Part of the debate – Senedd Cymru am 4:40 pm ar 29 Mawrth 2023.
This shows very clearly that decisions made by the Welsh Government have a big impact on the finances of Welsh local authorities, with major levers of funding that local authorities have in terms of delivering their services coming from the Welsh Government. It's because of the significance of the impact of this funding on our communities that today we are calling for the Welsh Government to commission an independent review of that funding formula. Remember, it's the thing that determines how much funding is provided to each local authority to enable them to deliver those important services that our residents expect.
Of course, there have already been some reviews in minor detail from time to time that the Minister and previous Ministers have had with local government. A recent example of this was in regard to rurality, which wasn't properly accounted for in the past, but there has been some work to ensure that does take place. But that's just a one-off issue that is looked at, not going for a full review. As a further example, I've raised my concern in the past about some of the data being used and the recency of the data being used to determine that funding, because some of it is decades out of date.
There are also some actual measures in there that I believe are still not being properly considered. These include the appropriate level of funding to support older people. The Minister will know that the Welsh Government's funding formula assumes that an extra £1,500 a year will be needed to support each person over the age of 85. However, for people aged between 60 and 84, this figure is reduced to £10.72. It's a huge discrepancy. Surely, the assumption that providing care for an 84-year-old costs less than 1 per cent of the cost required to care for an 85-year-old shows that the funding formula is not appropriate in its current form. I would have thought it would be much more sensible that the assumed level of funding needed to care for our elderly increases gradually, not at a cliff edge. That's just a quick example of the type of thing that an independent review would seek to challenge, taking it away from the potential party politics. What I find perplexing, Deputy Presiding Officer, is that if the funding formula is currently so good, why would the Government want to resist an independent review? I expect the Minister, surely, today would want to welcome an independent review of its funding formula.
Finally, the funding formula must take the levels of reserves held by local authorities into account. I mentioned earlier that the current level of reserves held by local authorities is around £2.75 billion in their useable reserves, numbers that only the Welsh Government would want to dream of having in their reserves. It cannot be right that some councils over a period of years have been able to build up significant reserves, some close to £300 million, while other councils are barely able to get by. There seems to be a significant gap in the levels of funding that some councils are able to enjoy compared with others that enables this financial cushion. We know that Rhondda Cynon Taf council holds around £250 million in their reserves, Caerphilly around £233 million in their reserves, Carmarthenshire around £230 million in theirs. Whilst many of these reserves will be held for good reason, it cannot be right that £3 billion of public money is squirrelled away, not being used to support such important public services that our residents rely on. Therefore, I think it's essential that the local government funding formula takes account of the reserves held by local authorities to better support the finances of those authorities that do not have large reserves and to encourage those authorities that are sitting on large reserves to make better use of them.
Having focused on the funding formula, I will now briefly turn my attention to council tax. The average council tax increase this year was 5.5 per cent, with a quarter of councils increasing tax by 7 per cent or more. These significant increases can have a real impact on the household budgets of people throughout Wales. It's important that those people are able to make their voices heard. I know that the Welsh Government are very, very keen to see active, engaged citizens in our communities, and a great opportunity to increase that engagement is to introduce a requirement for excessive council tax increases to be put to the public in a referendum, so I'm sure the Minister will welcome that motion here today also. Allowing the public to have a direct say over large council tax increases will improve that public trust in how their local representatives set their local levels of council tax and that can only be a good thing for democracy.
So, I'll leave my contribution there, Deputy Presiding Officer. I look forward to the other contributions from Members today, and I call on all Members to back today's motion unamended.