I propose that

I propose that

I propose that

I am delighted to propose these regulations, which honour the Labour Party’s commitment to concessionary travel in Wales. I am more than delighted, I am proud to propose these regulations. Although this is a measure on transport, in reality it is an act of social responsibility, a way of directly benefiting those members of our society that deserve support and recognition. The Government of Wales has determinedly led the way on concessionary travel, both in regulation and financial support. Concessionary travel is a cornerstone of equality, a tangible act of social inclusion, which turns these abstract words into something meaningful. We made a promise on concessionary travel for pensioners: not only have we honoured that promise, but we have extended the commitment.

The Order places a mandatory requirement on local authorities to provide free concessionary travel on buses to elderly and disabled people from 1 April 2002. They will need to hold a concessionary fare travel pass, issued by local authorities in Wales. As you know, from April 2001, the Assembly has provided additional funding so that these passes are free. An elderly person is defined at present as women aged 60 and over and men aged 65 and over. However, as from 1 April 2003, the definition will extend to men aged between 60 and 65.

The Order goes further still. It places a mandatory requirement on local authorities to guarantee free concessionary bus travel to specified companions of disabled people. The elderly, disabled and, where appropriate, companions of disabled people will be entitled to free bus travel throughout the day, with no time restrictions. I hope that you agree that that is important.

I am aware that there is a lack of sustainable commercial routes in parts of Wales, restricting public access and its ability to take full advantage of the scheme. That is particularly true in rural areas in Wales, but also in some of our valley communities. I was in Ferndale yesterday, and was shocked to hear that 40 per cent of households there do not have access to cars. This scheme is for groups of people across Wales, where community transport could be useful.

It is important that we give fair accessibility to everybody in Wales, particularly where car ownership levels are low. That is why I have considered how community transport can develop and flourish to fill these gaps. At the recent Community Transport Association annual general meeting in Brecon, I made a commitment to examine how we can extend entitlement to include community transport. However, I cannot support Plaid Cymru’s amendment, which requires me to make proposals for a future Order by March 2002. It is not practicable to set a date.

This is a voluntary matter and is complicated. We must seriously consider the structure of community transport. To do that, I have set up a small group from the transport forum, including representatives of the Community Transport Association, which is exploring the role and potential of community transport for extending and sustaining accessibility. It is vital that this collaborative work with the voluntary sector and local government is completed and considered first, so that we can establish sustainable structures throughout Wales. The Community Transport Association empathises with my efforts and supports the approach.

The Environment, Planning and Transport Committee’s public transport review noted the merit of extending the concessionary scheme to community transport, subject to value for money considerations. If it will reassure Members, I am happy to report back to the Committee on progress and ideas on developing community transport. I emphasise that we must get the new definition of community transport development in place, so that we can consider how entitlement and concessionary fares can work.

I emphasise that we must first ensure that the scheme runs smoothly for buses. The process and the arrangements are complicated. Twenty-two local authorities, numerous bus operators and thousands of people are involved in Wales. We must ensure that it works efficiently and assuredly.

I turn to the complications, and particularly to the Mandatory Travel Concessions (Reimbursement Arrangements) Regulations 2001, and their intended effect. Those regulations arrange for local authorities to pay bus operators for running the concessionary fares scheme. Local authorities are required to publish the arrangements at least four months before their intended effect. Every operator affected by the regulations will receive a copy of the proposed arrangements, and no bus operator should lose out from participating in the concessionary fares scheme. If bus operators consider that they will be unfairly affected by the arrangements, they may apply to the Assembly to have them modified.

This instrument has financial implications for local authorities. The Assembly will, therefore, reimburse local authorities in 2002-03 and in future through the local government revenue settlement.

To develop the concessionary travel policy and procedures, a working group has been set up, with local government and industry representatives as core members. The level of funding is in accordance with the estimates of that group.

On resources, I remind you that in 2001-02, I made £1.2 million available for free travel passes. In 2002-03, I will make an additional £16.5 million available, which will increase to £28.4 million for 2003-04: these are substantial sums. That last figure will include £5 million, which is our current estimate of the increased costs for extending the scheme to include men aged between 60 and 65, from 1 April 2003.

There are considerable complications, and I thank those people, particularly in the concessionary travel group, who have put real effort into supporting this laudable idea.

As a councillor I was involved many years ago, when we introduced free travel to those aged over 75 in Cardiff. It was one of our best achievements, and I am delighted that Cardiff has been able to extend that concession. I was also a member of the former Welsh transport advisory group that recommended the extension of concessionary travel to pensioners across Wales. It was not envisaged at that time that extending this concession to other groups, such as disabled people and their companions, would be possible. Perhaps you will appreciate my delight at seeing this whole scheme.

We have received the full co-operation of local authorities and bus operators in ensuring that the scheme will be available throughout Wales with inter-availability of ticketing systems between local authority areas. We are working up proposals to ensure that everyone who is entitled to free travel is aware of its availability. That point is important, because we need to ensure that, as well as putting this scheme into place, it is promoted widely. I know that this measure will be welcomed throughout Wales, and there has been unanimity here among the political parties in pushing this matter forward. I hope that everyone can support it.

The principle of extending concessionary travel must be welcomed by us all, but Plaid Cymru believes that there are gaps in the current scheme, which need to be addressed urgently.

The Minister for Environment has acknowledged that in many rural communities, and elsewhere in Wales, there is little or nothing in the way of conventional bus services. Community transport is often the only form of public transport available, and therefore concessionary fares must be extended to cover this also. Concessionary fares will mean little or nothing to pensioners or disabled people in these areas unless the scheme is urgently extended to cover community transport. Likewise, there are many disabled people across Wales who would be confined to their homes if it were not for community transport provision. They are unable to reach the bus stops from which free travel would be available to them and their companions—and I welcome the extension to the companions of disabled people—so if they are unable to get to the bus stop, free travel means nothing. It is iniquitous that their only means of transport should be excluded from the scheme. I accept that the Minister will review this matter, but the question is when will this take place? The principle of including community transport as an eligible service under the scheme has, as the Minister said, been discussed on several occasions at the Environment, Planning and Transport Committee, and is widely supported. Changes to the regulations on eligible services and reimbursement are required for this to occur, and I am sorry that the Minster will not support the amendment to the motion.

If the work of implementing the new travel concessions is prioritisied, we believe that the timescale set is reasonable, and given that the Minister will not support this amendment, I trust that she will get on with the work as a matter of urgency. Why should those without access to commercial buses have to wait even longer?

Plaid Cymru will support these regulations, but I have one major concern regarding the reimbursement of local authorities, and I would like the Minister’s reassurance on this. The formula for funding, as I understand it, is based on a basic calculation of the eligible population in each local government area. It takes no account of public transport or bus provision, or the current state of local concessionary schemes. There are areas which already have highly developed schemes, on which the local authority concerned has been spending for a long time, and there are other areas where the schemes are underdeveloped. There are also areas with high numbers of elderly residents, but almost no buses, and the uptake is likely to be low in these areas. In areas of relative prosperity, older citizens may prefer to continue using their cars, whereas in other areas where older people may make up a lower percentage of the population, many of them may need to use the bus.

What will happen, Minister, if the uptake is higher in some areas than is predicted by the formula? Will the local authorities be reimbursed, or will they have to deprive other vital services to make up the shortfall? Will the additional funding be ongoing and will it be reviewed to take into account the development of the scheme? Like many areas of the Lib-Lab Government of Wales’s performance, this is a good idea that has not been fully thought through and delivered—a little bit half-baked, you might say. Those who depend on community transport might well agree. However, it is a good idea and we will not oppose it. I press the Minister again to set a timescale for the inclusion of community transport, and I seek her categorical reassurance on reimbursement for local government.

I welcome these regulations, which give effect to yet another made-in-Wales Labour Party policy commitment. I am delighted to share Sue Essex’s pride this morning. Peter Law, the former Secretary for Local Government and Housing, was equally committed to implementing this policy and he is delighted that Sue Essex is doing so today. This policy has been widely welcomed in my constituency, and Flintshire County Council is positive and enthusiastic about implementing it. The council has been working with bus companies in north-east Wales to improve the bus network. The bus subsidy is particularly important in improving travel opportunities for all people. It is disappointing that Plaid Cymru, again, is trying to turn positive into negative, good news into bad news. This initiative by the National Assembly for Wales will be welcomed.

