Diolch am y cyfle i ddweud gair personol ar ddiwrnod olaf y tymor.

I am grateful for the opportunity to make a short personal statement on the last day that I will attend a Plenary session as a Member of this Assembly. Today, I thank those who gave me the opportunity to bring the National Assembly for Wales into being and to lead it in its early life. I am confident that history will show that sound foundations were laid for the development of a mature and effective institution to an extent that even Members of this body may not have understood at that time. That required super human efforts by civil servants whose commitment to the Assembly has been wholly underestimated on all sides. There are many I could name but I will mention two of them: Jon Shortridge, who proved that he is more Sir Richard than Sir Humphrey, and Lawrence Conway, for it took a Grangetown boy to shape an effective cabinet office system for the new Wales.

On a personal level, I thank many Members and the Assembly staff for their kindness. I make it clear that I stand down as an optimist about the process of devolution. I make no bones about it, when I stood down as First Secretary it was in circumstances that damaged the image and standing of the Assembly, to whose role and development I remain wholly committed as I have been throughout my political life. My subsequent decision to stand down from the Assembly was not an easy one but the Assembly is additional and complementary to Parliament. Westminster remains as important to people in Wales as it ever was. We must ensure that both democratic bodies deliver the best for Wales. That is why, in the end, I responded positively to the unanimous request of Labour Party Members in Cardiff South and Penarth to continue my role in Welsh politics as their representative in the UK Parliament. I spelt out my reasons in a letter to them and to the Labour Party branches in mid and west Wales. However, let us be clear. I am not turning my back on the Assembly and certainly not on Wales. As the past week has again shown, there is a long way to go before the Assembly brings its relationship with the United Kingdom Government to full maturity. The relationship needs to be nurtured by politicians in both institutions and I pay tribute to Paul Murphy and David Hanson’s efforts in that regard.

This Assembly is not a sovereign institution, nor should it be. It is a devolved body that must earn respect. It is of equal importance for men and women of vision and maturity to represent Wales at both levels of Government. As we have seen too often in this Chamber, it is easier to stir up discontent and discord than to broker agreement. Megaphone diplomacy is not the way to represent Wales unless you want the relationship to fail. That is why I deeply and sincerely believe that nationalism remains the greatest threat to devolution, slightly ahead of other forms of conservatism.

I leave, therefore, with a plea to true patriotism, a plea for all Members of the Assembly to understand that devolution is a settled and exciting place in which you have the opportunity to deliver dynamic devolution. That is not only my vision but one which was nurtured by visionaries such as Keir Hardie, Jim Griffiths, Emrys Jones, John Morris, John Reynolds and Labour leaders of more recent times.

I hope that there will be increasing realisation that Assembly Members alone cannot deliver devolution. You need to develop the vibrant partnership with people in business, the voluntary sector, the community sector and local government for which the structures were put in place during my time as First Secretary. That needs more than lip service. It needs a personal and sustained commitment to partnership from all Assembly Members. You must work with the 40 Members of Parliament who represent Welsh constituencies. My continuing contribution to Welsh politics will include trying to develop that as a two-way understanding.

As a passionate advocate of devolution, my enthusiasm has not dimmed. I will be as passionate an advocate of devolution as I have been in the past three decades of my life in Welsh politics. Call me a hopeless romantic if you will, but despite some of the evidence of the last three months, I believe in the Assembly’s potential and I want to applaud your success. Please, colleagues, make us proud, make Wales proud, by rising above petty conflicts to rekindle the sense of purpose and destiny that marked our official opening.

Ar ran y Cynulliad, diolchaf i Alun am y ffordd y mae wedi dweud ffarwél wrthym, oherwydd heddiw yw’r Cyfarfod Llawn olaf cyn toriad y Pasg ac erbyn diwedd y toriad bydd Alun wedi ymddiswyddo o’r Cynulliad a dychwelyd i San Steffan.

I thank Alun for his positive message today in saying farewell to the Assembly as a Member. However, he is not saying farewell to the business matters that will come before the Assembly, or the hopes that everybody in Wales has for its future as an effective body that runs the domestic agenda on behalf of the three million of us who live in Wales. I thank Alun in the same spirit for his incredibly hard work in helping to establish the Assembly in its transitional phase, as he was the last Secretary of State for Wales to carry out the traditional duties of the 1964 to 1999 period of the office of Secretary of State for Wales and the first First Secretary of the Assembly. I also thank him for giving a strong indication that he wants to be an effective advocate for all Welsh matters and those that relate to the Assembly when he returns to Westminster. He is right: we will need strong and effective bridges between the Taff and the Thames in the future. He has promised to be one of those bridges and I look forward to working with him in the future, even though our roles may be slightly different.

Alun, diolch yn fawr ichi am bopeth.

I will make a statement on the payment of members’ allowances by Cardiff City and County Council. As the Secretary for Local Government, I have been concerned at the council’s allowance scheme. I publicly asked them to consider their situation, as everyone here will know. A fortnight ago, the Assembly adopted a motion that called for the capping of all such allowances. The gravity of that decision did not escape me, and I regard it as very serious. I said that I would give the council a fortnight in which to decide, voluntarily, to revert to their previous system of members’ allowances, or I would ask the Assembly to legislate. With the local government modernisation plans in mind, I said that the way forward on councillors’ allowances was to convene a joint working group of Assembly Members and local government representatives, on an all party basis, and under the auspices of the partnership council. I made it clear that I saw the Boyne report as the starting point for that joint group’s consideration.

Following that debate, I wrote to the leader of Cardiff council calling for a response no later than today. I wrote again last Wednesday. It was right to give Cardiff a reasonable period of time in which to respond. I restated that yesterday, and the action of opposition Members in voting down the business statement was regrettable. Together with officials, I met the leader of Cardiff council last night at his request. We had an amicable and constructive discussion. I received a letter from the leader today, formally committing Cardiff council to restrict its total expenditure on members’ allowances, of all kinds, in the financial year 2000-01, to £832,000.

