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Politics

Universal Income plans depend on Westminster

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MARK DRAKEFORD’s announcement that the Welsh Government plans to trial Universal Basic Income in a few locations in Wales captured headlines in online media.

The First Minister was variously said to have ‘hinted’ at a trial or announced a trial would take place.

However, nobody should have been surprised by the First Minister’s announcement.

Not only was the policy contained in Labour’s Manifesto for May 6’s election – a bit more than ’a hint’ – but also the principle of holding a trial in Wales was enthusiastically passed by the last Welsh Parliament in September last year. It was a policy in Plaid Cymru’s election manifesto and Labour’s; so, whether Labour went it alone in Government or was in partnership with Plaid Cymru, a trial was on the cards.

WG KNOWS WESTMINSTER HAS THE FINAL WORD

However, whether the Welsh Government can carry out a trial is beyond its immediate control.

Headlines that said the Welsh Government WILL carry out even limited Universal Basic Income trials are also jumping the gun.

When the Senedd debated a motion brought forward by Jack Sargeant MS on September 30, 2020, here is what the Finance Minister Rebecca Evans had to say about it: “The Welsh Government would be open to such a trial taking place in Wales, but we have to be realistic that such a trial would not be possible without the active cooperation of the UK Government, and this is because of the interaction of universal basic income with the tax and benefit system. 

“If such a trial were offered, we would also require that conditions were met to ensure that the Welsh Government and this Senedd were able to play a significant role in the design, governance and accountability of any scheme. 

“Were the Welsh Government to make payments to individuals without the cooperation of the UK Government, this could simply result in them being ineligible for existing benefits or paying more in tax. 

“Aside from the fact that this would not then be a proper test of the effect of an unconditional payment, it would result in the transfer of resources from the Welsh Government to the UK Government. 

“And, sadly, our recent experience of the UK Government’s approach to the taxation of our payments to social care workers doesn’t suggest that we should expect their active cooperation.”

In short, the Welsh Government needs Westminster’s ‘active cooperation’ to make a trial possible.

Without Westminster’s cooperation, those who get the Universal Basic Income could (are almost certain to) lose all of their entitlements to other benefits, tax credits, and other means-tested benefits. They could also have to pay tax on it.

WHAT IS UNIVERSAL BASIC INCOME?

Universal Basic Income is not a new idea. Its long history stretches back to antiquity and has been a feature of both romantic and progressive political theory for centuries.

At its simplest, Universal Basic Income does away with a raft of welfare benefits. It substitutes them with a single payment of a fixed amount.

Schemes that guarantee a basic income, short of enough to live on, exist in a few US states and a handful of national economies. However, those are more of an income floor for those who are otherwise dependent on welfare benefits. They are not an actual Universal Basic Income.

A national trial in Finland ended after two years with no definitive finding of better outcomes for those who received UBI over those who did not.

The Covid pandemic increased interest in the idea of UBI in continental Europe. At the same time, the US used a series of relatively modest income replacement initiatives to stop people’s descent into poverty (or into deeper poverty). 

The UK’s furlough scheme was – essentially – a basic income guarantee but not genuinely universal in nature. 

A major multi-national academic study published in 2017 found that UBI probably improved some health outcomes and increased the likelihood of children attending school. 

However, the same report also concluded the evidence for positive outcomes from UBI-type schemes was ‘very uncertain’.

THE COST TO WALES

The main deterrent to a truly Universal Basic Income is cost.

• If a full universal basic income were paid in Wales to all working-age adults and set at the level of the official living wage, the cost would be around £35 billion a year. 

• If set at the level of the real living wage, the cost would be around £40 billion. 

• For illustration, those figures are around twice the size of the Welsh Government’s budget. As a further comparison, income tax in Wales raises in total just over £5 billion. 

• Of course, the costs could be much reduced if universal basic income were paid at a lower rate. However, payment at a lower rate would reduce its attractiveness.

Those last four points are not our own words. They are the Welsh Government’s position as set out in 2020 by its own Finance Minister.

Nothing has changed those figures since September 30, 2020.

