Y Pwyllgor Cyllid - Y Bumed Senedd
Finance Committee - Fifth Senedd29/01/2020
Aelodau'r Pwyllgor a oedd yn bresennol
Committee Members in Attendance
|Alun Davies AM|
|David Melding AM||Yn dirprwyo ar ran Nick Ramsay|
|Substitute for Nick Ramsay|
|Llyr Gruffydd AM||Cadeirydd y Pwyllgor|
|Mark Reckless AM|
|Mike Hedges AM|
|Rhianon Passmore AM|
|Sian Gwenllian AM|
Y rhai eraill a oedd yn bresennol
Others in Attendance
|Anthony Hunt||Llefarydd Cyllid ac Adnoddau Cymdeithas Llywodraeth Leol Cymru|
|Spokesperson for Finance and Resources, Welsh Local Government Association|
|Daniel Hurford||Pennaeth Polisi, Cymdeithas Llywodraeth Leol Cymru|
|Head of Policy, Welsh Local Government Association|
|Jon Rae||Cyfarwyddwr Adnoddau, Cymdeithas Llywodraeth Leol Cymru|
|Director of Resources, Welsh Local Government Association|
Swyddogion y Senedd a oedd yn bresennol
Senedd Officials in Attendance
|Ben Harris||Cynghorydd Cyfreithiol|
|Leanne Hatcher||Ail Glerc|
|Samantha Williams||Dirprwy Glerc|
Cofnodir y trafodion yn yr iaith y llefarwyd hwy ynddi yn y pwyllgor. Yn ogystal, cynhwysir trawsgrifiad o’r cyfieithu ar y pryd. Lle mae cyfranwyr wedi darparu cywiriadau i’w tystiolaeth, nodir y rheini yn y trawsgrifiad.
The proceedings are reported in the language in which they were spoken in the committee. In addition, a transcription of the simultaneous interpretation is included. Where contributors have supplied corrections to their evidence, these are noted in the transcript.
Dechreuodd y cyfarfod am 09:02.
The meeting began at 09:02.
[Anghlywadwy.]—Rhun ap Iorwerth fel aelod o'r pwyllgor. Dwi'n siŵr ein bod ni eisiau rhoi ar record ein diolch i Rhun am ei gyfraniad ef fel cyn aelod o'r pwyllgor erbyn hyn. Croeso hefyd i David Melding, sydd gyda ni eto'n dirprwyo ar ran Nick Ramsay. Gaf i eich atgoffa chi bod yna glustffonau ar gael ar gyfer y cyfieithu neu i addasu lefel y sain? A gaf i sicrhau bod pob un wedi diffodd y sain ar unrhyw ddyfeisiau electronig, gan gynnwys fi fy hun? A gaf i ofyn os oes gan unrhyw Aelod unrhyw fuddiannau i'w datgan? Nac oes. Iawn.
[Inaudible.]—in place of Rhun ap Iorwerth as a member of the committee. I'm sure we'd like to put on record our thanks for Rhun's contribution as a former member of this committee. Welcome also to David Melding, who's here substituting for Nick Ramsay. May I remind you that headsets are available to hear interpretation or for sound amplification? And may I ensure that you've all put any electronic devices on silent, including my own? And may I also ask if any Member has any declarations of interest? No.
Ymlaen â ni, felly. Mae yna ambell i bapur i'w nodi, sef cofnodion y cyfarfod ar 9 Ionawr eleni a chofnodion y cyfarfod ar 15 Ionawr eleni, ynghyd â phapur i'w nodi sy'n lythyr gan y Gweinidog Iechyd a Gwasanaethau Cymdeithasol ynglŷn â goblygiadau ariannol y Bil Iechyd a Gofal Cymdeithasol (Ansawdd ac Ymgysylltu) (Cymru). Ydych chi'n hapus i nodi'r papurau yna? Pawb yn hapus. Dyna ni. Reit.
Therefore, there are a few papers to note this morning, which are the minutes of the meetings held on 9 January and 15 January, as well as a letter from the Minister for Health and Social Services on the financial implications of the Health and Social Care (Quality and Engagement) (Wales) Bill. Are you happy to note those papers? Everyone's happy. Right, then.
Rydym ni'n cyrraedd prif eitem ein cyfarfod ni y bore yma, felly, sef i dderbyn ein sesiwn gyntaf ni o dystiolaeth ar y Bil Llywodraeth Leol ac Etholiadau (Cymru). Mae'n bleser gen i groesawu atom ni y bore yma: Jon Rae, cyfarwyddwr adnoddau Cymdeithas Llywodraeth Leol Cymru; y Cynghorydd Anthony Hunt, sydd yn llefarydd cyllid ac adnoddau gyda Cymdeithas Llywodraeth Leol Cymru; a hefyd Daniel Hurford, sydd yn bennaeth polisi gyda Cymdeithas Llywodraeth Leol Cymru. Croeso i'r tri ohonoch chi.
Mi awn ni'n syth i gwestiynau, os ydy hynny'n iawn? Fe wnaf i gychwyn, os caf i, gan amlygu mai un o'r prif resymau dros gyflwyno'r Bil llywodraeth leol drafft a gyhoeddwyd yn ystod y Pedwerydd Cynulliad oedd yr angen i drawsnewid llywodraeth leol oherwydd bod angen cwrdd â heriau ariannol yn benodol. Nawr, i ba raddau ydych chi'n credu mai dyna yw un o egwyddorion y Bil yma sydd ger ein bron ni heddiw?
We'll move to our main item, which is our evidence session on the Local Government and Elections (Wales) Bill. I'm very pleased to welcome to the committee this morning: Jon Rae, who is the director of resources at the Welsh Local Government Association; Councillor Anthony Hunt, who's a spokesperson for finance and resources with the WLGA; and also Daniel Hurford, who is the head of policy at the WLGA. Welcome to all three of you this morning.
We'll go straight to questions, if we may? I'll begin this morning by highlighting that one of the main reasons for introducing the draft local government Bill in the Fourth Assembly was to transform local government because of the need to address financial challenges specifically. Now, to what extent do you think that that is one of the key principles of the Bill in front of us today?
Well, obviously, it's a really tall order to solve the problems caused by austerity through legislation, as opposed to funding, but this will help us, I think, to become more efficient and better at dealing with the implications of increasing demand and decreasing resources. So, to that extent, I think it's a welcome part of the solution, if not the solution as a whole.