I am satisfied that that figure corresponds to the total cost of Cardiff’s former system of allowances, as they stood at 31 March 1999. It is a figure, at which I would have proposed to limit Cardiff’s expenditure, if it had proved necessary to proceed with a capping regulation. I understand that Cardiff’s expenditure on members’ allowances would otherwise have been £1.052 million, a difference of £220,000. I am pleased that Cardiff has complied voluntarily, which protects the interest of the council taxpayer and should allow the joint working group to review the issue of members’ allowances in a calmer atmosphere. I have made it clear that the Boyne report must be the starting point for the deliberations of the joint Assembly and Welsh Local Government Association working group.

It is worth remembering that the members’ allowances working group was set up in response to representations from local government. Whatever their opinions are on the Boyne report recommendations, there is no doubt that the WLGA supported the exercise at the time. That is why their logo appeared with the Assembly’s on the front cover of the Boyne report. It is an important and carefully considered piece of work by a group of independent and knowledgeable people.

I wrote to Sir Harry Jones yesterday, as leader of the WLGA on the Partnership Council, and proposed the following terms of reference for the joint working group. It is to consider what would be an appropriate scheme of special responsibility allowances for Welsh local authorities in the light of the report of the members allowance working group—the Boyne report—and of such further material or representations as the group may agree to take into account and make recommendations accordingly. I look forward to a positive response to this. The sooner the joint working group starts considering the issues, the better for us all and particularly Welsh local government. There is a good measure of cross-party consensus that councillors need allowances at a realistic level, which support them adequately in the vital work that they do on behalf of their communities. I pay tribute to their work regularly in this Chamber. I hope, with goodwill on all sides, that the joint working group will be able to come up with agreed recommendations. It will then be for the Cabinet and the Assembly to decide whether those recommendations should be endorsed.

I have asked Gwenda Thomas, Chair of the Local Government and Housing Committee if she will chair the working party. She kindly agreed to that, and I hope that it will be endorsed in the Partnership Council. It is important that we act fairly and reasonably, as well as firmly. By giving Cardiff adequate time to consider my request, I have secured a satisfactory outcome on a voluntary basis. I have kept my assurance to the Assembly, the people of Wales and to Cardiff. I pay tribute to Cardiff council for this sensible and constructive decision. In the light of that decision, no useful purpose would be served by introducing a capping regulation for the authority at this time.

There is a visual link between you holding up a piece of paper and proclaiming peace in our time, and a former Prime Minister who did the same. I hope your letter is slightly more substantial. I do not think anyone appreciates the brinkmanship that Cardiff council embarked on by leaving it until the very last minute. However, I welcome the council’s action. With the theatricals over, we must develop a system of allowances that will be fair to all councillors and that will fully reflect the new responsibilities that they will be undertaking as the new structures of local government develop. I look forward to that work starting.

Will the group to which you refer be the Monday meeting of the Partnership Council’s modernising group? Is that the group who will begin this work? Wherever or whoever that group is, it must start work as soon as possible and must develop a system of allowances that encourage more people from differing backgrounds to take a fuller part in local government.

I thank Janet for her positive comments and I endorse them. I am grateful for her kind comments, which reflect well on my negotiating skills. We had best value out of the fortnight of negotiation and I am pleased that it has resulted in this decision. I assure you that it will be an all-party working group. It will be a separate working group and will be organised as soon as possible. I will be in touch with you and other party representatives, because you will be able to play an important part in that.

I will continue with Janet’s analogy. You are rather more like Neville Chamberlain than Janet led us to believe. This owes more—

After what I said about Rock Park in Llandrindod Wells.

That is past history.

Savaged by the dead sheep.

This owes more to your presentational skills than to your negotiating skills. There is nothing in the statement about Russell Goodway’s salary coming down. That has not escaped us. It is the major issue. There is mention of the budget coming down but that is different. We said yesterday that you would kick the ball into the long grass and that is what you have done today by setting up this working group. There is no guarantee at the end of the day that his salary will be lower than it is at the moment—£58,000. That is what this is about. It is what the people of Cardiff and Wales are concerned about. It is not only about Russell Goodway—it is about other council leaders who may seek to emulate his salary. I would be grateful if you could say whether his salary is coming down and whether you have a copper-bottomed guarantee on that in the budget. There is nothing about that in this statement. We will feel obliged to raise the question of the business statement again unless there is a copper-bottomed guarantee that his salary is coming down to what it was before the present increase. There is nothing in the statement to that effect. Although that is regrettable, there is no other device in our armoury relating to this. It is a shoddy compromise that is all about getting the Labour Party off the hook. It is not about getting Russell Goodway down to a reasonable salary for a job that reflects a combination of public service and professionalism. That is what we called for initially.

As someone once said, ‘he would, wouldn’t he?’ Cardiff county council had an allowance system that was drawn up by an independent committee. Whether we agree with it or not, it was implemented. One must recognise that a great deal of good work is being done in Cardiff at present. This Assembly’s powers enables it to cap the total overall budget for allowances. That is what we could have done but we did not need to do that because Cardiff county council has now given a voluntary agreement to do that. That is excellent. There has to be partnership and trust between the Assembly and local government. Councillors are democratically elected on behalf of the people of the city and county of Cardiff. We must work in partnership with local government. That is what is important. We do not have power over individual salaries. That is a matter for each local authority. They are answerable at the ballot box to their constituents. To compare the Cardiff situation—because it is the capital city—with any other local authority is unfair and unnecessary. To be fair to local government, I have not heard of any other authority where there is a similar concern or problem. We have a good solution. We have a voluntary agreement and it is in the interest of the people of Cardiff and Wales.