There is no doubt that some practical issues need to be addressed. My constituency borders with England. The cross-border travel arrangements and the cost consequences may well fall to the host authority. Flintshire County Council has raised that issue with me. Nonetheless, the council is extremely supportive and asks the Minister to address the consequences of the changes in future. Notwithstanding those concerns, it is clear that local government is positive and supportive of this made-in-Wales Labour Party policy.

Perhaps I should leave aside whether any Members should declare an interest because of their age groups. If any one wants to intervene, I am more than happy to give way.

I apologise. The Conservative group welcomes these proposals, as does everyone. Leaving aside the internal wrangles of the Labour Party as to whether this is the policy of the Labour group or the Lib-Lab alliance, all political parties in the Assembly support it. These regulations are long overdue. This is one of the first issues that I took up on behalf of a constituent, Mr Tye from Abergavenny.

We will support the regulations. However, I want to raise two points that the management of a leading bus company in Wales have raised with me. First, the company is concerned that, although the reimbursements may cover their basic costs, it will not allow it much room to make a profit. That could affect the viability of certain routes. I hope that the Minister for Environment will take that on board and will perhaps talk to the management of these companies to ensure that they are happy with the arrangements.

Do you agree that using community transport, which is run by not-for-profit organisations, ensures that all profits made—if any are made—go back into providing these vitally needed services? It is completely different to using private bus companies.

With all due respect, you are jumping the gun. I was about to discuss the Plaid Cymru amendment, which we will support. However, I want to discuss reimbursement for bus companies. Not all bus companies are entirely happy with the arrangements. I wanted to throw that out as a note of caution.

Secondly, the biggest issue that concerns bus companies at the moment is the safety of drivers and passengers. I realise that this is not directly related to these regulations. It is good that more elderly people are travelling on buses, but we must ensure that they are safe when they do so. We need to do more to support bus drivers who are under threat and who suffer verbal abuse almost daily in some areas.

We support the Plaid Cymru amendment. Community transport is a good thing, but it must run in conjunction with commercial bus services. Finally, we welcome these regulations. We are glad that it does not take as long for a bus to turn up as it does for Labour to honour its commitments.

I welcome these regulations. They fulfil one of Welsh Labour’s key election pledges. I am sorry that Plaid Cymru cannot welcome these regulations with an open heart and 100 per cent commitment. If we could fix every flooding problem in Wales, Plaid Cymru would complain about the impact on bucket manufacturers.

There are around 18,000 pensioners in my constituency. We should never forget that many of those pensioners—around 30 per cent—have no access to a car, and that bus fares form a significant part of their weekly budget. The regulations will have a significant impact on pensioner budgets. We all know that pensioners do not take up their full entitlements to any welfare benefits, so I would like an assurance from the Government that there will be an imaginative public information campaign to promote this scheme vigorously.

Finally, will the Minister confirm that pensioners will have access to local buses outside their immediate area? I ask this not because my mother in the Rhondda is contemplating travelling to Clwyd West by linking a series of local buses, but because Colwyn Bay, Abergele and Ruthin pensioners are a mobile lot, and they would like to travel all over north Wales using this scheme.

I declare an interest as a member of Rhondda Cynon Taff County Borough Council. I will speak to the Plaid Cymru amendment. I draw Members’ attention to the valuable work of Accessible Caring Transport in the Cynon Valley. It currently has nine vehicles with between nine and 16 seats, and transports 2,000 elderly and disabled passengers a month. It is registered under section 19 of the Transport Act 1985, which means that it can pay its drivers but it cannot take fares—it must invoice its customers instead. It is registered and licensed by the transport commissioners’ office for south Wales, which, by the way, has moved from Cardiff to Birmingham. As a community transport operator, its customers are denied the service of the concessionary bus fare scheme. It could register under section 22 of the Transport Act, but the drivers would then have to be unpaid volunteers rather than the present arrangements. It would also have to consult with the commercial network operators to see whether it could take fares on the routes that it wished to service. Even then, it would not qualify under these regulations to enable its customers to use its concessionary bus arrangements. The disadvantage of the second arrangement, using voluntary drivers, is that it could affect the service’s reliability and, in view of the Government’s back to work regulations, I am told that fewer drivers are volunteering.

I make these points to illustrate that this company alone transports 2,000 elderly and disabled people a month who will be disadvantaged because of the type of transport that they use. The concessionary bus passes cannot be used on community transport because of the regulations that I mentioned, and community transport operators will suffer as a consequence. I appeal to the Minister to consider the amendment as a way forward to reinforce an obvious concern in this matter.

The Welsh Liberal Democrats welcome these regulations as they implement another partnership pledge, taking forward another made-in-Wales policy. The benefits of this bus pass scheme to the elderly and disabled, who are often the most excluded groups in society, are immense. Pensioners and disabled people often do not own cars and are on low incomes. They therefore rely on public transport to get around, access services and play a full part in their communities.

However, this is about more than bus passes, it is a challenge that the Assembly faces in bridging the gap in Wales between the provision of public transport and the needs of those who use it. That is why the Liberal Democrats in Wales particularly welcome the Minister’s commitment to community transport, which was so evident in her speech. We, like Sue, wholeheartedly support the principle of extending this scheme to reimbursement arrangements for community transport in the future. In rural areas, where bus services are limited, community transport forms a lifeline for many pensioners.

We will not, however, support Jocelyn’s amendment because, on the one hand, it is redundant, and on the other, it sets out an unrealistic timetable for achieving what is already a partnership Government objective. In a letter to Mick Bates on 29 October the Minister described in detail the extensive work that she has already undertaken with her officials, community transport organisations and local authorities to achieve a better-funded, more integrated approach to local transport provision.

The amendment cuts across that work and fails to recognise the Minister’s extensive efforts to achieve this common goal.

I will pick up an issue that some Members have raised regarding the development of community transport. Tom talked about the local authority discussing with private bus companies, and David also referred to private bus companies; we know what happened, especially in rural areas, when private bus companies took over bus routes. Many no longer exist, and many people have been left without access to services. That is why it is important that we develop community transport, which can tailor the service to meet the needs of people. However, not all authorities welcome the development of community transport. What discussions is the Minister holding with colleagues in local government to ensure that community transport schemes are written into their service delivery plans?

First, I reassure David that I do not have to declare an interest as regards free bus passes for the elderly, I may be getting older by the day, and the grey hair showing, but I have not gone that far.

I would not have thought so for a minute. [ASSEMBLY MEMBERS: ‘Hear, hear.’]

Thank you. It is nice to see that the Tories still have a bit of the old-world charm, although you could not say that of all them.

Perhaps David will not agree with my next point that many of the bus industry’s problems are down to deregulation. I reassure him that I meet the confederation of passenger transport—

As chair of the older people strategy steering group, I take exception to David’s suggestion that there are negative connotations to being an older person. We should enjoy and celebrate it, rather than make negative aspersions.

Thank you, Brian, for that point.

I will address the points made in the debate. As regards Alun Pugh’s comment about cross-border arrangements, I am happy to say that they are developing. It is up to the local companies to come together but, as time goes on, those cross-border arrangements will develop. However, we cannot impose it; we can only suggest that they take place. That work is in progress. We must remember that although we can pass these Orders and regulations, you cannot begin to imagine how much hard work has gone into dealing with the nitty-gritty of trying to get consistency between local authorities. Some of them have been operating schemes, others have not. It has been a complicated and difficult process. I sincerely thank the operators, the local authorities and my officials, who have worked hard on this to try to ensure that we get this consistency and, importantly, that people know that this can be delivered. There is no point in people turning up at the bus stop, if they do not know that this can be delivered. It is a matter of taking this scheme through, stage by stage, so that we can establish something that we are confident will work.

As regards the amendment, I say to Plaid Members that you have my commitment, you know where I am coming from and where I want this scheme to go. However, I cannot impose it on community transport. It would be wrong for me to do so. We must put the systems in place.

Plaid Cymru does not doubt your commitment to this scheme. It is a question of time. This is a good scheme, and we welcome it, but there are elderly and disabled people who will not be able to take advantage of it. Are we talking about seeing a resolution to this in six months’ time, or in a year’s time? No-one underestimates its complexity, but I am sure that you agree that there is a huge will in the community transport community to sort this out. It is concerned, where there is competition, about possibly losing services to commercial services if older people have to pay for using them and do not have to pay for using community buses. Can you give an idea—or if you cannot do so now, will you come back to Committee—of how long this will take? The purpose of this amendment is to tie the regulations to a timescale and to say to people—

We want to know how long this will take.

I am glad that you admit that this is a good scheme. You must realise that community transport is different to commercial transport. It was set up within the social services mould.