So, would you characterise it as being one of the key drivers for this legislation or not?
Certainly, it's an important aspect. Regardless of what you think about austerity, the challenges for local government remain. We estimate that there are still pressures in the system. We estimated £254 million for next year. That will be a figure that will continue in the future, because those pressures are still there: the demographic pressures and the pressures due to workforce inflation. Austerity just meant that there was a large funding wedge built into that. Actually, in other evidence we gave to the ELGC Committee as part of Welsh Government's budget 2021, we estimated that authorities' budget gaps were between £200 million and £250 million every year, going back to 2014-15. It's difficult envisage a scenario where actually it doesn't go back further. So, the pressures have been there. It's important to point out that none of this is a silver bullet for that. Even in previous incarnations of the Bill, where there may have been savings estimated at—let's say full-scale reorganisation—£60 million a year, that's a one-off saving. Obviously, it would be recurrent, but that was a small proportion of the £200 million to £250 million budget gap that local authorities have to bridge every year.
Ocê. Mi ddown ni at rai o'r manylion unigol ynglŷn â chostau o gwmpas rhannau penodol o'r Bil yma yn nes ymlaen. Ond mae yna nifer o feysydd yn y Bil, wrth gwrs, sydd ddim wedi cael eu costio, ar y cyfan oherwydd eu bod nhw'n bwerau galluogi sy'n cael eu rhoi i Weinidogion, ac mae'n anodd rhagweld pa ddefnydd fydd yn cael ei wneud o'r pwerau yna a dod â chostau i gysylltu â'r gweithgaredd yna. Felly, ydych chi'n pryderu efallai bod yna gostau cudd sy'n gysylltiedig â'r Bil, sydd ddim i'w gweld o safbwynt yr hyn sydd gennym ni ar hyn o bryd, ond efallai fydd yn gost i awdurdodau lleol ac eraill ymhellach i lawr y lein?
Okay. We'll come to some of the individual details of the costs around specific parts of the Bill in due course. But there are a number of areas in the Bill that have not been costed, on the basis that they are enabling powers that are given to Ministers, and it is difficult to foresee what use might be made of those powers and link costs to that activity. So, are you concerned maybe that there are some unknown costs associated with the Bill, that are not apparent based on what we have at the moment, but that may be a cost for local government and others further down the line?
I think we're less concerned about the uncosted costs as they are at the moment, it's more whether they're funded when they're eventually quantified. I think we can rely on the relationship we've got with Welsh Government to cross those bridges when we come to them. Certainly, that's something that, under both Julie James as local government Minister, and Alun Davies as her predecessor, has improved greatly in recent years. So, we're certainly much more confident than we would have been, maybe half a dozen years ago, that we can deal with those issues as they arise.
We see the regulatory impact assessment as part of a process, really. They're not written in stone and finalised; there's obviously another stage. As Councillor Hunt has said, there's been very good engagement. Overall, again, in terms of those figures I was mentioning before, in terms of local government spend—£7 billion of pressures that we're facing, £200 million to £250 million every year—the estimates that are there already are quite modest.
I think what local government gets hot under the collar about are some of the larger unfunded pressures that we've seen in the past. I can't remember whether it was a Finance Committee in this Assembly term or the previous Assembly term, but you had quite a thorough look at the costs of introducing legislation. So, in the evidence we presented then, we were saying—this was just for an estimate we came up with just for UK Government unfunded pressures—by 2019-20, they were running at around about £300 million.
So, the scale of that, just set in the context of what we've got here—I don't think that really scares us too much. And we know that there's good engagement going on—as there has been in the past—with various workshops, through some established groups like the revenues and benefits group, for example, and we're looking at anti-avoidance in terms of non-domestic rates. There's an ongoing conversation there. So, if something hasn't been costed up, we'd expect to see it costed up in the future, with our help. And then the question remains: does it get funded?
Who pays for it? [Laughter.] Yes. Thank you. Diolch. Mike.
That takes me nicely on to my two questions. What happens—? Tell me if I've got this wrong, but when I was involved what used to happen was that the money was added to the settlement—there was never any problem with that—but then when the settlement was reduced you ended up with exactly the same amount of money that you would have had if it hadn't been added to the settlement in the first place. Are you worried that that may well happen? That the money will be in the settlement? It will have been added to the settlement, but you won't actually see that uprating of the amount of money you get within the amount of money that comes out.
To be fair, that's not been our experience with the current budget. That has been a problem in the past, but, as I say, both under Alun and under Julie as local government Ministers, they've been very open with transfers. Because you're right, before, we had an issue with—. You'd have a certain amount of extra money for x, y or z, but then when you took into account the overall reduction you were left in a position of, 'Where is this extra money?' But, certainly, that's not been our experience recently.
That's very good news. What you're actually saying is you've been fully funded for the ALN Bill. [Laughter.] Well, that's what you just said, isn't it? That you've actually had the money in there, so that means you've been fully funded for the ALN Bill, and you're quite happy.
Well, certainly, I don't think we can take this out of the context of the settlement as has been proposed in the draft budget this year, which is a game changer and will help us fund things like ALN, as opposed to previous years when that was very difficult.
Okay. I won't pursue this.
No, you make a fair point.
The other question is on working out the costs: did they come to you and have a bottom-up approach, or did they work out the calculations based in Cathays Park, where they had a top-down approach?
Well, certainly, I think this Bill in all its iterations has been a good example of—I hate the word, but—co-production. All four political group leaders on the WLGA have been involved in all aspects of the Bill. We've not always agreed, I don't think that's ever going to be the case with 22 leaders, but there has been good engagement, certainly.
Sorry—maybe just to address directly in terms of has it been a top down or a bottom up. I think, inevitably, it's a kind of combination of both. Someone's got to put a lot of work into the regulatory impact assessment. There's certainly a lot of work there. We haven't had direct involvement as the WLGA, but the professional groups have attended workshops, for example. We know that returning officers have attended workshops. We know that democratic services officers have attended specific workshops on aspects of the Bill, obviously in terms of elections et cetera, and that has fed through.