The allowances retained by the Labour councillors in Cardiff are too high. There are also too many special responsibility allowances. However, this is a reasonable compromise. We can live with it for the time being and it has set a number of provisos. It was indicated in the press this morning that Russell Goodway will accept an allowance of £34,000 and it was implied that he previously received that sum. I understood that he received £29,000. That needs to be clarified. Liverpool is almost twice the size of Cardiff and its council leader receives £10,000. There are major differences between various councillors’ allowances.

It is also important that the full council of Cardiff City and County Council meets to endorse this recommendation. We have received a letter from Russell Goodway. This must be seen as an offer from the council as a whole before we can accept it. In the light of that offer, I agree with Peter that the legislation is no longer necessary and that we should therefore proceed with the joint working group looking at the Boyne report to find a workable scheme for Wales. Councils should not be imposed upon. Guidelines should be set within which councils can work. In relation to what Janet Ryder said, we need to encourage more people to come onto councils. The misapprehension about the Cardiff council allowance scheme is that raising allowances to high levels is the key to getting people involved in local democracy. That is not the key. The key is making sure that the council is open, inclusive and accountable and meets at times when working people can go to the meetings.

I agree with those last comments. There will always be a voluntary element to a councillor’s work. One has to recognise that there are far more responsibilities in large areas like Cardiff, the capital city of Wales, than in other places. All aspects need to be taken into account, which is why the working party will be so important. I hope that you will play a part as a member of that working party so that you can make a direct input. I cannot comment on what was in The Western Mail this morning, and I cannot comment on salaries because that is a matter for Cardiff county council, not for me. I can only talk about the total budgetary figure, which we now have a voluntary agreement to fix at a point before the Parkinson report, which was what all the furore was about.

I congratulate Peter and the Assembly for taking this speedy and effective action. It is a pity that the Conservatives are, as ever, churlish and unwilling to recognise the reality of the situation, which is that the Assembly has taken timely, effective and necessary action to deal with a situation that was causing a great deal of concern to the people of Cardiff and the rest of Wales. The Assembly is to be congratulated for showing this leadership. That reality must be recognised. There has been speedy, timely and necessary action to deal with a situation that required that response.

As I said on a previous occasion, it should not be lost in the generality of the debate that councillors across Wales carry out sterling public service, often for little reward. Those of us with a local government background are acutely conscious of this. We do not want this to be lost in the criticism of the situation that prevailed before you took this action. That situation had developed too quickly and had gone too far. We all recognise that the way forward is partnership. Peter, you deserve congratulating for recognising that and for recognising the need to move forward in partnership with local government. That is the correct way forward. I hope that the working group considers the new reality of local government in Wales, the new modernisation and the cabinet structures. I hope that it also recognises the need to attract a cross-section of the population to become councillors, the sacrifices that people often make in terms of poor promotional prospects and the time spent on council activities that means that time cannot be given to family and career. That will all be considered as things are taken forward in partnership, as it should be, between the Assembly and local government.

I am grateful for those relevant points. I was a councillor for many years and I understand the sacrifice that families make, the promotional prospects that disappear through the window, and the time that has to be given to more work than there ever was under the old scheme. They were probably some of the sentiments behind the scheme that was introduced in Cardiff. However, it was the wrong thing at the wrong time. It was felt to be inappropriate. I understand that reaction, which I felt myself. However, that does not take away from the commitment of people in local authorities throughout Wales who give of their time to better their communities. We see it every day. I recognise it and I am sure that the working party will recognise it in its work on this important subject.

As one of those Members who has the great privilege of representing our capital city, I congratulate Assembly Members who supported the Conservative led motion to cap councillors’ allowances. I thank you on behalf of the people of this city. I am dismayed that the Labour Party failed to support the motion.

I will not pay tribute to Cardiff council or the lord mayor of the city. He has been dragged kicking and screaming into making the decision that was made at the last hour, last night. I do not think that this man has shown a positive attitude in his response to the work that has been done by opposition parties and the Conservative group in particular.

I have two points that I want Peter to clarify. If the total amount has reverted back to the original amount from 31 March 1999, how much money are the lord mayor, Russell Goodway, the deputy mayor and the deputy mayors in the cabinet, being paid? If they are being paid well in excess of what they were being paid until 31 March 1999, that money must be coming from somewhere. It could be the ordinary council members who see a reduction in their own expenses to cover an increase for those cabinet members. If the total amount has not changed and they receive an increase, that money must come from somewhere. Therefore, we want to see some figures and I hope that you can provide them.

I also want to know why a deal has been struck. Russell Goodway has agreed to cap the overall amount on councillors’ allowances in the hope of an extra review. You will be mindful that this Assembly did not ask for an extra review. It instructed you to cap councillors’ allowances in Wales. You have not done that. Therefore, what is the status of that motion? It was crystal clear: to cap councillors’ allowances in Wales. You have not done that and I expect you to bring forward the necessary legislation.

Most other Members and I interpreted that as a reference to Cardiff council. In fairness, I do not know of any problems in other local authorities in Wales. You have tried to shame those authorities by making such a statement today. I regret that, because we always see such behaviour from the Tories. If you had had your way, we would have centralisation, as we saw so many times under the 18 years of Tory rule, we would have quangos running everything and you would eventually do away with local government altogether. That is the approach that we would have and people in communities would have no democratic say at all. We are against that, because we want people to be part of a partnership working with the Assembly and local government to get the best for their communities. That is what it is all about. I made it clear, I did not shilly-shally about it. I told Cardiff council publicly, that either it withdraws or I will bring forward legislation. There has been no hole in the corner arrangement. It takes time to negotiate. That is reasonable. I have depersonalised this. I have talked about Cardiff council and in my discussions with Russell Goodway, he has been positive and acted in the interests of Cardiff, rightly recognising the Assembly’s authority. I thank him for that and I am glad that we have an agreement, which is in our interest. As Janet Ryder and Peter Black said, we must look positively to the future and go forward with the working party to get fair and proper remuneration for our local government representatives.

