Extract from Wales Assembly Questions to the Finance Minister - Jan 30

Neil Hamilton AM: Diolch, Llywydd. I wonder if the Minister saw one of the attractions of her new job as taking responsibility for the complexities of local government finance in the years ahead, and whether she agrees with me that the funding formula for local government is now looking increasingly dated and requires reform. In particular, one of its defects is that the mechanism within it seems to work so as to force councils to raise council tax almost every year. Welsh Government predicts council spending over the next year, and a larger need prediction brings about a larger block grant. The need prediction is based upon council spending in previous years, so if there's a previous history of high council taxes, then you get more money; if you've got lower council taxes, then you get less money. So, councils need to increase the council tax every year to get higher financial need estimates and higher grants from the Welsh Government. So, there's no incentive whatever within the formula as it currently is for local councils to get better value for money or to economise in spending. What we need to do is to have a formula that removes such a perversity.

Rebecca Evans AM (Minister for Finance and Trefnydd): Thank you for that question. I'm afraid I'm going to disappoint you now and let you know that it is actually Julie James who had this given to her in her portfolio. However, clearly, I have a strong interest in ensuring that we do fund local government properly here in Wales, which is why I attended, alongside Julie James, the finance sub-group very recently. The finance sub-group brings together leaders of local authorities, Police and Crime Commissioners and others to talk about specific issues, such as the local government settlement funding formula.