They demonstrate the prohibitive and unsupportable cost of UBI to Wales without massive and systemic change across the whole UK.

SCOTCH MIST

As an illustrative example of the timescales and complexity of introducing even a pilot scheme, we only need to look at Scotland.

In September 2017, the Scottish Government announced it would support local authority areas to explore a Citizen’s Basic Income Scheme by establishing a fund to help regions to develop their proposals further and establish appropriate testing. 

The funding offered was £250,000 over the two financial years 2018/19 and 2019/20. 

Four local authority areas: Fife Council, City of Edinburgh Council, Glasgow City Council and North Ayrshire Council, worked together to research and explore the feasibility of local pilots of Basic Income in Scotland. 

Notlaunch a basic income. Explore its feasibility.

Over three and a half years since the Scottish Government’s announcement, there is still no UBI trial in Scotland.

Putting such a scheme in place depends, yet again, on Westminster’s cooperation.

A report on the progress of the feasibility study notes’ any pilot [must] have the necessary support to influence the future of national policy and the role of Department of Work and Pensions (DWP), HM Revenue and Customs (HMRC), HM Treasury and the NHS will be vital in the design and implementation of a Basic Income pilot.’

Three years to design and complete a feasibility study into a limited trial in four local authority areas in Scotland combined with the need to wait for Westminster approval does not suggest a quick fix.

And if it’s not a rapid process in Scotland, it will scarcely be quicker in Wales.

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Drakeford says Wales is not immune to Indian coronavirus

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MARK DRAKEFORD,  First Minister for Wales, has warned that Wales will not be immune from the Indian coronavirus variant as it becomes the dominant strain in England and Scotland.

He was speaking at the Welsh Government’s coronavirus briefing as he detailed the results of the latest three-weekly lockdown review and announced that large outdoor events are set to go ahead once again.

He also urged people to come forward to get vaccinated, even if they had missed their appointment, saying it remained the best defence against the virus – even the new variant.

He said: “It is never too late to be vaccinated in Wales – if you are not yet one of the millions of people to have had a vaccine, you can still arrange an appointment. There are details on our website about how to do that.”

Confirmed cases of COVID-19 in Wales remain at less than 10 cases per 100,000 people, which continues to be the lowest rate in the UK. This reflects the hard work of people throughout Wales to keep themselves and their families safe.

Our vaccination programme also continues to make extraordinary progress. More than85% of the adult population has now received their first dose of the vaccination and nearly half have completed the two-dose course.

However, the emergence and the spread of the more transmissible delta variant in parts of the UK – most notably in North West England – is a cause for concern. There are just under 100 cases in Wales, including a cluster in Conwy but we expect these numbers will increase.

We have the headroom to move to alert level one but we will do this in a phased way, focusing on outdoor events and activities in the first step. This phased approach will provide time for more data on the impact of this variant to become available and for more people to be vaccinated.

The changes to coronavirus regulations from the 7 June will therefore include:

  • Up to 30 people can meet outdoors, including in private gardens, outdoor hospitality and public places.
  • Larger outdoor organised gatherings and events, such as concerts, football matches and sporting activities, like organised running groups, will be able to go ahead for up to 4,000 people standing and 10,000 people seated. All organisers planning events and activities must undertake a full risk assessment and put in place measures to prevent the spread of coronavirus, including social distancing.
  • Up to three households can form an extended household.

We will consider further changes to the regulations on indoor activity later in the three-week cycle, if public health conditions allow. These will include:

  • The rule of six for meeting indoors in private homes and holiday accommodation.
  • Increasing numbers for indoor organised gatherings and restarting indoor events.
     
  • Opening ice skating rinks.

We have reviewed the Public Health (Protection from Eviction) (No.2) (Wales) (Coronavirus) Regulations 2021 and decided these will remain in place up for the time being but not exceeding June 30. We are considering further options to strengthen support for tenants. In the meantime, we would urge all tenants struggling to pay their rent to speak to their landlord and contact Citizen’s Advice Cymru or Shelter Cymru for further help and support.