On the transport framework, we are trying to identify gaps in accessibility, and whether we can install community transport schemes that sustain that accessibility so that we can define routes on the ground and implement those linkages. The other issue is that we must then make it clear that funding for schemes must be transparent. Edwina Hart would not want to agree to anything where we could not put our hand on our heart and say that the money is going in the right way and that we are answerable for those sums. That work must be done and put in place.

On having a definite timescale, I cannot give you one because it is unfair for me to do so. We are working in collaboration with the community transport association and Welsh local government. A sub-group is considering how we can take community transport forward in future. Concessionary fares are an important part of that, but we must get the structures right first and, as Pauline said, get the regulations right so that community transport can operate in a way that perhaps it would not have envisaged five or 10 years ago. We have put money into the system. There are now more people working for community transport in Wales. As soon as the sub-group has done its work, you have my guarantee that it will come back to the Environment, Planning and Transport Committee. I cannot force things on these people. It would be wrong to do that, because they are doing that work as a sub-group for the Assembly. Once that work is done, I will bring that forward and we can see where we are going, and we will have a clearer view.

On concessionary fares and costs, we are funding a study this year to ensure that costs are fair and reasonable to each local authority. We only have the practice of a couple of local authorities to depend upon. We do not know whether that will work out in exact pounds and pence. This year we will see how it works, we will fund the study, and if the formula needs adjusting, we will do so. There is such goodwill to make this available, that everyone has lived with this. I hope that answers some of your questions.

Like Tom, I would like to thank Peter Law, who, as Secretary for Local Government and Housing, supported this scheme well.

Can you give an assurance that there will be a vigorous public information campaign for this scheme?

I will come to that in a minute. I would like to thank Eleanor for her wholehearted support. I appreciate that. She fully backed the scheme. Alun, the last point in my opening speech was that this needs to be promoted so that people across Wales know what their opportunities are. I give that assurance. As we learn more about making this work and making it practical, I hope that the scheme will roll out to reach every community in Wales.

I wish, like you, Deputy Presiding Officer, that I could propose the motion, have no speakers and then have the vote in favour—that would be nice. However, I am pleased to present my final budget proposals for 2002-03 and 2003-04. During the debate on the draft budget on 18 October, I gave full details of the various measures that underpin the proposals for the main expenditure groups. I will not repeat them today, but I have written to Nick Bourne, David Davies, Helen Mary Jones, Dafydd Wigley and Phil Williams, responding to the points that they raised during the debate. I have already spoken to Rhodri Glyn Thomas about the Cardiff European Capital of Culture bid, which he raised in that debate. The debate was useful. I have taken careful notes from the comments made in the correspondence that I received from the Chairs of Subject Committees that have been debating the budget proposals during the past month. The relevant spending Ministers will reply to the letters, but I will pick up two or three key issues that have emerged from the correspondence.

Glyn Davies wrote to Carwyn Jones on behalf of the Agriculture and Rural Development Committee, calling for greater transparency on the funding of the rural recovery plan. I regret that the Committee did not find the tables that I published in advance of my draft budget sufficiently clear on this point, but it was not for the want of trying. As I have explained before, the rural recovery plan is being funded with end year flexibility. Since this is not recurrent expenditure, it does not form part of the main budget proposals. Instead, on 6 December, I will announce to the Assembly the in-year changes to the Assembly’s 2001-02 budget. That will give details of how I propose to allocate any additional resources due to be provided by the Assembly by virtue of the winter supplementary estimate. The statement will also include details of changes between budgets. The specific allocation of resources relating to the rural recovery package for the current financial year will be confirmed at that time. I will also publish a table at that time to show how expenditure on the remainder of the package is profiled.

We will be dealing in a similar fashion with the support for the Wales Millennium Centre—a point raised by Rhodri Glyn Thomas in a letter to Jenny Randerson on behalf of the Culture Committee. Richard Edwards wrote to Sue Essex on behalf of the Environment, Planning and Transport Committee. One issue raised in that letter was the Committee’s forthcoming report on the investigation into the Nantygwyddon landfill site. I recognise that that may lead to additional resource requirements, and while Members will understand that I am not in a position to make provision for this matter immediately, I am mindful of the issue and will remain in close contact with Sue Essex about the matter.

Turning to education, I am pleased that the discussion of the draft budget proposals in the Education and Lifelong Learning Committee has been broadly favourable. However, I have noted the concerns raised by the Committee in respect of further education and higher education sector pay and unit of resource, as reflected in Cynog Dafis’s letter to Jane Davidson. The Assembly is currently dealing with major policy issues in the education and lifelong learning area that may have significant financial implications. These include the implementation of the Rees report and the reform of the HE sector. We are currently examining the options in the Rees report and shall deal with higher education in setting out our strategy for HE, taking account of the results of the Education and Lifelong Learning Committee’s review. The partnership agreement’s commitment on adequately funded development and expansion for higher education remains, but I am determined to consider the financial position in the round so that a sustainable position can be achieved for the medium to long-term. My supplementary budget in March provides an opportunity to revisit these matters should it prove necessary. However, I acknowledge that early next year, both HE and FE sectors may wish to devote more resources to recurrent spending than is proposed in the budget. I have agreed appropriate flexibility between capital and revenue provision to meet these pressures as necessary.

I have published tables covering further additions to the budget. These are fairly marginal, but they include additional recurrent allocations totalling nearly £5.8 million for the next two financial years and £4.5 million from end of year flexibility over the same period. However, I take this opportunity to confirm that full provision will be made for new hospitals in Rhondda and Porthmadog. Since I intend to fund these projects from end year flexibility, I will make the necessary resources available when they are needed. In addition to publishing the tables following the final budget plans, I have circulated a table to Assembly Members, detailing the changes that have been made to the draft budget proposals, including the numerous technical transfers in and out of the Assembly’s budget and between main expenditure groups. I thank Members who have e-mailed me to ask for clarification on this matter.

In addition to the two new hospitals that I mentioned, a number of specific issues have emerged between the draft and final budgets, which I will highlight. They include the possibility of a beta interferon risk-sharing scheme, in which the drug could be funded for patients with relapsing-remitting multiple sclerosis. That is currently being discussed with the Department of Health and it is not certain that trials will go ahead. However, following discussions with the Minister for Health and Social Services, I have set aside £1.7 million a year to assist with the funding of such a scheme.

Secondly, a further £1.8 million for transitional grants will ease the impact of the new revenue support grant formula for next year.

Thirdly, one of the targets in ‘Plan for Wales 2001’ is to ensure that all public bodies in Wales have asset management plans in place, or in preparation, by April 2002. That is important as they will help inform future Assembly capital spending plans, and I shall publish the Assembly’s review by the end of November, which confirms that we are on-target to meet that objective.

The Welsh Local Government Association set up a working group, with Assembly representation, which published guidance for the preparation of local government asset management plans in September. I am pleased to announce that for next year, an additional sum of £1 million will be distributed among local authorities to assist them in completing this task.

A sum of £150,000 per annum recurring has also been set aside to fund a chamber orchestra for Wales, with the objective of making performances more accessible to communities. End year flexibility will provide £900,000 to develop the fundamental review of procurement across the Welsh public sector. That is the first time in the United Kingdom that procurement has been reviewed as a cross-cutting issue and, with Welsh public sector expenditure now exceeding £3 billion, it is vital for Wales, its economy and its environment that these issues are tackled.

The review identified potential value for money savings amounting to some £90 million per annum over time. Therefore, we are investing to save in this vitally important sector. The initiative will be taken forward by a small team of procurement professionals within the Assembly, directed by a supervisory body, which I chair. In addition, the Assembly will part-fund a local government procurement initiative support team to take the initiative forward in local government.

Finally, I want to announce our support for one particular scheme, to which I attach the highest priority. The Assembly is providing the Llanhilleth area regeneration scheme in Blaenau Gwent with £5.5 million. Part of the funding will be delivered from additional sums that I have set aside to deal with the impact of the Corus closures on our steel communities. That is over and above the funding announced by the First Minister on 3 May. When other sources of funding, including Objective 1, Communities First and the Welsh Development Agency are added, this is a £10 million project.

This scheme is important for several reasons. First, it represents our cross-cutting agenda in real terms, as the project involves a new integrated school and institute, which will also be used for adult lifelong learning and community health purposes. In addition, further phases of the project involve regeneration, infrastructure, and business development opportunities.

Secondly, the project started life as a potential private finance initiative, but it did not add up. However, the fact that we are proceeding with it shows that this administration is prepared to examine all funding options when it comes to dealing with essential projects in our most deprived communities.