How much better it is, Llywydd, to see negotiation working instead of force. That is not something that the Welsh Conservatives understand. They introduced the capping system and implemented it ruthlessly. They were not interested in local democracy; they were only interested in capping and using force instead of negotiation. That was their opinion of local government. I am glad that you, Peter, have taken the view that negotiation with our partners in local government is a better way forward. Do you agree that at last people can say that we are looking at this situation and making a difference? Nobody can say now that the Assembly ignores matters. You, Peter, as the Secretary for Local Government and Housing can say that we have considered this and are ensuring that, where there are excessive rises, the Assembly will take action. You have done that through negotiation and I congratulate you on that. The ball has not been kicked into the long grass. The game has kicked off and you have scored under the post. We hear incoherent ramblings from the Welsh Conservatives. They are playing a different game that they always lose.

I agree with those wise words. I hope that the Conservatives are learning because they need to learn everyday about what this Assembly is doing. The Assembly is making the difference as far as the people of Wales are concerned and they are seeing that in policy every day.

I make my usual declaration of interest as a Cardiff councillor. I pick up a few points in response to Peter. I deplore the length of time it has taken for anything to be done about this. It took three months for your party to respond and, in typical negotiating technique, it has taken until the last minute of the eleventh hour for Russell Goodway to respond. It is with regret that I recognise that the Assembly’s power in this case is a blunt instrument. We have the power to cap the councillors’ total allowance. You have chosen the logical figure but I point out to Jonathan that that figure allows for significant individual increases. I will explain why. There used to be 56 Labour councillors, of whom 46 received a special responsibility allowance under the old system. There are now only 50 Labour councillors—and I predict that next time there will be a lot fewer—but 27 receiving a special responsibility allowance. Therefore it allows for increases within that total figure. All of Cardiff’s councillors should discuss this. I ask Peter to seek an assurance that this issue will be put formally to the council and that it will not be done purely on a voluntary, one-off, one member one decision basis and that there will be a rigorous decision that applies to all councillors with a special responsibility allowance. This applies to every member of the council.

You referred to the new Cabinet system. I warn you that this Cabinet system gave birth to this appalling situation. You need to liaise closely with the Westminster Government in bringing controls on the potential excesses of the Cabinet system. Local government is now like the Wild West—we have thrown out the old rules from the old committee system and we have nothing in their place. I would like your assurance that there will be strict controls in their place. It is ironic that Conservatives, who are making so much noise here today, removed controls on councillors’ allowances in the first place. There is a case for the review that you have set up but I ask you to consider the damage this issue has done to local government throughout Wales. The public will not support massive allowances for councillors. The review body must learn from the mistakes of Cardiff and consider the excellent example of Liverpool.

I appreciate you reminding us that the Conservatives removed the legislation in 1995. I am always grateful for these snippets that you occasionally bring to the debate. I have been open about the amount of time it has taken. I made my comments here in answer to Jonathan Morgan in March that if I felt that there were communities in which there was concern that allowances were inappropriate, I would take action accordingly. I have looked carefully at this for some time and I made a public statement some two weeks before we debated it in the Chamber. I gave Cardiff two weeks, which is appropriate and correct. We are not running a twopenny-halfpenny outfit. We are running the Government of Wales in the National Assembly for Wales and we have a duty to act in a proper, appropriate manner and to give local government, or whatever organisation with which we deal, appropriate time to respond. They had 14 days. All sorts of opinions will swirl around in a debate in 14 days and people will have all sorts of ideas. I would have failed in my duty if I had not given 14 days. Last night I eventually had a meeting with Cardiff City and County Council. As long as it was not at 3 p.m. this afternoon, that is fine. We have ensured a positive outcome that is in everybody’s interest.

I appreciate you acknowledging that a logical figure has been reached by voluntary agreement. A structure of allowances in Cardiff council is not a matter for me or for the Assembly, but for that council. We can only deal with the overall budgetary figure. We have done so and I hope that you will endorse it.

Cabinet systems—whatever your opinion on them—are the future. As far as the UK Government is concerned, they are part of local government modernisation and will be introduced shortly. It is important that we consider local government modernisation in relation to the working party, and remember that members of those cabinets will have many more responsibilities and duties. We must be realistic. However, I recognise that we want to have much more debate and discussion about it as the Local Government Bill comes before the Assembly. The Committee has already started its discussions.

Did the agreement that you reached last night follow the council resolution or the word of the leader of Cardiff council? It seems to me that, under the existing legislation, he would not have the authority or the power to make that decision whether a cabinet system exists or not. What comfort can you give us that a council resolution to this effect will be tabled, if it has not been, and can command the unanimous support of all the membership of Cardiff council?

I declare an interest as the non-claiming leader of Rhondda Cynon Taff County Borough Council.

And a member of the cabinet—very impressive.

I had an official meeting with the leader and chief executive of Cardiff council, together with other officials. I then had an assurance today in a letter from the lord mayor and leader of Cardiff council. In that letter, he states that, in the light of the commitment given, his colleagues have agreed voluntarily to limit, from today, the individual allowances paid to members so that the total amount of allowances to be paid for 2000-01 will not exceed the 1998-99 level, which is £832,322. That assurance has been publicly made and I expect Cardiff council to take the necessary legislative action to honour it. The letter confirms that it has immediately suspended those payments.

