime that he outlined today is very helpful and very useful, and it will certainly aid us in understanding how this Bill and the new regime will work. As Mike Hedges has just outlined, the current situation in health boards is effectively crisis management on an annual basis, where they build up deficits and then pull them back in the last quarter, with all sorts of little dodges taking place to try to ensure that they do not overspend at the end of the year. Certainly, that is something that we need to put an end to as a result of this, and I hope that the rolling three-year planning system will enable that to happen and enable a more considered and planned way of spending money in the national health service to take place, and allow for services, accordingly, to be delivered in the same way. I asked last week what happens if the money runs out. Some of that has been answered by today's budget, with the extra money being put into the health service, and I think that having that extra money will be very helpful in delivering these three-year plans.
There are two things that are really essential if this is going to work properly. First of all, we need these plans to be robust. I think that everyone has said that, and that the Minister agrees with that. That robustness is absolutely essential. As part of that robustness, we must have clear and considered monitoring of the plans—the Minister and his officials need to be on top of things to make sure that they are aware when things start to go awry and that health boards are pulled back on track.
Secondly, there needs to be accountability and transparency. I think Elin Jones referred to the need to put lines in the budget for each LHB. I would certainly support that. We would like to see exactly how much money is going to each local health board. At the moment, we have this big sum of money—this big main expenditure group—and it is very difficult to actually follow the money through. That would be part of the transparency, but, certainly, in the regime that the Minister has outlined, with the publishing of plans and the scrutiny of them, there is some transparency there as well.
In the past, we have had a problem in the centre with the health boards, because the Minister has been responsible, but, when we have tried to scrutinise the individual health boards, we have, effectively, been referred back to those health boards. The level of scrutiny that has been available has not always been ideal as far as what opposition or even backbench Assembly Members would want, in terms of being able to get to the heart of why a health board is having problems. I would hope that, under this new regime, we could have a greater level of scrutiny from Assembly Members, not just in terms of individual budget lines, but in terms of those plans as well. I would hope that those plans would become subject to a regular review by the Health and Social Care Committee, and possibly the Finance Committee and the Public Accounts Committee, so that we can ensure that this regime is working properly and that it has not run off track, and that finance directors have not run away with the fact that they now have a three-year rolling programme and are able to relax the regime that Mike Hedges outlined earlier on, and which has caused so many problems in the past.
I, too, support this NHS finance Bill. I appreciate the benefit of health boards being able to plan over the longer term, which can bring benefits through investment and change—something that is more difficult to achieve in an annual regime. This move does carry flexibility. The inflexibility was recognised by the Assembly’s Finance Committee and Public Accounts Committee last year. However, one of my main concerns with this Bill is what planning processes and safeguards are in place on an annual basis to ensure that the health boards are coming in on target with their finances. What we do not want to see are increased costs in the first two years that will only build further pressure in the third and final year.
I know, Minister, that you have answered several questions on this last week, but I would appreciate further assurances and information on the scrutiny and monitoring of the LHBs. When you introduced the Bill last week, you said that financial disciplines will apply to LHBs from year one, as part of the Welsh Government’s commitment to ensuring that there is rigour in the practical application of the Bill, and that you would outline the detail of this integrated planning framework at the end of the month, when you write to LHBs. Can you give assurances that this detail will be available for us to see and comment on?
I am aware of Hywel Dda health board’s current deficit, which is £22 million and was discussed at its latest board meeting. The executive team is now meeting weekly to manage costs and make efficiencies. A poor fourth quarter last year impacted on the first quarter of this financial year. While it is taking a serious approach to deficit management, this is nevertheless of huge concern to me. I do not want a situation where such deficits are compounded and greater efficiencies have to be made at the end of the three-year cycle. We must place a great emphasis on creating the conditions for local health boards to be able to plan on a basis that is sustainable for the first, second, third and consecutive years. Sustainability must be at the core of financial arrangements, as much as it is at the core of service delivery.
There are two final points that I would like to raise with you, Minister, today. The first is on the use of locums to sustain services that, over the medium to long term, significantly increases costs for local health boards. Second is the referral of patients to external providers. Having looked at the most recent financial reports from Hywel Dda health board, these costs are significant and I would like to take these issues up with you separately, at a later date. I look forward to receiving further information from you, Minister, when you write to the LHBs.