I also welcome the strong partnership with Blaenau Gwent County Borough Council that is driving the project forward. I am particularly grateful to Peter Law for his unstinting support during this difficult period, in terms of negotiating this project. If Members want further details of the project, I urge them to look at the displays on the right-hand side of the neuadd as they leave the Chamber. I want to see many more of this type of innovative project brought forward in the coming months.

To recap on the budget, I underline that this has not been a spending review year. The scope for major increases in budgets has been limited. However, I made it clear when introducing the draft budget on 18 October that these proposals offer a balanced approach, reflecting the priority invested in public services within the scope provided by the Assembly’s budgets. Our immediate task is to improve our spending performance and to ensure that all resources reach the front-line services for which they are intended. I made this clear in my statement on 18 October. I invite the National Assembly for Wales to support the motion.

Nid wyf am wneud araith hir am ddau reswm: yn gyntaf, bob tro yr wyf yn paratoi araith o sylwedd, caf wybod mai dim ond tri munud sydd gennyf i siarad; yn ail, nid oes llawer wedi newid ers y ddadl rhyw fis yn ôl ar ddrafft cyntaf y gyllideb. A wnewch chi gymryd yn ganiataol felly ein bod yn parhau i deimlo’r angen am fwy o gyllid gan y Trysorlys, yn credu y dylid ailwampio fformiwla Barnett, ac yn anfodlon ynglŷn â’r diffyg arian cyfatebol llawn ar gyfer Amcan 1?

Yr wyf am ganolbwyntio ar ein systemau cyllido, ar sut y mae’r Cynulliad yn ceisio rheoli cyllid ac ar y modd y rheolir ac ailgyfeirir tanwariant at ddefnydd derbyniol arall. Cyn hynny, hoffwn arweiniad gennych, Ddirprwy Lywydd, ar ba un a oes gennyf yr hawl i gyflwyno papurau ffurfiol i’w hystyried yn y Cyfarfod Llawn?

Os felly, a gaf i gyflwyno—

Yr oeddwn yn meddwl mai ateb felly y cawn i gennych. Dyna paham yr wyf wedi rhoi copi o’r papurau i’r pedair plaid eisoes, ac, er mwyn cwrteisi, teimlais y dylech chi gael copi hefyd. Y rheswm pam y lluniais ddrafft o system—a fyddai’n cael ei defnyddio ym myd diwydiant neu unrhyw sector arall—yw oherwydd bod angen inni ddeall yn iawn yr hyn sydd yn digwydd gyda’n harian. Mae’r ddogfen a roddais i’r Aelodau yn cynnwys system dryloyw sydd yn rhoi darlun llawn o sut y mae tanwario yn digwydd, yn dangos gwerth cronfeydd wrth gefn ac yn pwysleisio’r angen i gael gwybodaeth yn fuan. Mae hyn yn gwbl hanfodol—ac y mae’r Gweinidog a’i staff yn ystyried yr argymhellion ar hyn o bryd—os ydym am sicrhau y defnydd llawnaf posibl o’n hadnoddau yn y modd mwyaf effeithiol.

Ymddiheuraf am drafod mater mor fanwl â hyn mewn Cyfarfod Llawn. Dyma’r math o drafodaeth y dylid ei chynnal mewn pwyllgor cyllid, ond nid oes gennym bwyllgor o’r fath. Dylai fod gennym bwyllgor cyllid a fyddai, yn ddelfrydol, yn cyfarfod yn fisol, ac yn sicr yn chwarterol. Byddai hwn yn bwyllgor trawsbynciol, ac, yn ôl Deddf Llywodraeth Cymru 1998, mae gennym yr hawl i sefydlu pwyllgor o’r fath. Gallai’r pwyllgor ystyried y math o ddogfen yr wyf wedi ei pharatoi a chynnal adolygiad bob chwe mis. Derbyniodd y Gweinidog fod hynny’n amserlen resymol, er y byddai’n well gennyf pe bai hynny’n digwydd yn chwarterol. Gobeithiaf y caiff hyn ei ystyried, er mwyn inni weithio’n fwy proffesiynol wrth gadw llygad ar ein cyllid. Dylid defnyddio’r un fformat dadansoddiadol ym mhob pwyllgor pwnc, er mwyn iddynt oruchwylio gwariant yn gyfrifol o fewn cylch gwaith y Gweinidog perthnasol, ac yn arbennig i ailgyfeirio gwariant yn fwy effeithiol.

Y mae gennyf ychydig bwyntiau penodol. Yn gyntaf, a oes digon o arian yn y gyllideb hon ar gyfer y codiadau cyflog i athrawon a ddaw ym mis Chwefror neu fis Mawrth? Byddai gennym achos i bryderu pe bai’r setliad yn uwch na’r hyn a ddarparwyd gan y Gweinidog ar ei gyfer. Gallai hynny arwain at oblygiadau sylweddol i’r Cynulliad a llywodraeth leol.

Yn ail, mae’r cynllun homebuy yn fenter ardderchog a gyflwynwyd gan y Gweinidog. Serch hynny, hanner ffordd drwy’r flwyddyn ariannol, nid oes arian ar ôl gan Gyngor Gwynedd ar ei gyfer. Felly mae angen tua £10 miliwn ar gyfer y cynllun yn hytrach na’r £3 miliwn a ddarperir.

Yn drydydd, beth yw gwir sefyllfa cynlluniau PFI yng Nghymru? Croesawn y ffaith na fydd ysbytai ym Mhorthmadog a’r Rhondda yn defnyddio PFI, a chroesawn y datganiad am Flaenau Gwent heddiw. Fodd bynnag, cawsom neges gymysg gan y Prif Weinidog a’r Gweinidog dros Gyllid: a yw PFI yn dderbyniol ynteu a ydym am ddefnyddio llai arni, fel y byddwn i’n dymuno ei weld?

Yn olaf, a ydym eisiau symud tuag at osod cyllidebau tair blynedd ymlaen llaw fel bod llywodraeth leol a’r sector gwirfoddol yn gwybod yn union lle maent yn sefyll? Agorodd y Gweinidog y ddadl y bore yma gyda’r geiriau canlynol:

‘I am pleased to present my final budget proposals for 2002-03 and 2002-04.’

Mae’r geiriau hynny’n awgrymu ein bod yn symud ymlaen at batrwm o’r fath. Os yw hynny’n wir, yr wyf yn ei groesawu.

I congratulate Edwina on her final budget statement. It represents a fine and politically astute balancing act. All finance ministers in her position would be leaned on by all manner of vested interests to produce such a budget. She has not only undertaken it with great skill, but also with an eye for social justice, which is what the Government of Wales is here to ensure. We are talking about record levels of investment in our public services in Wales in my lifetime. I fought for that in my election campaign and I am proud to support it now that I have taken my seat in the Assembly.

I cannot allow Plaid Cymru’s comments on economic proposals to pass without questioning their moral authority to make such comments. Its raison d’etre is to break up Britain and to remove all prospect of Wales benefiting from social justice policies that affect the 60 million taxpayers in the UK. If Plaid Cymru cannot explain how it would fund these budget strands without the existence of Britain, it has nothing to contribute, except the views of a pressure group. It has no moral authority—

I will give way in a moment. Plaid Cymru’s real contribution to this debate is no more than aggressive beggary—[PLAID CYMRU ASSEMBLY MEMBERS: ‘Oh.’]

I will in a moment.

Plaid Cymru demands more and more from a British Treasury and more and more redistribution of wealth across Britain, which the Labour Government is attempting to achieve. Plaid Cymru is not sincere in that demand, but uses it as a way to build up resentment between Wales and the rest of Britain.

From your contribution, am I to understand that you did not read my book on this subject? I gave you a copy. It explains fully how we would fund such a budget, and offers a full analysis of why total Government spending in Wales per head is less than the UK average.

Of course I read your book, and I congratulate you on your great imagination, but meanwhile back on earth, the people of Wales continue to be dissatisfied at the ballot box every time Plaid Cymru tries to dissemble its economic policies.

I will leave the subject of Plaid Cymru for the moment—

In her response, will the Minister re-emphasise the importance she placed, in drawing up the final budget, on the principles of social justice on which the Government of Wales has rested its economic and other principles. With that in mind, I will be a little parochial and press her to let us know what progress has been made regarding programmes for regeneration in Merthyr Tydfil and Rhymney.

First, I will deal with some main issues. I agree with Dafydd Wigley that there is no great change in the final budget compared with the draft budget, therefore some of this is old territory.