I respond to Jonathan Morgan. He asked why Labour Members had not supported his motion on capping councillors in Wales and said that that was a shame. Labour has no interest in doing so. Today, we are discussing a particular council and there has been much inappropriate personalisation in the local press and in the Chamber. I have a legitimate interest because my constituency includes part of Cardiff. It seems that the two fundamental things that have happened today have been lost. I would like Peter to assure me that he has achieved the same thing by voluntary agreement as he would have achieved by capping, and that the Assembly has no powers to alter individual members’ allowances—that is a matter for local government.

In my speech, I referred to the fact that the voluntary agreement that I obtained from the negotiations that I have led—after giving you an assurance two weeks ago that I would deal positively with this—has led to the same result that we would have had if we had gone ahead with a capping arrangement. That is much better because we are working in partnership and agreement. It has a ramification for the whole of Welsh local government because it is part of the Welsh Local Government Association, which has been helpful in these negotiations. I thank it for its co-operation. Individual allowances in any authority is not a matter for the Assembly.

Unlike the moaning minnies—to coin a phrase—to my right, I pay tribute to you, Peter, for your pivotal role in resolving this sorry saga. You deserve the highest praise. You have delivered the objectives set for you by the Assembly. The Assembly, local government and its reputation and the people of Cardiff and Wales are in your debt. Well done.

Thank you, Richard.

In the usual positive way that I like to contribute to this Chamber, I say how much we welcome this announcement. It was, despite what some Members say, the culmination of a Conservative campaign to get the leader of Cardiff City and County Council to pay himself a fair wage. I remind Members that the Conservative Party gave up one of its precious minority party debate slots to raise this issue. It was because of that Conservative campaign and because the other opposition parties supported us, that you had these meetings and forced this issue. What of the Labour Party? What was it doing when we had this debate? Labour abstained and sat on the fence. It now tries to claim credit for what we achieved. The Liberals who get up—

The Liberals—

What about his back pay and how much is he earning?

Yes, get to the point.

Everyone who has been on this planet in the last few weeks knows that I have been publicly critical of Cardiff council’s allowances because I thought that they were not appropriate. I have never sought to hide that. If something is not appropriate, I am the first one to say so, immaterial of who is involved. That has been the case with other members of my party and matters that had to be dealt with. I am pleased that we have been able to come to a voluntary solution. I thank Cardiff council for that. You asked, David, about what he will be paid. I do not know what anyone will be paid following this decision today. That is a matter for Cardiff council.

There is no back pay. However, I think that it would be appropriate for any arrangement that is reached in the new local government allowances working group to be applied retrospectively back to April 2000 as far as Cardiff is concerned. That would be correct, fair and appropriate. That is all I can say on that.

I make a statement on the budget for 2000-01. This follows my earlier statement on 28 March. Since that time, my colleagues and I have consulted the relevant Committees and the other political parties on our proposals. I am grateful for all the comments that we have received and I believe that there is a fair measure of consensus.

I am also grateful to the other political parties and the Presiding Officer for allowing me to proceed by way of a statement. As I said on 28 March, Standing Order No. 19 is currently silent on the treatment of additional funds. We shall bring forward amendments to that Standing Order in the near future to remedy that situation and so that we can clarify the position in future years. I understand that the matter is on the agenda for the Business Committee meeting after the recess.

Some £158 million extra is available for this financial year. The bulk of it will go to health and education, the Assembly’s main priorities. I confirm that £99 million extra will go to health. I propose to allocate a further £11 million from uncommitted carry-forward in other programmes, making a total provision of £110 million. This delivers a cash increase in the health sub-expenditure groups over last year of £293 million. That is an increase of 11.3 per cent in cash terms, or 9 per cent in real terms, that is, after taking inflation into consideration.

The total 2000-01 health authority allocation is now £2.2 billion. That is an overall cash increase of £196 million or 9.4 per cent in cash terms. This, of course, still leaves £80 million of new money available in the current year to address our spending priorities for improving health services in Wales and to invest in the future of the national health service.

We will establish spending priorities for the use of these additional resources following consultation with the NHS and its partners, and the Health and Social Services Committee. The Assembly will also challenge the NHS to improve its performance and, as I indicated on 28 March, will expect the NHS to make significant progress in service delivery and in getting its house in order in light of the increased allocation. We will also set specific new targets for the delivery of the changes and developments funded from the £80 million.

On education, as I previously indicated, £49.6 million will be allocated across the following priorities: additions to schools’ budgets, capital investment in schools and a teacher recruitment package. I can now give more details. A sum of £20.5 million will be added to schools’ delegated budgets. Primary schools will receive between £3,000 and £9,000, depending on their size. Secondary schools will receive between £30,000 and £50,000. Special schools will receive £15,000. Nursery schools will receive £3,000 and pupil referral units will also receive £3,000.

These proposals were discussed and endorsed by the Pre-16 Education Committee on 29 March. I know that Members were particularly concerned that small schools should receive additions to their budgets. The proposals have also been discussed with the Welsh Local Government Association, which is content with the distribution of resources.

Schools can use the funds as they wish. We expect them to use the moneys in ways that will improve standards and attain targets in school development plans. They could be used for books, equipment, staff costs, homework support or repairs. However, I am sure that all of you, like me, have every confidence that governing bodies, teachers and headteachers in schools will ensure that this money is wisely spent.

The funds for schools will be distributed to local education authorities by means of a special grant report under section 88B of the Local Government Act 1988. The terms of the grant will require local authorities to distribute resources to schools as additions to their delegated budgets. The report will be laid shortly after the Assembly returns from its Easter recess.

I know that capital provision for schools is one of the key priorities of the Assembly and the Pre-16 Education Committee in order to get all school buildings into good physical shape and properly maintained by 2010. I am therefore pleased to be able to announce an increase in schools’ capital provision, above the £25 million I indicated previously. A sum of £26.8 million will be allocated to schools’ capital.