I, too, am grateful for the opportunity to take part in this debate, and am delighted to say that we will be supporting this Bill, as has already been said by my colleague Paul Davies. Let us just remind ourselves why we are here: we know that, annually, every single year, as has been demonstrated today, the health boards across Wales have relied on bail-outs towards the end of the financial year because they have not been able to plan ahead effectively, to live within the financial envelope that they have been given. That lurching from bail-out to bail-out and the struggle, as the Welsh NHS Confederation has put it, to land the jumbo jet on the postage stamp at the end of each year has not been helpful. It has taken the eye of the health boards off patient care, at times, and focused it on finances, quite inappropriately. We have to change that culture within our NHS and that is why we want to give this Bill the opportunity to address those concerns, which I know are shared across the Chamber.
I am very pleased, Minister, to hear you make a reference to your consideration of tolerance within the new regime, because I do think that, if there is the availability of tolerance at the end of that third year, then it could present an opportunity that will allow health boards to think more creatively and imaginatively when they are planning their budgets, rather than have that struggle to land the jumbo on the postage stamp on an annual basis, after the third year of financial planning and delivery is completed. I look forward to hearing what the outcome of your deliberations on that will be as the Bill progresses.
You will know, Minister, that we have also expressed our suggestion to you that borrowing powers ought to be considered for local health boards—will there be an opportunity in this particular Bill, or will an opportunity arise in the future to allow for local health boards to be vested with those powers? I do not know, but I do think that they ought to be considered for local health boards. We know that there is significant trading income that local health boards achieve outside of the money that is awarded to them from the Welsh Government. The Wales Audit Office has estimated it to be at £352 million per annum—a significant income stream from which and against which local health boards ought to be able to borrow, so that they can invest in their capital infrastructure. We know that the Auditor General for Wales has expressed concern about the huge backlog of maintenance on the NHS estate—at least £395 million according to the latest finance report. I think that it is really important that the opportunity to hang borrowing powers, if we are able to, somewhere in this Bill should not be missed.
As the Chair of the Public Accounts Committee, I would like to make reference to the reports that we have produced. In those reports, we have always suggested—in two reports now—that there ought to be flexibility afforded to local health boards at the year end. We have never suggested a three-year rolling programme, but what we have said is that similar flexibility to the flexibility that has been given to local government ought to be afforded to local health boards. I think it is important that we do not have too tight a straightjacket, as it were, for our local health boards to be able to manage within, so that there is that flexibility and trust conferred upon the management of local health boards to be able to perform and deliver against their financial targets and objectives.
I will reiterate that I am very much prepared to work with the Minister through any of these issues as the Bill continues to proceed into Stage 2. I look forward to you being able to respond positively to some of those points that I have made.
This has been a debate on the general principles of the Bill. I have been very grateful that every person, I think, who has spoken in the debate has indicated a support for the general principles that the Bill is based upon.
Underneath that, a number of themes have run around the Chamber this afternoon. The first is the one that I tried my best to address in my opening contribution, which is that this cannot be a Micawber Bill, to follow what some colleagues have said—a Bill based on the hope that something will turn up in year 3, having spent recklessly in years 1 and 2. I am absolutely determined that that will not be the case. I have set out a framework—I am grateful to Paul Davies for his indication of support for some of that—as to how we will make sure that the powers that this Bill may provide will be used sensibly; they will be used cautiously in the first instance, while we are all able to gather confidence in the flexibility provided.
The second theme, I think, has been the ideas for widening the scope of the Bill. I do have some anxieties there—the anxiety that Jocelyn Davies started off with was that this was a Bill brought before the Assembly on the fast-track procedure, explicitly on the basis that it would only address issues that had already been extensively rehearsed in Assembly committees. Jocelyn set some of those on the record in terms of the thoughts that the Finance Committee had already given to this issue. I am reluctant to widen the scope of the Bill very much, because that prior consideration at a Stage 1 committee set of hearings has not taken place. Nevertheless, in terms of the tolerance limits, I hope to come back to that at Stage 2. I will be taking a precautionary and slowly, slowly approach to that, as well as to the other matters in the Bill.
I am very interested in what Members have said about borrowing powers and the revenue streams that the health service has. If it is not possible to address that in this Bill, it is certainly something that I am prepared to think about in relation to the NHS Wales quality Bill, which we have mentioned previously in the Francis context.