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Politics

Budget cuts: Social Services and education take two-thirds of all councils’ money

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Pembrokeshire County Council: Pandemic has forced through change to digital services

How will local government services change?

THE FUNDING pressures on local government over the last decade have been a catalyst for change in local service delivery. Increasing costs and lower revenue for local authorities means some services have reduced or are being run differently.The pandemic put significant new demands on local government, exacerbating existing pressures. The future of local government services is uncertain. How it responds to the challenges will shape those services for years to come.
The shape of local authority services has changed significantly over the last decade.

Overall local authority spending has decreased by around 7% since 2013-14 (in real terms). In contrast, expenditure on social services has increased by over 10%. Spending in most other service areas has been cut, including in education.


Planning and economic development services have been hit particularly hard, as have libraries, culture, heritage, sport and recreation services.

WHERE THE MONEY GOES

Together, social services and education made up over two-thirds of total expenditure on services by the 22 local authorities in 2019-20.


But while social services have been protected from the most severe spending reductions, this won’t be enough to ensure its sustainability for the future


A 2017 report by Wales Public Services 2025 found that spending through local authorities on social care for the over 65s is not keeping pace with the growth in the population of older people. Spending may need to have increased by at least £129 million (23%) between 2015-16 and 2020-21 to get back to the equivalent spend per head in 2009-10.


The ONS estimates that, between 2021 and 2031, the population of Wales will grow by just over 60,000 (1.9%). Within that population growth, there’s a projected increase in the proportion of older people. The population of over 65s is due to increase by around 119,000 (17.5%).


Wales Fiscal Analysis notes that, while future demand for care can’t simply be linked to growth in older populations, projected growth in older people with complex care needs is highly likely to mean increased pressure on care services.


It details that the number of older adults living with severe dementia is expected to double to 53,700 by 2040.
The Inter-Ministerial Group on paying for social care estimated that in a ‘high-cost’ scenario, between 2019-20 and 2022-23, the net costs of social care could increase by almost £400 million.
Wales Fiscal Analysis projects that by 2025-26, social services could account for 55% of all local government spending pressures, with school pressures accounting for a further 21%.

INCREASED RELIANCE ON COUNCIL TAX?

Where local authorities get the money to spend on services has also started to shift. There’s been a reduction in grant funding to local authorities over the period 2013-14 to 2019-20, some of which has been mitigated by local taxes. Grant funding still makes up most local authority income.


The amount to be collected from council taxpayers (excluding council tax benefit/reduction scheme funding) was up by almost 30% over the same period.


The overall increase reflects annual increases in council tax paid by residents over the period. Average Band D council tax (excluding the police element) increasED in real terms by £186.


However, local authorities have consistently warned that raising council tax is not enough to fill future funding gaps

Following the UK Budget 2021, Wales Fiscal Analysis notes that “the UK government’s medium-term spending plans make for a more austere outlook for the Welsh budget and Welsh public services” and outlines the possibility of a return to austerity for parts of the Welsh budget.


The financial impact of the pandemic on local government is likely to be felt for many years.
Audit Wales notes that, even in local authorities generating a budget surplus in 2018-19, some had significant overspends in demand-led services like social services. It suggests those pressures are likely to intensify because of the pandemic.

TRANSFORMINGPUBLIC SERVICES:

Local government has embarked on a journey to transform how it delivers services.
Local authorities are thinking differently about improving services for users while reducing the cost of running them.


An example of this is one-stop-shops or ‘hubs’. These hubs host multiple council services under one roof, such as libraries, money advice and adult learning services.

One of the most significant aspects of the transformation programme is to make better use of technology and digital tools.


The Digital Strategy for Wales, launched in March 2021, sets out a national vision for digital transformation. The Strategy seeks a cultural shift in how public bodies “deliver and modernise services” designed around user needs.
Over the past year, local authority resources have been diverted from some of this transformational work. Anticipated financial savings are now uncertain.
The WLGA recently suggested there’s doubt about when, and indeed if, some of those savings will now happen.