I think, as I maybe hinted in the previous question, there have been discussions in established professional networks as well, so in the revenues and benefits group, which is all our officers who are experts in collecting taxes, NDR, council tax, benefits, et cetera. They've had a sub-group on anti-avoidance, and I think that was specifically set up to help address the later look at the local government finance provisions that are in the Bill. So, maybe there's a mixture of both, is the answer to the question from Mike Hedges.
Daniel wants to come in as well.
Yes, just to say there's been an extensive amount of dialogue, as Jon said, through professional groups, but through the WLGA politically as well, particularly around the policy development of the Bill. And it's important to remember this Bill has had various iterations, through White Papers, Green Papers, the draft Bill you mentioned earlier, Chair. Some of the costings have been tested; some perhaps haven't been. There is a Wales elections co-ordination board, which includes returning officers, electoral administrators, the Electoral Commission. So, some of the more costly elements of the Bill will have been tested through that process. There have been discussions around broadcasting costs, and we've got some differences of opinion about the scale of those, but, generally, there's been quite a lot of dialogue, but possibly, around some of the costings in particular, we haven't worked through detailed examples as yet.
Okay, thank you. Thank you, Mike. David.
Yes. I would like to just look at the electoral arrangements, and, obviously, the fundamental one, the first—moving to a single transferrable vote from first-past-the-post. It's a very significant power for a local authority to decide itself whether it wants to do that. It's a bit surprising that there seems to be no costing on what that might be in the RIA. So, do you have any ideas?
Yes, it's obviously interested a lot of people, and there are mixed views around STV for obvious reasons. Different political parties have different views. The WLGA's view, and authorities' views so far that I've seen in terms of responses, has been that there's no support for that option within local elections going forward. The view is that there should be a consistent voting approach across Wales, for consistency and complexity purposes, risk of voter confusion and so on. So, we haven't undertaken any costings work of what STV might cost if an authority decided itself to implement it locally.
I don't think the Electoral Commission have either, but, obviously, there's evidence from Scottish examples to find out exactly how much it would cost. It would be a decision of the authority; if they were moving down that route, then I'm sure there would be discussions with the Welsh Government around any costs. But, obviously, there would be costs in terms of information campaigns, communication campaigns with the local electorate, and, obviously, working with parties locally. The Electoral Commission would have to get involved as well, and I think they've got concerns about variation of systems and risk of confusion, because they would want a more straightforward, national information communication campaign. And, obviously, there would be significant training implications for electoral staff in that particular authority.
So, as it stands, we aren't aware of any authority that's exploring this as an option, and I think we'd have to look at the Scottish experience and the Scottish costs for any examples.
I suppose my question, really, and it's for Welsh Government as well, is, presumably, major reform is not put into a Bill just to be a modern version of a giant appendix that's never functioning. That seems to me a remarkable position to be in. And it's also extremely naive that, in the next round of local authority elections in the 22 local authorities we have, there's not going to be some in no overall control where certain political parties will definitely see major advantage to them, but also to the public welfare, they would say, in shifting to STV. Not to calculate these things as the Bill goes through the legislature—and, as you said, there's the obvious example in Scotland where it is used—that is a bit of a lacuna, isn't it?
Well, as I say, we've not done the work as the WLGA, because our members aren't supportive of the concept, but there would be evidence out there that could be used should an authority decide to go down this route in the future.
And you've not urged the Welsh Government to do the work either by the sound of it. It is for them, really—I think they are primarily responsible—but, presumably, you're an interested party, and you've not, as the WLGA, pushed that.
No, as I said, because there isn't political interest in it at the moment.
You have made the suggestion that using multiple systems—so, you could have first-past-the-post for parliamentary, we have additional Member, and then you could have STV for local authority elections—would be complex and confusing. So, have you talked to your colleagues in Scotland, because that's exactly the current situation there in terms of electoral arrangements, and what evidence do we have from them that it's complex, confusing, and possibly expensive?
The Wales elections co-ordination board will have had dialogue with Scottish colleagues. The issue is the inconsistency—potential risk of inconsistency—across Wales of having one or two or three authorities with a different voting system compared to others, and the difficulty in getting out a consistent public information and communication campaign. The other issue of concern that electoral administrators and returning officers have when there are a number of elections on the same day is, where there are different voting systems, there's additional risk of confusion for the electorate, but also complexity in terms of electoral administration. So, in this situation, should an authority choose STV, it's more than likely that there would be first-past-the-post community and town council elections on the same day, as well as STV election to the unitary authority. So, it's a slightly different situation in Scotland, because there's scope for variability and inconsistency across the 22 authorities.
Is there evidence from Scotland that there's been a very high increase in spoilt votes, for instance? And obviously that would increase the costs in any publicity campaign, if we were trying to avoid that. What sort of firm evidence do we have? Because I don't sense the electorate do have problems understanding different systems myself, but it's a profound issue.
Yes, and this is the line the Electoral Commission takes as well. Their view is that it should be a consistent system for clarity, consistency, public awareness and understanding. So, the Electoral Commission have given evidence to the Equality, Local Government and Communities Committee on the same basis.
Mike just wants to come in, if that's okay.
In terms of complexity, if I go through the last set of elections I voted in, I voted for a police and crime commissioner, preferential voting; I voted in European elections, and that was on an whole-Wales proportional system; I voted in the council elections, when I had an opportunity to vote for five members; I voted in the Assembly election, I had first-past-the-post and an additional Member. I haven't got a community council, but, if I did, I'd have multiple candidates under first-past-the-post. Aren't we used to having different electoral systems?
I think that's a a fair point. I think people are used to different electoral systems at different levels of government. I think the issue comes when you have the same level of government in different areas that have a different electoral system. Let's say I, in Torfaen, went for an STV system, and my party won 40 per cent of the vote and was in an overall control situation. Next door in Caerphilly, they stuck with first-past-the-post; they got 35 per cent of the vote, but they were in overall control. I think then you start to get certain tensions in the system. I don't think it's so much the individual voter being confused. I'm certainly probably more worried about the administration—the other end of the votes being cast, than the actual voters. I think they can adapt to these things. It would be that confusion, if different systems were used at the same level of government.
It's the financial implications that we're looking at, but they kind of follow: if we have evidence that the public do get confused, then, obviously, that increases the costs of publicity, campaigning and advice, potentially, as they enter the polling station and the like.