How will the Minister for Finance, Local Government and Communities deal with the issue of underspends to ensure that we do not face that serious problem in the current financial cycle? At a time when we are facing the problems of massive waiting lists and waiting times, we do not want to find that, at the end of the year, a significant sum of money—or indeed any money—has not been spent.

Briefly on the Barnett formula, I share the position of the Minister for Finance. We should not revisit the issue of the Barnett formula unless we are convinced that it will deliver a better outcome for Wales. Were I convinced of that, I would be keen to re-open the issue. However, it deserves further attention before we call for this review, or we may be short-changing Wales.

I believe that the administration should come clean on private finance initiative, because there is a strange dichotomy between the First Minister and the Minister for Health and Social Services—not to mention the Minister for Finance, Local Government and Communities—which I will talk about later. I agree with Huw Lewis that Plaid Cymru must resolve its dichotomy on whether it wants independence from the rest of the United Kingdom, or whether it wants extra money from Westminster. All the handouts in the world, Dafydd, helpful as they may be, do not answer that question. Therefore, I would be grateful to know Plaid Cymru’s position on this. I noticed that when Huw Lewis was talking about independence, Rhodri Glyn Thomas was nodding his head, and I assume that it was in agreement rather than nodding off. He may wish to clarify that later.

Regarding the specific details of the budget, we have heard much—and indeed we are hearing much now—from the Liberal Democrats about their influence in the administration. Why then is it the case, with so many Liberal Democrat Members purporting to represent rural Wales, that there is such a poor settlement for agriculture and rural affairs? During this last year, we have had a worsening of the agricultural crisis. We have heard from Huw Lewis on how the Government will help the socially dispossessed, but that is not the case in rural Wales. Farm incomes at the beginning of the year were £4,500 per annum on average, and have now fallen to approximately £2,500 per annum on average in the areas of Wales ravaged by foot and mouth disease, and yet there is a standstill position on this in the budget. There is nothing significant being done for farmers and for rural Wales—and it is not just farmers who are affected, it is the whole rural community, because there is a knock-on effect on tourism and tourism-related businesses. These areas, particularly Powys, have had little assistance.

I agree that it is absurd to expect anyone to live on an annual income of £2,000 or £3,000. Will you quantify how much you would put into the budget to achieve the desirable objectives of which you speak?

We would put more in than has been there previously, and we would also ensure that in your specialist area of health—to which I am coming in a moment—our position on PFI was clear. I was reading Progress, the Labour magazine, this week—I like to know what you lot are up to—and there was an article by Rhodri Morgan, welcoming PFI for hospital building, yet, at the same time the Minister for Health and Social Services says that she does not want PFI for the hospitals in Porthmadog and Rhondda. I would like to know where the Minister for Finance, Local Government and Communities stands on this dichotomy of view within the administration. Is Rhodri Morgan right, or is the Minister for Finance right? Also, why is there no provision in the health budget for the restructuring of the NHS? A new finance director, new nursing directors, and so on will incur massive costs.

On education, the vice-chancellors are saying that the higher education settlement is pathetic. There is no doubt that it is a far worse settlement than in England. I would also like to ask the Minister for Finance, Local Government and Communities whether she will confirm that the cost of abolishing tuition fees would be £40 million in a year, and why does she not do it?

On contingency money, you are raiding the reserves and they have been reduced by 80 per cent, which is not good enough.

Lastly, we are pleased about the additional assistance for Blaenau Gwent. Will you confirm that the decision to send this money to Peter Law’s constituency was a Liberal Democrat initiative? I am sure that it is part of the partnership agreement, and that Mike German—who surely is shortly to be canonised for his help to the administration—insisted on that being there. We are supportive of that part of the budget, and we think that Peter has done such a good job that it would be a good idea if the absent quarter of the Cabinet, namely Rhodri Morgan, considered giving him one of his two posts.

I am a bit taken aback by that comment.

We are proud of this budget. I compliment the Minister on this morning’s announcements. It is making a difference throughout Wales, for all our people. You must recognise that. It is alright to take political shots now and then—we must live with that—but we are seeing the Assembly move forward and make a difference in the quality of life of people in so many fields. It shows that the Minister is listening and this is another example of her wanting to fight social deprivation throughout Wales. I thank her for her announcement this morning about the new school and regeneration package at Llanhilleth in my constituency, which dovetails into the excellent Communities First initiative. That will come to a deprived community and give children decent, modern school facilities, moving from a Dickensian era to opportunities that others have always had and taken for granted. That will make a difference to us, and I thank her for it. We look forward to that school being built, with conventional finance, which is wonderful news for us in Blaenau Gwent.

When you look at the budget overall, you cannot fail to be impressed by the commitment to Communities First and the way it is rolling out across Wales. We saw some of that in yesterday’s Committee, and we know that it is beginning to work. Edwina Hart is projecting that strongly on behalf of the Assembly. It is an exciting concept of which we should be proud.

Let us not forget that we are looking at a record contribution to NHS funding, despite all our difficulties. I was pleased to hear that £1.8 million will be made available to fund the investigation into beta interferon. It is possible that that drug will be made available to our patients. I hope that it will, because we are all aware of that issue.

I commend the administration for increasing the health budget, but are you as concerned as I am that waiting lists have officially doubled in the last five years?

The health service is a victim of its own success and you know that. [CONSERVATIVE ASSEMBLY MEMBERS: ‘Oh.’] While there may be an increase in waiting lists—I am fully aware of that, and I have spoken about it in this Chamber, as everyone acknowledges—you cannot fault this Government on the amount of money it is putting into the health service to deal with the problems. We need the proposed reorganisation to address the problem and to find out why we are unable to deal with patients when massive, record resources are being made available. I have no doubt that Jane Hutt will be able to achieve that.

If I follow your line of argument, you are saying that the purpose of the health service reorganisation is to reduce waiting lists. Are you suggesting that waiting lists will come down as a result of this reorganisation?

I am not saying that. I am saying that it will be a useful tool in targeting the health service’s difficulties. The reorganisation will be beneficial in getting to grips with it.

There is an excellent settlement for local government: we can be pleased with 7.9 per cent, which is the equivalent of a 5.5 per cent increase in the budget, excluding new burdens. It is 7 per cent in real growth above inflation over two years. That will deal with problems in the community, in the front line with our friends in local government, giving them the resources to do the work on our behalf.

Lastly, I will mention concessionary fares. My friend Huw Lewis admitted this morning that he read Phil Williams’s book without an anaesthetic, which is an achievement. Plaid Cymru is good at whinging about so many issues. Today Sue Essex announced the concessionary fares, mentioned in this budget, but it was damned with faint praise. I heard Helen Mary say that it was a good idea. I tell you that it is a ground-breaking idea. We are proud that this is a Labour Party commitment from the Welsh general election being realised. [PLAID CYMRU ASSEMBLY MEMBERS: ‘And the Lib Dems.’] No, it is not a Lib Dem policy at all [Laughter.] I have told you that the add-ons do not come into it, or even come up for air. Sue Essex has given us that opportunity, therefore, let us not damn it with faint praise. It is groundbreaking and will give inclusion to many people across Wales, as will this budget. I congratulate the Minister again because she is doing what is necessary to give the people of Wales a future.

Datganaf fy muddiant fel meddyg teulu ac aelod o Gyngor Dinas a Sir Abertawe. Dilynaf y pwyntiau a wnaeth Dafydd Wigley eisoes ynglŷn â thryloywedd a sut y dylem weld i ble yr aiff yr arian. Cawn gyhoeddiadau lu ynglŷn â’r ffaith bod mwy o arian ar gael ar gyfer y gwasanaeth iechyd. Yn naturiol, fe groesawn hwy. Er hynny, mae’n anodd dilyn trywydd yr arian. Croesawn pob dimau goch ychwanegol a ddaw i’r gwasanaeth iechyd ond mae angen tryloywedd i ni allu profi bod yr arian yn cael ei wario ar yr hyn y mae Jane Hutt yn ei gyhoeddi. Oni bai am hynny, bydd pobl yn dechrau meddwl bod y Llywodraeth yn ail gyhoeddi drwy’r amser bod yr un arian ar gael. Credir nad yw’r arian yn cyrraedd gwasanaethau sy’n bodoli er budd y claf. Gwelwn bod rhestrau aros yn codi’n sylweddol. Nid oes amheuaeth ynglŷn â hynny, mae’n ffaith.

In his report to the Health and Social Services Committee on health allocation, Peter Townsend made the important point that health authorities were one of the main reasons for this obscurity regarding funding and that disposing of them would mean a more transparent resources allocation system in the NHS.