The detailed arrangements are being discussed with the WLGA, but we envisage funding by means of 100 per cent grant. Local authorities must demonstrate that their proposals are additional to their normal capital plans. That is important. We intend the moneys to be used for significant schemes, which local authorities would have difficulty funding from their normal capital programme. Local authority proposals must take account of their asset management plans and the conclusions of their school organisation plan on the need to add school places or remove surplus ones.

Finally, I indicated in my previous statement that we were looking at a teacher recruitment package. We examined the Department for Education and Employment’s package and we do not believe that, as a whole, it would meet the circumstances in Wales. We have therefore developed our own package. It includes training and teaching grants and is aimed at boosting the numbers of graduates entering teaching, with an improved graduate teacher programme. It is an employment-based route to teaching. It begins in September 2000 and the net additional cost of the scheme in 2000-01 is estimated at £2.3 million.

The training and teaching grants will be for postgraduate secondary teaching trainees. In subjects where there are shortages—for example, maths, modern foreign languages, science, technology and Welsh—a training grant of £6,000 and an additional £4,000 for trainees who successfully complete their first year of teaching and continue to teach in those subjects will be provided—£10,000 in total. In other subjects, a training grant of £4,000 and a £2,000 bonus for trainees who successfully complete their first year of teaching and continue to teach will be provided—£6,000 in total.

In addition, schools that train teachers through the graduate teacher programme, aimed at mature students, will receive up to £13,000 to help meet the cost of recruitment and training. Rosemary Butler will make a separate announcement on the details of the package, but we believe that it is the right approach to meet our circumstances in Wales.

On transport, I confirm that £8.2 million will be made available and will be split between local authority integrated transport packages and safer community transport projects. As I previously indicated, despite increasing this year’s transport grant settlement, bids still far exceeded resources available. We will therefore increase the allocation by a further £4.1 million. We are also keen to see the progress made in implementing some of the many worthwhile small-scale safety schemes that await funding. We propose to allocate £4.1 million towards this and we shall target this money taking into account the new Great Britain road safety strategy and the Assembly’s own policies. The majority of this money will be allocated to local authorities, but some will be available to support trunk-road safety.

The Assembly has responsibility for the careful stewardship of Wales’s beautiful countryside, for people today and future generations to enjoy. I am pleased to confirm that we are allocating £800,000 for the Countryside Council for Wales to promote the conservation of, and access to Wales’s finest countryside and wildlife. In making this allocation, we shall ask the council to give priority to a number of measures. These will include the acceleration of a mapping exercise—required under the Countryside and Rights of Way Bill when enacted; the establishment of local access forums across Wales; and additional grants for voluntary bodies, such as the wildlife trusts and the local authorities in Wales’s five areas of outstanding natural beauty. Sue Essex will make a separate announcement on the use of the extra funds for transport and the environment.

I can also confirm that I shall allocate an extra £1 million for economic development from uncommitted carry-forward resources to the Pathway to Prosperity fund for use in developing economic development programmes. Subject to the Committee’s views, we will propose that these funds should be used for state aids and for support to credit unions.

Finally, I have one announcement that I did not signal on 28 March. If you were reading my script, I have changed the text. On 1 April, thanks to the decisions taken at the last budget by the Assembly, the National Museums & Galleries of Wales were able to give free entry to all children and young people of school age. This was universally welcomed and represents a significant step in widening access to the huge range of exhibits, paintings and other items on display. But this is only the first step. I am delighted to announce the further extension of free entry—this time to the over 60s and the unemployed. From 1 May, the museum will open its doors for seven days a week to these groups, apart from Cathays Park, which will continue to close on a Monday. This will cost £200,000 in 2000-01 and will be met from the carry-forward of uncommitted resources. I hope that the Assembly will support this measure, which will directly support our aims of social inclusion and lifelong learning.

The detailed budgetary tables were circulated with this statement—they are formatted to reflect the new committee structures. They do not include the allocations coming from uncommitted carry-forward or the agricultural monies that I announced. These will be dealt with in-year. In this context, I shall make a statement regarding the carry-forward of resources between the last financial year and this when we return after the recess, when all the necessary figures are available. I will be delighted to take any questions on the statement.

Diolchaf i Edwina am y datganiad ac am roi gwybod inni o flaen llaw am yr hyn yr oedd yn ceisio ei wneud. Cyfeiriaf at bedwar neu bum pennawd.

Yn gyntaf, iechyd. Wrth groesawu’r arian ychwanegol, a wnaiff Edwina roi rhyw arweiniad ar beth fydd y sefyllfa o safbwynt y gwariant cyfalaf yn y sector iechyd? Cyfeiriodd at y sector gyfalaf o fewn addysg, ond nid o fewn iechyd. Gwyddom faint o wasgu a fu, a gobeithio y bydd arian cyhoeddus tuag at gyfalaf o fudd inni wrth ymwneud ag ysbytai newydd.

Mae lleihad o £9 miliwn yn y gyllideb tai a drosglwyddwyd. O ystyried cyflwr ein stoc tai a’r nifer o dai sydd yn disgwyl cael eu hadnewyddu, oni fyddai wedi bod yn fwy priodol i gadw’r arian hwnnw o fewn y sector dai, ac os oedd arian ychwanegol i Gymru, i geisio cyfeirio’r arian tuag at dai?

Cyfeiriodd Edwina at y newidiadau ym myd addysg, yn arbennig ar gyfer hyfforddi athrawon a denu graddedigion i fod yn athrawon. Croesawn hynny yn fawr. A wnaiff ddweud wrthym faint o drafodaeth a fu gyda David Blunkett ynglŷn â’r datganiad a wnaeth ef cyn iddo wneud y datganiad? Mae’n rhaid cael cyd-ddealltwriaeth rhyngom ni yng Nghaerdydd a Llundain, neu byddwn mewn sefyllfa anodd iawn.