The third general issue that has emerged across the Chamber is that of scrutiny and transparency. As Peter Black suggested, there are many existing mechanisms within the National Assembly that can be used to make sure that there is a strong degree of scrutiny of the Bill. I listened carefully to what Elin Jones said this afternoon, and I hope that I can offer her some assurance that the committee paper that I will provide to the Health and Social Care Committee for next week’s budget scrutiny will include a table showing indicative breakdowns of allocations at each LHB level for next year, and a greater level of detail in the budget than has been made available to that committee in previous years. It may not go far enough, but I hope that it will be a start to developing some of the extra transparency.
I did not find myself attracted to some of the specific ideas that Elin suggested. I notice a sort of creeping back to corporate body days in some of her contributions. [Interruption.] I think that there is a distinction to be made between accountability and the corporate-body ways of doing things. Local health boards are accountable to me, I am accountable to you, and I want to make sure that you have that accountability in a full and proper sense. However, some of the specific ideas would, I am afraid, very much create the conditions that Darren Millar alluded to in his final contribution of creating a straitjacket on the way that flexibility might be deployed, rather than allowing it to do the job that I think that people around the Chamber have said that they are keen for it to do.
I am very grateful for today’s contributions. I look forward to further discussions in the later stages of the scrutiny of the Bill, and to working with Members on all sides of the Chamber to make the Bill as good as we can make it.
Y Dirprwy Lywydd / The Deputy Presiding Officer
The proposal is to agree the motion. Does any Member object? There is no objection, therefore the motion is agreed in accordance with Standing Order 12.36.
Motion agreed in accordance with Standing Order 12.36.
Motion NDM5319 Lesley Griffiths
To propose that the National Assembly for Wales, for the purposes of any provisions resulting from the National Health Service (Wales) Bill, agrees to any increase in expenditure of a kind referred to in Standing Order 26.69, arising in consequence of the Bill.
I move the motion.
Y Dirprwy Lywydd / The Deputy Presiding Officer
There are no speakers, therefore the proposal is to agree the motion. Does any Member object? There is no objection, therefore the motion is agreed in accordance with Standing Order 12.36.
Motion agreed in accordance with Standing Order 12.36.
Y Dirprwy Lywydd / The Deputy Presiding Officer
We will now proceed to voting time. I propose to take the first vote, unless three Members wish for the bell to be rung? There are not, so we will proceed.
Result of the vote on amendment 1 to motion NDM5315
Amendment not agreed: For 17, Against 33, Abstain 0.
Result of the vote on amendment 2 to motion NDM5315
Amendment not agreed: For 17, Against 34, Abstain 0.
Result of the vote on amendment 3 to motion NDM5315
Amendment not agreed: For 17, Against 33, Abstain 0.
Result of the vote on amendment 4 to motion NDM5315
Amendment not agreed: For 17, Against 34, Abstain 0.
Result of the vote on amendment 5 to motion NDM5315
Amendment agreed: For 34, Against 5, Abstain 12.
Result of the vote on amendment 6 to motion NDM5315
Amendment agreed: For 51, Against 0, Abstain 0.
Motion NDM5315 as amended:
To propose that the National Assembly for Wales:
1. Notes the UK Government’s continuing plans to introduce direct payments;
2. Calls again on the UK Government to change its policy on direct payments to reflect the likely negative impact on many tenants, as well the risk to the financial viability of housing organisations; and
3. Commends work by housing and other organisations to help people to cope with the changes;
4. Believes that direct payments could lead to more evictions, resulting in additional costs to evict and re-house individuals, and calls on the Welsh Government to work with local authorities and housing associations to implement best practice on avoiding evictions; and
5. Calls on the Welsh Government to work with local authorities, credit unions and housing associations to consider the best ways to make financial products with built-in budgeting features more widely available and to promote the use of money advice services to tenants, in order to help those affected by direct payments.
Result of the vote on motion NDM5315 as amended
Motion NDM5315 as amended agreed: For 34, Against 17, Abstain 0.
Motion NDM5316 as amended:
To propose that the National Assembly for Wales in accordance with Standing Order 26.11:
Agrees to the general principles of the Social Services and Well-being (Wales) Bill.
Notes the importance of individual advocacy in ensuring that the best interests of people reliant upon social services are met.
Result of the vote on motion NDM5316 as amended
Motion NDM5316 as amended agreed: For 46, Against 5, Abstain 0.
Result of the vote on motion NDM5317
Motion NDM5317 agreed: For 46, Against 5, Abstain 0.
Y Dirprwy Lywydd / The Deputy Presiding Officer
That concludes today’s business.
The meeting ended at 18:42.