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Isherwood: More spend and failure from the Welsh Assembly Government

Speech in a Welsh Assembly debate on the draft Budget

Having squandered the economic inheritance of 1997, which, as official figures confirm, featured the best job creation record in Europe and record inward investment, which was the second highest on the planet—it was second only to the United States of America—and having blown his 2001 election war chest, the clog iron Chancellor in London is failing to meet his growth targets and is forecasted to exceed his borrowing target by almost £10 billion this year. It is possible therefore that this draft budget is the Welsh Assembly Government's last chance to tackle the problems and crises facing the people of Wales. Instead, we have been presented with a funding fog that amounts to a budget of missed opportunities. The 2003-04 draft budget is further complicated by the exclusion of comparative figures which would reflect this Government's new ministerial briefs. Nonetheless, in her press release of 14 October, the Finance Minister measured certain of her spending announcements against last year's ministerial briefs. There began the funding fog and the spin that was manifest in virtually all of her comments in that press release.

The Finance Minister claimed that there is a 8.8 per cent increase in the economic development budget. In fact, there was only a 7 per cent increase in the economic development and transport brief, although that is still positive. As we have heard, that increase was mainly due to structural funds, and was 15 per cent less than the figures first shown for economic development in the 2002 draft budget. The reality is that Dun and Bradstreet has reported that the number of business failures in Wales is increasing, the regional strategies being published at the moment indicate that the number of companies registered for value added tax purposes in Wales is falling and Experian's August report showed that company profitability in Wales had fallen almost by 90 per cent, that recruitment was being frozen and that investment was being cut. We also know that the increased investment is not reaching the places where it is needed, and that is worrying. I have been told time and again by business organisations and individual companies that the vast majority of the business support budget is consumed before it reaches businesses on the front line who badly need that support. We must replace that top-down, bureaucratic approach with a bottom-up, demand-led approach, in dialogue with small and large businesses throughout Wales.

We welcome the 8.9 per cent increase in the health and social services budget. However, we must be cautious, as the increase of almost 40 per cent since 1999 has led to a 3 per cent reduction in the number of patients treated in hospitals. Meanwhile, as Jonathan highlighted last week, there has been a 106 per cent increase in the number of civil servants working in the Assembly Government's health department. Around 10 per cent of Wales's population is on a waiting list. Waiting times have gone up and up—one good example being that the number of outpatients waiting more than six months has increased by over 1,000 per cent. Expenditure must be accompanied by reform, and the top-down, micro-management approach that distorts clinical priorities, as the National Audit Office reported after the last general election, must be replaced with clinical freedom for professionals on the front line, allowing them to focus on patient outcomes. A consultant told me that, almost word for word, on Monday.

The Finance Minister claimed in her press release that there is a 9 per cent increase in the social justice and regeneration budget. However, that has only led to a 2 per cent increase in the budget for the Minister for Social Justice and Regeneration, Edwina Hart. Such an increase ignores the crisis in the availability affordable housing for rent and purchase in Wales. That crisis must be tackled if the Government's claimed agenda of social justice and regeneration is to be achieved. Social housing is the key to achieving social justice and regeneration throughout Wales, working in partnership with economic regeneration, with the health and education sectors and with the recreation and transport sectors. Without this, we will not kick-start the recovery that we all crave.

Reduced spending on the voluntary sector also makes a mockery of this Government's claimed partnership with the sector, which we only heard about from the Minister last week. I was also concerned to see a zero increase in the rapid response adaptations programme. I hope that this does not mean that there will not be further investment in the successful care and repair programme, for which I praise the Government for this—. I seek an assurance that is not the case.

The rural economy throughout Wales is in crisis not only in financial terms, but in terms of the vital role it plays in creating and maintaining a living Welsh language and culture in the twenty-first century. The language will receive an increase of only 1.6 per cent, with a 0 per cent increase for regeneration and sustainable development and just £300,000 more for the waste strategy. Contrast that with the Minister's press release, which said that there would be almost £30 million for the waste strategy, over £18 million for regeneration and over £900,000 for sustainable development. The reality is that there is no more money here. Furthermore, the Government's real commitment to sustainable rural development is exposed by the large cuts in Tir Gofal funding, and cuts in the funding for the rural development plan, community regeneration and development, and TB support and slaughter payments. It is not good enough to say that this cut is the result of low take-up of Tir Gofal. The Countryside Council for Wales says that the low take-up was caused by the Government not allowing it to invest sufficient resources in processing the current backlog of 1,600 applications.

The 4.95 per cent increase in the local government budget will generate massive council tax hikes and pain, which will be most acute for pensioners and those on fixed incomes. The increase will also fail to fund the workload agreement in cash-strapped schools, which the WLGA estimates will need £44 million just to stand still. Where in the funding fog is the 13 per cent higher equivalent funding for public services in Wales, rather than in England, that is included in the Barnett block? The last high school I visited in Wales had received £5,000 in year 1 of the workload agreement. In England, £300,000 in direct grants per school will be awarded over three years. Staff at a primary school in north Wales told me that it had received less than £2,500, while primary schools in England are receiving £70,000. The Government's initial announcement, prior to this budget, of £21 million for the workload agreement was contained in pre-workforce expenditure plans in Wales. The £33 million we have heard about today is not only unhypothecated, which means that it could go anywhere, but it is also only three quarters of the amount the WLGA says that schools need.

An increase of only 3.95 per cent in funding for education fails to address the funding crisis in Welsh further education colleges. I have lost count of the number of college principals who told me during the summer that their deficits mean that they will be unable to meet the demands of the lifelong learning and work-based learning agendas. That is the reality in our FE colleges. There is also concern in schools and FE colleges that the increase in FE teaching pay, which I am sure we all support in principle, will not be a levelling up but a levelling down. Can we have an assurance that this increase will be funded in full so that, in the long term, it is not at the expense of teachers?

The fall in student support funds is the cause and effect of the debt burden imposed on students by Labour. Take-up has not been as high as expected because of affordability issues. I am sure that all Members have spoken to countless numbers of young people who face this crisis when they consider whether to fill in the UCAS forms.

I will conclude by saying that, without real public service reform that liberates people, communities and professionals, this budget merely threatens more spend and failure, more dogmatic waste and more arrogant we-know-best. Without common sense and value for money, the people of Wales will continue to suffer from some of the worst public services in Europe. This is not only about how much money we spend—although, of course, that is critical—it is also about how well we spend it. Finally, this Welsh Assembly Government clearly seeks its place in history because it thinks a great deal of itself, but its Ministers' ego-boosting projects are like golden domes on crumbling buildings. They ignore the reality that if crumbling buildings collapse, their golden domes will come crashing down with them.

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