Ar y gyllideb ddatblygu economaidd, a ydwyf yn gywir i ddweud ein bod yn dal i gredu mai £25 miliwn sydd ei angen eleni ar gyfer y gwariant ar y rhaglenni Ewropeaidd newydd—nid y rhai sydd yn cario drosodd o’r flwyddyn ddiwethaf? Os yw hyn yn annigonol, a gawn sicrwydd y gallwn fynd i mewn i’r gronfa wrth gefn gyda’r Trysorlys er mwyn cael unrhyw arian angenrheidiol ar gyfer gweithredu rhaglen Ewrop uwchben y £25 miliwn hwn?

Yn olaf, croesawaf y £780,000 ychwanegol ar gyfer archwilio. Mae hyn yn dangos ein penderfyniad fel Cynulliad i sicrhau bod gwerth am arian ar yr holl raglen wario cyhoeddus yng Nghymru, ac os oes unrhyw wastraff y darganfyddir hynny a’i rwystro.

I totally concur with Dafydd’s comments about the audit. We need to recognise all the value for money issues and be stringent in dealing with matters.

On health, it will be for the Health and Social Services Committee and the Assembly Secretary to discuss priorities, but as I have said before, we would like to extend what we are able to do in terms of capital programmes. It is up to us to ensure that we get the right balance in that area to invest in the future in terms of capital programmes. I hope that the Health and Social Services Committee will develop that.

I share some concerns on housing, and the budgetary position on housing. I would have liked, if I could, to develop a more satisfactory financial means of supporting a housing strategy. As I indicated in my budget speech prior, this is an area that is of concern, and of concern to the Committee. I hope that when we come to the spending review and this year’s budgets, we will perhaps be able to make further allocations in this area, from the whole.

On education, I was not aware of the information regarding David Blunkett’s announcement made in London. I read the announcement on the front page of The Guardian in the morning and saw the details of the teaching package arrangements. This concerned me, and I raised the matter with Andrew Smith, the Chief Secretary to the Treasury, on Friday. It leaves us in a difficult position in Wales when announcements are made in this way. I am not the Secretary for Education and Children—I am the Finance Secretary. I understand that Rosemary Butler was aware of the position the day before the announcement and had some inclination. I was not aware of it.

This is a problem. England has decided in advance of the spending review to take the risk for the whole package. If we were to do the equivalent, and go for the whole package approach in 2000-01, it would have cost me £6.5 million, in 2001-02 it would have cost me £9.63 million, and in 2002-03 it could have cost as much as £12 million. I was not able to make a recommendation of that nature without knowing the outcome of the spending review within the Assembly’s limited resources. It has raised a fundamental issue that I have discussed with the First Secretary. It is incumbent on us all to ensure that protocol arrangements are more than pieces of paper and that they actually mean something. We need to have a clear idea of what is going on in terms of spending departments. This has brought it home to me. We will now need to have difficult discussions on the teachers’ recruitment package. I believe that the package that we have is correct for Wales and it is subject to review. However, I am aware that there is an England and Wales teaching marketplace, and we therefore need to be alert to all the issues that arise from that.

On European programmes, Dafydd, like you, I want to ensure that these will be properly funded. I have already indicated that I am prepared to look at matters regarding funding in-year and I hope to have further discussions with the First Secretary to ensure that these matters are addressed during the coming months if the need arises. Your points on education, regarding our arrangements with Westminster, are very valid.

I thank the Finance Secretary for her statement. We welcome the extra spending on health and education, particularly on health. I wonder whether you could say something about the debt provision and whether or not any of the increase will be required to pay off existing debts. Many health authorities have massive debts, and we wonder to what extent they are being directed to clear existing debts before spending new money on the sharp end of services. Could you also say something about public-private partnerships in healthcare? It has come to our attention this last week that at least one health authority in Wales, is buying in healthcare from the private sector. We are not concerned about that—we welcome it—but is it part of a national strategy? Is there any impact on the budgetary arrangements in relation to your statement today on those health considerations? It is Gwent Health Authority, if you were not aware.

On education, we welcome the increased spending. Could you say something about money being routed through education authorities? Is this necessary? I do not believe that it happens in England. The money could possibly go directly to schools. I wonder why we are not able to do that in Wales, if that is the position. I welcome what you say about the Westminster dimension—we need to keep that under review in relation to Dafydd Wigley’s earlier points. I hope that you will undertake to do that.

On the countryside, we are disappointed that more is not being done on the impact of the right to roam on landowners. There are financial implications for them. We raised this with you when you made your initial budget statement, and, perhaps unintentionally, you seem to be rather cavalier about their concerns, by saying that landowners are a minority. I am sure that you would welcome the opportunity today to say that they are dear to your heart and that you will do something for them. There are implications for them from some of these proposals, which will be costly in terms of the extra precautions that they must take and the extra expenses that they will have to meet. I would be grateful if you could say something about that.

We welcome the broad thrust of the additional money for health and education—it is something for which we argued. Initially, in relation to your first budget, we voted against it because we did not think that there was enough for health.

Could I also ask you to say something about Objective 1 funding? This is a regular concern, but I think that it is appropriate to say that the comprehensive spending review limitations were breached in relation to health. Were representations made by you and the First Secretary to act likewise in relation to something that is equally vital for Wales—Objective 1 funding?

On Objective 1 funding, we made no representations to the Chancellor about pre-empting the spending review in terms of health. That decision was taken nationally. We were going along the road of making all the representations in the context of the comprehensive spending review and anticipating the outcomes in July. Our representations on a whole host of issues were therefore well known and documented for the Chancellor in respect of the comprehensive spending review. We genuinely had no indication that anything would be done in these terms in health. We continued making representations on Objective 1 and we did not lose an opportunity on Thursday and Friday during the Prime Minister’s visit. I believe that it got into every aspect of conversation.