Let's move to an area that doesn't seem as potentially troublesome and that's that a minimum amount of £1 million will be made available, I think, mostly to deal with 16 and 17-year-olds coming on the roll. I know we're not just going to divide that between 22 local authorities, but, if we do, it's £50,000 each, roughly. And presumably, that's around some publicity, but also the way the electoral register is then managed, because there are certain safeguarding issues, I think. So, have you looked at that in terms of the robustness of that figure, and can you reassure us that you think that that is an adequate amount?
Yes, certainly. That commitment's welcome—the £1 million additional funding and the consideration of the need for financial support. The estimates of the additional cost are around £912,000 for the next two financial years, as well as £267,000 extra for an election year. So, that's certainly something that's welcome. So, yes, we welcome and believe—and I think everyone believes that that's a fair reflection of the costs that we'll—
Yes, we thought those costs were reasonable. Obviously, the Minister's written to the committee. In future years, you look at the regulatory impact assessment—and I think we tried to draw that out in our evidence, just as to, regardless of whether costs were recurrent or whether they were transitional, what kind of pressure are we looking at every year over the period that's covered in the regulatory impact assessment. So, it's important, obviously, the 2020-21 budget, and, the provisions, they're obviously for subsequent years as well, which is why we're always big fans of multi-year settlements—medium-term financial planning—but that's another story.
And, in terms of the safeguarding issues, do they tend to be transitional? Because are we operating two registers, then, in terms of disclosure? I'm not quite sure how that's likely to work, or is that work in progress? And, again, it's obviously the cost of such a dual system, if that's what happens, is what we're interested in.
I think that's beyond my level of expertise in terms of the electoral system. I think returning officers and electoral administrators can provide that, if you'd like us to submit something afterwards. But I think, generally, the view, as I say—there is a Wales electoral co-ordination board, which includes all of the administrators and professionals in this area. I think they're broadly content with the reforms as they're going forward. They've been involved; they shaped them, and I think they feel that this is a reasonable estimate around the cost implications in terms of capacity, information, communication plans and so on.
Certainly, I asked my head of elections this very question earlier in the week about the 16 and 17-year-olds—what that process would be, if there were any safeguarding issues, and certainly I'm more than happy to share the response she gave to me.
Yes, at the minute, we run a system where, you know—. I'm not, as far as I know—my details are not revealed on the electoral roll publicly, and I think citizens are allowed in general to make that—. But, for 16 and 17-year-olds, they will not be revealed, will they, their details. So, it's just how that operates, so I guess it's an extension, in a way, of the current ability to ask for privacy in that regard.
Finally, the RIA says that Welsh Government will fully fund electoral pilots between 2022 and 2027. I just wondered: is that if a local authority does want to scope out the use of STV? I'm not quite sure what all that is about, and what these electoral pilots would be.
I think it relates to alternative voting arrangements; not specifically STV, but voting in different locations, voting across different days, potentially electronic voting or remote electronic voting, and, obviously, there's some cybersecurity concerns around that, so I think it's more around the process, rather than the voting system.
I'm presuming this would be a help, then, if there is a commitment to fully funding that—to look at these innovations, and then not be put off by the cost in doing that.
Thank you, Chair.
Diolch yn fawr. Alun.
Thank you, Chair. I'll just make a declaration that since, as a former Minister, similar to this, matters that were under debate are discussions that I was involved with in Government, so I don't want to put the witnesses in a difficult situation of trying to mark my own homework. So, I'll stick to some general questions on this matter, if you'll forgive me.
And, in doing so, I'd like to go back to where the Chair started the session, about where we are with local government. When I look at local government sometimes, both in our own area in south-east Wales and across the country, it's like having a Ferrari in the garage—you've spoken about the general pressures that you face, and I think you were right in your analysis. I've got no issue with your analysis. This Bill doesn't address any of those fundamental issues about service provision, does it?
I don't believe any Bill on its own could—I believe that the only way to fundamentally change those pressures is to have a reassessment of the funding for the local services we provide. I believe a Bill can be part of that, but I don't believe it can on its own solve that problem, which is fundamentally one of resources, in my view, as opposed to one of organisation.
As you know, I'm not convinced by that argument, although I understand the thrust of it, but we've just completed scrutiny of the Welsh Government budget, and you will have read some of the supporting documentation around that. And the consistency around that supporting documentation was that—you've described in an earlier answer, Councillor, the current settlement as a game changer. Now I'm sure Ministers like that—I would have appreciated that—but is it really? Because, if you look in the medium term, there isn't a financial projection that I have seen that sees local government receiving considerable increases in funding. I've seen no projection of that. And in fact, the funding projections that we have seen have all been marked by uncertainty and potential real-term declines, and I am interested, therefore—. The Bill is a huge Bill—I've read it—and I'm thinking that we could pass all of this into law and yet not be sure of some of the costs, which we've described this morning, and also not be sure that this answers any of the fundamental questions facing local government.
There is a great deal of uncertainty going forward, and I agree with the assertion that one year of a different funding situation doesn't change the fundamentals. But what it does do is, if it's a new normal, if you will, and it can help us meet halfway on the pressures we face, then we've got a job of work to do to address the rest of those pressures.
I know we don't necessarily agree on this, but I don't believe that any organisational solution will face down those pressures. Those pressures have to be faced down by a combination of work to be more efficient in local services, work to organise ourselves on a super-authority level and better every year—I hope we'll continue to do that—but also by trying to meet us part of the way in terms of funding those services so that things like schools and social care can be resourced properly.
I don't think there's any one single solution to that. And whether there is structural reorganisation or not, the onus is on us as authorities to do things differently, to not rely on the status quo, to not just expect that we're going to get the problem solved for us in terms of resourcing. But at the same time, the responsibility is on higher levels of government to recognise the pressures that are there and to try and make that gap manageable for us. I don't think the gap's ever going to go away, but I just think it needs all our efforts to meet it from both angles.
I certainly agree it's a joint venture. There's no issue there. I'm not sure I agree with this higher and lower system of government—we're all governing in different ways. I'm interested as to how you'd use, for example, Part 5 of this Bill, in terms of the collaboration between principal authorities in, for example, south-east Wales, where we're both familiar with some of the challenges we face. And I'm interested, therefore, as a leader, how you would look at that and say, 'This is what I would like to do in order to deliver those services, and therefore reduce some of the ongoing costs.'