We should get rid of health authorities, perhaps, but not by replacing them with tier upon tier of structures. However, we will hear more about that next week.

Mae rhestrau aros yn cynyddu ac yn mynd drwy’r to. Mae fy nghyd-feddygon a nyrsys yn cwyno yn gynyddol nad yw pethau sylfaenol yn newid. Yr ydym yn wynebu’r un problemau bob diwrnod. Ni welwn yr adnoddau yn cyrraedd y mannau sy’n delio â chleifion.

Gan ein bod yn trafod newidiadau strwythurol, beth am y term cost-neutral? Mae Jane Hutt wedi cyhoeddi eisoes nad yw’r newidiadau strwythurol yn mynd i gostio mwy. Dyna ddatganiad anghyffredin o ddewr, sydd yn annhebygol o fod yn gywir. Dylai’r newidiadau gael eu gweithredu ym mis Mawrth 2003, felly, dylai gwybodaeth am linellau ariannu ymddangos yn y gyllideb hon er mwyn paratoi’r ffordd ar gyfer y newidiadau strwythurol enfawr hyn.

Ond, beth fydd cost y newidiadau strwythurol hyn? Ni wyddom. Sut all unrhyw un gyhoeddi, felly, y bydd y broses yn niwtral o ran cost? Ar ôl yr holl ailstrwythuro a fu i’r gwasanaeth iechyd dros y degawd diwethaf, os ydym am ailstrwythuro o gwbl, dylem ddefnyddio’r achlysur hwn i arbed arian ac i sicrhau rhagor o arian i drin ein cleifion. Ni ddylem ailstrwythuro dim ond er mwyn ailstrwythuro. Bydd y strwythurau newydd yn gymhleth a bydd llawer mwy o siawns i ni golli’r arian ar ei daith rhwng y Cynulliad a’r cleifion gan y bydd mwy o strwythurau rhyngom. Mae’r ffeithiau yn eglur, Brian. Efallai nad ydych yn deall beth fydd hynny’n ei olygu, ond bydd 37 corff newydd yn lle pump. Mae fy mathemateg—

Yr wyf yn rhedeg allan o amser, Brian. Bydd yn rhaid i chi aros tan yr wythnos nesaf. Mae yna bryder yn y gwasanaeth iechyd. Mae’r holl negeseuon a dderbyniais dros yr wythnos diwethaf yn awgrymu y bydd y newidiadau strwythurol hyn yn golygu y caiff yr arian a bennwyd ar gyfer gofalu am gleifion ei ddefnyddio ar gyfer gweinyddu.

Much of what needed to be said about this budget has already been said in the debate on the draft budget. As has been mentioned, there are few differences between the two, apart from a few transfers here and there. This budget continues to build on the foundation established last year in the three-year programme, ‘Putting Wales First’, which saw a substantial increase in funding targeted to match the partnership Government’s priorities. This budget ensures that more of the commitments in ‘Putting Wales First’ will come to fruition, proving yet again that the partnership Government is delivering on its promises. In particular, we are fulfilling our commitment to fund fully the recommendations of the Rees Commission that are within the Assembly’s powers. There is also money in the budget to implement our commitment to a policy that will keep small rural schools open. That, again, is welcome.

Underspend has been mentioned, and it is a matter of concern. However, the statements made by the Minister for Finance show that she is getting to grips with that issue. We welcome the investment of £40 million of the underspend resources in much needed equipment and other capital projects this year. The reallocation of this money to meet the Assembly’s priorities should also be welcomed. All Members should take on board the Minister’s commitment to tackle this problem in the future. The announcement of £1.7 million for the beta interferon scheme is particularly welcome, as it puts Wales at the forefront.

The Minister’s announcements on the private finance initiative are also welcome. In terms of the hospitals mentioned in the Minister’s speech, we have stated that the Assembly will fund such schemes fully where possible. The further announcement on the bid in Blaenau Gwent is also welcome, as it sends out an important message to public services, especially in the context of the previous announcement that we will fund these schemes directly if possible.

Until the Chancellor of the Exchequer changes Treasury borrowing rules, it is likely that we will still need to use some form of private finance. However, I believe that the direction that we are now taking is the right one. We must find more resources for other capital projects, such as a new Welsh-medium comprehensive school in Swansea—to mention a parochial issue—if that is possible.

This budget has been made more difficult by the many crises that the Asssembly has faced in the last year, particularly the job losses at Corus, flooding and the foot and mouth disease. The fact that we have found significant extra resources to deal with these crises while still increasing our funding commitments for our key priorities of health and education, as well as finding more money for housing, the Welsh language, rural areas and other key policy areas, is a sign of good management of the Assembly’s finances.

Nick Bourne raised the issue of rural areas. The £47 million for the rural recovery plan is a significant commitment by the National Assembly to rural areas, as is the extra money for health, education, housing, economic development and the arts.

If the partnership is so effective, why have we not found money for care homes across Wales to ensure that their funding is increased to make up for the effects of measures such as the minimum wage and the care standards that have been introduced?

Peter has clearly not been paying attention, because in at least two meetings of the Health and Social Services Committee, the Minister has announced £8 million for the care sector. She is currently considering how £5 million of that can be spent to help care homes.

Will the Minister give way?

I will not give way. [Interruption.] I will not get into an argument on this. The commitment made by the Minister is clear. For Alun’s information, I am speaking as the Liberal Democrat spokesperson on finance, and not as a Minister or even a Deputy Minister. If Alun wants to promote me, he is welcome to do so.

Despite the Conservatives’ remarks earlier this morning, there are extra resources for rural areas in this budget, as well as a significant commitment to tackling poverty and deprivation. I am pleased to support the budget, as is the Liberal Democrat group.

Many Members have been greatly concerned by the way New Labour in the Assembly has been throwing a lifeline to municipal Labour in the Valleys who, year after year, have failed to control spending levels. This year is not an exception. Despite assurances to the contrary, a huge amount of transitional grant is again being doled out to the usual overspending suspects. Why is it that far from getting rid of the transitional grant, as was suggested would happen, the amount has shot up from under £4 million in the draft budget to over £5 million in this budget? There is no doubt that as a result council tax payers in some areas—and I suspect that Monmouth will be one of them—will be asked to put their hands in their pockets and bail out local authorities that cannot keep their books in order.

Presumably, on that basis you advised Monmouthshire County Council to refuse last year’s transitional payment assistance?

No, I did not, because Monmouthshire County Council only received a small amount of transitional payment assistance—about £200,000. It was given that because it receives the lowest amount of funding of any local authority in Wales. Instead of asking Monmouthshire to refuse that money, Brian should ask why some local authorities, such as Blaenau Gwent, spend far more per head collecting domestic rubbish than large rural areas like Monmouthshire.

David, if you are so opposed to the transitional relief scheme, why was it that when we discussed the formula for local government, you supported the Plaid Cymru amendment to extend the period over which that transitional relief should be paid?

I supported it, as you well know, on the basis that some of it would go to Monmouthshire, which was receiving a small amount of money. I point out that Monmouthshire and other local authorities were entitled to that money. When that formula was being drawn up, people such as the Deputy Minister for Local Government, told us that the amount of weighting given to rurality would be fully taken into account. We were led to believe by people such as the Deputy Minister and the former Secretary for Local Government that rural areas like Monmouthshire would receive more money in order to pay for the higher costs of delivering services. When that formula was introduced, the weighting given to rurality was reduced from 8 per cent to 6 per cent, which means that local authorities like Monmouthshire suffered. Why is it that instead of asking about traditional grants—

Why have Monmouthshire council tax payers been saddled year on year with huge council tax rises in order to bail out local authorities that cannot keep their books in order?

Will you accept that Monmouthshire County Council last year broke the ministerial guidelines by setting council tax rates far above what it should have done? Will you also accept that deprivation in Monmouthshire is insignificant in comparison to that in places such as Merthyr Tydfil and Blaenau Gwent, because its wards are not among the first 100 wards in the Welsh index of multiple deprivation? Do you accept that?

I would not accept either of those points, because two wards in Monmouthshire are in the top 100 wards; one of which is in the Monmouthshire council area, but not in the constituency. Secondly, there has been a report that shows that people in Monmouthshire have among the lowest average incomes in Wales. [ASSEMBLY MEMBERS: ‘Come off it.’] Yes, that was an independent report. Thirdly, the reason why the council set a higher rate of council tax was because it was not given an adequate amount of money in the settlement.

