Funding Local Government

This is a Cabinet statement on the provision of the £22 million arising from Gordon Brown's pre-budget report. On 10 December, the Chancellor of the Exchequer announced increased allocations to government in England, which resulted in an extra £22.382 million being added to the funds available to the National Assembly for 2004-05. Of that extra money, £20.026 million is as a consequence of an increase in local authority funding in England.
I wish to report to the National Assembly the allocation of the extra money that has been decided by the Welsh Assembly Government. The Government has decided that £20 million in extra funding will be used to increase funding for local government in 2004-05. It has not been possible to consider putting this addition through the revenue support grant, as the Assembly made a final determination on this grant on 10 December and statute prevents us from changing the level of determined grant.
The Welsh Assembly Government has decided that an extra £19.508 million will go to local authorities as a special grant to increase the capacity to care for people in their homes and communities. In coming to this decision, we were substantially informed by the expenditure needs report submitted to the Assembly Government last year to inform preparations for the 2004-05 budget. The revenue support grant had responded to the highest priority pressures identified in terms of pay, prices, pensions and teachers' workload. Although this was sufficient to at least maintain existing capacity in social services it did not necessarily provide for the increased capacity that was an identified priority for both the Assembly Government and local government.
In broadly defining the purpose of the specific grant for the elderly, there will be scope for local authorities to innovate and respond to local circumstances. The terms of the grant are being considered with the Welsh Local Government Association, but it is anticipated that it can support expenditure in domiciliary and residential care, housing adaptation and new investments and various forms of community support. Insofar as local authorities were intending to fund new capacity in these areas by increasing council tax, this new grant will have the effect of reducing council tax from the levels that they would otherwise have reached. The Wanless report advised that we should be investing in forms of care that reduce the demand for hospital care. This grant will have that effect. The formula used to distribute this social grant will be based on that used to calculate the need for social services for the elderly in the RSG. It is a distribution that has been previously consulted upon and agreed with local government.
The Welsh Assembly Government is also allocating over £0.5 million to increase the deprivation grant in line with inflation. This will provide additional resources to our most deprived communities in line with the Welsh Assembly Government's pledge to create a better Wales for all. The distribution of this money is based on the Welsh index of multiple deprivation, which reflects a wide variety of indicators of deprivation.
Two million pounds will go to the health service to provide support for renal services. The funding will allow us to maintain the current level of treatment at the Swansea treatment centre in Morriston at three sessions per week, and will raise the number of sessions at the Cardiff centre from two to three per week. The Assembly Government views the provison of good quality services to people with kidney disease as a priority. This will ensure that the current support for patients requiring dialysis will be maintained.
Finally, I will be allocating a further £350,000 or so to the culture budget to help finance programmes that develop opportunities for swimming free of charge, including opportunities for older people. This is in line with our priority to support lifestyles that allow people to enjoy better health.
The sum of £22 million is a useful addition to our budget for 2004-05, which will now be more than £11.9 billion. The allocations that I have announced respond to the real needs of people in Wales in ways which support the
strategic priorities of this Assembly Government