On the countryside, I did not want to sound too cavalier, because I am a Roundhead by nature. On landowners, in view of your comments, I will ask Sue Essex to consider this further.

Thank you for you comments on the Westminster question. It is important that we consider our relationships with Westminster to ensure, as I indicated before, that there is respect on both sides. We always adhere to the concordats by advising the appropriate people when we make an announcement, and I believe that it would be agreeable if the same thing happened to us.

On education, officials have assured me that I have to route the money through the education authorities. That is the method—I cannot follow England’s example. Let us be clear, local education authorities know what money must go out and why it is going through them. I have been assured that that is the only mechanism that was open to me in Wales. If the Pre-16 Education Committee was interested in addressing the issue, they could do so with the Secretary for Education and Children. That was the assurance that I received.

I was interested in your comments on public-private partnership—an issue close to my heart. I am aware that sometimes health authorities in the public sector access private facilities. If the money is available in health authorities—there are private hospitals and we want to make a list of them—I have no objection for those facilities to be used. We must do everything possible to ensure that we minimise waiting times and reduce waiting lists and that we have value for money in terms of the money that is expended. Health cannot be measured in those terms. However, I am not aware of the detail of that. On debts, I have made the allocation in broad terms for health authorities. I will not go into detail on the specification of how they intend to use the money, but it is clear that our own health authority has welcomed it as it has helped them with specific debt problems. I do not have a clear picture of that, although I assume that the Secretary for Health and Social Services will have an indication of how it intends to use those additional funds.

I welcome the Finance Secretary’s statement and the much needed extra money in this year’s budget. How much it is needed can be seen when the money is put into context. There is still a £500 million backlog in school building repairs, people have to wait longer for hospital treatment and there is a £1.2 billion repair bill for Welsh housing. I agree with Dafydd Wigley’s comments. We must address the housing issue and secure more money for it, given its impact on health and education.

School buildings and class sizes must be the top priorities in education. I hope that some of this money can be used to reduce class sizes for seven to 11-year-olds. That should now be our priority as we have started to sort out the younger age groups. The Finance Secretary said that nursery schools will receive an extra £3,000. Does this also apply to nursery units that are attached to primary schools or will that come out of the money that the primary school will receive?

On what basis will the additional £26.8 million capital funding for schools be divided between local education authorities? Edwina Hart indicated that a 100 per cent grant will be used. Will these grants go to the local education authority that makes the strongest case or will they be distributed on a pro rata basis according to the relevance, strength, size and needs of the LEA?

There are also concerns that the graduate recruitment package may adversely affect recruitment in Wales. As graduates effectively have to wait nearly a year longer for their money, perhaps Edwina Hart would consider offering a little more in Wales to compensate them. Above all, it must be monitored closely for adverse effects as compared to England.

Although we welcome paying money directly to schools this year, there are dangers attached to hypothecation, not least the impact on other services. I hope that we can compensate local government in future years by increasing the amount of money that is available to them, so that we do not have high council tax rises and cuts to essential services again.

I urge the Finance Secretary and the Secretary for Health and Social Services to consider using the extra money for health to tackle the bed blocking issue that we raised in Plenary yesterday. It could also be used to re-establish a capital programme for Wales, increase the capacity of Welsh hospitals and invest more money in hospital staff, especially nurses and doctors. Tackling those four key health issues would be worthwhile.

The big issue in health is the link between health and social services. I reinforce how I anticipate that money should be used between the two areas to ensure that we can bolster the social services to address some of the problems in the health services. That must be a key message that has come through, especially from the Committee.

We are all anxious to ensure that we have a decent capital programme that will allow the facilities to exist so that people can have better healthcare in Wales. We are restricted in budgetary terms, so we must make the money go further and work better.

I was in a dilemma on graduate recruitment. The money for entrants was paid up front by the Department for Education and Employment. I am old-fashioned on some matters. If someone wants to enter the teaching profession and £6,000 is offered, they should take the money. However, I would like to have a teacher at the end of that. It is nice to give £4,000 for the year and give the extra money when they have completed their probation year. At least we know that there is a chance that someone who has completed the probationary year will go into teaching. I do not see the point of a scheme that does not benefit us at its end. When I was young, if there had been a choice of schemes available to encourage young people to enter teaching, students of my generation would have accepted £6,000 from one scheme and then taken more money from another scheme. We must consider what outcome we want. You may call me a cynic, but if we want more teachers, we must secure a balance.

Capital funding will be achieved by formula, in real terms, to local government. Only nursery schools that are separate units will receive £3,000. Class size is an ongoing issue and we are trying to ensure a reduction across the board. Housing is an area that concerns the administration. As I indicated to Dafydd, it is an area to which we need to return. I am anxious that we take action on school buildings. Although hostility has been felt in the Chamber towards the private finance initiative, it has delivered new necessary school buildings across Wales. As long as we can produce value for money, I do not care how we set about securing new school buildings and repairs to existing ones on behalf of Welsh schoolchildren.

I wneud pethau’n glir, gan fod yr wybodaeth hon yn cael ei gwneud yn gyhoeddus, hoffwn gael cadarnhad fod y £4,000 yn y flwyddyn hyfforddiant a’r £2,000 ddilynol ar gael i’r rheini a fydd yn cwblhau eu blwyddyn ddysgu gyntaf yng Nghymru.

The problem with the scheme is that it is for England and Wales. We had to ensure a scheme that would not allow us to jack-up things. It would have been nice for me to give more at the back end of that sum, but I could not complete financial terms with DfEE if we had a turf war on new teachers. Teachers who train in Wales will receive £4,000, with another £2,000 at the end of their probationary year.