I would certainly try and look at that as a big opportunity and use that radically. Obviously, any collaboration is dependent on coming to that view mutually. But certainly, in Gwent, I think we have a big opportunity to move forward with things like a joint public services board, and bring on the regional partnership board to that and really working across Gwent to address the common issues that we all have, whether that's the Valleys, the city of Newport, or the more rural areas of Monmouthshire, I think there are common challenges there. I think there are things that we can do better working together across Gwent, and I think we've got a big opportunity, because we do have a history of working together more as authorities and the wider public service, more than perhaps other areas in Wales. So, I think that's a big opportunity for us to grasp. So, certainly, from a Torfaen point of view and from a Gwent point of view, you've got my assurance that we will use Part 5 of the Bill in a very positive way to try and really break some of those issues. I get very frustrated at the fact that there are still five public services boards in Gwent. I know that view isn't necessarily shared by everyone—
It is here.
But I bet it is shared more by institutions like Natural Resources Wales who have to cover five in Gwent. My view has always been: less meetings, more collaboration. Or, fewer meetings, more collaboration, sorry—I'll get hit by people for bad use of language there. And I believe Part 5 of this Bill can be a catalyst to getting there.
You wouldn't get criticised by a mathematician.
I remember being told by a former Minister that we wouldn't have 22 public services boards because local government reorganisation will happen in the next two years. Well, we do. So, there we go.
And I think, if I'm the former Minister that you're referring to—
No, you're not.
—I would certainly support that, but let me say this—. Okay, let's move beyond areas where there may be some contention over these things and focus on some of the areas where you do have opportunities—and I'm interested in the finance and not the policy, okay, so we need to think about that. The Minister, when she was giving evidence, seemed quite reluctant to see local government using the general power of competence, for example, in commercial ventures. Now, whilst I don't think I would want to see local government becoming a publicly funded property developer, I am interested in that view and I am not sure where I stand on it. What's your view? How would you use the general power of competence?
I'm not entirely sure where I stand on it either, not because I've not thought about it, but because I've seen good and bad examples of it used elsewhere in the UK and I would want to take on board the good examples whilst maybe avoiding some of the less palatable examples. I also worry, frankly, about the ability of the so-called economic powers to exacerbate socioeconomic divisions between council areas. My council area or your council area, for example, has less capacity to generate income than, perhaps, some other more affluent authorities in Wales, and that needs to be recognised, not because it's a bad thing that other councils can raise more money, but because there needs to be, like with business rates, some form of equalisation there.
I much prefer commercialisation where there is both a public service and public benefit as well as a commercial benefit. I've seen some examples of some councils in England developing a huge commercial portfolio that might work on a revenue sheet but stores up a lot of risk in things that are completely unrelated to their principal area of operation, and you do wonder about the cost-benefit analysis of that. On a balance sheet, it might say, 'Look, that means that we bring in x hundred thousand pounds, x million pounds more revenue', but what if there's a downturn in a particular area that they've invested in? The risk there is actually quite high, because that's in millions, not in hundreds of thousands. So I think there are good and bad examples. So it's not that I haven't thought about it, it's just I'm—
I agree with you.
I suppose in the examples from England of using the general power of competence there have been some fairly high-profile, high-risk commercial case studies. I think it was that that the Minister was maybe referring to. I'm not convinced he was down on the overall general power, because when you look at it, actually, in England, it was introduced on the back of what was called 'the LAML case', which was a case where London authorities couldn't really collaborate or have a shared service around mutual insurance. So it was less about having a financial—. There was obviously a financial objective there, but actually it was more about just removing some of the barriers to setting up a shared service.
One of the things local authorities could do as well with a general power of competence would be to borrow under the new lease set-up, the municipal bonds authority, which they need to do in a joint—. In the past, certainly, they've needed to do it on a joint and several basis in terms of some of the risks around that. That requires a general power of competence. So English authorities could do that, but Welsh councils couldn't. So once we have that, it removes some of those legal barriers, really, to better co-operation and shared services.
And there are good and logical financial examples of things that councils across the border can do that we can't that have necessitated councils getting the private sector in to manage developments and therefore take some of the profit out of them that could have been kept within councils, had the general power of competence been available. So I think there are positive examples about how it can be used as well.
Okay. A final question from me: it's quite a long Bill and, when I was reading it—. Let's put it this way: it's a difficult read, to put it kindly, but legislation always is. In the main parts of this Bill, are there any elements, or what elements are there—you might wish to write to us on this—that you believe are superfluous micromanagement with a relatively high cost to administer with a relatively low actual impact for the community? What I want to avoid is a situation whereby local government is being micromanaged in some ways, and I feel that in some elements of this Bill you were erring towards that level of micromanagement where, as elected authorities, you really should be taking these decisions yourselves and accepting the democratic accountability of the people you represent for your decisions, rather than having a very tight structure established by statute.
As you know, the WLGA's position is that there should be as much flexibility and local discretion and determination as possible, and we try to remove as much prescription from the face of legislation or statutory guidance as possible. Generally, in terms of the cost element, this isn't the most significant Bill in terms of costs, and we've touched on some of the more significant elements, which are largely around elections. There are some elements where we think there's just too much detail, around a duty for Ministers to make councils establish joint scrutiny arrangements, for example. We feel that would be best left to local discretion, and if authorities want to scrutinise a joint service jointly, then fine; if they want to scrutinise it individually to ensure that that authority or that community is getting the benefits, then fine. There's not a huge cost implication, but on a point of principle we don't think that should be in the Bill, for example.
So I don't think there's anything specifically in the Bill with a cost implication around prescription that causes too much concern. As I mentioned earlier, some of the broadcasting estimates are, perhaps, a little low, and we're still working through with colleagues in authorities and civil servants around, if there was an all-Wales approach, how much would it cost, and so on. But, again, they're not in the millions in those terms. Generally, we don't support prescription, but there's not a huge amount on the face of the Bill, at least, that will come with a significant cost due to the prescription.
Ocê. Diolch yn fawr iawn. Siân.
Okay. Thank you very much. Siân.
Bore da. Yn eich tystiolaeth chi i’r Pwyllgor Cydraddoldeb, Llywodraeth Leol a Chymunedau fe fuoch chi'n trafod y system ddeisebau sy'n cael ei chynnig gan y ddeddfwriaeth yma ac yn dadlau y bydd hynny'n costio llai na'r system o gynnal pleidleisiau cymunedol, fel sy'n digwydd ar hyn o bryd. A fedrwch chi ymhelaethu ar hynny a sut ydych chi'n gweld y gwahaniaeth rhwng y ddwy system?