I will move away from that particular subject for a minute. Will the Minister guarantee that any extra costs incurred as a result of EU legislation on the export of fridges will not be borne by local authorities? The last time I mentioned this people sniggered a bit and wondered what I was talking about. However, people have now begun to realise that this is an important issue, because local authorities across Wales will be saddled with the cost of warehousing fridges, which cannot be exported anymore. I know that Monmouthshire and other local authorities are already looking into the cost of warehousing. It will be extremely expensive and we need a guarantee from the Minister that those costs will not be passed on to council tax payers.

I have about 30 seconds left. The Minister responded to my comments about the road haulage modernisation fund. I asked why, after the fuel protest, Gordon Brown got up in the Houses of Parliament and promised £5 million to Wales for a road haulage modernisation fund. We have not seen any of that money. We might see about £1 million, which will come through in other ways to be spent on slightly different issues. Is it right that the Chancellor of the Exchequer, during a huge, nation-wide protest, can promise money to people and then for us, months later, to be told that the money will not come through? This budget is not good for Wales. This budget is a stealth tax on council tax payers and it is daylight robbery for Welsh hauliers.

Minister, I draw your attention to a major weakness in the Assembly Government’s concessionary bus pass scheme, which provides free travel for the elderly. Not enough money has been made available to local authorities to subsidise the scheme, and this will result in major shortfalls in local authorities’ budgets as they struggle to meet demands in some areas. At this point, I declare an interest as a member of Rhondda Cynon Taff County Borough Council.

This is a valuable scheme, which local authorities are proud to support. However, they need sufficient funding to run it. The Assembly Government’s estimates are based on figures for the elderly population and not on the number of journeys likely to be made. This is wrong and will lead to significant discrepancies between regions in Wales. Local authorities in rural areas will be better off as there are few buses for pensioners to catch, while urban authorities will struggle to pay the bus operators. By the same token, pensioners in rural areas will be denied maximum use of free travel because of the lack of bus services. The money available is at odds with the Government’s commitment to promote public transport and social inclusion. A mechanism should be introduced to allow retrospective adjustment to be made for authorities where the scheme is popular. If this is a national scheme, then it must be fully funded by the National Assembly.

In local government, there are significant changes to existing funding arrangements and new pressures. These include: neutrality of the sixth form transfers; the Department for Work and Pension’s preserved rights and residential allowance transfers; inflation and pay increases; funding teachers’ threshold payments—a gap still remains; concessionary fares; the cost of Best Value; waste management; costs associated with the modernisation agenda; and progressing the e-government agenda. Most council treasurers are currently trying to separate the facts from the spin. The additional financial pressures placed on each council by Westminster and the National Assembly are immense. However, there are already indications that some councils will find it difficult to deliver on the Minister’s expectations.

Other Members have already mentioned that councils are required to manage the intermediate care sector and deliver the National Assembly’s policy changes with insufficient financial support from the National Assembly. From representations made by local authorities and other providers, the Assembly should be aware that the intermediate care sector is in crisis. That is due to increased costs, which are significantly affecting the independent and voluntary sector; policy changes that are not fully financially supported; difficulties in recruiting staff to work in the sector; and rising demands for services, resulting in bedblocking in the NHS. If the National Assembly is to improve intermediate care, it must take greater financial responsibility for these services. It must stimulate the market across Wales and encourage, not only local authorities, but new and existing independent and voluntary providers, to offer core care and added-value services for the most vulnerable in our society.

As regards capital funding, Minister, you confirmed in your statement that Porthmadog and Rhondda hospitals are to be funded directly. I welcome that. However, are they exceptions? Will you make clear that, in terms of housing and other capital projects in the public sector—primarily in health and education—the choices are stark? Indeed, there are none. In housing investment, stock transfer, health and education there is only one choice, private finance initiative. On Peter Law’s point on the increase in the local government settlement, with respect to Peter, the underlying increase is 5.67 per cent to cover costs such as pay increases for staff and the shortfall in funding for teachers’ threshold pay. That will leave little room for growth in the sector. On Huw Lewis’s remarks on Plaid Cymru—The Party of Wales, I remind him that when Labour lost control of Merthyr Tydfil County Borough Council, the Labour leader in Merthyr asked the Plaid Cymru councillors—whom he described as like-minded socialists—to join with Labour. Huw is clearly out of touch with his colleagues in Merthyr.

I welcome the recent convert, Alun Pugh AM—

Thank you, Deputy Presiding Officer for calling me to speak, especially since you informed me a moment ago that I did not have time. Nick Bourne raised PFI and tried to make out that there were inconsistencies in our position. The main test for PFI is whether it represents good value for money. If a PFI bid does not represent good value for money, then it should not go ahead. That is an entirely consistent position.

I sought clarification on what appeared to be a dichotomy of views. Rhodri Morgan, in the answer to which I referred, welcomed PFI for hospital projects, yet we know that the Minister for Health and Social Services has set her stall against it. I sought clarification from the administration on which of those two views is correct.

It is clear that the test is whether it is good value in terms of the public purse and services for patients or students in Wales, not the dogmatic point that you are trying to generate.

I accept that, when commenting on the Minister for Finance’s budget proposals, we should adopt a responsible attitude to them and recognise that the budget at her disposal is finite. It is largely decided at Westminster by the Chancellor of the Exchequer. That is the basic position. However, it is reasonable for opposition Assembly Members and their parties to point to those areas where more money should be spent. This is particularly relevant in this Assembly because underspending has become a feature of the management of the Assembly budget. Underspending almost ought to be part of the planning process. The figures that we are talking about are so massive that to decide how to spend the money through end year flexibility is probably not the best way. There must be some recognition that there will be major underspend and an examination of the programme for a way to introduce increased spending part way through the year.

There are several issues; I will touch on two. The first is Tir Gofal, which is a massively important scheme. It is currently designed to support individual farms. However, the benefit of the scheme is much wider. It transforms how we support farms from a method that some parts of the community no longer think is right, to supporting agriculture in a way of which everybody—both the urban and rural populations of Wales—approves. It is a scheme that can act as a bridge between rural and urban Wales. All Assembly Members fully support it. However, I have frequently expressed the view that, given current levels of funding, it cannot work. It will finish up being no more than a farm support scheme and it must be more than that. If we are to secure the economic benefits off the farm, and the environmental benefit throughout Wales that this scheme could produce, funding levels must be much higher.

The second issue—which others have already mentioned—is local government funding. The reality is that, since the establishment of the Assembly, there have been massive increases in council tax levels throughout Wales, including double-digit increases over some years. Many of these increases have been as a result of issues that have impacted on local government and were beyond its control.

I have just described the facts. David Davies raised another fact about fridges. He was right to say that it was laughed at, perhaps because of the context within which he raised it. However, it is an important issue that rural councils will have to face. I believe that the way in which the Assembly has supported local government is a back door tax increase, introduced by this Government over a number of years. You should not just tell us in this Chamber of the increases in funding in your proposals, Minister. You should consider the burden that will, for various reasons, fall on local government. That is what will lead to council tax increases. This year, despite what you have said in your opening speech, tax increases will be above the rate of inflation, and when this is added to those other increases that have occurred since you have been in control of this Assembly brief, it is totally unacceptable to local government.

I am concerned about two aspects of funding for the Countryside Council for Wales. Its budget for protecting sites of special scientific interest remains inadequate. What is the view of the Minister for Finance, Local Government and Communities on whether the proposed increase in funding for the council will enable it to improve its performance on this, this year? On Tir Gofal, like Glyn Davies, we remain concerned about the inadequate level of funding, and the backlog of over 1,000 farming businesses waiting to join the scheme. I am also concerned about the apparently high percentage of current expenditure spent by the Countryside Council for Wales on administering the scheme, set against the amount that is paid out to participants. I would welcome the Minister’s comments on this.

I will make a brief response to some of the comments made about the position of the Party of Wales on budgets and public spending. Huw Lewis’s constituents, as well as being confused, as Pauline Jarman has said, must be disappointed at his lack of grasp and ambition. Does he think that Wales will always be so poor, that we will never be able to pay our way? I am disappointed but not surprised that he understands so little about the historic deprivation suffered by our communities, and the reparation to which they are entitled in the short term, and by his lack of ambition for the prosperity and potential self-reliance of our communities in the long term—

Will you give way?

I am not giving way, I do not have enough time. I am sure that you will have an opportunity to respond again, Huw, but we have heard enough from you this morning.

Nick Bourne unsurprisingly displays a similar historical and economic ignorance. Our position is simple: we want additional resources in the short term to put historical injustice right. Whether those resources come from Europe, as they did for Ireland, from the UK central Government, or from anywhere else, all that matters is that the resources go into our communities. In the longer term we want Wales to be able to stand on its own feet. Now do you understand?