MIND THE GAP

Corporate Joint Committees (CJCs) are bodies designed to enable greater regional working and collaboration in areas like education and transport.


However, questions remain about how these new bodies will operate.

Responses to a recent consultation on CJCs by the previous Welsh Government show there’s still uncertainty about how they’ll function and their associated costs and benefits.


Despite the recent increase in the local government settlement for next year and the substantial funding support in response to the pandemic, significant challenges remain.

Wales Fiscal Analysis suggests that to meet cost pressures over the next few years, spending on local services needs to increase, on average, by 3.4% a year (in cash terms) between 2020-21 and 2025-26.


The WLGA recently reported that core pressures, the financial gap in money coming in, and what’s needed to pay for services could amount to £822 million by 2023-24.

Leaning on local taxation, such as council tax, to support critical services like social care and education won’t stem the demand for and cost of providing those services.

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Politics

Voter registration opens for Welsh Youth Parliament elections

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YOUNG people across Wales are being encouraged to get involved with their Welsh Youth Parliament by registering to vote in the 2021 Elections in November.

The registration process opened yesterday, Thursday, June 3, on the Welsh Youth Parliament website.

It takes just 5 minutes, and registration will remain open until November 12.

This is an opportunity for Wales’ young people, aged 11 – 18 years old, to use their voice in choosing the Members who will represent them and their area in the next Welsh Youth Parliament.

This will be the second Youth Parliament, made up of 60 young people in Wales to represent different areas and backgrounds.

By meeting regularly, consulting with young people and conducting inquiries, they discuss the issues that matter most to young people to bring their views to the attention of the elected politicians of the Welsh Parliament.

The online election in November will choose 40 Members to represent all regions of Wales, the other 20 Members will be put forward by partner organisations to ensure a diverse representation.

The application process for interested partner organisations is also now open.

Organisations and charities are invited to apply to work with the Youth Parliament and to have a representative among the 60 Members.

Talulah Thomas and Cai Thomas Phillips, former members of the Welsh Youth Parliament, hosted an online panel discussion to mark the opening of voter registration which coincided with the Urdd’s Eisteddfod T.

The panel session focused on the importance of young people’s relationship with democracy.

A month since 16- and 17-year-olds were able to vote in the Senedd 2021 Election for the first time, getting involved with the Welsh Youth Parliament is one way that young people can make sure their voices continue to be heard.

Talulah Thomas, former Member for Clwyd South, says; “Be part of a Youth Parliament which gives us a voice on the issues that matter now and in our future. Register now to be able to vote in the Election, send in your ideas for topics and I also encourage you to consider standing to be a member too. When the opportunity comes. Go for it – be part of something great!”

YOUR FUTURE –  THE ISSUES THAT MATTER

With the opening of voter registration, young people are also asked to put forward their suggestions for topics they would like to be prioritised by the next Youth Parliament. A form is available online for young people to contribute to the conversation and highlight the issues that matter most to them and their communities.

Last time, the Youth Parliament chose to prioritise three topics: Mental Health, Life Skills in the Curriculum, and Littering and Plastic Waste, holding inquiries and publishing reports to present to the Welsh Government.

Cai Thomas Phillips, former Member for West Carmarthen and South Pembrokeshire says; “Young people’s voices need to be at the heart of important decisions as we emerge from the pandemic; a better way of working, economic recovery after COVID and tackling environmental degradation. I really hope the next Youth Parliament will take their chance to look at these issues and much more. It’s an amazing opportunity for anyone to give new ideas and opinions to the decision makers.”

Llywydd of the Senedd, Elin Jones MS encouraged Wales’ young voices to get involved in their Welsh Youth Parliament; “The first Welsh Youth Parliament showed us how passionate young people are about the issues which matter to them and their communities. Their voices need to be heard now more than ever.

“I encourage young people across Wales to get involved, to register to vote and be part of the conversation about the topics that should be prioritised by the next Youth Parliament. Your voice is powerful, and your views are important to us all.”

More information about registration, topics and how to be part of the Welsh Youth Parliament are available on the website – https://youthparliament.senedd.wales/

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