Good morning. In your evidence to the Equality, Local Government and Communities Committee you discussed the petitions system that is proposed by this legislation and you argued that it would be less resource intensive than the system of holding community polls, as happens at present. Could you expand on that and what's the difference between those two systems?
I'm happy to lead on that. The petitions approach—and a number of authorities already accept petitions—is well-recognised, particularly by the public. There's been a growth in petitions generally, but also electronic petitions. Obviously, the Assembly has a very well-established petitions scheme and Petitions Committee, so we're broadly supportive of the approach to petitions and we want to learn from best practice in authorities, not just in Wales but elsewhere, but also from the Assembly's experience. So the key issue here really isn't so much the cost, although there is much more of a cost implication with community polls, but it's the administrative burden, not just for the authorities but for the public.
I don't know if anybody's familiar with community polls or has participated in them, but they're extremely bureaucratic, much longer, require all sorts of different thresholds, community meetings have to be called with a certain threshold from the electorate in the community, a community meeting is then held and you need a certain threshold of eligible voters in the community to agree that a poll should be passed and then there's a poll, which comes with all the paraphernalia of polling stations, polling cards, and so on. So it's quite a lengthy, laborious process, as well as costly, for authorities, but in terms of giving the opportunity to the public to have a say on something, it's not the most immediate, not the most responsive, or familiar, or innovative. So, petitions have been around for a while, and electronic petitions have increasingly been adopted. That's a far more cost-efficient and public-friendly approach to getting a public view on a particular issue within an authority area.
Ocê. Felly mae yna arbedion i'w gwneud wrth symud i system ddeisebau, yn bendant, ond dydyn ni ddim yn gwybod faint.
Okay. So there are savings to be made in moving to a petitions system, certainly, but we don't know how much.
Potentially there may be an increase in demand, because as I mentioned community polls are quite onerous and, if you have a more inclusive petitions scheme, particularly an electronic petitions scheme, councils may get a significant number of petitions but there are ways that that can be managed in terms of appropriate thresholds, specific criteria around what types of issues can be considered through petitions, also, signposting to engage with councillors as well to discuss particular issues. So there are ways and means of managing the potential growth in workload, but we don't really know yet how much additional work there would be.
Ocê. Gan droi at ddarlledu cyfarfodydd yn electronig, ac rydych chi wedi sôn am hwnna gynnau, dwi'n credu eich bod chi'n teimlo bod yr asesiad effaith rheoleiddiol yn rhoi amcangyfrif rhy isel o'r costau yn y cyswllt yma.
Okay. Turning now to the broadcasting of meetings electronically, and you mentioned this earlier, I think that you feel that the regulatory impact assessment underestimates the costs in that context.
That's correct. I think the RIA assumes that there would be an all-Wales contract let and there would be savings as a result of that, which may potentially be the case in the future, but feedback from authorities suggests—. I think the RIA says that the cost is around £12,000 extra per authority; the feedback we're having from authorities at the moment is that it's averaging at around £24,000 in addition. It really depends on what authorities currently do. Some have very extensive and expensive systems that are all-singing and all-dancing, very similar to Senedd.tv, where members of the public can tune in and click on particular items on the agenda and particular speakers, while others have a lower cost option that is essentially YouTube, but it's just one long three-hour or four-hour meeting, so it's not particularly intuitive for members of the public. So it really depends on where authorities are at currently.
So, as I said, it's an average of around £24,000 extra per year. Some are projecting up to £70,000 extra a year, and also there's likely to be an initial capital outlay for some authorities that don't have all committee rooms equipped with cameras, screens, and so on, and there's also an additional administrative element to it as well, because they need staff who are monitoring the broadcast, the stream, ensuring it's still going out live without any technical issues, and people to manage the cameras, if you want a more sophisticated approach, to ensure that cameras align to the people who are speaking. So, as I said, it's an area that we're working through with civil servants at the moment to try to get a more accurate and robust picture, because all authorities are starting from different starting points.
Okay, but in principle, as far as enhancing democracy is concerned—
I definitely agree. We made the decision to webcast all our meetings, committees and planning, because I believe it's a principle of openness. And if I believe that in an area like Torfaen, which is relatively compact, then in areas like Powys and Gwynedd, I think it provides a real boost in terms of access to the democratic proceedings for people who might live quite a long way away from where the meetings are taking place.
Sorry, Siân, Mike just wanted to come in.
Mae'n flin gen i.
What I'm trying to do is relate that answer to the question I asked earlier of whether it was bottom-up or top-down. You've said it was somewhere in the middle, to the question I asked, but now you're saying that local authorities have come up with different numbers to the Welsh Government for the cost of broadcasting. Have I got that right?
Yes. This is an area where we're still discussing with civil servants what exactly will be required—the initial capital outlay but also recurring costs.
Ocê. Diolch, Mike.
Okay. Thank you, Mike.
A oes yna enghreifftiau o lefydd eraill—? O ran y pwynt y mae Mike wedi ei wneud, a oes yna enghreifftiau eraill lle rydych chi'n anghytuno efo amcangyfrifon y Llywodraeth ar hyn o bryd? Rydym ni angen bod yn ymwybodol os oes yna lefydd eraill, efallai, sy'n mynd i gostio dipyn yn fwy nag y maen nhw'n sôn amdanyn nhw.
Are there examples of other places—? On the point that Mike has raised, are there other examples where you disagree with the estimates of the Government at present? We need to be aware if there are other places that are going to cost quite a lot more than what the Government talks about.
I think this was the only one where some of our members came back and thought there was a considerable underestimate, but as I said at the outset, we're seeing the RIA as just part of Stage 1, and we've got ongoing discussions with civil servants. I think it's due to timing issues as well. The Bill came out back in the autumn. I think some local authorities are still—and us as well—trying to absorb all the information that's in there and come up with reasonable answers to some of the questions that are raised around costs. We're not going to nail it all down in the first pass; it's going to certainly take—
Although as a committee we are scrutinising legislation and a regulatory impact assessment that has been tabled by Government. They shouldn't table it if it's half-baked; it should be oven-ready, as somebody once said, but there we are, we won't go there.