Will you give way?

No, I do not have time Nick. The Assembly rightly prides itself on an open and transparent budgeting process, in sharp contrast to Gordon Brown’s secretive, anally retentive annual box of tricks. However, this apparent openness will mean little unless expenditure can be accurately tracked throughout the year, and I hope that the Minister for Finance, Local Government and Communities will be open to Dafydd Wigley’s suggestions in this regard.

When people say that more money is required in budget lines, it would be helpful if they could suggest from where the administration should take that money. When I have a call for more money for agriculture—which is currently operating under difficult circumstances—should I take that money from health, education, or transport, for example?

In answer to Helen Mary Jones’s comments about the Tir Gofal administration issues, I am holding ongoing discussions with Carwyn Jones on how to minimise these administration costs. On the Countryside Council for Wales, we are all aware of the impact of foot and mouth disease on its work programme. I know that Sue Essex and her officials are discussing these issues with CCW, and we will consider any properly costed proposals that come forward which we are able to fund. We happened to examine CCW’s budget line in the middle of a favourable three-year cycle from its point of view. Its rising baseline of 14.2 per cent will allow it to continue its work of monitoring Natura 2000 sites, along with the other issues that the Agricultural and Rural Development Committee is concerned about.

I turn to Glyn Davies’s comments on Tir Gofal. His points about the current level of funding for the scheme have been well made in the past. In terms of the budget, he was right to say that Gordon Brown uses the comprehensive spending review to set the Welsh block grant, within which we must then administer our budget. In an ideal world we would like to invest more money in a number of initiatives that would improve the Welsh economy as a whole. However, that has not been possible.

On council tax, you must understand—

Do you accept that Tir Gofal is an opportunity to turn around agriculture and the economy of rural Wales? If the Government was responsible in dealing with the rural economy, it would take that opportunity.

Tir Gofal is a good scheme but it must be phased in as resources allow. To make further substantial allocations at this juncture would mean that I would have to reconsider the Assembly’s priorities and reallocate money. Members tell me that their priorities are education, health, the economy and European structural funds. Therefore I must get the necessary balance correct.

I turn to Glyn’s point about local government funding. Local government acknowledges that last year’s settlement, as a result of the comprehensive spending review, was the best for a generation. It is important to recognise that council tax is a matter for local authorities. Ultimately, they will set the rates that they believe are relevant to allow the provision of services in their areas. We have a genuine partnership with local government. We recognise that the Assembly and central Government place burdens on it. We discuss new burdens with local government and try to make the necessary arrangements to deal with them. That is why I did not laugh when David Davies raised the issue of refrigerators. Following on from his serious point, there are issues that the WLGA will raise with the Assembly in terms of the additional burdens on local government. I consider such issues when we discuss at the Consultative Forum on Finance how to identify and deal with new burdens. David’s other points about local government were not well made.

On the needs of Blaenau Gwent—one of the most socially deprived areas in Wales—we must consider them in terms of how we deal with expenditure. It is not a matter of authorities being profligate; authorities have a difficult job to do. Council tax in Monmouthshire—

I welcome your commitment to the hard-pressed communities of Blaenau Gwent. I am sure that all Members will do so; my colleague Peter Law has already expressed his appreciation. However, will you give an assurance that all the hard-pressed communities affected by Corus’s announcements earlier this year will be recognised in your budget allocations, not least the communities of Shotton, which are suffering a further decline in steel processing as a result of those announcements?

I will finish my comments on local government and then answer your question, Tom.

Council tax in Monmouthshire last year was well below the average rate for band B. No large increases were required due to the generosity of the local government settlement. The decisions were made by the local authority. We must recognise that there is no comparison, in terms of real deprivation, between Monmouthshire and Valley areas such as Blaenau Gwent and Merthyr Tydfil. If we are to deal with these issues, local authorities must take responsibility for the services they deliver and any council tax increases.

Monmouthshire had a council tax increase of around 24 per cent in the Assembly’s first year and about 14 per cent in the second. These are huge increases, way above the rate of inflation. How can you justify that, especially as Monmouthshire receives less money per head than any other local authority in Wales?

In terms of Monmouthshire, we must recognise that the council tax decisions were made by the local authority. It is a matter of local democracy and the council will have to face the electorate at the next council elections.

On Tom Middlehurst’s question, Flintshire will receive £1 million from the second phase of the Corus package, to use as the local authority sees fit, and probably for local regeneration as a result of the unfortunate closures in north Wales.

Brian Gibbons was right about PFI. It is about taking a pragmatic approach, not about dogma. When PFI is appropriate, we will use it, and when it is inappropriate, we will not. That has been well illustrated—

No.

—by what we have done with the hospitals in Porthmadog and Rhondda and Llanhilleth school. That is essential. There is no difference of opinion in the administration about what we want to do with PFI; we just want to take a pragmatic approach so that we can ensure the best investment in the public sector.

I understand Pauline Jarman’s comments on transport concessionary fares, which were published today. However, we must recognise that concessionary fares are a key Assembly policy. For example, free bus travel for pensioners is one of the National Assembly’s key priorities. The funding will be provided by means of the revenue support grant and it reflects the best estimate made by working group that included the Welsh Local Government Association. It is also important to recognise that some authorities have expressed concern about this. If representations are made by the WLGA, they are considered in the distribution sub-group. Therefore, there are mechanisms for dealing with concerns that may arise. I object to the implication in some of those comments that this is all spin. I have not spun anything. I do not repeat announcements that have been made. I am careful in this respect and so is the Assembly administration.

I turn to your points about waste management and e-government. That was covered in my initial budget and I gave additional resources for the delivery of these issues by local authorities. On housing, I fully appreciate the difficulties that local authorities have with the housing agenda. Of course, your local authority, Pauline, has been looking into the issue of stock transfer. Other authorities have looked to me for an innovative approach, perhaps in terms of the community mutual option that we are considering. We must recognise that there is work to be done, but I am confident that we will find a way forward that is acceptable to everyone. Stock transfer will be acceptable in some areas and community mutual options in others. Some local authorities with stock in good condition will not need to do anything with any of these options, but will continue to allow it to remain in the public sector.

I refer to a few other points that have been made—

Yes, I will be brief.

I turn to the comments that have been made about underspend. I deal vigorously with underspend and, on this issue, the National Assembly for Wales is one of the best departments in the UK. If one draws a comparison in departmental terms, the Assembly is the best devolved administration on this issue, and I set a firm target on it. I appreciate your support on the position regarding the Barnett formula, because I do not want Wales to be short-changed in any arrangements that could be entered into.

On rural Wales, one must look at the settlement for agriculture in terms of the additional funds that were allocated, namely £60 million from end-of-year flexibility and £5 million via the reprofiling of the agricultural budget.

On health reforms, there will be a debate next week—

I listened carefully to your speech and I have only just realised the full implications of your comments on the Barnett formula. Since you are so sure that we are not being short-changed as a result of the operation of the Barnett formula, could you publish the evidence on which you base that statement?

I was alluding to the fact that Nick Bourne indicated that we would not want to be short-changed. In that context, I agreed with Nick that we must be certain that we are not being short-changed before any changes are made. I am aware of the issues surrounding the Barnett formula. I know that there are mixed views across the Chamber about what we should do, but I stress the need for caution in this respect. One does not open Pandora’s box until one is sure about what one wants to fly out of it.

I will not take another intervention. I will quickly finish—

I will finish quickly. I want to refer to Dafydd Wigley’s points.

Dafydd showed me the form that he showed you, Deputy Presiding Officer. I will work with my officials to consider how we can outline matters more clearly. There is transparency in the process if you know where to find the figures and then track them. I would not say that it is not transparent.

On the homebuy scheme, my answer to Delyth’s question this morning indicates my commitment to what I consider to be an excellent scheme. On private finance initiative schemes, Dafydd will accept that I have been clear in what I have said in response to the debate. One must have certain options that are viable at the time and use the most appropriate ones. I understand your comments on local government and the voluntary sector, in terms of allowing the necessary timing for settlements so that they have a clear understanding of funding.

To make one final point, social justice is integral to this budget, Huw. It always has been and always will be. There is no need to be parochial about New Tredegar. He took me to visit it in the summer. I am pleased to advise you—and I will write to you about this—that the necessary funding has been found to start the project in New Tredegar. It is an innovative project, which allows all the money that is available from various strands to be used to enable those plans to come to fruition. That is how to work in Wales in future and, of course, how to make money work best for the people of Wales. I commend my budget to you on that basis.