A ydych chi wedi ystyried beth fydd goblygiadau'r gofynion yn ymwneud â phresenoldeb o bell o safbwynt awdurdodau lleol ac i ba raddau y mae’r gallu technegol gan awdurdodau lleol i gynnig hynny'n barod? Hynny yw, a oes yna gostau dydyn ni ddim yn eu rhagweld ynghlwm efo'r agwedd yma hefyd?
Have you considered what the implications of the requirements around remote attendance will be for local authorities and to what extent do local authorities already have the technical capabilities to offer this? That is, are there costs that we don't foresee related to this aspect of proceedings?
We're supportive in principle where remote attendance allows greater accessibility and flexibility for our members. Of course the issue, I guess, as well as the cost is the reliability of the technology.
Yes, you're telling me.
So that's something we need to get around as well.
Yes. Some authorities do this for informal meetings already, and you can potentially use your phone, tablets and so on, and authorities do have video-conferencing facilities. The area where we do have concern around this is the reliability of technology, and we've all, I'm sure, been in video conversations or video-conferences where the connection has broken down, and there's just a little bit of nervousness around what happens if there's a committee meeting with a councillor remotely attending and the signal goes down or the Wi-Fi drops, or whatever. How do you handle that as a chair in terms of the meeting proceedings? So, I think Lawyers in Local Government in particular submitted evidence to the committee last week around just having saving provisions around what would happen in those circumstances. But on a point of principle, a point of cost and technology, it's not an insurmountable issue, it's just the reliability of that equipment once it's there.
Iawn. Felly, does yna ddim costau cyfalaf mawr ynglwm â hwn na'r dechnoleg. Mae'r offer yna, jest y signal ac yn y blaen yw'r broblem.
So there are no major capital costs related to this and to the technology. The equipment is there, but it's just the signal and so forth that's the problem.
Okay. Thank you.
Diolch yn fawr. Mark.
Thank you very much. Mark.
Thank you. The regulatory impact assessment states that the new joint committee arrangements would simplify and streamline existing collaboration arrangements. Do you share that assessment?
We generally support the proposals for corporate joint committees as the vehicle for collaboration, and there's a benefit in trying to standardise that system. There are obviously issues around mandation and some of the issues there that some of my colleagues have, but there's a set of principles that has been agreed with the Welsh Government, certainly, but I think there is a benefit in moving towards a more standardised system of collaboration as opposed to the myriad different examples that there are at the moment.
Any other comments?
Yes. The Minister has suggested that strategic planning and transport would come in first, and there are potentially two different models that the Welsh Government might impose on authorities. So, consistency is obviously a potential benefit. As Councillor Hunt has mentioned, there are differences of opinion across the 22 authorities and, again, we took a cross-party delegation to the local government committee last week. It's really around the approach to mandation, which was touched on earlier, about prescribing and insisting that authorities adopt a certain approach. So there are differences of opinion across the 22 around whether authorities should be mandated or whether these should evolve organically. I think there's general support for the adoption of corporate joint committees on a voluntary basis as another model for joint working, whether it's a joint committee, a joint company, a partnership or a lead-authority model, but there is still some discussion around mandation.
Okay. And on the transport and strategic planning committees, having those mandated, can you give an estimate of what costs you would expect to be associated with that for authorities in setting up and maintaining those committees?
There hasn't been any discussion around the cost implication of those because, essentially, they would replace existing models. Depending on how integrated systems are as a result of those joint committees—so, for joint committees, obviously you would need some administration, and there's certainly an impact on members' time in participating in a range of different meetings—. If, as a result of joint committees, there was a joint service, for example, across the six north Wales authorities for a transport service across north Wales, there may be transition costs in terms of moving staff in and recruiting, and so on. But until the shape and scope of those models exist, we don't have the full details.
Rhianon wants to come in.
You mentioned there was discussion around mandation; in that regard, is the discussion around cost, in terms of what you've just outlined, or are there other concerns—[Inaudible.]
It's more around things other than cost, I would suggest, about—
So, would it be fair to say that there is ambiguity around that at the moment?
Well, I know we're discussing it again on Friday at a meeting of WLGA leaders, but it's more around the practicality of mandation and how it works, rather than whether it happens at all, I would suggest.
So it's not a point of principle.
Some leaders would say it's a point of principle that local government should take a lead on where it collaborates and how it collaborates, as opposed to being mandated to do things in a certain way. So, certainly for some leaders, I think it is a point of principle.
I think my point would be: if there is clarity around the cost aspect of this, would that be a thing that would create a more defined view? It's not the case, is it?
Okay. And it's on to you next, I think, Rhianon.
Okay. Thank you. So, moving on to the new governance and audit committee arrangements, the self-assessment of performance, in regard to these new performance arrangements and the requirement for the principal councils to review the extent to which they're fulfilling them, to what extent is that already happening at the moment? What new tasks do you think will have to occur? Also, can you touch upon where you feel the improvement grant that's been mooted will satisfy those new arrangements, moving forward?
I think the performance sections of the Bill streamline some of the existing arrangements. So, the Local Government (Wales) Measure 2009 established the current improvement framework, improvement and performance management planning framework. And I think it's widely regarded that it's not fit for purpose any more: the Auditor General for Wales recognises that, the Future Generations Commissioner for Wales recognises that and authorities do as well. It's quite cumbersome and bureaucratic, and it's been superseded, to a large extent, by the Well-being of Future Generations (Wales) Act 2015 as well in terms of setting well-being objectives, planning and reporting, and so on. So there's a lot of administrative burden still in the system as a result of that and this Bill strips some of that out, which is welcome.
It formalises a process and creates a statutory duty around self-assessment. All authorities and all organisations self-assess their performance and their direction of travel, where they're going, what they're doing well, what they need to improve on and what they need to prioritise. So it's already in place in authorities, but what the Bill will do is, as I said, provide some clarity around what is expected. The guidance that will come on the back of it will also outline what authorities are expected to do around self-assessment and—
So there's general agreement around that, in regard to the costings of panel assessments and also in regard to, for instance, the additionality around lay persons being on the audit and governance committee. Is that satisfactorily addressed financially within the Bill, or is it all very much 'Look and wait and see'?
I think that part's satisfactory. There's a difference of opinion around panel assessments and whether they'll add value and whether they should be mandated or voluntary. The costs are around £26,000, I think, estimated in the Bill. That's probably an appropriate ballpark figure. As you may know, the WLGA, working with the Local Government Association, provides corporate peer reviews, which are probably not as expensive as that, so it's a reasonable estimate for—
So you would suggest that it indicates that they would provide value for money in the longer term.
In view of the ability of the Auditor General for Wales to carry out a special inspection—and we'll move on to a different section in a moment—there are no costs attached to that. Is there any discussion around that? What is your view on that at this stage?
We haven't been privy to those discussions. I'm sure those discussions have been had between the Welsh Government and the auditor general. Some of the intervention powers in the Bill are similar to the current arrangements. It just updates them slightly. So we don't have any views—. Hopefully, we wouldn't have special inspections anyway, but we haven't been party to those discussions with the auditor general.
Okay. Moving on, with regard to the enablement of the merger of councils, either voluntarily or by the new power, with regard to the cost on that basis, is it possible for there to be more indicative costings around that, because it's very much 'Let's wait and see who comes forward voluntarily', or what happens ministerially around that. So could you give me some sort of outline, because we discussed very early on today, Anthony, with regard to the need for clarity, the ability to be able to forward-plan, whether on a medium-term or longer term basis? So, can you outline to me where you sit at the moment in this regard, because as we all know, it's been a very long road of travel?
Shall I kick off on that? A lot of work was done in the past on the costs and benefits of mergers—
In relation to this Bill, however it has been defined.
No, there isn't, but I think the work that has been done previously tells you why. Firstly, it's massively complex, and that was the work that was done in the past by—. Well, we commissioned the Chartered Institute of Public Finance and Accountancy to do it and the Welsh Government had done their own work based on work that was commissioned, I think, from KPMG. It was finger-in-the-air stuff, to be perfectly honest. We did it on an all-Wales basis. Some of the work that I saw individually—. Our work was based on local authorities. It depended where the mergers were actually going to take place, where those pairings happen. The costs and benefits could vary quite widely, depending on how harmonised, let's say, certain things were. If your council tax was quite harmonised, then it wasn't going to be a problem. I think it was the south-east that there was a problem: Caerphilly, Newport and the Blaenau Gwent area— . These are the types of things that have to be quantified when the pairings actually happen, and that's the—
So, historically, we're sort of up to date in terms of the complexity.
We've got a method. There's a clear method. That CIPFA method that was used was actually, as far as I was aware at the time, being used by local authorities in England to come up with their own business cases.
So, in terms of voluntary mergers, is there anything that is on the cards for the future in that regard? Are there any plans?
Go on, give us a scoop. [Laughter.]
I've got to ask these questions.
And with regard to timescales, have we had any discussions, if there were to be any mergers, or is it just going to be a bespoke, unique situation? I'm asking you to look into a crystal ball.
You might be right there in that—. Again, going back to the previous voluntary merger exercise, the timeline set out there was three and a half or four years from setting out the prospectus to the first elections.
So, with regard to the Bill, and bearing in mind it is quite silent on some of these issues, do you feel that it should have been or it can be, more iterative, or is it just one of those great unknowns at this moment in time?
It's an unknown. I don't think you can iterate on that unless you know a firm pairing or where it's going to happen.
Okay. I think I've done this one to death, Chair.
Yes, that brings us back, I think, to where we started on the enabling powers and you don't know what use Ministers or others might make of some of those powers and able to cost them. We fully appreciate that dilemma.
We're slightly over time, but I'll just conclude with one question, if I may, because there is provision or powers in the Bill relating to non-domestic rates avoidance, which obviously will have an impact on local authorities. I'm just wondering whether the resources are available to you to make best use of those potential powers and also whether, of course, in reducing avoidance, I think it's been quantified as between £10 million and £20 million that's being lost, whether that could help certain other pressures within local authorities.
I think authorities welcome the powers in the Bill and believe that they'll help tackle avoidance. I think the proof will be in the pudding, I guess, and I think that they're keen that the proposals about share-gain are something that could be taken up as something that would further assist.
I think that in the past, these kinds of issues were looked at. Obviously, avoidance, if it saves a substantial amount of money like that, is there a way for local authorities potentially to retain a proportion of that? I think that proves difficult—. It's difficult when you've got a big—. It's a pool, you know, NDR—Wales is a big £1 billion pool—so I think the share-gain issue has proved difficult. It is one of those things, I think, that is still being iterated. I think, actually, the lofty avoidance sub-group of the revenues and benefits network is actually meeting tomorrow to discuss some of the aspects of the Bill and how they might be refined. But, broadly, I think there'd be enough resource in there to tackle the avoidance issue.
Okay. There we are. Well, if Members are content, can I thank you?
Diolch yn fawr iawn ichi am eich presenoldeb bore yma. Mi gewch chi gopi o'r transcript jest i wneud yn siŵr ei fod e'n gywir, ac os oes yna unrhyw issues yn amlwg dewch nôl atom ni. Ond diolch yn fawr iawn ichi am eich tystiolaeth. Mae wedi bod yn fuddiol iawn. Diolch yn fawr.
Thank you very much for your attendance this morning. You'll get a copy of the transcript just to ensure that it's accurate, and if there are any issues, please come back to us. But thank you very much for your evidence. It has been very beneficial. Thank you.
bod y pwyllgor yn penderfynu gwahardd y cyhoedd o weddill y cyfarfod yn unol â Rheol Sefydlog 17.42(vi).
that the committee resolves to exclude the public from the remainder of the meeting in accordance with Standing Order 17.42(vi).
Cynigiwyd y cynnig.
Mi awn ni felly i mewn i sesiwn breifat. Felly'n unol â Rheol Sefydlog 17.42(vi) dwi'n cynnig bod y pwyllgor yn gwahardd y cyhoedd o weddill y cyfarfod. Ydy'r Aelodau yn hapus i wneud hynny? Iawn. Diolch yn fawr. Mi awn ni i sesiwn breifat felly. Diolch yn fawr iawn.
We'll therefore go into private session now. So, in accordance with Standing Order 17.42(vi), I propose that the committee resolves to exclude the public from the remainder of the meeting. Are Members content to do that? Fine. Thank you very much. We'll go into private session. Thank you.
Derbyniwyd y cynnig.
Daeth rhan gyhoeddus y cyfarfod i ben am 10:07.
The public part of the meeting ended at 10:07.